NPDP

Business, Legal & Accounting Glossary

Definition: NPDP


NPDP


Full Definition of NPDP


NPDP stands for new product development process.

The design of any product or service is critical to its success. At the design stage, the quality, features, function, cost, producibility, serviceability, maintainability and more are established.

The NPDP is the foundation for the company’s products and ultimately its direction and future.

Drivers Of Design-Change

  • Technology – products must keep up with the latest.
  • Customer demand – users or customers may require specific design attributes. Much of this info can be gathered from market research, focus groups, warranty claims, and customer service feedback.
  • The competition – if the competition introduces new models or designs, other companies may need to do so as well to remain competitive.
  • The law – the FDA, EPA, CPSC and other bodies may govern product design characteristics
  • Raw materials – new and better materials may become available, existing materials may become scarce or expensive.
  • Obsolescence – in time, products become outdated or no longer viable

Idea Generation

Ideas for new products can come from various sources. Some are:

  • Research and development in general
  • Suppliers, sales teams, and distributors – they should know what customers want
  • Industry publications and trade journals
  • Product returns, warranty claims, customer complaints, product failures in general
  • Focus groups and interviews, customer surveys and other market research
  • Trial users, beta testing, field testing

Other idea generators include:

  • Perceptual maps – these are a visual comparison of customer perceptions with respect to the company’s product and its competitors’.
  • Benchmarking – this involves comparing the company’s product or service with the best-in-class
  • Reverse engineering – this is looking at the competitors’ products and dismantling them to improve the company’s own product. There may be ethical issues with this, as well as intellectual property and/or patent violations.

First-mover Advantage

In a competitive marketplace, a design must be an ongoing process, endeavouring to make use of first-mover advantages. During the initial period of exclusivity (when the firm has the first-mover advantage) it can charge more than when other companies have comparable products. Then, even when other firms have competing products, the cost to produce them by the incumbent firm is proportionately lower.

Group Technology

In manufacturing, group technology combines product components into families. For example, all screws, all brackets, all wires, all bushings, all connectors, would each have their own group.

These products are designed as a group instead of individually. They are also manufactured in cells. Any similarities are useful in making the design and manufacturing processes more efficient.

Group technology aids in getting the product to market faster, part (component) standardization, limited developmental and tooling costs, and more.

Questions to ask during process design

  • Will the process achieve a competitive advantage in terms of differentiation, response, or low cost?
  • Does the process remove or reduce design steps that do not add value?
  • Does the process make the most of customer value (in the customer’s eyes)?
  • Ultimately, will the process contribute to winning new business and orders?

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Definition Sources


Definitions for NPDP are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 29th March, 2020 | 0 Views.