1. Managing NPD
Project Tradeoffs
Presented by:
Eric P. Rose, NPDP, MBA
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

2. Eric P. Rose, NPDP, MBA
• Adjunct Professor, Product Innovation,
Pepperdine & Loyola Marymount Universities
• NPD Consultant, Entrepreneur, Inventor
• BS Industrial Design, MBA, PDMA NPDP
• 30+ Years NPD Experience, 80+ Patents
• 2005 Co-Founded PDMA-LA, now President Emeritus
• Jan 2012 Launched Pinnacle Product Innovation, Inc.
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

3. Agenda
• NPD Project PentagonTM Framework
• NPD Stakeholders
• Managing NPD Project Tradeoffs
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

4. © 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

5. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

6. NPD Stakeholders Guide Tradeoffs
• External
• Partners (KOLs, Spokespeople, Reviewers, etc.)
• Customers, Shareholders
• Retailers, Distributors
• Internal
• Exec. Management, Finance
• Operations, Quality Assurance
• Research & Development
• Sales, Marketing, Customer Service, Repair / Service
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

7. Multivariate:
Having a number of
independent variables
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

8. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

9. Features vs. Product Cost
• Voice of Stakeholder (VoS)
• Prioritize Features by VoS
• Remove Low Valued Features
• Reallocate $’s
• To Higher Valued Features and or
• Increase Profit Margin
• [Mattel toy not TV promoted]
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

10. Features vs. Product Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

11. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

12. Features vs. Capital Equipment Cost
• Particular feature driving CapEx?
• Feature’s priority?
• Revise product design, reduce CapEx?
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

13. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

14. Features vs. Development Cost
• Identify feature driving Development Cost
• Feature priority (VoS)?
• Feature revised / eliminated / rolling launch?
• Cash flow management
• Existing technology to adapt vs. ground up
development?
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

15. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

16. Features vs. Schedule
• Feature priorities to develop? (VoS)
• Feature on or near project’s Critical Path?
• Development start before full project
approval?
• Feature roll out over time?
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

17. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

18. Product Cost vs. CapEx Cost
• Plant, Equipment, Tooling = CapEx
• ↑ CapEx = ↑ Output = ↓Product Cost
• Tooling / Mold Cavitation Review
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

19. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

20. Product Cost vs. Development Cost
• Engineers are never finished engineering
• Example – metal vs. molded caster socket
(Multivariate; Prod Cost, Dev Cost, CapEx, Schedule)
• Product Requirements Document
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

21. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

22. Schedule vs. Product Cost
• Deadline to meet? At what cost?
• Trade shows, investor meetings
• Again – metals vs. injection molded caster
socket example (multivariate)
• Available stock part vs. cheaper custom
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

23. NPD Project PentagonTM Framework
Features
Schedule Product Cost
NPD Project
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

24. Schedule vs. Development Cost
• Timing Critical? Add Resources?
• Mattel – “Christmas Never Moves”
Pooh Walker vs. Barbie
• Pay premiums to expedite services
(design, prototypes, market research, etc.)
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

25. Manage NPD Tradeoffs – With Eyes Wide Open
Features
Schedule NPD Project Product Cost
PentagonTM
Capital
Equipment Cost
Development
Cost
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com

26. Managing NPD Project Tradeoffs
Thank You!
eric@ericpaulrose.com
www.ericpaulrose.com
Twitter: @ericpaulrose
© 2014 Copyright Eric P. Rose, NPDP, MBA All Rights Reserved www.ericpaulrose.com