New Product Development
Affinity Diagram: An affinity diagram is commonly used within project management and allows large numbers of ideas stemming from brainstorming to be sorted into groups for review and analysis.
Alpha Testing: In-house testing of a new product or version, to identify design flaws or deficiencies. The results of the Alpha test either confirm that the product performs according to its specifications or uncovers areas where the product is deficient. The Alpha test should not be performed by the same people who are doing the development work.
As-Is Process Model: A version of a process model depicting how an existing process actually works. Also referred to as Current-State model.
Balanced Scorecard: The balanced scorecard is a strategic planning and management system to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.
Benchmarking: A process of collecting process performance data, generally in a confidential, blinded fashion, from a number of organizations to allow them to assess their performance individually and as a whole. Also referred to as Performance Benchmarking.
Best Practices: Methods, tools or techniques that are associated with improved performance. In new product development, no one tool or technique assures success; however a number of them are associated with higher probabilities of achieving success. Best practices likely are at least somewhat context specific. Sometimes called “effective practice.”
Beta Testing: The primary purpose of Beta testing is to determine how the product performs in an actual user environment before general availability to consumers. Another purpose is to capture feedback and testimonials from early adopters and customer advocates for launch promotion programs and creating a buzz in social media. Typical timeframe for an early adopter or beta program is between 8-12 weeks.
Bill of Materials (BOM): A listing of all subassemblies, intermediate parts, and raw materials that go into a parent assembly, showing the quantity of each required to make an assembly.
Break-even Point: The point in the commercial life of a product when cumulative development costs are recovered through accrued profits from sales.
Business Case: The results of the market, technical and financial analyses, or up-front homework. Ideally defined just prior to the “go to development” decision (gate), the case defines the product and project, including the project justification and the action or business plan.
Business Process Management (BPM): BPM involves modeling, design, execution, monitoring, and optimization of a business process with the intent to improve customer satisfaction, product quality, and time-to-market speed.
Business Process Modeling: Business Process Modeling is the activity of representing processes of an enterprise, so that the current process may be analyzed and improved. BPM is typically performed by business analysts and managers who are seeking to improve process efficiency and quality.
Business Process Improvement: Business Process Improvement (BPI) is a systematic approach to help an organization optimize its underlying processes to achieve more efficient results.
Cannibalization: That portion of the demand for a new product that comes from the erosion of the demand for (sales of) a current product the firm markets.
Capability Maturity Model (CMM): CMM is a model of the maturity of the capability of certain business processes. A maturity model can be described as a structured collection of elements that describe certain aspects of maturity in an organization, and aids in the definition and understanding of an organization’s processes.
Change management: is a field of management focused on organizational changes. It aims to ensure that methods and procedures are used for efficient and prompt handling of all changes to controlled IT infrastructure, in order to minimize the number and impact of any related incidents upon service.
Classification: A systematic arrangement into groups or classes based on natural relationships. Also referred to as Categorization.
Collaborative Development: When two firms work together to develop and commercialize a specialized product, the smaller firm may contribute technical or creative expertise, while the larger firm may be more likely to contribute capital, marketing, and distribution capabilities. When two firms of more equal size collaborate, they may each bring some specialized technology capability to the table in developing some highly complex product or system requiring expertise in both technologies. Collaborative product development can take place between a company and a key customer, supplier, or a research institution.
Commercialization: The process of taking a new product from development to market. It generally includes production launch and ramp-up, marketing materials and program development, supply chain dev elopment, sales channel development, training development, training, and service and support development.
Critical Chain Project Management (CCPM): CCPM is a method of planning and managing projects that puts the main emphasis on the resources required to execute project tasks. This is in contrast to the more traditional critical path and PERT methods, which emphasize task order and rigid scheduling. A Critical Chain project network will tend to keep the resources levelly loaded, but will require them to be flexible in their start times and to quickly switch between tasks and task chains to keep the whole project on schedule.
Critical Path: The set of interrelated activities that must be completed for the project to be finished successfully can be mapped into a chart showing how long each task takes, and which tasks cannot be started before which other tasks are completed. The critical path is the set of linkages through the chart that is the longest. It determines how long a project will take.
Critical Path method (CPM): CPM is a mathematically based modeling technique for scheduling a set of project activities, used in project management.
