New Product Introduction - NPI - & Life Cycle Management

Strategic and Effective Long Term Bottom Line Improvement

Why introduce a formal New Product Introduction (NPI) process?
What are the benefits of NPI?

At a strategic level, the NPI process ensures senior executives are fully aware of products in the pipeline and how each product affects their performance as well as how the company performs. This knowledge enables them to allocate or divert assets and resources to maximize the benefit to the company.

• Maximizing the effectiveness and efficiency of each of the functions involved.
  This reduces costs and improves profits
• Ensures products arrive on schedule by minimizing "scope creep".
  A release on schedule could improve competitive advantage

Extending NPI to Life Cycle Management (LCM) covering the product until "Service End of life" (Service EOL) extends the revenue stream associated with a new product even further; for years after it is off the sales book. By optimizing overall corporate and maximizing profitability, it can be a key factor in how well the corporation meets its primary objectives of ensuring revenue and profit growth.

Is a formal NPI process right for you? Will the resources invested in NPI pay off?

As with so many other vital questions, the answer is a resounding "Maybe!" Many factors influence how well NPI works within a company.

Some of the factors indicating you may not need a formal NPI process right now are:

• The company is small and compact, or is a start-up
• There is generally only one product in development at a time
• Service & Support are not critical to product deployment and use

Some of the indicators that you need a formal NPI process include:

• The company is too big to have everyone aware of each others work
• Functions are physically separated
• Strong inter-functional rivalry
• Company culture and individual goals discourage inter-functional cooperation
• Many new products, at various stages of development, simultaneously in the pipeline
• Service & Support are key requirements for product deployment & use

So, you'd like the bottom line benefits. How do you go about implementing NPI at your company?

For a good start, read - Unlocking the Potential of the New Product Introduction Process. It outlines the various steps involved and the controls needed to ensure success.

If, after reading the article, you would like to create a formal New Product Introduction process but could use some help, we offer a fixed cost package that includes:

• Four weeks "on site" at your premises
• Briefing executives to ensure they understand and commit to NPI
• "Hands on" guidance for the "Product Introduction Manager" on NPI process
• "Hands on" time with staff involved with working the process
• Guidance in setting up ancillary work and control processes
• 64 hours phone/internet support over the next 2 months

Please call or email us for details.

Remember, support and encouragement from the very top executives and managers is essential. Executives must accept and support decisions that maximize the corporate bottom line even when, in the short term, their functions "take a hit."

A key contributor to success is investing in tracking mechanisms and decision-support tools. Modeling the entire life cycle is one of the essential tools needed to correctly make the trade-offs needed to get the product to the field on time and on budget while still maximizing the bottom line impact. Such models need not be elaborate, a (relatively) simple spreadsheet-based model - easy to understand and use, and to implement quickly - may be all that is needed. Call us if you need help in designing and implementing some models.

Here is a real-life example of how the NPI process, augmented with excellent business models, significantly increased bottom-line profits

During the NPI process, Manufacturing and Development legitimately disagreed with a request made by Service to add additional keyboard versions to the Bill of Materials (BOM)for a new terminal as it would add to the manufacturing and logistics costs. A life-cycle (revenue / expense) spreadsheet model showed how this minor change to the BOM which added $200,000 to the manufacturing/logistics expense line would helped avert $4,900,000 dollars in service field expense. Results were so clear that all agreed on the needed changes.
(Read case study for details ...)

Roy Sequeira has been intimately involved with introducing new products to the field for nearly 30 years. He was a key player in launching the process at 3 companies and introduced the concept for subsequent implementation at others.

Please call or email if he could help you launch NPI / LCM in your organization, or streamline an existing NPI process that under-delivers on its potential.

Business Owners and Executives

Optimizing Service and Support