New product development

The new products are developed from time to time by companies and individuals to retain an edge in
the marketplace, to create a new identity and to escape from what could be called ordinariness or
commodity, (everyone makes it, so whats new). Even in commodity markets there is a perpetual
attempt being made to make it better (cleaner, more useful, and more beneficial), an attempt at
renewal or immortality. So let us consider new product development as a driving instinct in mankind
and examine the process in detail. (Please these are not notes but a wakeup call and a connect).

New product development process

The basic practical steps that a product development process consists of;
a) Idea generation
b) Feasibility study (can we do it)
c) Design of form or prototype.
d) Form design leading to functional design, which further leads to production design, which forms
an interactive circle, where problems and opportunities at each step are highlighted and ideas
thrown around to make it better. Ultimate aim being finalization of production design.
e) Pilot lot run and final tests (how does the pilot lot run in production, the operations
management parameters being set).
f) Product launch in the market.
Let us examine the new product development process in some detail.
1. Idea Generation: The design process begins with understanding the customer and actively
finding out what the customer wants. (Am sure all of you have heard of Steve Jobs, who had the
totally contrary idea, customer does not know, I do), but for the moment let us drop that
contrary idea.
Sources of new ideas: Everyone, but more particularly, since it will be difficult to talk to
everyone, we generally get new product development ideas from companys R&D department,
customer complaints or suggestions, marketing research, suppliers, field salespeople,
competitor product, factory production people, competition products. In the ideating stage
marketing and R&D often get together and draw up what are called:
Perceptual maps, which are peoples perception about a companys products, and try to
fill in a perceived demand and develop ideas and products.
Benchmarking, refers to the best in class products or process, measuring the
performance of your products against the best products in that category, and ideating on how
best to make improvements to fill the quality gap.

Module 1.1, rev 0, date 27th April 2014

Reverse Engineering, refers to carefully dismantling and inspecting a competitors

products to look for design features that may be incorporated in our product design.

Feasibility Study
Consists of market analysis, economic analysis, technology and strategic analysis and
preliminary design, we need to examine each in some detail so as to understand what these
terms mean.
Market analysis, Develop several product concepts and test each of them for finding out what is
best, get a demand analysis done to find out demand potential. Economic analysis is done to
calculate product development and production cost and compares it with estimated sales
volume, profit potential is estimated, risks are calculated and companys attitude towards risk is
formulated. Technological analysis answers whether new technology to produce the product is
required and the costs of such technology, strategic analysis answers questions like- is the risk
and capital investment excessive and do we have required labor, labor skills and production
capacity. Finally design engineers take general performance specifications and translate them
into technical specifications. The process involves creating a preliminary design, building a
prototype, testing the prototype, revising the prototype, retesting and so on, until a final viable
design is determined.

Form Design
Form design refers to the physical appearance and characteristics- its shape, color, style and
size. Aesthetics such as image, market appeal and personal identification are part of form
design, which very often take precedence over consideration of functional design.

Functional Design
Functional design, as the name indicates is concerned with how the product performs, or in
other words it seeks to meet the performance specifications of fitness of use by the customer.
The performance characteristics considered during this phase of design are reliability and
maintainability.
Reliability is the probability that a given part or product will perform its intended function for a
specified period of time under normal conditions, obviously the higher the probability the higher
the reliability.
Reliability can be improved by simplifying product design, increasing the reliability of individual
components, and adding redundant components, generally products that are easier to
assemble, are well maintained, and have users who are well versed in its use will have more
reliability.
Module 1.1, rev 0, date 27th April 2014

Maintainability (also called serviceability) refers to the ease and/or the cost with which a
product or service is maintained or repaired. Products can be made easier to maintain by
assembling them in modules.

Production design
Production design is concerned with how the product will be made. Overdesign or designing
products with too many features can result in poor quality, late design changes can result in en
masse product change. Thats why production design is considered to be a part of new product
development.
Objectives of a good production design are design simplification- where the number of parts and
subassemblies are kept to a minimum, standardization- so that the type of parts are minimum
and allows more control on inventory, and modular design for easy assembly.

All the three aspects of new product development i.e. form design; functional design and
production design have to keep interacting with one another, as all three have somewhat
differing objectives, which have to be incorporated in the final product design.

Prototyping and final testing

Prototyping and final testing of a final product or service is meant to see if the prototype is
conforming to preliminary design performance specifications and tests to see if the products will
survive the rigors of the market. We also check whether the costs per unit assumed in
preliminary design are as per the costs occurring in prototype, break even costs determination
are all considered. We may also see that preliminary design specifications are not good enough
anymore and we may need to go back to drawing board once more, owing to changes in
technology. Field testing for reliability and other aspects are done at this stage.

Product Launch
After prototypes are ready and tested, we are ready to launch the product into the market, all
our initial estimates of revenues stream, projected development costs vs actual, projected
production costs vs actual, the new break even points, and ultimately how the product will do in
the market. Will it meet the expectations set forth, will it be a dud or will it exceed expectations
will all now be tested.

Module 1.1, rev 0, date 27th April 2014

Module 1.1, rev 0, date 27th April 2014