Competitive Intelligence: Methods and activities for transforming competitor information (publicly available and word-of-mouth) into relevant and strategic knowledge about competitors’ position, size, efforts and trends. The term refers to the broad practice of collecting, analyzing, and communicating the best available information on competitive trends occurring outside one’s own company.
Configuration Management (CM): Configuration management (CM) is a field of management that focuses on establishing and maintaining consistency of a system’s or product’s performance and its functional and physical attributes with its requirements, design, and operational information throughout its life.
Cycle Time: The time it takes to complete a process, activity, or task from start to finish. Cycle time is one of the key performance metrics in process analysis.
Decision Analysis: Decision analysis is the discipline comprising the philosophy, theory, methodology, and professional practice necessary to address important decisions in a formal manner. It uses
Decision Tree: A diagram used for making decisions in business or computer programming. The “branches” of the tree diagram represent choices with associated risk s, costs, results, and outcome probabilities. By calculating outcomes (profits) for each of the branches, the best decision for the firm can be determined.
Differentiation Strategies: Differentiation segments the market and ‘vectors of differentiation’ define the relative position of products in the market. For technology products, typical product advantage based vectors of differentiation include features, design, increased productivity, quality, performance, security, availability, and Total Cost of Ownership (TCO).
Early Adopters: For new products, these are customers who, relying on their own intuition and vision, buy into new product concepts very early in the life cycle.
Earned value management (EVM): EVM is a project management technique for measuring project progress in an objective manner, with a combination of measuring scope, schedule, and cost in a single integrated system.
Exit Strategy: The term may be used for a business or a product. For a business, it refers to the process of a Merger and Acquisition or the sale of intellectual property. For a product, it refers to the process for deleting a product or product line from the firm’s portfolio.
Feasibility Study: The set of product development tasks in which major unknowns are examined to produce knowledge about how to resolve or overcome them or to clarify the nature of any limitations. Sometimes called exploratory investigation.
The Fuzzy Front End: It is the not-so-clear “getting started” period of new product development processes. It is in the front end where the organization formulates a concept of the product to be developed and decides whether or not to invest resources in the further development of an idea.
Gap Analysis: The difference between projected outcomes and desired outcomes. In product development, the gap is frequently measured as the difference between expected and desired revenues or profits from currently planned new products if the corporation is to meet its objectives.
Growth Strategies: Strategy aimed at winning larger market share, even at the expense of short-term earnings. Four broad growth strategies are diversification, product development, market penetration, and market development.
Idea Management: All of those activities and processes that lead to creating broad sets of solutions to consumer problems. These techniques may be used in the early stages of product development to generate initial product concepts, in the intermediate stages for overcoming implementation issues, in the later stages for planning launch and in the post-mortem stage to better understand success and failure in the marketplace.
Initial Screening: The first decision to spend resources (time or money) on a project. The project is born at this point. Sometimes called “idea screening.”
Innovation Strategies: The firm’s positioning for developing new technologies and products. One categorization divides firms into Prospectors (those who lead in technology, product and market development, and commercialization, even though an individual product may not lead to profits), Analyzers (fast followers, or imitators, who let the prospectors lead, but have a product development process organized to imitate and commercialize quickly any new product a Prospector has put on the market), Defenders (those who stake out a product turf and protect it by whatever means, not necessarily through developing new products), and Reactors (those who have no coherent innovation strategy).
Integrated Product Development (IPD): A philosophy that systematically employs an integrated team effort from multiple functional disciplines to develop effectively and efficiently new products that satisfy customer needs.
Intellectual Property (IP): Information, including proprietary knowledge, technical competencies, and design information, which provides commercially exploitable competitive benefit to an organization.
Key Performance Indicators (KPI): Criteria on which the performance of product or process are evaluated.
Knowledge Management (KM): KM comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizations as processes or practices.
Market Research: Information about the firm’s customers, competitors, or markets. Information may be from secondary sources such as analyst reports or published papers or primary sources such as customers or potential customers. Market research may be qualitative in nature, or quantitative.
Market Segmentation: Market segmentation is defined as a framework by which to sub-divide a larger heterogeneous market into smaller, more homogeneous parts. These segments can be defined in many different ways: geographic, demographic, behavioral, etc. There are many analytical techniques used to identify segments such as cluster analysis, factor analysis, or discriminate analysis.
