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Product Development
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Product Development has probably the most significant impact on the firm’s fortunes going ahead. Future of the company hinges on the success of new products launched. Companies good at product development reap the benefits of higher revenues and greater margins compared to competitors. To increase the market share or penetration, a firm needs to introduce new and highly differentiated customer centric products at the right time regularly.
- New product introductions impact the revenues of the company in a major way.
- If a firm is able to launch a customer driven product at the right time, it is able to derive higher margins at least for the time before competitors come up with a similar product.
- Stock markets move on expectations. Depending upon the strength of the planned product launches, the market valuation shoots up in the stock market, which gives the firm an added source of investments and increase in the brand equity at the same time.
Product development deals with all the stages from the product conceptualization to disposal throughout the lifecycle of the product. Typical stages that a product goes through are: conceptualisation, detailed product design, engineering (prototype), testing, mass production and disposal. Product development can involve slight modification to an existent product, a new product in same segment/category in which the firm is already present or penetrating into an entirely new target segment. These three are in increasing levels of complexity.
Some typical issues in Product Development
- Go-to-Market Strategy: How to sense the market needs for a product in the right time so that the product launch is at the right time before the competitors?
- Technological Infrastructure: How to link up the different technological platforms used by the different functions to provide higher visibility?
- Early Supplier Integration: How to leverage supplier’s resources, know-how and R&D to cut down on costs and launch time?
- Concurrent Engineering: Many functions are involved in the product development process including the Design, Manufacturing, Marketing, Suppliers, Supply Chain (to decide on the sourcing, inventory, warehousing) etc. How to effectively co-ordinate the various functions involved in the product development so that an effective customer centric product is achieved?
- Handling Uncertainty: How to effectively handle and manage the uncertainty associated with the product?
Aqua MCG Solutions
Effective supply chain management is essential for efficient product development. Despite a strong need for tighter integration with external partners, product development takes place in isolated silos. Aqua MCG helps you achieve a well integrated supply chain allowing you to concentrate on your core competencies and shorten product development cycles.
- New Product Development and Introduction (NPDI)
- Market Strategy
- Product Planning
- For a yet-to-be launched product there is certain amount of uncertainty attached to it in the form of project cost, expected time-to-market, revenue potential, targeted market share and product effectiveness
- Optimization of all these factors which might be conflicting
- Alternative scenarios need to be studied for example new distribution channels, suppliers, etc.
- The dynamic nature of the market also needs to be factored in. For example the cost of raw material might change drastically during the course of the product development. A sensitivity analysis on the various components helps identify impact
- Change Management: Effectively handling the change that the new product brings in: new set of suppliers, customers and new processes
- Root cause analysis of any bottlenecks that might come up
- Product Data Management: Build up a backbone IT infrastructure for the new product
- Resource Management
- Cost Management
- Program Management: Program manages the whole process. Performance metrics(KPIs) are used to keep track of the progress
- Standardized framework for the product development process
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