How to optimise your product development cycle
In manufacturing, product development is critical – new products mean new customers, new business and a competitive spot in the market. But the product development process isn’t simple. From concept to manufacturing and launch, there are several complex elements involved, with potential issues along the way.
Every misstep represents a delay in getting your product to market and a significant cost to your business. It’s a risky process with no guarantee of success, with the Harvard Business Review reporting around 75% of new products fail outright or fail to meet their sales goals in the first year.
A faster way to quality product development
While there will always be an element of uncertainty, the good news is that product development doesn’t have to be so fraught or drawn out. Thanks to technology, the whole complex, multi-faceted process can be pulled together, streamlined and optimised, helping you work through complex stages as quickly and efficiently as possible. In today’s tough and competitive development market, that can be the difference between a process that ends in success and an expensive failure.
Enterprise resource planning (ERP) software is designed to pull data and process management together across your business, and it can also be a driver of new product development (NPD). ERP platforms with a product lifecycle management (PLM) component can pull the strands of your NPD process together, helping you navigate the pitfalls and barriers that often hinder development success.
Optimising the key stages of the product development cycle
New product development requires connected teams, accessible data and an overarching strategy – that’s why an ERP platform is such a good fit. Modern ERP software connects work processes across your business, offers real-time access to crucial business data, and provides a wealth of tools to help your teams communicate, share information, and manage the design and development process smoothly.
The strength of an ERP platform is visibility and connection – it pulls all the elements of the NPD process together, providing a comprehensive real-time view for your teams and ensuring that your entire business is working from the same development playbook. Even further-flung parts of the process, like your supply chain, are linked, so no step or issue is missed. It’s about arming you with the tools and information you need to keep new products on track – instead of letting them drift off course.
An ERP can help you at these points in the NPD process:
Explore and validate
An ERP system with a CRM module is invaluable at the concept validation stage of the NPD process. Not only can you use sales data from your CRM to explore sales trends and spot gaps in the market, but you can also use it to connect with customers and solicit feedback during the discovery stage. This sort of real-time, real-life feedback from your actual customers is incredibly useful as you explore your concept’s strengths, weaknesses and sales potential.
Design and manufacture
The design and manufacture stage involves many moving parts, all needing to be planned and tracked in minute detail. From vendor selection, material and design choices to product performance testing and supply timelines, your ERP system connects all these elements, letting you manage every part of your NPD process from one dashboard. With historical business data on hand, you can assess factors like suppliers, materials, past product performance and costs, helping you make the right decisions for your new product.
Document what the finished prototype will look like. List the steps that you will take to get to where you want to be with the prototype, and list any materials or resources that will be required. Insert quality checkpoints as needed to ensure you are moving in the right direction.
ERP allows you to use a production job or batch process flow to model the prototype process. An ERP system is essential for controlled management of the prototype processes.
Those quality checkpoints you inserted in the prototyping process are critical. With this kind of process, your quality check might be just to ensure that the prototype is going to help a customer solve a real problem. It will help ensure that you are working toward that goal with no time wasted making the prototype ready for sale.
ERP has recorded all the process steps required for the finished product. Eliminate the unnecessary work and you have a complete, well documented prototyping process that you can use right away to manufacture your new product or improve existing products.
Having all your product development, marketing and launch information on one platform means a smooth, integrated scheduling process. Because all your teams have access to key elements, tasks and the projected schedule, and updates are fed into the system automatically, it’s easy to see when a date needs to be pushed back or a task brought forward.
Expenses and revenue
Development and manufacturing costs can be difficult to measure – particularly when you’re dealing with a complex, multi-stage production process. It’s far too easy to focus on the cost of materials and manufacturing while ignoring design, transport, marketing and other costs of the process. With ERP, all these elements are tracked, giving you full visibility across the development and manufacturing process. This gives you accurate insight into the cost of production, so you can set an appropriate price for your new product.
