How to improve the pace of your new product development process
Launching new products is both exciting and stressful. It can also be costly, labor intensive, time consuming, and data complex. In other words, deeply painful. The assessment guide presented here can help companies quickly determine what they can do to improve the process.
William Crane is the CEO of IndustryStar, an on-demand supply chain services and software technology company. He can be reached at william.crane@industrystar.com.
The new product and service development (NPSD) process is a major endeavor for any firm. (For a quick review of the components and outcomes of the process, see the sidebar, “New Product and Service Development 101”.) Recently, in an effort to reduce new product lead times and costs while improving quality, the NPSD process has undergone extensive revision and rethinking to become more collaborative.
NEW PRODUCT AND SERVICE DEVELOPMENT 101
The new product and service development (NPSD) process embodies all the steps necessary to take a product and/or service from concept to full production. One can envision NPSD as consisting of several linked stages such as:
advanced research,
product/service concept,
specification development,
product development,
pilot,
operations, and
reincarnation/disposal
Sometimes referred to by such names as “simultaneous engineering” and “concurrent engineering,” the collaborative NPSD process typically involves multifunctional teams made up of both internal and external stakeholders. These teams work closely together and consider all stages of the product’s life cycle. For example, the development process will consider not just the initial design of the product but also issues relating to operations planning and execution, such as the ideal manufacturing processes and potential product cost. Furthermore, one function or group no longer manages each activity of the development process in isolation.
Research shows that such a collaborative NPSD process can provide a competitive advantage. My company IndustryStar Solutions LLC, which provides on-demand supply chain services and software that empower teams to bring new products to market faster, recently partnered with Dr. Sime Curkovic of the Haworth College of Business at Western Michigan University on a series of in-depth interviews about NPSD with 126 professionals across 25 industries. Participating companies included: Whirlpool Corp., Toyota Motor Corp., Stryker Corp., Deere and Company, Coca-Cola Co., General Dynamics Corp., and Parker-Hannifin Corp, among many others. Our research produced the following findings:
80% of companies surveyed said collaborative NPSD has helped optimize development cost, ongoing production cost, quality, performance, and customer satisfaction.
75% said that collaborative NPSD has resulted in a competitive advantage.
82% planned to increase collaborative NPSD in the future.
85% wanted to start collaboration earlier in the NPSD process.
However, the survey also revealed that companies face many obstacles in the way of conducting an effective NPSD process. For example:
Only 50% of the surveyed companies said they were currently satisfied with their NPSD results.
70% claimed they lacked a process to integrate suppliers into NPSD.
50% of respondents said their technical staffs were unwilling to share designs with suppliers. This finding contradicted most respondents’ belief that there was trust between their company and their suppliers.
In the interviews, the three most cited obstacles for NPSD were: 1) talent, 2) communication, and 3) alignment of stakeholders.1
To help companies address these three main challenges, we developed the PACE assessment tool. The PACE method is meant to help leaders determine the baseline performance of their company’s current NPSD process and what specific actions could help generate greater NPSD results. The assessments are not meant to provide definitive scores, rather they are intended to be viewed as a guide to best practices. The acronym “PACE” comes from the first four steps of what the five-step assessment covers: 1) people; 2) automation; 3) collaboration; 4) empowerment; and 5) realization. We highly encourage companies to do the assessments in this order.
Step 1: Assess your people
The single biggest key to the success of a new product launch is having amazing people. No process or software technology can add as much as people with clear roles, documented processes, and standardized training. If you want to enhance your new product launches, then it is critical that you first conduct a thorough assessment of the current state of your people, roles, processes, and training.
One thing that is particularly important to assess is how well your team understands the company’s new product focus. The natural impulse that many of us have is to jump right into coaching our teams, but we need to outline our business “game plan” first. Our teams need clarification on what business we are in and what products to focus on. This might seem simplistic, but verbalizing what the company’s focus is can sometimes be more difficult than it first appears. For example, is General Motors in the automotive market or the mobility market? Should the company be focusing on developing electric vehicles or mobility services?
As leaders, we need to communicate a clear vision for where we are headed before striving to align our people for the road ahead. Once our people are onboard with our vision, we need to ensure our team members are in roles that maximize their current skill sets and the value that they add to the company. Further, we need to document our processes, which is typically an area that we can all get better on. Additionally, it is necessary to provide forums for consistent training and enhancements to our processes.
