How You Can Be Successful
New Product Development (NPD) in most industries today is complicated by intensive competition, rising raw material costs, advancing technologies, increasing demand for functionality, focusing on enhanced safety, and improving supply chain and distribution. Ideas come from consumers, end-users, customers, distributors, suppliers, universities, and in-house research and production staff. Products are regulated and fast-changing (note the recent development trends of nutraceuticals in the food and beverage industry). Even a small company is testing and marketing dozens of product varieties. Managing this vast array of products, ideas, and requirements is a challenge for anyone. What’s a new product development practitioner to do?
Enter Portfolio Management (PM). PM is a decision-making process, utilized in conjunction with the NPD process (such as stage-gate™), to help senior management strategically align and prioritize projects to add the most value to the firm while optimizing scarce resources (people, time, money, and equipment). Selecting from the broad spectrum of available projects requires company-specific strategic criteria and guidelines to evaluate each project relative to others under consideration. Using PM to wisely choose the right projects to work leads to faster time-to-market, higher return on NPD investment, and earlier selection of exceptional projects.
Portfolio management is a dynamic decision-making process used to allocate scarce resources to deliver the most valuable new products to the market. Lack of a PM process often means a failure to match the firm’s strategic mission, vision, and values to the project development work ending up with too many projects, too few resources, poor quality of execution, and suboptimal cycle time.
Instead, innovative companies can supercharge their product delivery by focusing on the projects that match the firm’s strategy, balance new products with existing product lines and customer needs, and optimize the financial value of the new product portfolio. Strategies and active new product portfolio projects should be visible and shared amongst team members. In conjunction with a formal, cross-functional NPD process, portfolio management can help identify the best new product and service concepts early in order to maximize time to market and profitability.
Premier Members: Please refer to the white paper “Best Practices for Portfolio Management” for tips and techniques to manage your NPD portfolio.
All others can can download the entire white paper for just $8.95. Download Now
Image of products in supermarket courtesy of Flickr.
© 2011 Global NP Solutions, LLC