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"The business model of SAP Research is based on co-innovation through collaborative research.
In collaboration with leading universities, partners, customers, and SAP product groups, SAP Research drives the
development of promising ideas and prototypes into
market-ready software for maximum customer value. "
Source : SAP
From Idea to Market-Ready Product in Record Time
Market-Ready is also known as :
Market Ready,
Mitigate Market Down Turn,
Market Ready Public,
Market Strategies,
Market Ready Public Relations,
Market Ready Field,
Market Ready Corporation,
Market Ready for Growth,
Active Market,
Market Ready for Takeoff,
Services Market Ready,
Location-based Services Market,
Page of Market Ready,
Interact Market Ready,
Applications on Market,
Market Ready Opening,
Stock Market Regulator,
Market-ready Technologies,
Priority Market-ready,
Market Niche Site Ready,
Endorses Priority Market-ready,
Market Ready Workshop,
New Product Development Market Ready,
Market-ready Home-cleaning,
Market Recalls Similar,
First Market Ready,
Business Market Intelligence,
Offers Market-ready,
Firewall Market Ready,
Firewall Software Market,
High-Tech Market Leaders,
Market Ready to Support,
Stock Market Ready,
Market-ready Innovations,
Market Ready to Rebound,
Market Niche,
Market Ready Sold,
Access Market-ready,
E-learning Market,
Market Ready Criteria.
New-Product Development and Introduction in the Consumer
Products Industry
EXECUTIVE SUMMARY
Innovation is key to market success in the consumer products
industry. To speed innovation and bring new products to
market quickly, you must link all relevant functions, information,
people, and IT support in a fast and cost-effective process.
SAP can help. It combines functions from its product life-cycle
management, trade promotion management, procurement,
and business intelligence solutions into a standardized business
process for new-product development and introduction (NPDI),
available via the SAP for Consumer Products set of solutions.
These solutions manage the entire innovation process,
enabling you to develop new products that meet your
customers' requirements and are aligned with your corporate
and market strategies. The solutions are integrated with the
functions for systematic ideas management, methodical
portfolio management, and strategic resource management
found in SAP' solutions for product life-cycle management,
supply chain management, trade promotion management,
procurement, and business intelligence. SAP for Consumer
Products creates the best conditions possible for mapping
your product development process intelligently and
managing it effectively.
Figure 1: Streamlining NPDI with the SAP for Consumer Products Set of
Solutions
DEVELOPING AND INTRODUCING
NEW PRODUCTS: NO ROUTINE MATTER
Strong competition in the consumer products market is forcing
manufacturers to develop innovative products in increasingly
shorter cycles. These products need to win over consumers and
convince retailers - a challenging task for many reasons including
saturated markets, a growing variety of products and brands,
increasing consumer sensitivity to prices, and shorter product
life cycles.
The odds against successful product innovation are long. Every
year, the consumer products industry enters 25,000 to 30,000
new products in the race to win customer favor. More than 60%
of these fail, according to the results of a study by the German
market research institute Gesellschaft fr Konsumforschung.
Why? Companies have less and less time to conquer the market
and achieve a return on their investment because ideas are
copied quickly and me-too products and store brands infiltrate
the market in almost no time.
Faced with the need to go to market faster with new products,
consumer products manufacturers rely heavily on optimized
development processes. In many companies, the period between
product idea and product launch is too long and punctuated
by expensive delays. A benchmark study on consumer packaged
goods, conducted by AMR Research in 2003, confirmed this.
According to the study, the average time to market for a new
product in the consumer products industry is approximately
27.5 months. And when McKinsey consultants looked into the
effects of delays, they concluded that a six-month delay can
reduce total profit by 33%.
To shorten time to market, companies need to closely integrate
all development-related areas - research and development,
marketing, production, logistics, quality management, sales
and distribution, purchasing, and controlling and finance. And
integrating interdepartmental processes and information flows is
just as essential as integrating external service providers, suppliers,
and other partners. In todays tightly networked global economy,
these external providers need to be part of the collaboration at an
early stage. But even that is not enough. A faster process chain
requires system support for handling approval steps and processes.
