How to Speed Up New Product Development While Meeting Cost Goals

Peter Drucker said, “The best way to predict the future is to create it”. Developing new products then, is the lifeblood that enables leaders to create the future.

Shepherding an idea to become a product is a political game of tradeoffs at most companies, and this complex multi-variable equation of success seems to elude many of us. Unfortunately, companies that rely solely on the “lightbulb” moment, lacking a repeatable process for new product development, fail; whereas leaders who institutionalize a new product development process that considers all of the critical product variables will be rewarded with profits for their companies’ bottom lines.

Therefore, it’s critical to acquire data from different functions within your organization — variables such as cost, time, risk, quality, and features — to feed early product development. So, why do so many companies continue to view product development as the responsibility of a select few, typically in marketing, engineering, or design?

How to Avoid Common Pitfalls

Since we’ve established the fact that a wide range of inputs need to be considered from across an organization, what are common pitfalls professionals face bringing new products to market? How do we avoid them?

According to Chris Kondogiani, Principal at technology commercialization firm Third Shore Group, “Failing to validate the market or ability for the technology to meet requirements are near the top”.

Understanding your customers and market isn’t glamorous stuff. It’s meticulous work, often involving talking to potential customer after potential customer to understand their pain points. These invaluable direct-from-customer insights then need to be paired with market data, requiring further time to research and document the market size of product opportunities. All this work should be done after a given technology is proven to work.

New technology pitfalls may also include unknown system interactions and manufacturing variation, but applying a product development process with a system engineering process could significantly reduce the risk of new technology commercialization.

Kris Houghton, Executive Director of Product Development at engineering services and low-volume manufacturing firm Pratt & Miller, says, “Developing a robust simulation model for function and performance is a wonderful technique to understand the function and interactions of new technology”.

Simple right? So it’s understandable why we’re tempted to slim down, or all together cut out, the upfront time dedicated to critical customer discovery, market research, and technology validation. However, according to Kondogiani, “It’s hard to invent on a timeline, and it’s even harder to create a market for a product that’s a collection of features rather than an efficient delivery of well understood customer values”.

Tips to Reach Cost, Time, & Risk Goals

There are many practical tools you and your team can implement that’ll make a dramatic, positive impact in the short term on your organization’s new product development. Below are seven tips to help you reduce the cost, time, and risk of launching new products in days and weeks, not years.

Tip 1: Follow a Product Commercialization Framework

An overarching framework that’s underpinned by a product development process ensures you don’t lose sight of the big picture go-to-market strategy. “Periodically review the status of your market, function, and business objectives to make sure you’re on track, which will enable you to react appropriately to issues when they arise”, said Kondogiani.

Tip 2: Utilize a Standard Product Development Process

The old adage “measure twice, cut once” applies here. While it may seem like running decisions through a formal product development process would take longer, the clarity it provides to status, timing, and risk saves time in the end.

Tip 3: Leverage Product Simulations Where Possible

Even with manufacturing breakthroughs like 3D printing that have exponentially dropped the cost for physical prototypes, building physical tooling, parts, and products is expensive. “Developing a robust simulation model for function and performance is one of the most common techniques used to understand the function and interactions of new technology”, noted Houghton.

Tip 4: Create a Plan for Every Part (PFEP)

Adopt a PFEP to guide the product development team to identify different priority buckets of parts and visualize a product dashboard roll-up of target to actual KPIs. Creating a PFEP also has several side benefits like ensuring the BOM (Bill of Materials) is complete, understanding alternative manufacturing process options, and clarifying make vs. buy decisions.

Tip 5: Identify Timeline Bottlenecks Upfront

Timelines are driven by the longest lead items, so identifying the services, tooling, parts, and testing that’ll take the longest to complete will best position your team to shorten timing. Houghton says to, “Identify sources of ‘A’ parts early, so specific design details from the supplier can be incorporated in the final design from the start to avoid redesigns that cost time and money”.