It may seem appealing to assume you are fine in the people department, but you skip this step in the assessment at your own peril. Have your leadership teams and your extended new product and service development team complete the survey in Figure 1 to conduct an honest assessment of the current state of your people. Remember, every company can get better, no one is perfect.
You can also accelerate the speed of product launches by automating repetitive tasks. When it comes to the supply chain part of new product development—sourcing the materials and services needed—many companies have invested heavily in software productivity tools, such as e-sourcing and enterprise resource planning (ERP), to successfully automate many of their repetitive tasks. Still, many find themselves relying upon more manual tools such as Microsoft Excel early in the product ideation stage to organize a product’s commercial bill of material (BOM) for potential suppliers, directional quotes, and estimated lead times. Yes, Excel is a fine product, but it’s built for flexible one-off analysis, not for repeatedly developing and launching new products with large BOMs. It’s simply not the right tool for the job.
Not to mention that an industry best practice for decades has been to essentially expand the commercial BOM and adopt “a plan for every part” (PFEP). A PFEP involves tracking information such as component costs, lead times, and supplier data in one large spreadsheet. This “spreadsheet of all spreadsheets” often includes more than 35 columns of data. Thus, for a 100-line item BOM, one’s PFEP can equate to 3,500 data inputs that need to be manually inputted.Although PFEP is a wonderful tool, it’s often abandoned due to the immense individual maintenance effort required.
Innovative companies, however, are deploying automated PFEP software with application programing interfaces (APIs) to bridge the technology divide between product lifecycle management (PLM) systems and ERP systems. This step up in technology helps to accelerate new product launch speed.
The survey in Figure 2 will help you quickly determine your current level of product development and launch automation. You will also need to review new product key performance indicators (KPIs), data, and information-sharing processes.
The extra work and time spent on the NPSD process is often the result of inefficient collaboration, such as poor communication, data rework, and having “duplicate playbooks.” The good news is that large step changes in productivity—and as a result in speed—can be realized in a surprisingly short amount of time simply by sharing the least amount of right information at the right time. For example, as you move closer to producing a prototype of your product, you will need more information in the product’s PFEP. You should partner with your engineering colleagues to know what specific data they need at each new product development milestone. This ensures that you are not wasting time adding extra data too early in the process. It also ensures that the process is not held up by waiting for a specific piece of information. Improving how you share new information can improve collaboration and increase the speed of the development process.
The questions in Figure 3 will help you quickly determine the level of productive collaboration among your team and the extended enterprise.
When we peel back the onion, we often find companies are doing far too many things themselves, which slows down the new product launch process. Firms should only do the specific tasks that they have a competitive advantage and/or a strategic reason to do. Too often firms do a particular task just because it is what they have always done or because it is what their competitors do. The net result is that companies spend far more money and time completing a task internally when they could easily outsource it to a strategic partner to execute at a lower cost. Outsourcing not only frees up valuable capital, it also frees up valuable time.
We should empower our partners to do the tasks that they excel at, while focusing internally on those tasks where we can provide competitive value. As an example, are we managing prototype-part buying when a supplier could deliver a completed prototype product at lower cost?
Empowerment is more than simply deciding what your company should do and not do. Often, leaders need to delegate more tasks to team members, giving them the chance to develop new skills and responsibilities. For example, is the vice president of procurement approving all commercial request for quote (RFQ) packages when a director could approve them? Is a manager assembling all the logistics routes when a lead logistics coordinator could determine them? If you want to accelerate your NPSD, you need to empower your team to do more.
The questions in Figure 4 will help you quickly determine the level of empowerment of your team, which is critical for speed.
The companies that are the most successful at new product and service development, such as Apple and Tesla, are able to tie the process to realizing the company’s mission. Those leaders who choose to inspire their teams, who craft a noble mission and the core values to support it, and who believe in the mission deep in their souls are near impossible to keep “pace” with. They will realize their mission faster than those who lack that passion. You can assess how well you are performing in this area by taking the survey outlined in Figure 5.
There is an argument for making this assessment process follow (or be combined with) the first assessment area (people), but that’s largely a matter of preference. However, if you find yourself with a low people score and/or in a turnaround situation, consider following improving your people with improving your “vision realization” to accelerate NPSD results.
