Minimising risk in product development
A
Crucible Industrial Design product story
Edited by the Engineeringtalk editorial team
Feb 26, 2007
Mike Ayre highlights three issues that can reduce the risks involved in new product design and development.
Dragon's Den, which began its new series this month, has popularised innovation as a means of generating wealth, but the statistics are sobering.
According to the Harvard Business School, over 70% of business initiatives fail.
Product innovation is particularly risky as it often involves significant investment.
So, if product development is such a gamble, what's the answer?.
There are three main issues that can improve the odds.
The first and most important issue is that the potential new product must be the result of "market pull" not "product push".
Ideas that are based on limited personal experience or belief may succeed, but the risks are very high.
The same goes for new technologies with no clear commercial application.
Conversely, projects with the lowest risk are based on a clear market requirement.
Ideally, this would come from a large customer asking you to develop a product to fill a niche that they have identified, but it is more often the result of careful market research.
This can be difficult, time consuming and expensive, but not as expensive as losing a six figure sum invested in a product that no-one buys.
The second issue is the composition of your development team.
Innovation and individualism seem to go together, and many new products are driven by one strong personality.
However, to succeed, particularly in the complex markets we now operate in, a broad mix of skills is required.
Finance, planning, production, design, marketing, sales and customer care are all vital roles in any new product, and a good team of people who can cover all of them is essential.
Equally important is that they meet frequently and cover a clear agenda, to make sure that all aspects are on track.
Finally, plan your project carefully, and work back from critical dates.
This may seem obvious, but it is extraordinary how many companies do not do it.
If you have one major exhibition in your industry per year which is your main chance to launch your new idea, work back from that date.
Do you have time to complete all your development, tooling, testing, approvals and literature in time for this year's show, or will the launch need to be delayed until next year?.
How long will it take to create the tooling for the product?.
How will it be tested, and what approvals are needed?.
Are you compliant with the RoHS and WEEE directives and their time and cost implications?.
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