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					A Tutorial on New Product Development: A Practical Approach

Stephen Daniels, School of Electronic Engineering, Dublin City University

1. Introduction
The product development process is the process involved in taking an idea / product
proposal to a fully released and available product on the market. The decision to embark
on a new product development endeavor is not to be taken lightly and the full impact on
the available resources and costs need to be understood. Successful new products fuel the
growth and sustainability of a venture into the future, so it is imperative to:

   a) make the right decisions regarding what products to develop
   b) optimize their chances of success
   c) ensure on-time delivery to the right cost and product specifications

As with any endeavor, it is essential to be clear from the outset of the desired result.
Generally, and R&D team / resource is similar to a machine, it will produce outputs
based on the inputs – any ambiguity will lead to unexpected results. Additionally, the
machine will continue to produce (sometimes misguidedly), regardless of other concerns.
It is vital to place some controls on the process to measure progress and evaluate results.
A schematic of a generic product development process is given in figure 1. Based on
some external trigger, a ‘Proof of Concept’ Phase of product development is initiated.
This external trigger could be an opportunistic event based on an observed
customer/market need, or it could be the output of a more determined, systematic
opportunity identification activity. Here we enter the realm of idea generation, which is
closely tied with the corporate culture.




                     Figure 1: Generic Product Development Process



The process illustrated in figure 1 needs to be toll-gated at the exit of each phase. Each
organization will need to define the exit criteria, or set of deliverables, for each phase and
ensure that the sign-offs are sufficiently rigorous, without being overly burdensome and
slowing the process down. The quality function within an organization (whether it is an
actual team of people or an embedded rigor and methodology), should play a major role
in designing, facilitating, and validating this process.



There is an emerging school of thought that promotes a ‘new’ approach to product
development that includes a ‘Customer Development Model’. This approach has been
pioneered by Steve Blank at Berkeley and essentially promotes a parallel activity of
intense engagement with the customer – identify potential evangelists in the market and
‘sell’ them the product as early as possible in the product development cycle, i.e. even
before it is development. This parallel activity is referred to as ‘Customer Discovery’.
While to my mind there are a number of weaknesses in the specifics of this approach, the
general philosophy of two-way customer engagement is absolutely correct, and however
it is achieved, it needs to be a priority. The approach outlined in this paper is
fundamentally a generic conventional approach but the interaction with all the relevant
stakeholders from the outset is emphasized. This is illustrated in figure 2, where it is vital
to ensure stakeholder commitment as early as possible to maximize the chances of
success, both in successfully developing the product on time and on budget, and the
subsequent market adoption of the technology.




                       Figure 2: Product Development Stakeholders


2. Product Proposal Screening

It’s inevitable that new product ideas come your way, through a variety of sources. The
idea could come from a customer or could be generated internally within the
organization. The product idea may form the foundation of venture, it may be a new
product line within an existing organization, or it may simply be an upgrade or additional
feature on an existing product. In any case it is essential that the right level of due
diligence is carried out upfront, before any investment in technical resources and time is
expended. A full discussion of this topic can be found in reference [1]. An interesting
study of the variables in new product development and their impact on likely success and
failure is discussed in [2]. Figure 3 from is adapted from this study and a number of
related studies.




                      Figure 3: Attributes in New Product Screening

The relative importance of the attributes outlined in figure 3 will depend on the specifics
of the market and company situation but it is easy see how they could be weighted and a
more analytical approach to decision making implemented.

3. Proof of Concept
The activities within this phase of product development are essentially to determine the
feasibility (or otherwise) of the proposed product development. Outputs from this phase
should include a full product specification to be used by design / development engineers,
a commercial justification based on market need, strength of competitors, project costing,
project planning. As part of the technical feasibility activities, it may be necessary to
produce a prototype device to try out new concepts. The voice of the customer needs to
be heard strongly in this phase. It may sound obvious but it’s essential to talk and to listen

This phase is probably the most appropriate phase to do a full project costing. For a new
venture this might include the purchase of development tools such as software licenses,
outsourcing technical tasks such as aspects of the hardware and software development.

