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Breaking Down the Differences: New Product Introduction Versus New Product Development

Although New Product Introduction and New Product Development are similar, they do not describe the same components of product innovation. Learn about the key differences between each process.

Companies develop products to generate new streams of income and increase their market share. In dynamic markets, companies have to introduce new products and services to keep up with the constantly changing needs and wants of consumers.

Producing high quality products, though, is far more challenging than it sounds. However, the task becomes far less intimidating when equipped with the right knowledge of production workflows — from product concept to launch.

What does NPI mean in manufacturing?

New production introduction (NPI) is how organizations bring innovative products and services to market. 

From a manufacturer’s viewpoint, this means promoting the use of best practices and removing barriers to communication between cross-functional teams. NPI usually takes place after a product or service has already been designed and developed, with a focus on ensuring a successful product launch.

Benefits of a well executed NPI process include: 

  • Quicker Time to Market - Capture premium pricing and reduce time to revenue through early entry.
  • Increased Market Share - Build customer loyalty with differentiated products and compelling multi-channel marketing.
  • Higher Profit Margins - Profitability is increased because of cost controlling measures such as product lifecycle management (PLM) software, optimized engineering throughput, and strategic resource allocation.

What are the phases of new product introduction?

The NPI process is made up of several phases, which work together to introduce a cohesive final product. Use the following phases as a template while making adjustments to fit the specific needs of your business.

1. Define: What are we trying to make?

Assign a project manager to oversee the design process and keep work going. Discussion here should take place between cross-functional teams to ensure feasibility at all stages, as well as with internal stakeholders to make sure that design objectives and broader business goals are aligned.

Develop design specifications in addition to functional and performance requirements and have them reviewed by all stakeholders.

Undergo a risk assessment and perform a cost - benefits analysis. This information will be important when it comes to refining the product development process.

2. Feasibility: Is it possible and does it make business sense?

Review the proposed product designs and select one that best meets both company objectives and customer needs. Design concepts should meet the requirements outlined in the "define" phase.

3. Develop: How do we actually make and refine it?

Revisions may be necessary to bring the design closer to achieving intended goals. If you’re over budget, consider streamlining certain aspects of production to reduce costs. Design specifications may need to be changed so the design concept best meets customer needs. Identify what deliverables are and how they will make their way to consumers.

Consider what the production process will be. Is mass production necessary to make a profit and if it is, is it realistic in terms of both cost and scale? Determine development time as well as development cost for the manufacturing process.

Contract manufacturing can be a significant cost-saving measure to implement, as it allows for part of the new product development process to be outsourced.

Also ask: what does procurement look like and how will end users get the product or service? 

Figure out what supply chain partnerships need to be established to facilitate sales.

4. Validate: Does it work, and what can we improve?

Start by making a test product, not only to make sure the design is viable, but the manufacturing processes are as well. The cyclical process of engineering design can be a very effective problem solving tool for quality control as the product idea gets refined.

Design for manufacturing (DFM) can also be helpful to streamline the process of new product development, as it aims to make better products at lower costs through ongoing optimization of components and designs.

5. Implement: How do we release it to the market and scale up?

Market research is key here. Ideally, the project manager would have already identified trends and competitors within the target market during the feasibility stage.

As you get closer to product launch, build upon the work you’ve already done. For example, by this point you should already know if mass production will be used. This would then allow you to research past data for products launched by similar companies under a wide variety of market conditions.

Develop manuals and other instructional workflow documents to allow for standardization of your manufacturing process, resulting in the consistent production of quality products. 

6. Evaluate: Was it successful and what could we do differently in the future?

Review all previous steps taken, making sure to document any lessons learned along the way. Use data-driven insights to improve manufacturing and design processes.

Set future milestones to determine progress quarter to quarter. This is an easy way to ensure validation of all teams’ hard work. 

Now, let's talk about what new product development (NPD) means versus NPI. 

What does NPD mean in manufacturing?

New product development (NPD) provides a roadmap for the entire product lifecycle, detailing how to bring a new product to market, renew an existing product, or introduce existing products to new markets. This is used not only to analyze internal business, but also to develop forward-facing market strategy. 

NPI vs NPD

While both are part of the product development process, these phrases do not describe the same components of product innovation. 

NPI specifically refers to manufacturing and launching new products.

NPD, on the other hand, is concerned with the ideation, design process, and commercialization of new products. 

Overall, the NPD process is one of trial and error, as it has to prove that a product can be produced profitably. Creativity and risk taking are encouraged to drive new concept generation. By comparison, NPI processes are far more disciplined in realizing designs from prototyping through production.

There is significant overlap between the two as the process evolves from concept throughout development to launch. These carefully managed, collaborative processes draw from the entire organization’s resources to ensure new products launch on budget and on schedule.

Product Success software is an essential resource to use when first creating a process for either NPI or NPD. Propel’s product lifecycle management platform is an industry-leader because of its single platform approach, which enables top and bottom line impact at the same time. 

Learn more about Propel’s NPD & NPI offerings or request a demo.


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Be'Anka Ashaolu
Editor in Chief, Converged

Be’Anka Ashaolu is an experienced marketing operations, content marketing, and demand generation leader who is obsessed with aligning talent and responsibilities to drive measurable results. She began her career in journalism before quickly moving into marketing technology, sales operations, and integrated campaign execution in the legal, cyber security, and retail analytics spaces. Be’Anka is constantly striving to balance productivity with effectiveness, meaning: her teams don’t just get stuff done – they get the right stuff done.

Fun Fact: Be’Anka is the Co-Founder and CMO of Nirvana Soul Coffee Purveyors in downtown San Jose. She owns the coffee company with her sister, Jeronica. The two are only 11 months apart in age!

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