Summary: New product development is a critical source of revenue for manufacturers, that product development teams largely fail at. Help your teams excel with these simple solutions.
New products are a crucial part of profitability, but very few product development teams excel when it comes to launching them.
Of the 30,000 new consumer products launched each year, the Harvard Business School found that only 5% of the products succeed.
30,000 new consumer products are launched each year, but only 5% are successful.
And with 50% of revenue coming from new products, a lot rides on new product development (NPD).
The problem, however, is that many product development teams aren’t rising to the needs of the organization.
In fact, a recent survey by engineering.com found their performance to be so-so at best.
The performance of product development teams is so-so at best.
Today we look at the top three reasons product development teams fail, as well as how to overcome these common challenges.
1. Product data that’s hard to access
Product data is a really valuable resource.
Except when you can’t access it.
And this is, unfortunately, the reality for at least 50% of product development teams.
There’s plenty of product data out there, but very few, if any, people have access to all of it, especially beyond engineering teams.
Things get even trickier when you consider where this data is located.
Any given data point could be stored in an email thread, slack channel, shared drive or even exclusively on someone’s hard drive.
To be successful, product development teams must be able to access and reference the product data of their own projects, as well as that of others.
When teams can easily access product data, they benefit in multiple ways.
When information is hard to access, it becomes unclear which tasks have been completed, and which are still in progress.
As a result, product development teams often end up doing work the same work twice, because they’re unaware their peer has already finished the job.
Product designers are particularly bad at this, spending 80% of their time on work that’s already been completed, but is difficult for others to access.
When product data is hard to access, designers spend 80% of their time on work that’s already been completed.
When product data is accessible, it’s easy for product development teams to understand what needs to be done, and hop to it.
Innovation is easier
Access to product data like revision histories, product parts, and materials lists makes it easy for product development teams to fully understand the product, and to identify areas for improvement.
Access to product data from other projects is also beneficial when it comes to innovating.
When teams can access the product data within their organization, it’s easier for them to reuse parts to improve design efficiency.
Overall, access to product data simplifies and speeds up the innovation process for product teams.
Production is smoother.
When data is all over the place, it’s hard for product development teams to make sure their design meets all the specs it needs to.
The result? Mistakes get made and errors like incorrect designs being sent out to production happen.
With the minimum for most production runs in the 5,000 range, manufacturing an incorrect design is one pricey error.
When product data is organized, it’s easier for product development teams to ensure designs are up to snuff before going to production – keeping them on time and on budget.
Time isn’t wasted.
When product data is hard to find and access, product development is inevitably slower.
When information is all over the show, teams spend an upwards of 15% of their time looking for the information they need to do their jobs, instead of actually doing their jobs.
As a result, products take longer to release and generate less revenue when they do hit the market.
Product development teams can overcome this challenge by changing how they manage their data.
Hosting data in shared drives creates a central location for teams to find information, and is easily accessible with just a login and internet connection neccessary to do so.
2. Difficulty collaborating
Research by engineering.com found that the ability of product development teams to work together greatly impacted had a significant impact on their performance.
They found that teams who struggled to collaborate were six times more likely to fail when it came to developing innovative products.
Teams that had difficulty collaborating were six times more likely to fail when it came to developing innovative products.
The researchers also noted that product development teams that who didn’t receive feedback quickly from their peers were three times more likely to be over budget.
Product development teams that didn’t receive feedback quickly from their peers were three times more likely to be over budget.
The above findings demonstrate the importance of collaborating for product development teams.
When teams collaborate they:
To properly work together, product development teams need to be able to easily share information with each other.
Informal collaboration tools make it easier for people to share ideas and discuss the information they have at their disposal in a tool that they’re already using anyways.
3. Failure to leverage the cloud
Technology is the backbone of many teams today.
And product development teams are no exception.
Engineering.com found that the type of technology teams used during product development was tightly correlated with their performance.
They found that teams that use cloud-based systems are more successful overall.
Specifically, teams who use cloud-based tools:
- Stay on budget
- Create innovative products
- Launch on time.
Cloud-based systems make product data accessible, enable real-time collaboration, and help product development teams succeed.
To maximize the success of product development teams, they need to be equipped with tools that are cloud-based.
Cloud PLM / PDM solutions are particularly useful for teams because they streamline the revision process, and create a central repository for product data.
New product development is a crucial area where organizations can’t afford to fail.
Luckily the top three reasons product development teams fail are easily rectified.
To ensure success, product development teams need to:
- Make product data easily accessible through shared drives.
- Promote a culture of collaboration and give teams tools that support this.
- Use cloud-based systems to manage product development processes.
Image Credit: Tobias van Schneider via Unsplash
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