Analytics in

New Product Development

U Dinesh Kumar
What is new product?

A new product is a multidimensional concept with need

satisfying capabilities not previously experienced by the
stakeholders.

The degree to which something has not been previously

experienced its inventiveness can range from
incremental improvements (extension products) to
significant advances (breakthrough products).

The concept offers some form of value to all relevant

stakeholders.
Success of a new product depends on the degree of
innovation !
 Analytics in NPD

Pugh Matrix

Total cost of Quality

Ownership Function
(TCO) Deployment

Analytics
in NPD
Theory of
Inventive
Problem FMECA
Solving
(TRIZ)

SIPOC
New product categories
New to the world of products Products that are
inventions.
New Category entries Products that take a firm
into a category that is new to it.
Product Improvements Current products that are
made better.
Repositioning Products that are retargeted to a
new use or application.
Why is it important ?

It is big business: Over a $100 billion is spent yearly on

technical phase alone.

Millions of new products are marketed every year.

A successful new product does more good thing to an

organization than anything else that can happen.
Why NPD is important?

New products account for 30% of companies growth.

35% of current revenue was derived from products

that were not available in the market 10 years before.

25% of the current sales were derived from new

products introduced in the last three years.
Why NPD is important?
New Product is probably the only answer to the price
war.

New products can be a source of competitive

advantage.

New products can provide opportunities for

reinforcing or changing strategic direction.

New products can enhance corporate image.

New- Product Development Process
Step 1: Idea Generation

2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 2: Screening

2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 3: Idea Evaluation

2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 4: Development

2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 5: Commercialization

2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Idea, Concept, Prototype, Product

Idea: An idea is the highest form of abstraction. It is

usually represented as a descriptive statement, written
or verbalized.
Concept: A new product concept, more specific in
description than idea, should include the major
consumer benefits and features defining new product.
Product: Realization of the core product concept and
means by which stakeholders can experience true
benefits.
NPD Idea Generation
Idea Evaluation Checklist

Is your idea an original, new concept, or is it a new

combination or adaptation?
Is there a real need for it?
Have you considered all the advantages or benefits of
the idea?
Have you pinpointed the exact problems or
difficulties your idea is expected to solve?
What immediate or short-range gains or results can
be anticipated?
What long-range benefits can be anticipated?
Have you checked the idea for faults or limitations?
Idea Evaluation Checklist

Are there any problems the idea might create? What

are the changes involved?
Could you work out several variations of the idea?
Could you offer alternative ideas?
Have you considered the possibility of user resistance
or difficulties?
Does your idea fill a real need, or does the need have to
be created through promotional and advertising
efforts?
How soon could the idea be put into operation?
Is the Idea Original?
Idea generation Beer Launching Fridge!
Is the idea original!
Is there a real need?
Idea generation: Seedless watermelon!
Is there a real need?
Are there any problems the idea might create?
Idea: Problems Idea might create
Pugh Matrix (Decision Matrix)

Pugh matrix is the most effective known tool for preliminary concept
selection.
The first stage in the Pugh matrix involves selection of criteria and
concept alternatives.
The next step involves establishment of evaluation scale. Pugh
proposed a minimal scale of only {-1, 0, +1} for evaluating preliminary
concepts.
The next step involves selection of one alternatives that will be ranked
0 on every criteria and will be called datum.
The datum is the alternative to which every other concept will be
compared and rates as either (-1), the same (0) or better (+1), on each
criterion.
Pugh Matrix
If the team agrees that the alternative offers worse
performance than the datum, then the alternative is
assigned a (1) rank.
If the team agrees that the alternative offers a better
performance than the datum, then the alternative is
assigned a (+1) rank.
If the team determines that the alternative offers the
same performance as datum, it is assigned an (0)
rank.
Pugh matrix
Assess the individual concept scores by adding all
the scores.

Repeat process with winning concepts.

Proceed with strong concepts evolving from repeat

process.
Example: Pugh Matrix

Concepts
Criteria 1 2 3 4 5 (D)
1 +1 +1 -1 +1 0
2 -1 +1 -1 +1 0
+1
3 +1 0 +1 +1 0
4 -1 -1 0 -1 0
5 +1 -1 +1 -1 0
scores 1 0 0 1 0

Winning concepts
Example: Selection of Elective Course

Elective Courses
Criteria 1 2 3 4 5 (D)
Content +1 +1 -1 +1 0
Time Slot -1 +1 -1 +1 0
Level of Difficulty +1 0 +1 +1 0
Alignment to the -1 -1 0 -1 0
specialization
Evaluation criteria +1 -1 +1 -1 0
scores 1 0 0 1 0

Winning electives
Recommended Readings

S Pugh, Total Design: Integrated Methods for Successful

Product Engineering, Pearson Education, 1991.