Collaborative Product Development

One of the biggest hurdles consumer goods executives face is managing the introduction of new products and how to go up against a seemingly growing rate of failure. This month, Consumer Goods Technology sat down with Chris Colyer, Industry Manager, General Manufacturing for Microsoft. Chris touches upon the challenges consumer goods companies face in launching new products, the benefits to a collaborative process and tools as to how to lower the cost and increase the success of new product introduction.

What are some of the challenges that consumer goods manufacturers face in developing innovative new products?

The consumer goods industry is faced with the difficult task of introducing new products today in an already crowded marketplace. This is one reason that the failure rate of new products is greater than 50 percent and can be as high as 80 percent. With this poor percentage of new product launches it has created the need for consumer goods companies to work on new strategies to bring products to market faster, to work globally but implement locally, and to ensure resources are being used for new products that show commercial promise. To make this task more difficult consumer goods companies are faced with increasing external and internal challenges in the marketplace.

On the external side, it begins with the consumer that is less loyal to a given brand and demanding more value for their money. This combined with the need for greater convenience and demographics are playing more of a roll in product selection. Shelf space that is already overcrowded in a number of categories is gaining competition from private label brands. And finally there is pressure both from the consumer and regulatory agencies to increase public disclosure about concerns on issues like allergens, dietary effects, and other labeling requirements.

On the internal side, consumer goods manufacturers continue to face mounting pressure to build collaborative strategies to help speed up the time to market for their new product introductions. In addition to this, consumer goods companies need to build out a portfolio strategy ensuring they are funding projects with greatest opportunity for success instead of wasting resources on new products that do not have any commercial viability.

One of the challenges in new product development is involving all of the stakeholders in the effort, from initial design to customer delivery.  Talk about the concept of collaborative product development and how it works to ensure everyone is involved.

Collaboration expands the breadth of understanding that is brought to bear in organizing the volumes of information into useful knowledge. When subject matter experts (SMEs) work together to solve problems; they combine their experience, expanding the scope of knowledge that is brought to the decision making process. Collaborative Product Development (CPD) leverages rapidly developing digital communications technologies to facilitate -- and even drive -- collaboration between the subject matter experts and stakeholders involved in the design process. Communication, in the context of collaboration, expands the vision of participants beyond the limitations that their tools create for them. This collaboration needs to extend to include all the key players in the value to chain to ensure timely feedback in order to accelerate new product development. This value chain collaboration also creates the opportunity to see much quicker which products have commercial viability. Fortunately, the technology required to achieve this desired state exists today and is within reach of companies of all sizes. In fact, most global organizations already have the building blocks for these solutions in place: real-time communication, alerts, corporate portals, as well as line-of-business systems and network infrastructure.

With the cost of new product development continually rising, and the success of these introductions diminishing, how does collaborative product development lower the costs associated with design, procurement and manufacturing?

Fortunately, design and manufacturing data have become increasingly digital, enabling a new generation of collaboration tools to overcome many of the challenges posed by today's accelerated design processes. These new collaborative tools make it possible to: connect team members, customers, suppliers, and outsourced design houses; support the sharing of project and design data (project plans, CAD documents, Bill of Materials); enable reviews, changes, and approvals to take place virtually. The depth of features in these tools ranges from web-based clients, which provide access to data across enterprise boundaries, to rich clients, which typically provide higher performance and greater flexibility. Equally important is the integration of the design process with the rest of the manufacturing enterprise. The output of collaboration tools must integrate with Enterprise Resource Planning (ERP) systems for purchasing and billing, and Manufacturing Execution Systems (MES) for plant operations and scheduling, to provide a cradle-to-grave status of the project.

Manufacturers are also challenged with controlling their project portfolios, often losing track of valuable resources during a product's introduction.  What are some steps consumer goods executives can take to address this issue?

A key input into the collaborative design process is the resource constraints that apply to the project. Collectively, the process of analyzing available resources, deciding on their allocation, and prioritizing and scheduling their usage is known as Program and Portfolio Management (PPM). A PPM system must provide the decision makers with a view of all relevant and available resources and allow for the modeling of tradeoffs and alternatives. PPM provides management with insight into how resources are being allocated. Senior management can use this insight to better align resource and project priorities with organizational goals. Project managers can leverage this knowledge to identify those resources which are critical to the success of their particular projects. The second benefit is that it creates the ability for the organization to retain specific IP about new projects so the organization can learn from past projects and apply those to future developments.