These must also be integrated in the product development
process. And compliance with legal requirements at both the
national and international level demands additional flexibility.
Moreover, companies must create standards for processes,
specifications, and materials.
SAP: MEETING INNOVATION CHALLENGES
To respond optimally to such challenges, consumer products
manufacturers need an integrated, end-to-end solution for
developing and introducing new products. Success depends,
ultimately, on controlling the entire innovation process - from
the initial product idea to selling the product to the consumer.
The SAP for Consumer Products set of solutions plays a critical
role in this success with solutions that streamline the newproduct
development and introduction (NPDI) process. These
include functions for portfolio analysis and management, ideas
and project management, recipe management, and product
cost calculation.
SAP for Consumer Products provides the quality management
and promotion and demand planning support needed to integrate
production, distribution, and reporting, thus enhancing
the range of functions with which SAP helps accelerate NPDI.
Its solutions support nine areas of NPDI business process activity:
evaluating ideas, developing concepts, managing project
portfolios and resources, controlling projects and documents,
developing products and packaging, integrating procurement,
optimizing the market launch, harmonizing production and
distribution, and tracking sales in real time.
Evaluating Ideas
The SAP xApp Product Definition (SAP xPD) composite application
is one of the SAP solutions used to enhance the NPDI
process. It enables you to systematically collect, consolidate,
bundle, and depict ideas. It records proposals from different
sources and collects them in a central ideas pool. To enter ideas,
the people providing them - sales representatives, consumers,
retailers, suppliers - use an entry screen tailored specifically to
their role. In this way, a loose collection of ideas becomes an
intelligent database for new product concepts.
Sophisticated classification schemas enable different product
concepts to be evaluated and prioritized efficiently. Related
ideas can be linked on the basis of different parameters such
as brand, packaging, and source of supply - even if they are in
different functional areas or regions. Discussion forums support
the evaluation of ideas within teams. And integrated status
report functions enable people to track the progress of their
ideas in real time.
Developing Concepts
SAP xPD supports the product ideas that are developed into
actual product concepts. To create a solid foundation for this,
all concepts pass through a detailed evaluation, agreement, and
approval workflow. A phase-based approach is used. Concepts
being further developed go through a series of prescribed steps,
each of which must be successfully completed before the decision
makers release it to the next phase. Each company can
decide which concept data to use when evaluating the progress
of a project.
Data is stored centrally, and each person involved in the project
can access the data needed for his or her role. At the end of the
project, the data set, which grows with each phase, forms a solid
basis on which to create a business plan. The processes required
to develop concepts that are ready for development run on a
workflow-controlled basis. Examples include market potential
analyses, risk analyses, calculation of potential revenue, technical
and operational feasibility studies, market analyses, and
consideration of legal requirements.
The product concept itself is the starting point for further
development activities such as drawing up schedules, defining
further steps, and assigning development tasks to employees
and service providers. Status management enables you to
monitor all activities and track their progress.
Managing Project Portfolios and Resources
Most companies have multiple development projects in the
pipeline at the same time. These form a project portfolio that
needs to be monitored and managed with an eye to minimizing
risks. This is where the SAP xApp Resource and Portfolio Management
(SAP xRPM) composite application comes in. It brings
together project-related data from different systems, thus
providing you with a comprehensive and up-to-date view of
your entire project portfolio. Decision makers can display all
of the information relevant to portfolio management on their
screens. You can inspect the status, budgets, and schedules of
different projects and see which resources are involved. And
you can respond to problems and events by drilling down to
the project details in the original system. Moreover, SAP xRPM
enables you to analyze the potential profit of all development
projects and rank them accordingly.
In the product development process, the provision and availability
of key resources is crucial to success. