Generating new products(product and process design)

 Generating New products

Because products die because products must be weeded out and replaced because  firms generate most of their revenue and profit from new products product selection definition and design take place on a continuing basis. Knowing how to successfully find and develop new product is a requirement.

New product Opportunities

Aggressive new product development requires that organizations build structures internally that have open communication with customer innovation organizational culture aggressive R&D strong leadership formal incentives and training. Only then can a firm profitably and energetically focus on specific opportunities such as the following:

  • Understanding the customer is the premier issue in new product development. Many commercially important products are initially thought of and even prototyped by users rather than producers. Such products tend to be developed by lead users companies organizations or individuals that are well ahead of market trends and have needs that go far beyond those of average users. The operations manager must be tuned in to the market and particularly these innovation lead users.
  • Economic change brings increasing levels of affluence in the long run but economic cycle and price changes in the short run. In the long run for instance more and more people can afford automobiles but in the short run a recession may weaken the demand for automobiles.
  • Sociological and demographic change may appear in such factors as decreasing family size. This trend alters the size preference for homes apartment and automobiles.
  • Technological change makes possible everything from cell phones to iPods to artifical hearts.
  • Political/legal change brings about new trade agreements tariffs and government requirements.
  • Other change may be brought about through market practice professional standards suppliers and distributors.
Operations managers must be aware of these dynamics and be able to anticipate change in product opportunities the products themselves product volume and product mix.

Importance of new products

Change in society markets economies and society has led to a shortening of life cycle, and this has intensified the need for most organizations to improve in terms of the products they offer. New products can provide the mechanism whereby further growth can take place. New products are important to sustain growth increase revenues and profits and replace obsolete items.

Increasing competition often itself coming from new or new modified products means that innovation is frequently not an option but a necessity.

Newness can vary from restyling or minor modification to producing products that are new to the world and that lead to new markets. The higher the degree of newness, the more likely it is that major gains in sales and profits may be made but at the same time the risks of incurring high costs and market failure are also increased. A single new product failure if big enough could bankrupt and organization. It is generally accepted that a very large proportion of new products fail although precise quantification is impossible as many new  products may be kept on the market despite not meeting their orginal objectives.
operations manager and their organizations are faced with a dilemma in the management of new product development new product development is essential but is also fraught with risks. The successful management of the dilemma is often to produce a large number of new product ideas most of which will never reach the market because they have been weeded out by an appropriate screening process.

Post a Comment