Interpreting your scores
The score for each step should be viewed as a baseline diagnostic from which to continuously improve upon. Afterall, excellence is a continuous improvement pursuit; there is no end destination for the way in which you develop and launch all new products. Specific solutions to each question in the PACE Method will also vary by industry, company, and product. Tailoring the remedy is the art of maximizing the PACE Method. Your scored self-assessment should act as a starting point, provoking follow-on questions that enable deeper exploration into areas that could improve your new product development process.
We advise supply chain leaders, their teams, and all functions involved in the NPSD process to take the full assessment. The average scores for each step should help you to prioritize what step to focus on first. If a score of 9 or higher is attained for a step (for example, people), then you should focus on the next step in the process that is below 9. Have your whole team repeat the assessment process monthly until scores average 9 or higher for each step. To realize the fastest results, we would advise prioritizing improving one step in the PACE Method at a time. Once scores average 9 or higher for each step, shift your assessment efforts to quarterly.
Pick up the pace
Our experience and research have demonstrated that companies that repeatedly develop and launch innovative products generate outsized profits. Companies that want to be innovation leaders, therefore, need to accelerate their collaborative new product and service development process. The PACE Method can serve as a helpful guide to determining your company’s NPSD baseline performance from which you can then continuously improve upon.
There are no single actions that guarantee new product introduction supply chain success. Insights and tactics from trailblazing leaders simply highlight select actions that organizations can take to accelerate new product launches.
The PACE Method represents a significant opportunity to discover impactful practices that can produce gains in new product development and launch productivity. The key, as with anything new, is to get started.
Notes:
1. It is important to recognize the limitations of our research. The limited sample size and industries involved constrains the generalizability of the findings. Additionally, the qualitative approach does not support causality and the ability to empirically test propositions and hypotheses surrounding NPSD and reducing cost, timing, and risk.
Supply Chain Xchange Executive Editor Susan Lacefield moderates a panel discussion with Supply Chain Xchange's Outstanding Women in Supply Chain Award Winners (from left to right) Annette Danek-Akey, Sherry Harriman, Leslie O'Regan, and Ammie McAsey.
Supply Chain Xchange recognized four women who have made significant contributions to the supply chain management profession today with its second annual Outstanding Women in Supply Chain Award. The award winners include Annette Danek-Akey, Chief Supply Chain Officer at Barnes & Noble; Sherry Harriman, Senior Vice President of Logistics and Supply Chain for Academy Sports + Outdoors; Leslie O’Regan, Director of Product Management for DC Systems & 3PLs at American Eagle Outfitters; and Ammie McAsey, Senior Vice President of Customer Distribution Experience for McKesson’s U.S. Pharmaceutical division.
Throughout their careers, these four supply chain executive have demonstrated strategic thinking, innovative problem solving, and effective leadership as well as a commitment to giving back to the profession.
The awards were presented at the Council of Supply Chain Management Professionals (CSCMP) annual EDGE Conference in Nashville, Tenn. In addition to the awards presentation, the leaders discussed their leadership philosophies and career path during a panel discussion at the EDGE conference.
The surge of “nearshoring” supply chains from China to Mexico offers obvious benefits in cost, geography, and shipping time, as long as U.S. companies are realistic about smoothing out the challenges of the burgeoning trend, according to a panel today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Those challenges span a list including: developing infrastructure, weak security, manual processes, and shifting regulations, speakers said in a session titled “Nearshoring: Transforming Surface Transportation in the U.S.”
For example, a recent Mexican government rail expansion added lines to tourist destinations in Cancun instead of freight capacity in the Southwest, said panelist Edward Habe, Vice President of Mexico Sales, for Averitt. Truckload cargo inspections may rely on a single person looking at paper filings on the border, instead of a 24/7 online system, said Bob McCloskey, Director for Logistics and Distribution at Clarios, LLC. And business partners inside Mexico often have undisclosed tier-two, tier-three, and tier-four relationships that are difficult to track from the U.S., said Beth Kussatz, Manager of Northern American Network Design & Implementation, Deere & Co.
Still, dedicated companies can work with Mexican authorities, regulators, and providers to overcome those bottlenecks with clever solutions, the panelists agreed. “Don’t be afraid,” Habe said. “It just makes sense in today’s world, the local regionalization of manufacturing. It’s in our interest that this works.”
A quick reaction in the first 24 hours is critical for keeping your business running after a cyberattack, according to Estes Express Lines, the less than truckload (LTL) carrier whose computer systems were struck by hackers in October, 2023.
