Innovation Management and Product Development Process PDF

1 INNOVATION MANAGEMENT AND THE NEW PRODUCT DEVELOPMENT PROCESS. PROJECT PORTFOLIO PLANNING. Silvia Zamboni content/uploads/2017/07/5-ways-to-build-...

1 INNOVATION MANAGEMENT AND THE NEW PRODUCT DEVELOPMENT PROCESS. PROJECT PORTFOLIO PLANNING. Silvia Zamboni content/uploads/2017/07/5-ways-to-build- Image credits: http://www.pimcy.nl/wp- ecosystem-750x313.png?x89635 Silvia Zamboni New product Development & Open Innovation  2 Product innovation and innovation process Innovation is not creativity, but it requires creativity! A product/service is new if a customer perceives it as new (Burgelman, Christensen, Wheelwright, 2004): Innovation process […] can be defined as the combined activities leading to new, marketable products and services and/or new production and delivery systems; A successful innovation is the one that returns the original investments in its development plus some additional returns Silvia Zamboni New product Development & Open Innovation  3 3 The innovation process Market needs Idea Plan Execution Control Launch Technological opportunities Silvia Zamboni New product Development & Open Innovation  4 Strategy and new product and technology planning Scenarios Vision & Mission Strategic planning Strategic product planning Consistency Product Plan Short term Strategic technology New product planning development process Technology plan: - product Supplier - process New technology development Silvia Zamboni process Supplier New product Development & Open Innovation  5 Strategy and new product and technology planning Scenarios Vision & Mission Strategic planning Strategic product planning Long term Consistency Product Plan Short term Strategic technology New product planning development process Technology plan: - product Supplier - process New technology SHELF development Silvia Zamboni process Supplier New product Development & Open Innovation  6 Strategy and new product and technology planning Differentiation Scenarios Vision & Mission Product value Aesthetics / “Design” Strategic Breakthrough planning innovation Strategic Services product Time to market planning Long term Consistency Product Plan Short term Strategic technology New product planning development process Technological Technology plan: leadership - product Supplier Fast Follower - process Application Engineering New technology SHELF Me Too development Silvia Zamboni process Supplier New product Development & Open Innovation  7 Objective of projects mapping To link the corporate strategy to the product plan, classifying the development projects depending on the their degree of newness and their time to market in a unique tool. To distribute the resources in order to satisfy market requests To have a tool to check the alignment between “what has to be done” and “what is being doing” The tools: Projects’ roadmap Project map (i.e. Wheelwhright and Clark matrix among many others) Silvia Zamboni New product Development & Open Innovation  8 Projects roadmapping TIME Market Product Technology Silvia Zamboni New product Development & Open Innovation  9 Projects Roadmap Objective: — To represent the final distilled outputs from a strategy and planning process — To represent the evolution of the development of a company product family — To map the existing products (historical data) — To define the future path (potential market and technologies) Silvia Zamboni New product Development & Open Innovation  10 Generalized technology roadmap architecture Silvia Zamboni New product Development & Open Innovation  11 Projects Roadmap Improved version Customized version Prototype Core Hybrid Economical version Core time Derivate products Improved version: some functionalities are added to Prototype differentiate the product (segmentation) Customized version: some functionalities are added to Core (“forefather”) little batch of product for specific customers or distribution channels Economical version: functionalities are reduced to cut down costs of production Hybrid: it’s a new product taht derives from the characteristics of two core products Silvia Zamboni New product Development & Open Innovation  12 Bonduelle Agita e Gusta Salade kit Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  13 Source: Food Design Studio, Paolo Barichella READY TO EAT Bonduelle “Agita & Gusta” Questo esempio di soluzione alimentare risolve in modo estremamente efficace il problema di trasportare tutto il necessario per consumare una ottima insalata fresca durante una pausa pranzo fuori casa. Silvia Zamboni New product Development & Open Innovation  14 Nutella Snack & Go! Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  15 Nutella Snack & Drink Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  16 Nutella Snack & Drink Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  17 The project matrix: objective — The classification of the development of projects per typology can help to decide which is the best mix to launch new products. — These categories are different in the degree of change (newness) of the product and process technology, in the know how and in the requested information. — The different clusters help management to understand how each class is characterized by dimensions such as extension, number of people on the team, available budget, maximum duration, etc… Silvia Zamboni New product Development & Open Innovation  18 Projects roadmapping (of the entire portfolio of innovations) TIME Market Product Technology Silvia Zamboni New product Development & Open Innovation  19 Project Roadmap (of a single category of product) Improved Customized version version Prototype Core Hybrid Economical version Core time Derivate products Improved version: some functionalities are added to Prototype differentiate the product (segmentation) Customized version: some functionalities are added to little Core (“forefather”) batch of product for specific customers or distribution channels Economical version: functionalities are reduced to cut down costs of production Hybrid: it’s a new product taht derives from the characteristics of two core products Silvia Zamboni New product Development & Open Innovation  20 Example of an hybrid product Bonduelle Agita e Gusta Salade kit Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  21 Source: Food Design Studio, Paolo Barichella READY TO EAT Bonduelle “Agita & Gusta” Questo esempio di soluzione alimentare risolve in modo estremamente efficace il problema di trasportare tutto il necessario per consumare una ottima insalata fresca durante una pausa pranzo fuori casa. Silvia Zamboni New product Development & Open Innovation  22 Silvia Zamboni New product Development & Open Innovation  23 23 Silvia Zamboni New product Development & Open Innovation  24 24 Silvia Zamboni New product Development & Open Innovation  25 25 Nutella Snack & Go! Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  26 26 Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  27 27 Nutella Snack & Drink Source: Food Design Studio, Paolo BarichellaSilvia Zamboni New product Development & Open Innovation  28 The project mapping: objective The classification of the development of projects per typology can help to decide which is the best mix to launch new products. These categories are different in the degree of change (newness) of the product and process technology, in the know how and in the requested information. The different clusters help management to understand how each class is characterized by dimensions such as extension, number of people on the team, available budget, maximum duration, etc… Silvia Zamboni New product Development & Open Innovation  29 Project mapping: determinants + Newness of the product - Basic research New New product Completely generation in an existing Incremental new improvement family Completely new + - Newness of the process New generation Phase improvement Incremental improvement Silvia Zamboni New product Development & Open Innovation  30 Project mapping: categories of projects from a strategic perspective + Newness of the product - Basic research New New product Completely generation in an existing Incremental new improvement family Completely Breakthrough projects Cost new Technology push + innovation reduction - Newness of the process Law New Platform generation Compliance projects By- Product Phase products families improvement or new Derivative projects markets Voice of customer Incremental (Customer driven improvement Silvia Zamboni innovation) New product Development & Open Innovation  31 Project classification Basic R&D: advanced projects with scientific objective more than commercial return. They often originate by collaboration programs with research institutes, universities and external partner. Breakthrough: radical changes in product technologies or production process technologies (eg. compact disk). They normally create new products or new markets, for which customers cannot express their opinion in advance. The duration of these projects is normally more than one year. Platform: they create a new generation of a product line. The new product will have new functionalities or technologies, with great improvement also in their production process. The time to market is generally a year or less. Derivatives: incremental improvement to existing product or related production processes. The focus is on the customer (improving or adding a function) or on the reduction of cost. Resources involved are often limited to some organizational function and the development Silvia Zamboni time is short. New product Development & Open Innovation  32 Project classification Cost reduction/ Law compliance: these projects imply big changes (and risk) from the technical point of view, mainly related to the process used to obtain a product similar to the one already existing on the market. The key reasons for these projects are reducing the cost of production and/or be compliant with new laws. Byproduct/ New markets: this category of projects aim at obtaining new products in new market with marginal modification of the current production process or technology implied. Usually refers to the export of existing /adapted product in new geographical markets or to new target customers Silvia Zamboni New product Development & Open Innovation  33 Project mapping: projects All projects of new product development are represented in the matrix + Newness of the product - = Project Basic New productIncremental research Completely New in an existingimprovements new generation family Breakthrough Completely projects new + - Newness of the process New Platform generation projects Phase Derivative improvement projects Incremental improvement Silvia Zamboni New product Development & Open Innovation  34 Project mapping: projects and resources = x man hours = 10x man hours = 50x man hours + Newness of the product - Basic research Completely New New product Incremental new generation in an existing improvements family Breakthrough Completely projects new + New Platform - Newness of the process generation projects Phase Derivative improvement projects Incremental improvement Silvia Zamboni New product Development & Open Innovation  35 Project mapping: projects, costs, time Time legend 1 month to finish + Newness of the product - 3 months to finish Basic research Completely New New product Incremental 6 months to finish in an existing improvements new generation family Breakthrough Completely projects new + New Platform - Newness of the process generation projects Phase Derivative improvement projects Incremental improvement Silvia Zamboni New product Development & Open Innovation  36 Project mapping: determinants + Newness of the product - New Basic product in research Completely New Incremental an existing new generation family improvement Commercial risk Completely new + - Newness of the process New Technical risk generation Phase improvement Incremental improvement Moving from the product and process incremental improvement to product and process completely newness, projects increase their degree of innovation, as their technical and commercial risk. Silvia Zamboni New product Development & Open Innovation  37 Project mapping: projects = Project + Newness of the product - Basic Completely New New product Incremental research new generation in an existing improvements family Breakthrough Completely projects new + - Newness of the process New Platform generation projects Phase Derivative improvement projects Incremental improvement Silvia Zamboni New product Development & Open Innovation  38 Project mapping: projects = Project + Newness of the product - Basic Completely New New product Incremental research new generation in an existing improvements family Breakthrough Completely projects new + - Newness of the process New Platform generation projects Phase Derivative improvement projects Incremental improvement Silvia Zamboni New product Development & Open Innovation  39 Project mapping: projects, costs, time Sequencing projects: Planning projects with different time to market Product plan Product A 2019 2020 2021 2022 2023 Platform Platform Model 1 Derivate Derivate Derivate Model 2 Platform Platform Derivate Derivate Derivate Product B Platform Derivate Derivate Derivate Derivate Model X Silvia Zamboni New product Development & Open Innovation  40 Product plan 2. 1. 3. Product plan Product A Year 1 Y2 Y3 Y4 Y5 Platform Platform Model 1 Derivate Derivate Derivate Platform Platform Model 2 Derivate Derivate Derivate Product B Platform Derivate Derivate Derivate Derivate Model X Silvia Zamboni New product Development & Open Innovation  41 Summing up… We learnt: - How to link firm strategy to projects’ portfolio - How to evaluate the coherence between firm strategy and the new product development projects - How to map the evolutionary path of new products. Silvia Zamboni New product Development & Open Innovation