New product development (NPD) is about creating knowledge resulting in new products that drive revenue and earnings growth. It is arguably the most important business process and one of the most difficult to manage (1).
Why? Because it encompasses a series of workflow, information and decision flow across the entire organization. It is unique as well since every other process in the business can be driven to maximum efficiency. NPD is not just about efficiency, which often is the focus. The real concern should be how to make it more effective.
Many think of new product development strictly in terms of R&D’s responsibility in the process. They often assume that innovation success or failure lies with the R&D organization. In a manufacturing firm, however, effective NPD and innovation will only result if Manufacturing and R&D are closely aligned and equally engaged. Let’s look at the key determinants of success.
The first important requirement is the attitude and engagement of the senior manager, and the expectations that are set at this level. This person will be responsible for the financial success of the organization, and a culture that supports innovation. It may be the owner, the CEO, or divisional president if the organization is a large, decentralized company.
While there are many aspects of an “innovation culture”, the focus in this article concerns the shared responsibility between Manufacturing and R&D for innovation success. The senior leader must set that expectation. How R&D and Manufacturing management are motivated and rewarded should be aligned so they feel equally responsible. Furthermore, while most if not all project managers will typically reside in R&D, Manufacturing engagement in the process is an imperative. The senior leader should understand that and manage accordingly.
That does not mean that R&D and Manufacturing leadership will always agree. In fact, I have found that a “creative tension” will lead to better products. R&D will be focused on the product and its functionality. Manufacturing will be concerned about manufacturability which in turn impacts quality. There will be much room for disagreement, but a strong working relationship between the two functional leaders, supported by an engaged and knowledgeable senior manager will lead to success.
A second key determinant is the NPD process itself. A formal, but adaptable phased development process is important for any company managing multiple projects. That process will likely include the key aspects of how projects are managed including the use of core teams, which are temporary and specific to a project.
In my experience, the core team leader for a project is typically the project manager. The project manager in turn typically comes from R&D in most organizations. The core team consists of key players from each functional group, including Manufacturing, and assists the project leader in guiding the project from start to finish through the multiple phases. The core team members will in turn marshal and coordinate the resources necessary in their respective functional groups to drive the project. It is critical that Manufacturing commits and dedicates a competent, engaged core team member to the team.
In many manufacturing companies this will be a senior-level Manufacturing Engineer. Their role in the project is to 1) look at the product from a manufacturing perspective, and 2) transition the new product into the normal production processes. For many large projects, they must be a dedicated resource, not part time. If the project is not their top priority, then they will not take the project seriously.
I have seen projects where there is a lack of commitment. The Manufacturing lead, for instance, might not attend early product design reviews, or if they do, are not fully engaged. Then, later in the project, they suddenly realize that a particular design will create manufacturing problems. They might object, which results in many consequences. In some cases, changing the design at that point leads to project delays. That, plus the ill-will created within the team can damage relationships and trust impacting not only the current project, but future projects as well.
Finally, and related to this last point, all involved with the project must have their reward systems aligned. This goes beyond the R&D and Manufacturing functional leadership previously described, but is true at the project level as well. It might even be more important at that level. The R&D project manager will likely be judged on various metrics related to project success. If the key Manufacturing personnel are being judged and rewarded for something else entirely, there will be conflicts that affect the schedule as well as ultimate quality.
As an example of this issue and the consequences, I recently consulted with a small manufacturing company. Senior leadership was concerned that the quality of their recent new product launches was declining. During my assessment, I met with individuals from R&D and Manufacturing. As I discovered, the Manufacturing organization was being rewarded and judged on their implementation of “lean” (2): projects in R&D were far down on their list of priorities. The result was that R&D was having difficulty getting Manufacturing committed and engaged in projects. For the types of products being engineered and manufactured, this was a critical mistake. The responsibility for this was not at the project level. The company owner was responsible for not being truly knowledgeable about the importance of this alignment and the impact on the ultimate product quality.
So in conclusion, innovation success in a manufacturing company is not simply the responsibility of R&D. Companies that view innovation in this manner will suffer in the long term. While there are many other factors that lead to new product success, the senior manager must set the expectation that Manufacturing and R&D are jointly responsible. How functional management and the team are rewarded and motivated must be aligned. Finally, the NPD process itself should be designed to institutionalize robust Manufacturing input on projects. Without strong and early project engagement by Manufacturing, quality will be compromised. By following these three suggestions, a company is more likely to introduce successful, high quality new products on schedule (3).
- Refer to this article entitled Why the New Product Development (NPD) Process is Unique.
- See this article entitled Abusing Lean Methodologies.
- Interested in learning more about all the ways to improve your organization’s ability to manage innovation, introduce successful new products and grow revenue? You might be interested in the Innovation Coach Workshops.
Jeff Groh is President of New Product Visions located in Flat Rock, NC. New Product Visions helps companies improve their innovation management practices. We focus on processes, organization, management engagement and culture. Services include consulting, Innovation Coach™ Workshops and software enablers. Mr. Groh spent 30+ years in industry in a variety of management roles in sales, manufacturing and new product development prior to starting New Product Visions. He is particular passionate about the role of senior management and the culture that supports innovation success. For additional information or a no-cost on-line assessment of your company’s innovation management practices, email Jeff at email@example.com or by phone at (302)-367-3160. Available for select speaking engagements.