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Management of new product development

If a company is to be serious about new product development it must have a collection of ideas all fighting for approval. The problem is who provides the ideas and which ones should be developed.

There should be a policy that one or more ideas are being developed at all times, governed probably by a financial budget, because not all developments will succeed. As will be seen later, a typical development project takes several months so to have more than one running behind another is a wise strategy.

Sources of useful ideas

Product development is encouraged if a team of people appreciate what is wanted; they are allowed to share their ideas freely and in this way develop lateral thinking. They will be aware of the requirements (the problems) in their subconscious and should be ready to spot a useful idea whenever it is presented or occurs to them. By working together and stimulating each other, perhaps through brainstorming sessions where no one must be embarrassed about suggesting anything, many brains can be encouraged to be searching for ideas.

Members of the team should have experience of machinery developments, national market changes, competitors’ activity and be interested in products from overseas markets.

Having built a list of useful new product ideas the next stage is to put them in an order of potential merit for the situation in hand.

This list should be reviewed, added to and amended at least every six months.

From this list are chosen one or more products that will form the subjects for Development Projects.

Establishing a Development Project

A Development Project covers everything from making and assessing prototypes of the product to the first production run and the packaging.

There are very many aspects to consider so as soon as possible a Critical Path Plan should be constructed. This Plan will include ALL the tasks involved with annotations of who is responsible for each and estimates of how long should be allowed.

A key point is the design of the product. This covers the specification and packaging. It probably cannot be fully refined until prototype samples, which have been prepared for viewing and tasting, have been accepted.

The following are key stages in the progress of the Development Project

Stage 1: Formation of the development team

Stage 2: Preparation of prototype samples

Stage 3: Assessment of samples

Stage 4: Definition of tasks to be done and refinement of the Critical Path Plan

Stage 5: The first factory trial

Stage 6: The first production run

Stage 7: The launch

Preparation of new product prototypes

At some stage there must be samples that can be viewed and tasted. How can these to be made? Ideally there should be an in house test bakery with dedicated staff.

Using their skill and experience samples will be made that match either an existing product, which originated from another manufacturer, or has been described in outline from an idea.

Through the course of test bakery trials it may be that another potentially better idea develops. During these trials feasibility for large scale production will be better appreciated possibly suggesting special ingredients and equipment that will be needed.

If the company does not have access to a test bakery, preparation of test samples is much more difficult. The options include,

  • trials in the factory with relatively large mixes, use of available dough piece forming equipment and a factory oven. Such trials are expensive in terms of both ingredients and labour and offer very limited scope for formulation and processing variation.

This course of action will be considerably enhanced if a specialist consultant is involved but it is a poor substitute for test bakery development.

  • contracting out to a development agency. This could be a good option but close liaison is required to ensure that the later scale up programme will be realistic and possible. Help in this way may be available from certain ingredient suppliers.

The development organisation may not be familiar with the company’s machinery and human experience resources which eventually will have to take the project forward in house.

  • contracting out to a machinery supplier. If the product to be made requires new plant it is possible to commission the supplier of the plant to make the product on his equipment in your factory. Close liaison is required to ensure that all aspects of the product conform to expectations.

Assessment of samples

An important aspect of product development is to be able to see and eat the new product. Well structured tasting tests are required at which individual’s assessment (not deferring to the managing director’s opinions!) are carefully and accurately considered. Each person involved will have a different point of view that may colour his private and personal enjoyment of the product. For example, Marketing will want to be confident that they can sell the product because it looks good and offers value for money, Production will want to be sure they can make the product efficiently and that it will integrate well with existing production programmes.

The results from these assessments of samples are critically important and should not be rushed. Decisions made as a result of the tastings and deliberations will guide the rest of the project to success or failure.

Some companies can afford to go to market research with prototype samples and clearly the results from a wider group of people will give much more confidence to a project. However, to be truly meaningful many people should be involved in market research and this means that the number of samples required will be great and probably beyond the capacity of the normal test bakery.

Sample storage

Most biscuit products baked to low moisture levels have good shelf life performance if well protected from moisture pick up and bright sunlight. As an integral part of the Development Project sample storage should be programmed. Unexpected changes in texture or favours could ruin the success of an otherwise enjoyable product. Changes are particularly likely to occur where one or more parts of the product have a high water activity or a strong flavour.

