Dave Vedder October 2012 Thank you to all Sponsors!

Getting Started Did you ever wonder………….. What would have happened if?? One Short Story – Luggage. Have to wait for the ending!

Agenda New Product Development Overview Innovation Types Business Types Guidelines Examples Floor scrubber Project Outboard Project Questions

New Product Development – Cross functional

Expectations Understanding New Product Development (NPD) does not ensure success Understanding NPD Improves chances for success, batting average Reduces wasted time, focused on things that matter Inspires creative thinking in alternate ways to commercialize Covering top level view of NPD, not diving deep into any single functional area.

New Product Development

R&D

Service and Support

New Product Development

Innovation Types

Business Type #1 Build to Stock High volume production, builds to anticipated or forecasted needs, emphasis on part cost, tooling, manufacturability. All options and variations pre-engineered. Business sets schedule and proceeds. Examples; Phones, vacuum cleaners, tape dispensers

Business Type #2 Build to Order Low volume production, builds to fulfill customer specific orders, emphasis on manufacturing cycle time/order fulfillment time, low inventory, flexible manufacturing lines. All options and variations pre-engineered. Business sets schedule after customer orders. Examples; Automobile to order, riding floor scrubbing machine, airplane

Business Type #3 Engineer to Order Very Low volume production, builds custom equipment, typically 75% reuse of parts with 25% all new. Emphasis on simple non-elegant designs, minimal tooling, reliability and durability, low risk machine designs 25% of product engineered after the order is taken. Examples; Paper making machine, fire truck

Guidelines Customize New Product Development Template to fit the “Situation” Many Paths Possible, No Silver Bullet You will hit Roadblocks; persistent, passion, flexible Risky - Simultaneous R&D and Product Development Customer Focused Value of a New Idea – Quick Test Partnerships Luck

Customize to Fit the “Situation” Innovation rarely uses the entire Template The Template is a reference, used to Understand and Manage Risks See the Big Picture (idea to commercialization) Increase your batting average (idea to commercialization) Focus on areas that make a difference Hit roadblock, rethink, adjust, attack

The Customer New Product Development is Customer Focused Give the Customer what they want, nothing more and nothing less. An intimate and profound knowledge of customer is key Push vs. Pull Customers/Needs Pull New Ideas thru the Pipeline New ideas not based on known customer needs are Pushed thru the Pipeline looking for customers Pull has more Success then Push

Test – Value of a New Idea

Partnerships You cannot be the expert in everything, know your Strengths and Weaknesses Partner to your Weaknesses Partner to your Customized Situation Partner with Business Type

Luck Right place, right time, right person

Example – Floor Scrubber Carpet Cleaning Helpful Hint! Soap or water???

Customer National Store Chain Reduce Floor cleaning and maintenance costs Simplify operator interface, high employee turnover

Foam Cleaning – R&D Tested various methods for producing foam including the chemicals Very crude testing methods, emphasis on testing concept Verified it works! Verified time and cost savings! Applied for Patent

Foam Cleaning – New Product Development Planning Set performance targets Set cost targets Scrubber cost Tooling and Manufacturing readiness cost Engineering cost Set customer interface targets Set schedule targets Set profitability targets, sales volume Established NPD team, including marketing, sales, engineering, manufacturing, finance, …….. Empowered to develop product that meets the targets

Foam Cleaning – New Product Development Design Concept Team develops detailed design concept that meets the targets Business reviews and approves Team empowered to get ready for production, i.e. spend money Production Production tests all processes and first products off the line Business reviews and approves

Foam Cleaning - New Product Development Manufacturing, sales

Foam Cleaning – New Product Development Service, Warranty Service Documentation distributed Service parts to distribution center Operator Training available Warranty support available Customer Service available

Industry Leading Floor Scrubber

Win - Win Happy Customers! Happy Business!

Example – Outboard Motor

Product Planning

Bust! Single Product, compromises made for each market Single Product, average for two markets

Luggage

Summary College Degree in New Product Development College Degree in Business You now know enough to be “Officially Dangerous”! + 3 Business Types

Questions

Partnerships Examples Ashland Area Development Corporation Wisconsin Innovation Network – Lake Superior Chapter Bayfield County Economic Development Corporation Schools, Universities Local Banks Local Businesses Experts Angel Networks Many More ………….

Example – New Idea 1. Patent the idea, license idea to a business 2. Fund own R&D, proof of good idea, patent the idea, license idea to a business 3. Fund own R&D, fund own business and all startup costs, own 100% 4. Skip R&D, fund own business and all startup costs, own 100% 5. Develop Business partnership, do everything above 6. Skip the patent, save expense, do everything above 7. Build a prototype to test technical feasibility, or market acceptance, or production version