Product manufacturing and product development are two very different types of activities. It is not much use trying to define common phases in these two type of activities. Product development, or more specifically new product development, refers to the process of identifying ideas for and developing or designing new products to be marketed by a company. In contrast, manufacturing refers to the process producing the products marketed by a company for supply to its customers. New product development is a one time activity leading to design of a new product, whereas manufacturing is a repetitive activity that results in physical products as its outputs.
Manufacturing processes are too varied depending upon the design of products, the volume of production, and available facilities and technology. Defining a common process for all different types of manufacturing will result in a process that will be too general to be of much use. Therefore there are no established set of steps identified to cover all manufacturing processes. However, a business can benefit substantially from adopting a systematic approach for its product development activities. Described below are the steps involved in one such new product development process.
- Identification of new product ideas.
- Initial screening of these ideas to discard new product ideas that appear to be least feasible, and do not have substantial profit potential. This results in a shortlist of product ideas for which further investigation is warranted.
- Evaluation of each short listed product idea to make preliminary estimate of development feasibility, cost and time, as well as to make in initial assessment of market demand. This step results in listing of product ideas that need to be pursued further for product development.
- Preparation of product feasibility report for each of the product development idea accepted at stage three above. The feasibility report is a document used for obtaining management sanction for taking up product development project, and describes in some detail the product development activities to be taken up with estimate of time, money and other resources.
- Based on the feasibility reports, management sanction of new product development projects. Sanction is given for a project only when it is expected that the project is viable, both technically and commercially. However, the sanction is always subject to review at major milestone stages. such as prototype development, and test marketing.
- Develop and design the product. This may involve stages such as development of prototype followed by testing and further improvements.
- Study the market of the product and take strategic marketing decisions such as target markets, positioning, and prices.
- Design product manufacturing process, and where required, identify new facilities to be created for manufacture.
- Initial manufacturing of product for trials and test marketing.
- Trial of new products and, where applicable, test marketing.
- Preparation for regular manufacture of the product and start of manufacturing.
- Market launch of the product.