1 CL NPD Process Evaluation Yanyi Wang NYU Mastering New Product and Service Process Fall 2004

2 Table of Contents Company’s vision, mission and strategies review The current NPD process Evaluation of the process Recommendations The next steps Questions and comments

3 CL Company vision, mission statement and strategies review Vision Continue to be the world leader in promotional accessories; be perceived as the preferred supplier in our marketplace Mission statement Our sales force and designers offer the leading Beauty brands around the world their own creative and original designs the most innovative and cost effective solutions to meet all their development needs

4 CL Company vision, mission statement and strategies review (cont.) Strategies  Increasing the speed of NP to market  Mixing our capacity of developing new technology and competitive manufacturing cost offered by our Asian factories  Increasing industrial presence in Asia, especially China by acquiring manufacturing infrastructures

5 Discovery Gate1Gate2Gate3Gate4 Stage 1 Stage 2 Stage 3 Stage 4 IdeationScopingDevelopment Testing/ Validation Production CL current NPD process

6 Evaluation of the current NPD process What went wrong?  NP failed to meet the needs of clients  Higher cost than anticipated  Technical or production problems  Competitors are faster

7 Evaluation of the current NPD process (cont.) Source: Robert Cooper “Winning at new products” Main causes of NP failure “Lack of market information remains the number one cause of product failure!”

8 Evaluation of the current NPD process (cont.) Source: Robert Cooper “Winning at new products” What is missing in your current NPD process?  Predevelopment step “The greatest differences (between winner and loser) lie in the first few steps of the new product process – the upfront or predevelopment steps.” --Rober G. Cooper  Quality of execution “Doing projects right” and “Doing the right projects.“ --Rober G. Cooper

9 Evaluation of the current NPD process (cont.) What does it mean?  Limited idea generation sources (mainly from designer’s brain)  No set up process for ideation system  Lack of preliminary business and financial assessment  Lack of product benefits to customers  Lack of market investigation and study  Lack of cost investigation

10 Recommendations Companies that follow a multistage, disciplined new product process—a Stage-Gate process— fare much better. The benefits of using Stage-Gate process:  Faster new product introductions  Less recycling to redo steps  Higher success rate of launched products

11 Recommendations Stage-Gate process Stage 1 Gate2Gate3Gate4Gate5 Stage 2 Stage 3 Stage 4 Stage 5 ScopingBuild Business case Development Testing/ Validation Go/Kill Discovery Gate1 Post Launch Review Launch Strategy clarification

12 Recommendations Stage-Gate process description  Strategy clarification to define focus of efforts  assessing customers industry  estimate future trends  Conducting internal analysis (SWOT)

13 Recommendations Stage-Gate process description  Discovery stage (idea generation)  Voice of customer, lead user  Designer  Sales force  Marketing  Competitors  Trade publications  suppliers

14 Recommendations Stage-Gate process description  Gate 1 (idea screen) -- a gentle selection of ideas  in line with our strategic focus?  add value to our customers?  feasible to manufacturing?  fit for market trend?

15 Recommendations Stage-Gate process description  Stage 1 (scoping) “spend a little money, gather some information, so that the project can be re-evaluated at Gate 2 in the light of the better information.”  Preliminary market assessment (internet searches,internal reports, key customers, focus group, own people, consulting, advertisements)  Preliminary technical assessment (R&D, engineer, operation)  Preliminary business and finance assessment (find out the investment required, probable annual income, ROI)

16 Recommendations Stage-Gate process description  Gate 2 –repeat Gate 1 with more information gathered in Stage 1  Sales force  Customer reaction to the product  Legal  marketing  Technical

17 Recommendations Stage-Gate process description  Stage 2 (building business case)—critical  define the new product (do we meet the customer’s needs, wants and preferences; market reaserch)  competitive analysis (possible reactions)  manufacturing appraisal (manufacturablility, cost and investment required)  detailed business and financial analysis (justification, sensitivity analysis to look at possible downside risks)  Result: -the product definition (the key to success) -project justification -detailed project plan are developed

18 Recommendations Stage-Gate process description  Gate 3  financial analysis result is important criteria  Confirm the case  Go to the development stage—heavy spend!

19 Recommendations Stage-Gate process description  Stage 3 (development) –a prototype  Technical work  Market analysis and customer feedback work continually  Customer assessment and feedback  Developing detailed test plan, production plan

20 Recommendations Stage-Gate process description  Gate 4 (go to testing decision)  Review the product  Check consistency with the original definition set at Gate 3  Revise financial analysis with more accurate data  Approve test and validation plan for Stage 4  Review marketing plan

21 Recommendations Stage-Gate process description  Stage 4 (testing and validation)  pilot module  In house testing  Customers acceptance for external validation  Revise business and financial analysis

22 Recommendations Stage-Gate process description  Gate 5 (go to launch)  Focus on result and quality of execution of testing and validation stage  Financial return review

23 Recommendations Stage-Gate process description  Stage 5 (launch) --mass production

24 Recommendations Stage-Gate process description  Post Launch Review  review the lastest data on revenues, costs, expenditures, profits, and timing  Post audit of the project’s strength, weakness and lessons learned  How can do better next time

25 The next steps Understand how Stage-Gate process works Assign a project manager for implementation of the new process

26 Questions and comments