Tip 6: Drive Timing Discipline Early & Often

New product development timelines in many industries such as aerospace, automotive, and medical devices take three to five years, or more, so it’s important to foster disciplined team program management habits early to generate first-rate results. Kondogiani remarks, “It’s very easy to throw away your opportunity to maximize outcomes by losing days or weeks early in a program through indecisiveness or lack of focus when it seems like you have plenty of time”.

Tip 7: Rollout Cloud Collaboration Software

If you’re feeling good about implementing the above tips, rolling out newer cloud collaboration software tools can further accelerate your team’s effort by removing communication- and information-sharing drag. Kondogiani says, “The best tools are the ones that are flexible and can be adopted and used by everyone on the team without much of a learning curve”.

Involve Supply Chain During Idea Stage to Enhance Results

The worlds most successful new product companies ensure there’s a seat at the table, on day one, for all functions. After all, the product ideation stage offers the highest percentage chance to impact cost, time, and risk. The ability for supply chain to positively impact a product idea diminishes over time as it matures, and decisions are made about design, manufacturing, materials, and suppliers.

“By far the biggest lever to meeting customer expectations from a functional and value standpoint is defining the right product architecture. So, having supply chain at the table very early in the product development cycle to help make sure your concept can be executed on time, at the right quality levels, and within budget is critical to success”, said Kondogiani.

Houghton offers the four following reasons for involving supply chain early and often:

To Avoid Redesign

Front load your supply chain development early on in product development. The final details can be incorporated into the design early avoiding costly redesigns.

To Identify Alternative Solutions

Supply chain professionals and suppliers often have other ideas or approaches to solving a problem that can be incorporated to save time, money, validation costs, and tooling costs.

To Reduce Cost

The lessons learned from the supply chain can be used to reduce cost. Often, small, simple changes to a material, shape, dimension, or orientation can save money.

To Mitigate Risk

Identifying sources early expands your team’s overall knowledge of the system, reducing the chances of late changes due to performance, validation, quality, process, or timing.

Building Great Products Starts with People, Processes, & Technology

Building a great product can be done once with a bit of luck, but repeating success is accomplished by empowering exceptional people, developing repeatable processes, and accelerating through technology. Ensure you put the right talent and experience in appropriate positions and provide them with the proper resources to succeed. Product development is a methodical process that requires teams to embrace the challenge of creating clarity where there is none by acquiring data and converting it to information from which to make informed decisions.

The detailed underlying data matters. “Invest time up front in a complete BOM since this becomes the master data source for all of these activities”, said Houghton.

Soon after, it’s imperative to expand a traditional product BOM, usually roughly five data columns of part number, description, quantity, cost, and supplier to a PFEP. Typically, an expanded PFEP will include 120-plus columns containing critical information like manufacturing process, part lead time, and backup suppliers. This PFEP then acts as a “common currency” across functions to track all pertinent product information from idea to product launch. Adding this data, though not the most flashy work, undoubtedly pays off in the end for on-time product launches, reduced inventory levels, and lower business risk.

“It seems simple, but it’s surprising how often we see companies that expect this type of mission critical commercial and technical data detail to be solved and tracked later during product launch”, said Kondogiani.

As with every well laid football game plan, preparation is half the battle, and the combination of planning and execution is what’ll equate to product development success.

Act to Enhance New Product Development Today

“Innovation is saying no to a thousand things”, said Steve Jobs. Certainly, in the tripod of tradeoffs that is new product development — cost, time, and risk — your ability to make complex decisions is a key enabler for success. However, new product development is a game best played as a team, and your team will only succeed when data is incorporated early and often from all parts of your organization.

Kondogiani says to, “Focus on process. If you have a broken process, automating it with expensive software systems will only accelerate your ability to make errors. Start with a strong process foundation and use it to identify and prioritize streamlining opportunities”.

There are a lot of new technologies that enable virtual execution of testing, validation, supplier identification, and PFEP. When used appropriately, and judiciously, they’ll significantly reduce the cost and time of new product development.

Ideas are wonderful, and without them, there would be no innovation or disruptive products. But don’t underestimate the challenge of execution. Nurturing the mindset amongst your team of a pragmatically applied product creation discipline is more important than following the best checklist ever created.

Improve your product development process and tools today. Your future depends on it.