Whether this is your first product launch or you have been down this road before, you will need to avoid the 7 Pitfalls discussed in this brief.

Transcription

1 Brian R. Bernard SPEC Engineering 1. Unclear or Wrong Market Analysis and Product Objectives. 2. Choosing the Wrong Project Manager and Support Team. 3. Not Properly Funded and/or Unrealistic Schedule. 4. Cutting Corners or Compromising Requirements. 5. Not Effectively Communicating within your Organization 6. Not Understanding External Issues or Limitations. 7. Not Securing the Right Resources to Support the Project. If given a problem and only one hour to solve it, I would spend 55 minutes to define it and 5 minutes to solve it Congratulations! You have been trusted with the future of your organization. The opportunity to lead or be an integral part in developing, marketing, formulating, designing, or implementing a process for a new product launch for your company: you absolutely have the future success of your company or division in your hands. Whether this is your first product launch or you have been down this road before, you will need to avoid the 7 Pitfalls discussed in this brief. Successful New Product Development is the commercialization of a successful and profitable product that is accepted as superior by the target consumer within a reasonable time frame - Griffin & Hauser, 1996 Before you do anything else you must make sure you define the why of your new product concept. The Three Disciplines - Albert Einstein Market Analysis: The need to define the product and the placement is paramount. Increased sales can only be reached if the product satisfied a need of your targeted consumer. If there is no need in the marketplace, there is no need to develop a new product and the product will fail. 2. Dynamic Resources: The ability to execute and lead all your people within the process and supply chain is imperative. The project lead must be part cheerleader, have vision and maintain an uncompromising commitment to the objectives of the new product. 3. Brick and Mortar: Although the factory, lab, plan, and equipment are easy to see; they have many hidden dangers. Not managing existing and new required capabilities and technology to meet the current and future needs of the product will result in costly setbacks and possible insurmountable challenges that can fail your launch.

2 2 #1 Unclear or Wrong Market Analysis and Objectives: Lack of direction or moving forward with a new product without proper justification or for the wrong reasons is the number one pitfall, for good reason. Even if you execute everything flawlessly, the project will fail if there is no need for the product. Many companies and their top management and executives feel the need to keep ahead of their competition by introducing new products. This is very dangerous; you can devalue an existing strong brand by dilution or cannibalization. Which can be more costly than the extensive cost of capital and company resources that is dedicated to a new product initiative. Although answering the questions of what attributes are important for the product and who will value them seems simple and fundamental, it is an in-depth process and must be executed by a focused team of people with at least one outside perspective. The flowchart below can serve as a roadmap for Product Development Process: The Seven Stages of Product Development: 1. Opportunity Identification 2. Concept Screening 3. Concept testing and evaluation 4. Market Strategy Development 5. Product Development (pilot) 6. Market Testing 7. Product Introduction It is of critical importance before embarking on the investment of product development, executive management should map out all metrics and hurdles for each step of the project with appropriate time frames to serve as mechanism to cut off a failing endeavor. #2 Unfit Project Manager: It goes without saying that leadership drives success at every company and organization around the world. However, choosing a wrong project lead is the biggest pitfall that companies fall victim. The Institute of Project Management surveyed 764 company leaders on a review and evaluation of their most recent important company project; and 695 of them attributed the lack of success or area for criticism fell on the project manager. 90% of the time, project and product development would be more successful if companies had done a better job selecting the correct lead and supporting team; therefore this should not be taken lightly. A common trap that management falls into is the mentality that the entire company will drive the project; and therefore the lead and its committed team members are not as important. Many times the originator of the base concept will be granted the lead. This makes sense only in the fact that he or she would likely have a deep passion for the success of the product. Reality is this actually works against the odds of success. Typically an individual from R&D or Production does not have the interpersonal skills and training to lead the project though all the steps to launch. Best practice is to choose a group of individuals from within the company and some support from close suppliers or partners. Using StrengthsFinder or Myers Briggs to evaluate tendencies of each individual can significantly assist in selecting your team. From that group you should select a visionary with strong organizational and analytical skills.