Errors and accuracy
There’s a lot of room for error in product development. New manufacturing processes can go awry, new materials may not be up to scratch, and slow design or prototyping can send your schedule off track. An ERP system gives you end-to-end insight into the process, giving you one source of truth your business can rely on. This reduces the likelihood of errors and gives your team a baseline to work from.
Time to market
Being first to market with a new product is a major advantage. Not only does it allow you to establish your product as the industry standard, you’ll potentially also be able to tap into consumers first and make a strong impression, which can lead to brand recognition and brand loyalty. On top of this, the potential to control resources, such as basing your operations in a strategic location, establishing a premium contract with key suppliers, or hiring talented employees is significantly higher.
ERP helps you get to market sooner, giving you control over every element of the NPD process and accelerating your time to market. Sophisticated change review processes and revision control mean you can produce a quality product quickly, while cloud-enabled platform access gives your internal team and external suppliers full visibility, avoiding the risks of miscommunication or delay.
Connection and communication
Siloed information slows communication – ERP facilitates it. Keeping track of prototypes, changes, revisions, drawings, designs, specs and documentation is extremely difficult with manual processes and disconnected software. ERP integrated with a PLM module ensures everything is tracked, accessible and accurate, making it easy for your teams to work on the right iteration and keep the design process moving.
Barriers to product development success
Why do so many new products crash and burn? It’s not just about the vagaries of the marketplace or the cost of the development process – it can also be caused by internal issues, ineffective process management, and failure to thoroughly research or test new ideas before launching into development.
Here are some common obstacles:
Discovery may be the most critical part of the new product development process. This research and testing stage helps you work out if your product is viable and useful, whether it already exists in some form, and if there’s a market or an appetite at the right price point.
It’s a vital information-gathering phase that helps you decide whether to invest in your new concept – or not. That’s why discovery can’t be rushed – if you miss a key piece of information or fail to gather accurate market insights, you could spend millions on a product with no real potential.
Lack of strategic planning
Strategic planning is about oversight and guidance through the multiple steps of the NPD process – from creating a prototype and manufacturing process to marketing, branding and eventually selling the product. Without a sound strategy, it’s easy for development to stall at the early stages.
Silos and disconnection
The NPD process usually involves almost every part of your business – manufacturing, design, marketing and sales, finance, retail and more. This means cohesion and communication are particularly important, and any departmental silos or disconnections between teams will exacerbate the issue. If teams can’t communicate or share information effectively, it’s difficult to keep the NPD process flowing and development on track.
Ineffective partnership choices
Often, product development involves partnering with a manufacturing firm or overseas producer. It’s hard to overstate the importance of these partnership choices, as they are responsible for the quality and production speed of your new product. Unfortunately, new product developers often choose the cheapest option, which often means inferior design and a lower-quality product – not the best first step to product success.
Why ERP and PLM fit together
Visibility and control are the overarching benefits of an ERP system. With an integrated system, you get a comprehensive view of the design and development process, from prototyping and testing to manufacturing, marketing concepts and product launch.
An ERP system gives you full, hands-on control of every stage, with a complete record of all tasks and activities underlying the NPD process. It’s a vital tool for manufacturers bringing new products to market.
A more effective product management process
Of course, ERP needs an integrated PLM system to be effective in product development. The two systems work in tandem, controlling different parts of the development process. PLM is designed to manage the product from documentation to launch, tracking revisions and product details along the way. ERP manages the operational and financial elements of product development, ensuring that all the resources and teams needed for the process are available.
It makes sense that connecting these two systems creates a stronger, more effective production process.
PLM and ERP are the solutions your business need
Instead of guesswork, gut feel and getting bogged down in prototyping, you get real-time data, collaboration and keen insight into innovation as it happens. It’s about connecting the development dots across your business, creating products that people really want, and getting them to market on time. It’s not quite as simple as it sounds, but with ERP and PLM working in sync, it can be done.
Find out more about product development – and how MYOB Advanced Manufacturing can help.