Immediately after discovering the breach, the company cut off their internet, called in a third-party information technology (IT) support team, and then used their only remaining tools—employees’ personal email and phone contacts—to start reaching out to their shipper clients. The message on Day One: even though the company was reduced to running the business with paper and pencil instead of computers, they were still picking up loads on time with trucks.
“Customers never want to hear bad news, but they really don’t want to hear bad news from someone other than you,” the company’s president and COO, Webb Estes, said in a session today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
After five or six painful days, Estes transitioned from paper back to computers. But they continued sending clients daily video updates from their president, and putting their chief information officer on conference calls to answer specific questions.
Although lawyers had advised them not to be so open, the strategy worked. It took 19 days to get all computer systems running again, but at the end of the first month they had returned to 85% of their original client list, and now have 99% back, Estes said in the session called “Hackers are Always Probing: Cybersecurity Recovery and Prevention Lessons Learned.”
As the final hours tick away before a potential longshoreman’s strike begins at midnight on the U.S. East and Gulf coasts, experts say the ripples of that move could roll across the entire U.S. supply chains for weeks.
While some of the nation’s largest retailers were able to pull their imports forward in recent weeks to soften the blow, “the average supply chain is ill-prepared for this,” Tom Nightingale, the former CEO of AFS Logistics, said in a panel discussion today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Despite that grim prognosis, a strike seems virtually unavoidable, CSCMP President & CEO Mark Baxa said from the stage. At latest report, the White House had declined to force the feuding parties back into arbitration through its executive power, and a voluntary last-minute session had failed to unite the International Longshoremen’s Association (ILA)’s 45,000 union members with the United States Maritime Alliance that manages the 36 ports covered under their expiring contract.
The ultimate impact of a resulting strike will depend largely on how long it lasts, the panelists said. With a massive flow of 140,000 twenty foot equivalent units (TEUs) of shipping containers moving through the two coasts each week, each day of a strike will require 7 to 10 days of recovery for most types of goods, Nightingale said.
Shippers are desperately seeking coping mechanisms, but at this point the damage will add up fast, whether a strike lasts for an optimistic “option A” of just 48 to 72 hours, a pessimistic “Option B” of 7 to 10 days, or even longer, agreed Jon Monroe, president of Jon Monroe Consulting.
The first full day of CSCMP’s EDGE 2024 conference ended with the telling of a great American story.
Author and entrepreneur Fawn Weaver explained how she stumbled across the little-known story of Nathan Green and, in deciding to tell that story, launched the fastest-growing and most award-winning whiskey brand of the past five years—and how she also became the first African American woman to lead a major spirits company.
Weaver is CEO of Uncle Nearest Premium Whiskey, a company she founded in 2016 and that is part of her larger private investment business, Grant Sidney, Inc. Weaver told the story of "Nearest" Green—as Nathan Green was known in his hometown of Lynchburg, Tenn.—to Agile Business Media & Events Chairman Mitch MacDonald, in a keynote interview Monday afternoon.
As it turns out, Green—who was born into slavery and freed after the Civil War—was the first master distiller for the Jack Daniel’s Whiskey brand. His story was well-known among the local descendants of both Daniel and Green, but a mystery in the larger world of bourbon and a missing piece of American history and culture. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
“I believed it was a story of love, honor, and respect,” she told MacDonald during the interview. “I believed it was a great American story.”
Weaver told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest, and has channeled it into an even larger story with the founding of the brand. Today, Uncle Nearest Premium Whiskey is made at a 323-acre distillery in Shelbyville, Tenn.—the first distillery in U.S. history to commemorate an African American and the only major distillery in the world owned and operated by a Black person.
Weaver and MacDonald's wide-ranging discussion covered the barriers Weaver encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she said she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, emphasizing a recent project to fast-track a new Uncle Nearest product in which collaborating with the company’s supply chain partners was vital.
Uncle Nearest Premium Whiskey has earned more than 600 awards, including “World’s Best” by Whisky Magazine two years in a row, the “Double Gold” by San Francisco World Spirits Competition, and Wine Enthusiast’s “Spirit Brand of the Year.”
CSCMP’s EDGE 2024 runs through Wednesday, October 2, at the Gaylord Opryland Hotel & Convention Center in Nashville.