New Product Introduction - NPI

Life Cycle Management -LCM

NPI for 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 the company has the knowledge and ability to allocate or divert assets and resources to maximize the benefit to the company. Senior executives and other staff are fully aware of where each product is in the pipeline and how it affects their performance and that of the company. 

Operationally, a well-designed and implemented NPI process significantly improves the bottom line by:

• Maximizing the effectiveness and efficiency of each of the functions involved.
  This reduces costs and improves profits
• Reducing or eliminating "scope creep"
• Gaining competitive advantage by ensuring products arrive on schedule
• Ensuring the product is ready for the market, and
• Ensuring the company is ready for the product

Extending NPI to Life Cycle Management (LCM) which covers the product until "Service End of Life" (SEOL) enhances the revenue stream associated with a new product for years after it is off the sales book. By optimizing overall corporate costs to maximize 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?

You need a formal NPI process if one or more of these are true:

• 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

The more these apply, the more you need a formal NPI process.

Will the resources invested in NPI pay off?

They most certainly will if you design and implement it well. They key to success is creating a flexible results-driven process with the needed checks and balances. 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 some help in creating a formal New Product Introduction process , please call or email us.

Remember, support and encouragement from 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.

Here is a real-life example of how the NPI process, augmented with excellent business models for on-going decision support, 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

• Went against good design practice of minimizing the number of parts, and
• Would add $200,000 to the manufacturing and logistics costs.

However, modeling  revenues and expenses over the product lifecycle conclusively showed how this minor change to the BOM averted $4,900,000 dollars in service field expense. Results were so clear that all agreed on the needed changes.

The result was that the company added $4,700,000 to the bottom line with no additional effort.
(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.

Call 508-481-1190 or email us now for a no-obligation initial consultation.