Needs Assessment: Needs assessment is a systematic process for determining and addressing needs, or “gaps” between current conditions and desired conditions or “wants”. The discrepancy between the current condition and wanted condition must be measured to appropriately identify the need. The need can be a desire to improve current performance or to correct a deficiency.
New Product Development (NPD): The overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product. For technology products, there are two distinct, parallel paths each with their own stages and gates in the NPD process. One is the research and development (R&D) path from concept to launch. The other is the product strategy, product management, and product marketing path focused with heavy emphasis on market research and market analysis.
PMO: stands for Project Management Office. PMO is the organizations source of project and portfolio management expertise. PMO is responsible for all the projects in the project portfolio and serves as the guardian of project management standards, a central resource for project management tools, best practices, template library, and reuse.
PRISM: stands for Product Idea Screening Model. It is used for applying stages and gates and a scoring system to determine which resources should be applied to New Product Development.
Project Portfolio Management: Portfolio management is the optimized allocation of resources on the right projects, specifically those aligned with the business strategy. Technology companies that apply portfolio management to their innovation management, NPD, and PLM processes are more likely to succeed in bringing new products to launch, creating profitable growth, and extending lifecycle returns.
Product Data Management: PDM is the use of software to track and control product data. PDM is the “heart” of many PLM implementations. Key components of PDM are Bill of Materials Management, Engineering Change Control, Configuration Management, Classification, and Security Management.
Product Launch: The process by which a new product is introduced into the market. Product launch is typically managed by product management and product marketing. Planning for a full-scale launch starts with a detailed checklist, clearly defined accountability and responsibility for each checklist item, a timeline of launch activities, and a contingency plan.
Product Lifecycle Management (PLM): PLM integrates the product information and processes for ideation, design, engineering, manufacturing, and maintenance through the life cycle of products.
Product Management: Product management is focused on bringing new products to market, ensuring that profitably meets the needs of customers, and extending lifecycle returns. Product management involves strategic responsibilities such as product strategy, portfolio management and roadmapping. Product management also owns tactical responsibilities such as requirements management, early adopter programs, and product launch. As a function, product management may reside within the marketing or the product development department.
Product Marketing: Product marketing deals with the first of the “7P”‘s of marketing, which are Product, Pricing, Place, and Promotion, Packaging, Positioning & People. It deals with more outbound marketing tasks such as marketing the product to prospects, customers, and others.
Product Mix: A group of products marketed by an organization to a given target market. The products in the group have common attributes, customers, and application. They may also share technologies, channels, and other elements of the marketing mix.
Product Platform Strategy: Platform strategy is the first manifestation of the strategic vision in a specific strategy. It affects the resulting product lines and their development.
Product Strategy: Product strategy starts with strategic vision and business strategy which together drive the platform/product line strategy and differentiation strategies such as product advantage or price-based. Product strategy should be constantly monitored to achieve a strategic balance by reconciling the unlimited options inherent in the strategic vision with the realities of limited resources such as time and money.
Process: A process is a series of interconnected activities that take input, add value to it and produce output. It’s how organizations do their day-to-day routines.
Process Simulation: Simulation of a process model to understand process dynamics and analyze process performance with the intent to improve the process. Typically, process simulation is used to evaluate a new process or changes to an existing process before the actual process is implemented.
Process Optimization: Process optimization is a quantitative tool for adjusting a process so as to optimize some specified set of parameters given some constraint. The most common goals are maximizing revenue, minimizing cycle time, minimizing cost, or maximizing throughput, a
Program: A program is a collection of related projects, often with the intention of delivering a capability to change. Programs may include elements of related work outside of the scope of the discreet projects in the program. Some projects within a program can deliver useful incremental benefits to the organization before the program itself has completed.
Project: A project is a temporary endeavor with specific objectives, a beginning and end, and a set of constraints that creates a beneficial change or added value. Three constraints of a a project are: time, budget, and scope.
Project Management: The set of people, tools, techniques, and processes used to define the project’s goal, plan all the work necessary to reach that goal, lead the project and support teams, monitor progress, and ensure that the project is completed in a satisfactory way.
