A contemporary approach to new product development

New product development is an integral part of all businesses today. The markets are dynamic, competition is fierce and the consumers are highly aware; all these factors compel businesses to keep offering something new and more advanced to their target markets. But New Product Development (NPD) is not that easy. There are high costs and risks to failure involved in NPD. Any failure in new product development may result into loss of the customers’ trust and it can also ruin the company’s image and goodwill.

The traditional objectives underlying NPD initiative

Whenever a new product development initiative is planned by a firm, there are basically two objectives that need to be essentially served:

  1. The new product meets the expectations of the target market and,
  2. The NPD process fits into the firm’s resources in terms of time schedule and funds.

These are the two basic objectives that traditionally every firm tries to focus upon and that is why a lot of time is often spent in designing strict time schedules and most cost-effective methods to NPD. It is important to focus upon these aspects, but certainly not at the cost of creativity and innovation required for NPD. It is important to adhere to strict schedules and minimize wastage but can there be any rigid schedules to new product development? And even if these are followed, can they assure success of firm’s NPD? It is important to understand that new product development is not about manufacturing the products. While manufacturing largely involves a set of repetitive processes, new product development hardly involves any repetitive procedures except the component manufacturing part. Thus, making the time schedules too rigid will not only hamper innovation and demoralize the workforce but may also result into a faulty outcome. Most companies commit the mistake of concentrating too much on streamlining NPD but innovation can never be streamlined.

Contemporary approach to NPD

Over the years, there have been many researches on deriving the best approach to new product development. The processes have largely changed and the traditional approach to adopt ‘Phased Program Planning’ (PPP) for NPD no longer works. Under PPP, a sequential approach was followed and the output of one process became the input for another. But it wasted lot of time as until and unless the previous process is not complete, the next cannot be started. Today, the NPD takes place into different processes running simultaneously rather sequentially. NPD now is a result of overlapping processes which may be undertaken by the firm itself or outsourced to a third party physically located into same or distant place. This saves a lot of time but it also gives scope to confusion and mismanagement.

The companies today need to adopt a holistic approach towards new product development. Rather than undertaking NPD as different projects or processes and focusing on their respective time schedules and costs, it is important to integrate them into a single objective of delivering the best product in the most resource-friendly manner. Often a lack of communication or inefficient management of innovation disrupts the whole new product development initiative of the firm. The firms focus on strict deadlines and this many times deviate them from the basics of NPD. Thus, the firms must learn to differentiate between manufacturing and new product development and make their NPD initiative more flexible so that innovation can find its due space.

References

  • Takeuchi, H. & Nonaka, I. (January, 1986). “The New New Product Development Game.” Harvard Business Review. Retrieved from: http://hbr.org/1986/01/the-new-new-product-development-game/ar/1
  • Thomke, S. & Reinertsen, D. (May, 2012). “Six Myths of Product Development.” Harvard Business Review. Retrieved from: http://hbr.org/2012/05/six-myths-of-product-development/ar/1
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Ankita Agarwal

Ankita is working with the editorial board of Project Guru as a Research Analyst and Writer. With Masters in Commerce and Business Studies, Ankita learned much of what she knows about management through experience. She has previously worked in various financial institutions like Birla Global, HDFC Ltd. and Citi Financial. She is self-motivated and writes for the Knowledge Tank section of Project Guru. She has authored more than 80 articles so far in Human Resources Management, Strategic Management, Finance and Marketing. She likes to pen her thoughts about the latest issues gripping these areas across the world.

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