For new products that will employ technology, the relevant IP landscape needs to be
evaluated and understood.
4. Alpha Development
The alpha development phase is the first full engagement of the R&D team in the new
product. Conceptual Design plays a major role in this phase where potential solutions are
explored and evaluated based on pre-defined criteria. A rigorous process which includes
design reviews, brainstorming sessions, and prototype evaluation needs to be followed.
Rigor around report writing, and proper documentation and analysis of test results will
pay dividends in the longer term. A means of indexing and referencing technical reports
should be in place and consistency of report structuring should be encouraged through
defining templates.

The primary outputs of the alpha development phase should be an alpha (early stage)
prototype, a refined specification that is more cognizant of technological capabilities,
documentation. It’s vitally important that other stake-holders (Customers, manufacturing,
marketing) are well informed and have been able to input as appropriate.


5. Beta Development Phase
The beta development phase should be technically informed by the alpha phase activities
and should be a focused effort by the R&D team to deliver to what should by now be a
tightly defined product specification. The involvement of manufacturing / production
should be ramped up in this phase and in addition to informing the actual core product
development, plans need to be made for practical issues such as packaging, certification
(CE, EMC,..), calibration, testing. In truth, testing is a major topic of discussion in it’s
own right. For many products, ‘on-board’ test capability (for both hardware and software
products) needs to be designed into the core product to facilitate testing during
development, manufacturing, final test, and field service.

For many types of products it would be usual to ‘sell’ a beta version of the product to a
customer. There are many motivations for this: from the point of view of the customer,
they may see it as a competitive advantage to have early access to the product offering.
They may also be able to negotiate more favorable commercial terms, at least for the
initial unit. The customer could also be part of a ‘joint development’ arrangement. From
the vendor’s perspective, the earlier a unit is at a customer site the better. It provides an
excellent opportunity to gauge the customer’s reaction to the product, benchmark it
against existing solutions in a ‘real’ environment, and generate useful application data.

6. Unit Build and Test Phase
The Unit build and test phase is essentially a dedicated manufacturing activity for testing
the production process for individual system components. Revision numbers, part and
assembly numbers, bills of materials, manufacturing assembly and test procedures,
shipping documentation etch should all be finalized at this stage and any bugs ironed out.
Depending on the nature of the product, several test approaches can be adopted including
environmental testing, stress testing, ironman testing etc. For hardware type products, it
would be typical for several units to be built and tested and the required statistics
generated.
7. System Build and Test Phase

The system build and test phase is similar to the unit build and test phase except that the
product including all sub-components, final software revisions, are fully tested in a real
environment – where it will actually be used. Final internal and external (user manuals,
calibration templates, safety notices, handling instructions etc) documentation needs to be
ready.

8. Manufacturing Release Phase

The manufacturing release phase is the handover process, where ownership of the
product is transferred from R&D to manufacturing and product management. The R&D
team will of course need to support the product transfer and provide training and on-
going back-up support to manufacturing, marketing, customer support, etc.

By ensuring that other stakeholders, such as manufacturing, have been a key part of the
development process from the beginning, an ‘over the wall’ approach of new product
introduction to manufacturing can be avoided.

9. Market Release Phase

The market release phase is where the product is ‘launched’ on the market. In this
document, this phase follows logically from the manufacturing release phase, however
this of course does not have to be the case. It is not untypical to ‘launch’ the product
earlier than this (even without the ability to ship product), to generate publicity and
public interest, to gauge market reaction, as a defensive ploy against market positioning
by competitors, etc.


10. Risks in New Product Development

The new product development process if fraught with risks:

(i) Developing the wrong product

The decision to embark on a new product development should only proceed on the basis
of a rigorous analysis of the technical and commercial assessment and in dialogue with
future customers

(ii) Delays and unforeseen expenses in the development process

Control the development process without stifling it. Hire great development people and
resource them adequately. Rigorous processes around documentation and testing.
(iii) Problems in launching the product to market

Make sure product marketing organization is well informed from early in the process.
Clearly understand customer pain points. Good sales collateral and marketing material.

(iv) Product problems following release

Rigorous testing and design for test. Good manufacturability and assembly procedures –
include manufacturing from early on. Well trained Customer Support.


References

[1] EE507 Session 9 Technology Assessment
[2] R. G. Cooper, The Dimensions of Industrial New Product Success and Failure,
Journal of Marketing, Vol 43, Summer 1979, pp 93 - 103

				
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posted:9/11/2011
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