New Product Development as Business Process and Best Practice Models

Apa itu NPD (New Product Development) ?

Activity of business, engineering, design, and technology. All of them integrated as overall projects and organized as a process. Therefore, it has an identified target of developing and launching a new product type. It requires business case (written or implied), and expectation of commercial success.

NPD versus R&D :

  • NPD aims to commercial success. It usually refers directly to the company’s product.
  • R&D aims to explore new opportunities/chances/technologies, either directly linked or not to the company’s product.

Why do we need NPD ?

  • Present product’s revenue tends to decline after few years/amount of time
  • The company has targets to grow the revenue
  • Use NPD to fill the growth expectation-vs-reality gap

Product Life Cycles :

  • The products are only generating revenue in a limited time (called product’s window).
  • Use ROI(Return of Investments), ROS(Return of Sales), NPV (Net Present Value), and IRR (Internal Rate of Return) to describe the product’s life.

Loss in Profits due to Various Cost :

  • Normally, delay in product shipments affects a lot more than overrun development cost.
  • Refer to product’s life cycle.

Kind of People that’s Needed to manage NPD :

  • Good self-expression
  • Careful
  • Confident
  • Courageous
  • Bold
  • Imaginative

How to learn NPD Management :

  • Structured course (take-aways, homework)
  • Debate (swap ideas/experience, workshop)
  • Involvement (observe how organizations work, how people behave, how you behave)

Needed Thinking Ways :

  • Lateral thinking (divergent, creative, brainstorming)
  • Critical thinking (analytical, linear)
  • Convergent thinking (focusing, decision-making)


  • Avoid manufacturing inputs too little and too late
    • Get parties (the people with real decision power, not dummies) involved in designing interfaces (eg. Design for Manufacturing).
    • Build cross-functional teams instead of team from single function.
    • Send NPD team members to other functions that’s not following the game rules
  • Avoid unrealistic planning
    • Give the managers : Worst Cases, Likely Cases, and Best Cases
  • Characteristic of qualified project team leader :
    • Have experience in successful team
    • Have knowledge in interpersonal skills : managing your bosses, your college, and your bottomline
    • Have knowledge in decision making
    • Have technical skills : deeper is better, since no one will underestimate your decisions.
    • Have inherited power from upperline manager
    • Have good networks
    • Not so important : older age than the other team members and doing the work longer.
  • Avoid lacks of cohesion / diligence :
    • Indoctrinate the clear vision and mission to the team members
    • Relate the rewards to the team’s cohesion / diligence
    • Feedback communication : ask the team member to talk back about the team’s vision/mission/job.
    • Informal communications : football team, company’s holiday
  • Avoid unmeaningful reviews :
    • Don’t manage projects using reviews. Directly talk to the people who’s responsible for it.
    • Use review to check team’s progress.

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