New product introduction (NPI) is a structured, inclusive, cross-functional process that modern companies use to take new products from initial concept all the way through design, engineering, prototyping, pre-production, and into full-scale production and market launch. Any company that makes and sells products needs to optimize their process of coming up with ideas for new products and bringing those items to market. In decades past, this may have happened organically or even accidentally, as new innovations changed the way people interacted with products and businesses. However, today’s businesses should establish a formalized NPI process for developing and introducing new products to their current and potential customers, in order to cut costs, minimize risk, boost revenue, and ultimately improve the customer experience.
New product development is part of NPI, but is typically focused primarily on the areas of new idea generation/brainstorming and product design. NPI is a more holistic process that encompasses the entire new product introductory cycle, from initial concept all the way to product launch and even beyond (see the common stages of NPI below).
Effective NPI processes involve and align procurement/sourcing, R&D, engineering, manufacturing, quality control, supply chain, finance, and sales/marketing teams.
A fully in-house NPI team is somewhat flexible in its makeup but will generally consist of:
Depending on the size and structure of your business, the NPI team may reside partially in-house while also utilizing outside members, in the case of contracted product developers, designers, engineers, consultants, manufacturers, and/or sales specialists.
It’s also worth noting that the teams, leaders, or key players may enter the NPI process at later stages (see below), depending on company custom and procedures. Some companies hire outside firms for new product concepts/idea generation and/or feasibility studies. Other companies may even stay out of the NPI process altogether until sometime during the mid-to-late design phase, if this works best for them. However, in most cases, it’s usually preferred to keep the NPI process fully in-house when possible, for efficiency’s sake (as well as better maintaining control of intellectual property and other related assets).
Since managing large teams with varying ideas and input can frequently become akin to herding cats, an efficient NPI team ideally consists of a limited number of people, each of which plays a primary role and has authorization to make key decisions. These decisions will then be communicated across other members and teams. The NPI process is intended and designed to allow members to express any concerns and resolve conflicts before the company expends unnecessary time or resources.
There are different ways of expressing the primary steps in the NPI process, but if we generalize we can usually identify 6 to 7 stages, depending on whether one’s definition of a new product introduction encompasses improvements/iteration after launch. These include:
The first step in any new product introduction is that someone actually has to come up with the new idea. This is harder than it might seem, especially in well-saturated markets with decades or even centuries of product history and iteration. A healthy company will encourage every employee to look at existing products in new ways, think outside the proverbial box, and suggest new ideas. These ideas may or may not be closely related to a company’s existing products or services. Some of the most successful businesses started out offering certain types of products or services but found greater success pivoting to a very different product or service. Netflix and YouTube are two famous examples.
Company leadership will have to decide how much freedom and resources they wish to allow for pie-in-the-sky brainstorming or idea creation, but at some point this stage will also include at least a cursory examination of feasibility, to determine whether a new product idea is even theoretically achievable. This is also the time for an initial risk assessment. As these factors are weighed, some ideas may need to be scrapped entirely, while others might be categorized as potentials further down the road as a growing company reaches financial milestones or other practical thresholds that permit further examination.
Before a new product idea can move on to the next phase, the team will need to identify:
If company management reviews and approves of the above and a feasibility/risk assessment shows promise, the NPI team can move on to the next step, which is usually market research.
Once company leadership have deemed a new product idea feasible and allocated at least a preliminary budget for development, the next logical step is to perform market research. The NPI team needs to identify what parts of the market might be interested in the new product, find the total addressable market (TAM), and develop theoretical/ideal client profiles. These can be based on age, income, interests, gender, and more. Market research may be done using internal resources or the team might elect to hire outside specialists.
There may be a clearly identifiable market if a new product is similar to existing ones, or there may only be a potential or theoretical market if a new product is radically different from anything else. In either case, all market information is valuable and can shape the prioritization and even the final design and production of the product.
Once a new product idea has been clearly identified, deemed feasible, and sufficient market research has been conducted, the product can enter the design and development phase. Typically the designers will produce several different virtual and/or physical models of the new product. The different designs may have only small variations if the market, idea, or intended functionality are extremely specific or esoteric. Or, the proposed designs may be radically different if there’s more flexibility in the market or the parameters of intended use or functionality are more broad.
The NPI team will usually produce and scrap multiple virtual designs before any technical drawings or physical modeling are produced, but this can vary depending on the industry and preference of the team. 3D printing and CNC machining might be useful at this stage (and is now common in the following stage; see below). In either case, the intent is to evaluate different designs as thoroughly as possible in order to gain an understanding of a product’s potential functionality, durability, effectiveness, customizability, and production costs, as well as any foreseen materials or manufacturing issues.
Also at this time, the team will ideally address any regulatory or safety requirements relevant to the industry so as to prevent wasted resources during the following steps.
