General Manager Topics in the Global Industrial Chemical Market. This is a series of 7 Short Papers regarding New Product Creation and the James Patrick McAliney Method of New Product Development.

1. JamesPatrick McAliney - January 26, 2018
General Manager Topics in the Global Industrial Arena –
A Series of Short Papers
#1 Before Even Thinking About a New Product Offering: MEASURE!
The businessof expandingIndustrial ProductOfferings inthe global arena(inthiscase,the Polymerand
Chemical marketplace) cansometimesrunonautomaticpilot followingapattern of customer
frustration,costlydelays,wastedrawmaterials,lostproductiontime,teamfrustrationandwasted
manpower!
NewProductCreation(newbusinesslines) mustbe basedupon the correctmeasurementsof existing
marketand customerneeds. Successful Business leaderswhocanmove fastand take advantage of rapid
marketchangesand volatility causedbychangesin regulations,raw material shortagesandchanges,
price increases (justtoname a few) are the leadersthatoutpace the competition. Foreseeingand
drivingthese changes canbe the differencebetweensuccessandfailure.
Basedon my experience,there are 7Areasto Measure whichdetermine successorfailure for New
ProductCreation:
1. Value
2. Timing
3. Resources
4. Competitive Reaction
5. Differentiation
6. Market Size
7. Intellectual Properties

2. Figure 1: The McAliney Method of New Product Creation: 7 Areas to Measure for Success
Everycompanyhas dedicated resources -- sales,marketing,development,R&D -- workingonnew
business generation,right?Butthe fact isthat youneedto challenge yourselfwith the brutal realityof
the marketNEED before launchingan“excitingnew”revenueidea. So the question becomes,“Howdo
we measure successorfailure of a newproductconceptbefore turningthe shipinthatdirection?”
Here are the 7 pointsof measurementthat have supportedmyowngeneral managementsuccess:
The McAliney Method
of
New Product Creation
The 7 Areas to
MEASURE to
ensure success
1."Value"
2."Timing"
3."Resources"
4."Competitive
Reaction
Assessment"
5."Differentation"
6."Market Size"
7."Intellectual
Properties"
Cost Advantage?
Profitability?
Scale up
time?
Market Timing?
R&D Know-How?
Manufacturing Asset
Availability?
Marketing/Sales
Horsepower?
Customer Champion?
Nothing?
Price
Movement
New Product
Intoduction?Aquistion?
Innovative
or Copycat?
Cost ?
Production
Yield?
Too
Small?
Too
Large?
Multiple
Market
Potential
Impenetrable Niche?
Patentable?
New IP?
Sub-
licence?
Raises the
Standard?

3. 1. Value:Whyare we doingthisproject? Will itgenerate the Profitability, MarginsandROIto make it a
winner?Orisit someone’s“pet”project thathasbeenonthe booksfor years? At whatprice do we
enterthe market?(Thisdecisionwill setthe stage withyouandyourcustomersforyearsto come.)
Competitors’ currentpricing?Canwe achieve the company’sfinancial goalsatcurrentcost/market/price
points?Whatis the expected margin once it’s commercial - price/volume/EBITDA.
2.Timing:The elementthatdeterminesyoursuccessandfailure isTIMING. Thisis yourroadmap to
successand accountability.Measure/Measure/Measure!WhencanMarketinggetcustomer
commitmenttoruntrials?Do we do the trialsinternallyfirst?DoesR&Dhave the
formulation/compounding/processing“bugs”all workedout? Whencan manufacturingscale upto
commercialization?Aswe know,everythingispossiblebutwhenwillitbegintoaddto the budget
profitability?Nextmonth? Nextyear?5years? Timingisprobablythe mostcritical elementwhen
developingnewproducts andthe costof timingmustbe calculatedbefore seniormanagementwill give
itsblessing. Ghantcharteverything - startto end - every step.Postit whereall can see. Changeit
daily/weekly.
3. Resources:Whodoeswhat forhow long?How much R&D/Manufacturing/Sales/Marketing/Supply
Chain/Customerservice/Legal/Managementtime needed?Willthe Assetutilization be improvedor
lessened?Workingcapital required? New Equipmentinvestment?CustomerInvestmentandoverall
customerinvestment/cooperation…orlackof? Do you havethe resources to bring it to market?
4. Competitive Reaction: Whatwill theydo?Nothing? Idoubtit. Remembertheywanttokeepthe
businessmore thanyouwantto take it. Will they dropthe price of theircurrentproduct?Acquire a
companyor technology toovercome youradvantage?Introduce anew product- perhapsalreadyonthe
shelf? Accountforall competitor’spotentialreactions.
5. Differentiation:Howdifferentisyournew product? Cost/Price/Waste/Line speeds/Efficiencies/Re-
qualification/HESconcerns –These are justa few of the differentiationelements. Measurethe
differencesusing real dollarsand put it on paper.
6. Market Size:What if the marketis toosmall – notworth the additional capital,inventoryandcost?
What if you hita homerunandit’sthe bestthingsince slicedbread? Are there potentiallymultiple
markets?Measureyourmarket, targetsize and expected volume/margin/EBIDTA.
7. IP: Can youpatentyour newproduct/technology? Isitnew? Is there similarexistingtechnology? Can
you measurethe valueof a newproductversus a currentsolution in the market?
The bottom line –To be best-in-class in new product creation, you must first create measurable
metrics. Otherwise, you are driving blind and wasting time and money.
Stay tuned for more detail in these 7 areas of Success Measurement at
jamesmcaliney.com/blog.

4. ABOUT THE AUTHOR: James Patrick McAliney is a veteran of the industrial productization
world, having spent the past 25+ years in the global polymers and chemicals market, managing
organizations and cultures across the globe. He resides in New York State and is available for
greater discussions on any of his blog topics. See more at https://www.linkedin.com/in/jim-
mcaliney