Storage tests should be made even with early prototype samples so that surprises are discovered earlier rather than later.

Record keeping

Detailed notes about all aspects of the Development Project, from results of test bakery trials, to results of tasting tests and updates of the Critical Path Plan, must be kept to monitor progress and prevent development going around in circles.

The Critical Path Plan

As mentioned earlier, this Plan should include ALL the tasks involved with annotations of who is responsible for each task, and how long should be allowed. It is convenient to prepare the plan with a computer programme as the visual and amendment facilities are simple. All members of the development team should have access to the plan but only one appointed member should make amendments and he or she should ensure that any changes are well communicated.

Scale-up to factory production

Scale-up can be one of the most frustrating stages of the development because the aim is to make a product that is as similar as possible to the accepted trial samples.

It is probable that there will be several scale-up trials spaced over a number of weeks.

The first problem is to design the correct dough piece former, cutter, moulding roller or depositing die. There are various ways that sample cutters or moulding dies can be used but it will eventually be necessary to have complete cutters, moulding rollers etc. so that the effects of a full oven can be assessed.

It is only after full production runs of the product have been made that change parts for the wrapping machine and wrapping materials can confidently be ordered. It is also at this stage that details of product ingredients and nutritional information can be confirmed for display on the pack.

It is difficult to match biscuit size to a wrapping machine set up and is much more satisfactory to match wrapping to a large sample of baked biscuits. Only in this way can the natural variations in size of the biscuits be adequately accommodated by the wrapping machine.

At each scale-up trial a full and detailed Process Standards Document record should be created.

Why and when new products

Business improvement

Without attention to improvement, it is likely that any business will decline in profitability.

Attention is needed to market developments, competitors’ activity, customers’ needs and preferences and to the advent of new opportunities.

Many companies will want to grow and this might involve the purchase of new manufacturing plant to make a wider range of products.

A "product" is the totality of the baked part that can be eaten and enjoyed plus the packaging that protects and displays it to the potential consumer.

While the development of a new product might seem exciting there should also be attention to existing products. Attention to detail may revitalise these products and it is much less risky to promote an established product than to hope to get acceptance of a new product.

The overall efficiency of a company may be hindered if too many low selling products are retained. A low selling product has disproportionate overhead costs and may be in less than ideal conditions when purchased through long storage life. A policy of deletion of low selling products is as important as investment in new products.

Improving current products

Attention should be given firstly to the best selling products. Build on strength. If sales can be increased, production runs and manufacturing efficiency and profitability can be improved. Competition is less likely to succeed if your product is the best.

Factors to consider for improving a product,

  • look at the appearance and eating quality, could the flavour or texture be improved?
  • look at process control and efficiency records to identify problem areas. Can the production efficiency be increased or the product variability be reduced?
  • look at formulation cost. Can it be reduced by using other ingredients?
  • look at the market position. Have competitors eroded your market share with a better product.? Could changes in pack size and presentation be attractive? Would the introduction of snack size or multipacks be worth considering?
  • would a variation like chocolate coating or cream sandwiching offer a market extension opportunity?
  • does the pack protect the product sufficiently against damage in transport? Do the results from shelf life tests suggest that the product deteriorates too quickly?

It is always possible to improve a product. The question is whether a change is worth the effort and expense relative to other developments. However, the sales, marketing and production position of all existing products should be reviewed at least every six months. If a need for change seems apparent a development project, to integrate all aspects of change, should be set up. The development project should be managed in a similar way to that for a completely new product.

The need for new products

A new product may be considered necessary as a result of one or more of the following reasons,

  • a competitor’s product is eroding your market share. There is a need to offer a similar product or range of products to retain market share.
  • your company’s range of products needs increasing in order to increase market share or to enter new markets.
  • there is a need to fill manufacturing capacity, there may be under utilised plant or an opportunity to increase shift working.
  • there is an opportunity to capitalise on a market trend, such as dietetic biscuits, snack products, new flavours, products for particular occasions or introductions from other countries.
  • there is a technical development that allows manufacture of a product previously not considered or not possible.

Description of the stages of product development

Description of the stages of product development 

Why and when new products

  • Business improvement
  • Improving products
  • The need for new products

Management of new product development

Sources of ideas

  • Establishing a Development project
  • Preparation of new product prototypes
  • Assessment of samples
  • Sample storage
  • Record keeping
  • Project critical path plan
  • Scale up to factory production