Issue Resolution and Prevention Specialists
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Surprise – Your Customer Just Fired You!
Our New Product Development team was following what seemed like the best-practice formula for success. They held several weekly engineer-to-engineer meetings and monthly management meetings with the customer, and regular internal management reviews to monitor progress. It was quite a shock when the customer fired us shortly before the product was supposed to launch - after 2 years of development effort and investment!
The product was custom and complex. Numerous engineering changes were made over the first 12-months to improve the design and better align with evolving customer needs. All changes were discussed frequently with the customer engineers, including ballpark estimates of the cost impacts of those changes. The customer engineers advised us to wait until all the changes were settled before issuing an updated quotation. Following that advice was a huge mistake!
Nearly 24 months after project kick-off, and innumerable requirement changes and optimizations later, the specification and design were frozen. It was time to quote the updated product (at its corresponding new, higher price, resulting from all the additional features the customer’s engineers had asked for along the way) formally to the customer’s Purchasing Management. Customer Purchasing Management felt blindsided by the new price and immediately canceled the project! We had assumed all along that our engineering counterparts were communicating within their own organization. They were not.
Analysis after the fact showed that despite direct contact with customer engineers and mid-level management, engagement with the right top-level contact people (the ones who make the budget/spending decisions) had not happened. The pricing surprise resulted in a loss of confidence in our team by the customer’s senior management team. There’s no such thing as “The Customer”. Each customer is made up of a variety of constituencies, each with their own motivations, goals, and metrics. It is your responsibility to keep all the relevant players in the loop.
Several lessons can be drawn from this expensive, unpleasant experience:
1. Make your own efforts to over-communicate to customers at all levels.
2. Do not assume the customer communicates internally across departments or between levels.
3. Set up a regular, formal way to quote the impact of any engineering changes to the customer.
4. Ask for written confirmation of product and process changes.
5. Maintain a change log document jointly used by both parties.
Danger is lurking around every corner in a new product development / new product introduction project. Avoidable risks wind up blindsiding teams, always at the worst possible moment. Risks blow up into problems because teams misjudge their nature and origin, and lack the right tools and processes to effectively identify, assess, and mitigate them. Let CAEDENCE introduce you to a systematic approach and toolkit for managing and reducing risk in new product development and introduction
There are dozens of tools for reducing risk in new product development and introduction. We know because we've used them to successfully launch dozens of new products in highly demanding industries like automotive and aerospace. Let CAEDENCE show you a few of our favorite tools that you can use immediately to dramatically reduce the chances of disaster on your next NPD/NPI project.
Risk is inherent in new product development and introduction. Regardless of your personal risk tolerance, it's critical to understand that unmanaged risk could ruin your business. We're not saying "don't take risks". We're saying "take risks with your eyes open". Let CAEDENCE introduce you to a systematic approach and toolkit for managing and reducing risk in new product development and introduction.
Many risks in NPD & NPI are visible. New process steps that must be implemented with caution and back-up plans. Unique product features that are challenging to accomplish. But there are other risks lurking. Things that can derail your project before you even realize. A bit nervous now? You should be! But, don't worry. Let CAEDENCE introduce you to a systematic approach and toolkit for managing and reducing risk in new product development and introduction.
Successful new product development and introduction projects require carefully balancing dozens of critical parameters, any one of which could sink the ship. At the end of the day, each of those dozens of NPD/NPI success measures relates to an aspect of just 4 main stakeholder care-abouts: Launch timing, Project budget, Product margin performance, Quality / delivery (customer experience). Learn the systematic method to reduce risks in your new product developments.
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