How does Project Management apply to New Product development?

As discussed in Typical problems in new product development in a manufacturing environment, we have observed some patterns of challenges. Project management is all about the application of different management knowledge, skill, tools, and techniques in each phase of the projects.

Hence, the following principles of project management can be applied in new product development also.

Some of the principles are given below

1. Starting the project with END GOAL in mind
2. Involving all stakeholders at an early stage
3. Define project scope with a set of key performance indicators
4. Tracking Key Performance Indicators throughout the project phase
5. Defining the phases or steps in the project 
6. Proactive risk assessment and mitigation plan
7. Review and communication process
8. Active Change Management Practices
9. Engaging people with team/leader structure

Those principles can be applied in new product development as well.

Typical Problems in New Product Development in SME's

Typically, new product development starts the moment's customer asks for a new product or giving intend for new products to the organization delivers the physical product to the customer .We can call it as C to C

In between the intent of physical delivery, a lot of issues or challenges the organization is facing. 

Given below some of the typical issues or challenges 

1.Not fully aware of the customer's requirement

2.No sign off of idea/concept between customer and organization leads to  frequent changes in the idea/concept of the product itself

3. Not identifying and involving all the key stakeholders at the beginning of the project may lead to changes at a later stage, in turn, affect the timeline/ cost and deliverables (Quality Requirements)

4. Not spending enough  on planning  product development process leads to time delay and cost overrun

5.No structured management reviews on risk assessment and mitigation of risks lead to delay in decision making, Q issues, cost overrun and time delay.

6.No structured tracking systems for  change management and in the absence of change management, any delay or cost overrun or quality issues in the new product development would be taken at a personal level and blame of others

7.No systematic planning on facilities like fixture/ gauges/material handling/toolings leads to delay and quality issues in the product.

8.NPD trials and proto building take the second priority in the organization next to day to day deliveries lead to delay and personal friction among the people on sharing the organizational resources.

when you observe those above challenges, you can find a pattern of challenges.

That is lack of target, people integration, lack of process on communication, resource planning, risk assessment, review forums and so on. To overcome those pattern of challenges only, PROJECT MANAGEMENT comes a holistic solution in the new product development process!

Why do you need to focus more on NPD( new product development)?

Why do you need to focus more on NPD?

This can be answered by understanding the changes happening in external and internal to the organizations.

Changes in Internal to the organizations :

As a Business head, your prime concern is sustaining profitability and ensuring future growth.

Conventionally , sustaining profitability calls for efficiency improvement,cost optimization and so on. Beyond some point, process optimization does not yield much improvement unless you revisit and re-engineer your product portfolio.

Hence, you can sustain your business profitability by creating an environment for continuous New product development and position yourself as the first mover or the preferred source to your customer on new product developments and ramping up. 

As you are aware that when you are manufacturing the same parts over a period of time, it will become a commodity and you lose the competitive advantage, in turn, you lose your profit margin. To compensate or sustain the profitability, smart organizations, equally focus more on New Product Development (NPD).

Also, the existing product portfolio dries out, the only way for growth is bringing out more new products.

Changes in External to the organization :

External to the organization, the consumers are changing fast. Thanks to awareness, affordability and enhanced lifestyle, consumers are looking for more varieties and prefer to change the product frequently to keep them update in the society. 

For example in the case of mobile devices, laptop, automobile, there were fewer varieties and more volume when they were introduced to the world than now. 

This change in external environment results in more new product development focus inside the organization.


Going forward, the organization which equally focus on both efficiency and new value creation will sustain the profitability and growth.