Requirements Management: Successful new product development starts by understanding what your customers want and need. Requirements management is the process of documenting, analyzing, tracing, prioritizing and agreeing on requirements and then controlling change and communicating to relevant stakeholders. It is a continuous process throughout a project. Requirements management requires interactions with external entities like customers, partners, and industry analysts as well as internal entities such as engineering management, quality management, and the chief architect.
Resource Capacity Management: Planning, scheduling, monitoring, and adjustment of resources such as people or equipment to meet a required demand or workload.
Roadmapping: Roadmaps are the means to define and communicate where the company is going, where the technology, platform, and product-line are going.
Scrum: Scrum is an agile software development model based on multiple small teams working in an intensive and interdependent manner. Although Scrum was originally intended for software development projects, it can be applied to any product development project.
Simpson’s Rule: is used for estimating the expected duration of an activity or task. The expected value is calculated by adding the minimum, maximum, and 4 times the most likely value, and dividing the sum of those by 6.
Six Sigma: It seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (“Black Belts”, “Green Belts”, etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction and/or profit increase).
Stage-Gate Model: Stage-gate model, also referred to as a phase–gate process, is a project management technique in which an initiative or project (e.g., new product development) is divided into stages (or phases) separated by gates. At each gate, the continuation of the process is decided by a manager or a committee. The decision is based on the information available at the time, including the business case, risk analysis, and availability of necessary resources (e.g., money, people with correct competencies).
Spiral Development Approach: A product development methodology in which prototypes and models are used early in development to define requirements and design the product. Commonly used when the product being developed is new (as in Research & Development) and the customers do not have a concrete understanding of their requirements and design attributes.
Subject Matter Expert (SME): Also refered to as domain expert, is a person with special knowledge and deep experience in a subject area.
Supply Chain Management (SCM): In the APICS Dictionary, SCM as the “design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.”
Technology Adoption Curve: The technology adoption lifecycle model describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or “bell curve.” The model indicates that the first group of people to use a new product is called “innovators,” followed by “early adopters.” Next come the early and late majority, and the last group to eventually adopt a product are called “laggards.”
Technology Assessment: Technology assessment is a scientific, interactive, and communicative process that aims to contribute to the formation of public and political opinion on societal aspects of science and technology.
Test Markets: The launching of a new product into one or more limited segments (geographic or demographic) in a very controlled manner, and measuring user response to the product and its launch. When multiple geographies or demographics are used in the test, different advertising or pricing policies may be tested and the results compared.
Theory of Constraints (TOC): TOC adopts the common idiom “A chain is no stronger than its weakest link” as a new management paradigm. This means that processes, organisations, etc., are vulnerable because the weakest person or part can always damage or break them or at least adversely affect the outcome. The analytic approach with TOC comes from the contention that any manageable system is limited in achieving more of its goals by a very small number of constraints, and that there is always at least one constraint. Hence the TOC process seeks to identify the constraint and restructure the rest of the organization around it, through the use of five focusing steps.
Time to Market: The length of time it takes to develop a new product from initial concept (ideation) to product launch.
To-be Model: A version of a process model depicting how a new proposed would work. The result of the process improvement or re-engineering work. Also referred to as Future State model.
Tornado Diagram: Tornado diagrams are useful for sensitivity analysis – comparing the relative importance of variables. The sensitive variable is modeled as uncertain value while all other variables are held at baseline values.
Virtual Product Development: Virtual Product Development (VPD) is the practice of developing and prototyping products in a completely digital 2D/3D environment. VPD has four main components: virtual product design (3D shape, 2D graphics/copy), virtual product simulation (drop test, crush test, etc.), virtual product staging (retail space planning, consumer research and behavior analysis), and digital manufacturing (process planning, assembly/filling virtualization, plant design).
Voice of the Customer (VOC): Market research process for identifying, organizing and prioritizing customer needs. VOC delivers a set of customer wants and needs that is: 1) complete, 2) expressed in customer’s own words, 3)organized into a classification, 4) prioritized by importance and performance.
Work Breakdown Schedule (WBS): A narrative document which describes the effort to accomplish all work contained in each WBS element. The WBS will often result in the project or contract statement of work (SOW).
Whole Product: The core product, plus all other sources of product benefits, such as options, plug-ins, service, warranty, etc. Also referred to as the Augmented Product.
Acknowledgement: Some of the definitions for terms in this glossary have been adapted from the PDMA glossary and Wikipedia.