3 3 Each successful product development team should have at lease one member with the following attributes: 1. Visionary Corporate Lead 2. Achiever Project Manger 3. Ideation Sales and Marketing 4. Facilitator Team Members, Admin 5. Analyzer- Clerk, Buyer, and CFO #3 Inadequate Funding and scheduling: The pitfall of getting so excited about the prospects of your new product leads to a mental jump to launch, which involves over simplification. Not understanding the natural balance of scope, budget and schedule leads to the next biggest contributor of lack of success on a project and product launch. The recipe for disaster that takes place every day in boardrooms and executive offices around the world; 1. Board approves a product/project based on a very preliminary budget and timeline. 2. They see the value in the projections and want them to hit the bottom line immediately. 3. The directive is sent to the team to accomplish the approved initiative in less time and with a reduced budget. This corporate culture, which has been carved in stone for generations, sets the stage for the third and fourth pitfalls. The good news is that the coming miss in budget and the delay in launch and the added complications in product and plant complexity can significantly affect the short term return and financial success of the plan; but in most cases a strong product will still not be a complete failure. Some questions that should be asked before going to the board for approval: 1. Did we back into the projected budget based on the identified product or project justification? 2. Is our focus too narrow? 3. How does this effect our existing operations? 4. What is the real cost of launch - including trials, sales samples, training, shut down hours, spare parts and back up inventory? 5. Are there any permit, label, regulation issues that could delay or add cost? #4 Cutting Corners: The pitfall of cutting corners is driven by the fact that the budget and schedule was not adequately planned. The result could be disastrous. It could lead to a complete collapse if this is not recognized and addressed by the project lead and communicated with all stakeholders involved in the project and product development. Each delay or scope creep will compound until the targeted budget and target launch is not possible under the current plan. Don t Jump the Shark! By skipping or not following the original objectives of the product. This could compromise quality or operations that may change the entire basis of the product and result in a market miss that could cost your company significantly. Some Examples of corner cutting that you must avoid: 1. Substituting an ingredient for a cheaper or more available source. Pitfall: loss of quality and product performance. 2. Choosing a lower quality processing or packaging equipment that will not perform or provide required reliability. 3. Compromising standards or material of construction. This can lead to non-compliance or contamination in products. 4. Not addressing safety or regulations that may derail the entire operation or inspection. 5. Not perusing the best technology because it is more costly upfront. It is better to look at total cost of ownership and revise and resubmit to management. 6. Not perusing alternatives that reduce risk in the short term and can serve as a fall back in capacity during product launch. 7. Not doing a constructability review with a trusted and qualified outside engineering and processing consultant. 8. Not using a resource tracking software that will give you a real-time status of where you are in schedule and budget throughout the project. This is critical to avoid surprises too far into the process. It is a daunting task to face management or the company board with a budget or schedule revision. However it is much better in the long run and could head off larger losses.

4 4 #5 Lack of Communications with Stakeholders: The pitfall of not communicating with your team, your customers, and management could lead to problems that could derail your launch and the success of your product. The most common problem is not meeting critical launch dates that cause customer commitments to be strained or lost business. Additionally, marketing and supply chain initiatives are perishable and can be lost if the product is not ready. Other issues arise when additional funding is needed and cannot be secured simply with a manager s signature. A successful tool that should be used on every project is the Project Questionnaire. After your team has been assembled the manager should set protocol for communications so it is clear and unbiased. All efforts should be based on what is best for the project and the Product Development process. The following questionnaire is a tool to serve as basis for everyone to be on the same page. Upon getting feedback from the entire team and other important stakeholders, the project manager should compile all the inputs and distill them into a guiding document that restates the corporate product and project objectives. Then that individual should review all the feedback from the questionnaire with the team. This should serve as a trigger; if ever the process gets off track, it is the responsibility of every member to bring it to the attention of the project lead. Going forward throughout the project, the following guidelines should be practiced: 1. Scheduled periodic stakeholder review meetings every 2-3 weeks or monthly depending on the overall timeline. 2. Meetings should have a prepared agenda with a responsible person reporting on status of each area of product development. 3. Meeting should be kept to 1 hour and clarifying questions will be collected and addressed at end of each presentation. 4. Interim reposts should be submitted in between meetings. All correspondence should funnel through the project clerk or admin. 5. Avoid overload. Do not allow conversations or debates to transpire in and be careful not to send FYI info to all members. 6. All modifications to plan must be signed off by project manger, corporate designee and team member in area of responsibility. 7. Each presentation in meetings should contain communication on the process: technical and specific, and include any financial updates and ramifications. #6 Misunderstanding Laws and Limitations: The pitfall of not doing diligence on which regulations and external conditions affect your product or project can add unexpected delays or costs, or potentially put the entire launch in jeopardy. Setting up testing and design parameters that are critical metrics for the product throughout development is critically important. These defined metrics should be evaluated throughout the process and coincide with the external demands, which may include: health claims, environmental impact, label requirements, local impact.

5 5 In considering the future evolution of the food product development process, there is a need to consider some of the important factors that are emerging: the growing recognition of the importance of the total food system, consumer concerns, the total food quality, the economic needs of food companies, and the multinational nature of food companies. Using outside resources with up-to-date information on regulations, local specific requirements, (noise, odor etc.), Kosher Certification, GFSI, or your customers 3 rd party specific requirements. In all cases it will be imperative to build a compilation of all meaningful documentations and SOPs that are involved with the new product and the supporting process. All state of the art systems today will have an automated control system of monitoring and recording process control, batch, lot tracing, and supply information to be archived and linked to label and date code information for potential recall or review. Best practice is to identify 3-5 qualified suppliers or support consultants and provide a one-page scope defining the valued deliverables, required results and defined timeframe. Don t chase a supplier. If they do not respond in the appropriate time, don t expect that to change. To achieve a successful product development and project launch, every organization must recognize the common pitfalls and leverage best practices to avoid them. Each organization needs to integrate their existing systems and business processes with the product development plan. For additional information, case studies or handy forms to use during your product development process. Please contact Brian Bernard at brianb@spec.engineering or visit the website: #7 Not selecting the right partners to execute your implementation: The pitfall of not doing enough front end planning can result in a costly miss and waste of time and capital. Some areas to solicit support in the early stages of the process in various areas of discipline: 1. Marketing and Creativity Support 2. Research Consultant 3. Outside Formulation Support 4. Third Party Lab Testing Services 5. Process Engineering Evaluation 6. Financial Analysis 7. Regulation Expert 8. Legal and Risk Analysis Managing the necessary outside resources is a large task and must be delegated to the appropriate individuals best suited to interact with each area of expertise. In all cased you must define up front deliverables and goals of the concluded information and direction. One common pitfall in the product and project development process is going to the vendors we know. This is comfortable because there is typically history and a comfort called the devil we know.