• New Product Development – The Fuzzy Front End

In our highly competitive markets, new products are thought by many to be the key to business growth and profitability. The problem developing successful new products is not a shortage of ideas, but rather the expense in producing and marketing new products without any guarantee of success. Sadly, this is a fact that is little known to individual inventors and is a tremendous hurdle for a manufacturer. Consequently much time and effort has been devoted to developing a systematic approach to new product development.

Individual inventors are free to go wherever their imagination and their pocket book will take them. Existing companies, however, have learned to restrict new product development to product ideas that are in line with the strategic direction of the company and the needs of the marketplace they currently serve or plan to serve in the future. In new product development there are steps that are common to most all-new product development.

Step 1. Gather new product ideas. Ideas can come from individual inventors looking to sell their ideas or gather a royalty on the sale of the product. Many companies encourage individual inventors to submit ideas on their websites. Ideas can also come from within the organization. Sometimes ideas come from a formal research effort or sometimes from people on the factory floor. The more product ideas you have, the more options you have and without good options to choose from, it is impossible to make a good decision.

Step 2. All new ideas need to be screened to insure that the idea supports the strategic direction of the company. Even though an idea looks interesting, if it doesn’t support the strategic direction of the company, it must be discarded.

Step 3. Make a business assessment of where best to spend time, money and effort in product development. Wendell Leimbach of MLE Consulting uses a matrix for strategically evaluating new product ideas, which I have modified slightly below:

 
This product matrix divides ideas into four quadrants based on ease of entry into the market on one axis and uniqueness on the other. Ideas below the line should be discarded unless there is some way to move them above the line. Ideas above the line should be evaluated for intellectual property protection.

Step 3 is a decision point that frequently is the end of the decision process about which product ideas to pursue. They stop here because efforts beyond this point become much more expensive and until recently, there have not been many alternatives. If this is the last step, then the likelihood of failure is extremely high. It also helps to explain why so many people refer to the process as the “Fuzzy Front End” of product development as there is little to help predict the success or failure of the idea at this point.

Step 4. Take the ideas and turn them into product concepts. It involves researching customer requirements. It also involves testing the concept to determine if the concept will meet the needs of the customer. Marketing will analyze market potential and possible price points. This is also the step where engineering gets involved in producing concept drawings, models and possibly even prototypes. It also involves the engineers and accountants working together to develop estimated product costs and possibly even tooling costs. All this is done in an effort to determine whether or not it makes economic sense to continue to explore the development of an particular idea.

Step 4 has become more feasible with the introduction of new technologies (like 3D CAD Modeling, Stereo lithography, Room Temperature Vulcanization, Reaction Injection Molding and Rapid Solidification process) that allow for the rapid production of prototypes and economical, small production runs. This step is iterative in that a prototype is produced and put in the hands of a statistically significant number of end users. Feedback on the product is obtained that provides an opportunity to enhance the new product and it’s acceptance. This information is fed back to the designers of the product. New prototypes are developed and the process is repeated until the product attains a level of statistical success that can be projected against the target audience or the idea is dropped before huge sums of money are spent on production tooling, inventory and expensive market introductions.

My experience and recent research confirm that most companies spend more money determining the cost to produce an item than they do on researching customer acceptance. I believe this is one reason why many new products fail to achieve commercial success. Rapid change, increasing competition, complexity, organizational stress and high customer expectations have combined to make successful new products a key to profitability for inventors and manufacturer alike. The pace of the market provides less time to overcome new product failures and reestablish credibility. Speed to market is important, but Step 4 (The Product Accelerator Process) is critical to financial success with new products.

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