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!

Causes of New Product Development (NPD) Success or Failure

Having discussed the strategic importance of New product development (NPD)  on business growth and profitability, now let us understand the factors contributing to NPD success or failure.


1.Planning :

Before starting a project, planning as an activity plays a significant role on project success or failure. This includes all the aspects of NPD like

a. Understanding the customer's requirement clearly by involving all stakeholders in the projects and understanding the requirements
c. Planning of time horizon and risk involved
d. Planning of resources, competency and risk involved
e. Planning of expenses both capex and revex, the risk involved
f.  Planning of conversion process either in-house and outsource
g. Planning of communication / MIS / KPI's and review mechanism

When we do not plan of above activities, by nature, we face the failure modes while executing the projects. Managing the failure modes during execution takes more time, cost and affect the product quality than during the planning stage.


2.Identification of project leader:

Even though NPD is a cross-functional activity, it is very much essential to identify a person as a project leader who is accountable for coordinating and existing the product development.

As we witnessed in most of the small and emerging organizations, NPD is driven by technology or design person. It is nothing wrong with driving by those people, they need to ensure the development completes successfully until it meets the customer's scope, cost, and time aspects.

It is advisable one person can play a role as project lead and coordinate all functions with more focus on internal and external deliverables.


3.Formation of a cross-functional team:

As said in the project lead, the establishment of a cross-functional team with a focus on product delivery is vital to speed up the NPD process. Typically, the people involved in the NPD are more oriented towards their functional ROUTINE activities, and NPD gets second priority. The reason could be organizations are wired and encouraged for functional or departmental success or deliverables rather than product delivery success which relies on many functions. To bring organizational focus on NPD, it is advisable to form core cross-functional team members who will be working on the project till it ends under the guidance of both project lead and technical lead.


4.Change Management :

Unlike Operations, New product development as a project calls for a lot of changes during execution. The change will come from either the customer or internal stakeholders. The challenge for the project lead and team is to manage the changes.

The critical challenge for all of us is how to manage the change and its impact than avoiding the change at all as it is impossible in a project environment.

This calls for proactiveness and experience in predicting the changes or risks and managing the changes. In mature organizations, there is a review forum, wherein the project team is encouraged to present the changes and its impact in a professional way. When the environment is created to discuss and review the changes and its effect on cost, scope, and timeline, eventually either team is getting involved proactively in the development process at the early stage and thereby reducing the possible changes that happen during the execution.


5.Top Management involvement :

Senior management's involvement in the NPD process is critical for the success. In my opinion, the involvement can be demonstrated by conducting fixed, preplanned reviews of the NPD progress along with project leader and team members. Periodic reviews of project status and taking timely decisions on important factors like scope, cost and any other people related issues or any other risks will save the NPD from failures.

The Top management can design suitable Management information system about the project with Key performance indicators at the initial stage of the project and tracking during the execution will save a lot of time of all and also improve the communication process among the team and shareholders.

Since unlike operations, NPD process itself is uncertain and risk involved, the team gets demotivated whenever there is a slowdown in progress. It is natural and the top management involvement and motivating the team behind helps the team to work with more enthusiasm.

In a nutshell, top management involvement through reviews of KPI's, timely decision on any risk, motivating the team are critical to the success of NPD.



As said, the project is all about managing the risk and people. Realising this fundamental, smart organizations adopt project management approach in New product development process and we have seen the improvement in the quality of execution. However, it takes time, and commitment of all stakeholders as delivering new product seamlessly is a way of working or culture building process!