Process as vital as products to improve NPD success

By Gary Scattergood

- Last updated on GMT

Related tags New product development Manufacturing Cost Npd

Don't compromise the success of new food and drink products by neglecting manufacturing practicalities, warns Coriolis
Don't compromise the success of new food and drink products by neglecting manufacturing practicalities, warns Coriolis
Food and drink companies are failing to give their new products the best chance of success by paying too much attention to products and not enough to the practicalities of the manufacturing processes, according to food specialist management consultancy Coriolis.

Failure to understand the basic processes involved and production timescales were responsible for significant number of new product development (NPD) failures, said Paul Eastwood, Coriolis’s operations director.

“Even if you have a good product, failing to understand the true cost of the manufacturing process, including things like labour and waste, all too often results in margins being eroded away. If a new product does not meet its cost standard in the first six weeks, it never will,”​ he said.

Trials rarely completed

He said his experience showed that factory trials were rarely completed to the standard required to deliver the true cost of manufacture. A good trial should involve a full length production run with the standard crew and run rate prior to agreeing a listing, he added.

“We regularly see companies which spend time and money carefully crafting new products in ways which do not reflect manufacturing conditions while the required trials are often never completed. This greatly reduces companies’ likelihood of success,”​ said Eastwood.

He said many companies viewed investing in a pilot plant as an expensive outlay, but insisted it was invaluable to deliver products that matched the manufacturing process.

Stock write-off

“In a recent trial, we witnessed a product made in a different size packaging to the final design. When the business came to use the new packaging design it did not fit on the existing kit. Having ordered 12 weeks of stock this meant not only a delay in launch but a stock write-off,”​ he said.

Eastwood also said that companies should only invest in new stock or equipment once concepts are proven.

“We estimate to invest up-front companies must be running at a 70% success rate just to break even. This does not include any consideration for stock and equipment on the balance sheet.

“In my opinion, if you can’t find a way of improving your NPD success rate, you’re probably not looking hard enough.”​ concluded Eastwood.

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1 comment

This is nothing new, it's been happening for decades

Posted by Tony Pritchard,

Irresponsible new product development (NPD) can often be the catalyst for productivity erosion, capacity sapping and packaging graveyards.

Also, how many times have you seen NPD departments developing products that are cost prohibitive to their customers because they don't fit their margin aspiration profile?

While NPD is critical to any organisation, it can also be corrosive to operations and customer relationships if allowed to function on a 'loose cannon" basis.

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