Realising high performance product launch - On the edge of excellence

On the edge of excellence Realising high performance product launch PA is transforming performance for New Product Development and Introduction Investment in New Product Development and To drive high performance within such a system and Introduction (NPDI) is still strong despite the global deliver real value for money, businesses must learn recession. However, the imperative for increased to structure the system. Only this allows product speed whilst still hitting tough budget and quality development programmes to flow and enables their targets is even higher on the boardroom agenda. teams to drive the system to its highest effectiveness. European research shows that an average 4.2% PA has developed a framework called New Product of sales is spent on Research & Development Excellence (NPE) – designed to allow the principles (R&D), of which 15% is spent on research and of Lean thinking to succeed within a complex systems innovation, whilst the remaining 85% is focused on environment and thus to replicate the successes in the New Product Development and Introduction (NPDI). operational environments of manufacturing and back However, the amount that a company invests in office processes. NPDI bears no correlation to its ability to deliver new products to market successfully. PA has used this NPE framework as the basis of a maturity model for surveying companies across Furthermore, despite companies looking for industrial sectors, markets and geographies. opportunities such as open innovation to reduce the investment required for filling the top of the product The key findings are: development pipeline there has been little success • Overall, businesses see themselves as highly in improving the effectiveness and efficiency of NPDI. competent in NPDI, but with poor achievement PA, through its work with clients and its own technology against the critical goals centre, realised that the drivers of NPDI performance are poorly understood. NPDI is in fact a business • Creation of New Product Flow and the management system, not a process – a system which by its very of people are essential enablers of success – and the nature is chaotic and iterative. most neglected. 2 Businesses see themselves as highly competent in NPDI, but with poor achievement against the critical goals The survey demonstrates that companies generally see Those areas that demonstrate greatest maturity tend to themselves as highly competent – but not excellent. be more tangible in nature: Despite apparently high levels of competence in the • Prototyping: rapid assembly with performance and capabilities required of a well performing NPDI system, customer testing the average proportion of new product launches on-time and to budget is around 70%. This will undermine the • Portfolio Management: balancing and managing the lifetime profits of the products launched and is, based on development pipeline experience, a top-end estimate. In reality, PA believes • Product Strategy: using platforms and modules the proportion of successful launches is far lower. • Governance: low bureaucracy and simple decision making processes • Business process: standard across all projects • Workflow and dataflow: automation and control of repetitive tasks. Figure 1: Levels of competencies for Lean NPDI Use of Involvement ‘Lean tools’ of R&D Creativity Clear actionable KPIs Requirements management Innocence Performance appraisal Prototyping Understanding Knowledge management Customer value Excellence Average profile Product optimisation Portfolio management Benchmarking Planning Workflow and dataflow Risk management Working environment CAE Technologies Capability development Product strategy Resource assignment Governance DFMA Managing Business the value process stream 3 Creation of New Product Flow and the management of people are essential enablers of success – and the most neglected The areas where companies display lowest levels of A key issue is a company’s ability to manage their maturity are the more intangible elements and more resources; frequently the core group of staff with unique closely related to people: skills and experience is not available to support the key design and problem resolution demands across • Resource assignment: managing conflicts the portfolio of development projects. Compounding across projects this issue is the fact that companies are not strong in • Managing the value stream: integration of partners expanding their resource pool through developing • Capability development: developing team members ‘T’ shaped staff; staff who, whilst expert in a particular to manage more than one role. area or field, have skills that can be applied across a broader spectrum of roles. Two of these, Resource assignment and Capability development relate specifically to the Lean principle Rather than delay progress, in such resource of creating flow – strength in these areas facilitates constrained situations, companies usually look for the flow of product, whether software or hardware, external support – yet this too is far from effective, and information throughout the development process. with the survey results demonstrating that suppliers are managed inadequately. The survey shows that if a company is weak in these areas there will be a corresponding decline in new product launch performance.