There’s an old military axiom stating something to the effect that “no plan survives initial contact with the enemy.” In the context of NPI, of course, this means that we can plan and forecast and make our best designs, but once we start actually making something the plans and designs may need significant adjustment. During the pre-production/prototyping phase, NPI teams will work closely with engineering and manufacturing to create one or more viable product prototypes of the new design. The prototype should ideally feature all the materials and design parameters projected to be part of the final product. The team will then test the prototype to determine whether the product meets the requirements defined during previous steps.
Additionally, the pre-production phase should include any necessary material, stress, or chemical testing required by the regulatory body responsible for oversight of the relevant market or product category. This helps ensure any raw materials necessary in manufacturing and production are safe and that the process also conforms to the established per-unit production budget.
Many companies elect to conduct market testing during this phase as well, to allow for feedback on the desirability and utility of the product. However, this is not always possible, and in some cases, it might not be prudent, if there are security issues or potential intellectual property leaks involved with letting a larger circle of potential customers know about the product before it’s fully ready for production and distribution. We’ll discuss this further below.
Pre-production is also useful for illuminating any potential manufacturing bottlenecks, production line issues, supply/materials caveats, or other issues that haven’t been foreseen until the product is actually being produced in its embryonic form. Companies can learn valuable lessons and save significant costs by thoroughly evaluating not only the prototype/pre-production products, but also any new or modified manufacturing processes required.
During the pre-production phase, testing may include:
There are some nuances here, and manufacturing is considered a different step from mass production in some NPI leadership thinking. At this point, the product and processes have passed all initial pre-production evaluations and the initial test run of the product has been done, ideally with successful outcomes. However, the manufacturing process still requires extra-careful monitoring and audits. There may be potential issues that don’t show up until the manufacturing process has begun in earnest. The NPI team will regularly sample and inspect manufactured products at an accelerated cadence until confident that the process and results are within established targets.
As manufacturing ramps up, there may be new issues to address with production lines. Due to space, resource, or labor concerns, the initial production line may differ from subsequent production lines in small or even large ways. Supply chain disruptions may also be exposed at this point as manufacturing accelerates. Any bottlenecks or sourcing/supplier problems can have devastating impacts and can create costly delays in mass production. Diversifying sourcing, key suppliers, and vendors can help alleviate these issues, but can also introduce unwanted variations in key materials or components, so strict oversight must be maintained. If possible, maintaining a buffer inventory of all primary components necessary for manufacture of the product is also a good idea.
Scalability should always be examined carefully, and the processes and products regularly tested to make sure that the final product meets all standards. At this point, production can continue to ramp up, and if testing continues to show that the resulting product is as it should be, the QC and monitoring/testing cadence can be spaced out appropriately and the product can reach full mass production.
A successful product launch obviously requires a product. Many companies have teased customers with “coming soon” media campaigns or have required pre-orders. These can be effective, particularly within a loyal, enthusiastic customer base that’s already sold on the brand. It’s also worth noting that some companies essentially swap the above manufacturing/mass production and product launch stages of their NPI process, launching the product fully to market before it has actually entered its full mass-production phase. Relying on early adopters, influencers, and company-approved customer beta testing can have its place in some markets with certain types of products.
However, we’ve found that most new product launches are more successful when the product is available in its full production format and can be purchased and delivered immediately in volume upon launch. Marketing teams that try to increase demand through intentional (or unintentional) product shortages rarely succeed in winning new customers and retaining current customers. Furthermore, it can backfire by making a company seem incompetent or short-sighted.
Once a new product is launched, that’s not the end of the process. Customer feedback can be incredibly valuable in improving products, creating long-term business success, and increasing a product’s lifecycle. After all, businesses exist fundamentally to produce an excellent experience for the customers who buy their products; otherwise, they don’t remain solvent very long. While internal audits and testing are essential, many times, customer response and input can expose issues or potential improvements to materials, design, or features that previously went unnoticed.
Additionally, as mass production continues, the NPI team may notice further manufacturing improvements or efficiencies that can be implemented to streamline the process further and reduce wasted resources or time.
As improvements or iterations of a product are implemented, the same processes must be followed as far as design, pre-production, prototyping, and manufacturing/QC. Ideally, a product will be able to live out its lifespan fully utilizing the allotted resources, production line tooling, and established procedures. However, this may not always be the case. The team will need to determine at what point a product should be considered improved or modified, and whether the changes are significant enough for it to be considered a different, new product and treated as such.
At its core, new product introduction is more than a process–it’s a strategic framework that embeds quality, manufacturability, cross-functional collaboration, and continuous improvement into a company’s product launches. A strong NPI strategy utilizing capable team members is critical for maintaining competitive advantage, efficiency, and customer satisfaction.
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