The modern manufacturing industry is driven by innovation and a relentless pursuit of efficiency. One critical aspect of this process is the New Product Introduction (NPI), which ensures that new products are developed and launched successfully.
Whether you’re launching a completely new product, or simply adding new features to an existing product line, introducing new processes into your operations can be stressful if it’s not planned properly.
Additionally, NPI creates the potential for quality issues as operators ramp up on new production processes. According to Quality Digest, experts estimate that the total cost of poor quality typically amounts to 5-30% of gross sales across manufacturing and service companies.
No matter what your company produces, improving your new product introduction process can help you improve brand loyalty and boost your bottom line.
Continue reading to learn how manufacturers are improving their new product introduction processes with structured, detailed procedures and digital solutions to help guide operators.
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What is new product introduction (NPI)?
New Product Introduction, or NPI, is the process of bringing a new product from its conception to market. It involves a series of stages, including design, development, testing, production, and market launch. A successful NPI strategy ensures that the product meets quality, cost, and time-to-market objectives, while satisfying customer expectations and generating a competitive advantage for the company.
Examples of NPI in manufacturing
Examples of new product introduction can be found across various
industries, such as consumer electronics, automotive, and medical devices.
For the sake of example, let’s look at smartphones. It’s very common for smartphone manufacturers such as Apple and Samsung to release a new version of flagship phones on an annual basis.
As each new iteration of the Apple iPhone or Samsung Galaxy launches, product design can change, internal components including processing chips and cameras are upgraded, screen materials are improved, etc. As a result, manufacturers' systems and processes, too, must adapt to accommodate these changes.
Breaking down the NPI process into 6 stages
To ensure a smooth and efficient NPI process, it is typically broken down into six distinct phases:
- Planning: Defining project objectives, scope, timeline, and resource requirements.
- Design and development: Creating a detailed product design, selecting materials and components, and validating the design through simulation and analysis.
- Prototyping and testing: Building and testing prototypes to validate the design, identify potential issues, and make necessary improvements.
- Pre-production: Setting up production processes, equipment, and quality control measures, and producing a small batch of the product to validate production readiness.
- Production ramp-up: Gradually increasing production volume, addressing any production issues, and continuously monitoring quality.
- Full-scale production and launch: Initiating full-scale production and launching the product in the target market.
The importance of optimizing new product introduction
The new product development process is important partly because of its impact on an organization's growth. When done properly, it improves the chances of creating a new product that will solve a real customer need. Using innovation through its new product initiatives also helps companies remain competitive in the marketplace.
When done incorrectly, however, new product introduction can result in quality issues, product defects, and unhappy customers.
Quality issues can have a devastating impact on profits and customer satisfaction, as well as a company’s brand image and reputation. New products that don’t perform as intended, or problem products that harm consumers, can be much more damaging than products that already have a track record in the field.
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Best practices for reducing quality issues during new product introduction
As we’ve discussed in this post, product innovation is one of the major ways manufacturers can build market share and gain a competitive advantage. But introducing new products can be inherently risky for businesses. In order to ensure the successful outcome of developing and manufacturing a new product, it is important to keep in mind the following best practices:
Thorough lifecycle planning - Consider each stage of the product life cycle to understand any potential challenges or problems that may impact the development of your new product.
Accurate sourcing and procurement - With an estimated 60-80% of the product cost and risks determined at the design stage, last-minute changes can have a substantial impact on your expenses as a manufacturer. From qualifying a potential supplier to changing production locations, it’s imperative to engage sourcing teams early on to mitigate the risk of a fluctuating global economy.
Target-based costing - In order to reduce the inherent risk of new product introduction, all stakeholders within the organization should understand targets and key budget drivers from the beginning. These factors should be included in decisions about the product from design to production and can impact the total timeframe and cost of a product during its lifecycle.
Data integration - When it comes to bringing a new product to market, referencing the right data can be a key driver in making your product launch successful. Aggregating external data, such as market intelligence and material costs, with internal data, including demand forecasts and purchase history can help guide decision-making across the product life cycle.
Cross-functional coordination - Bringing a new product to market requires significant cross-functional coordination at every stage, from material sourcing and regulatory compliance to production, quality control, packaging and so much more. Ensuring that all teams are on the same page is imperative to the success of a new product introduction.
How can you speed up time to market?
In addition to ensuring that quality standards are upheld throughout the new product introduction process, manufacturers must consider the time that it will take to bring a new product to market. Following the best practices outlined above can help tremendously when it comes to eliminating setbacks and ensuring timelines are met.
Additionally, platforms like Tulip can be instrumental in helping manufacturers capture, organize, and track every stage of the new product introduction process, from aggregating big data, training operators on new production processes, guiding workers with dynamic work instructions, and improving traceability of products across every stage of production. Using the right tools can be critical to mitigating the risk of quality issues and speeding up the production process for businesses looking to introduce a new product to market.
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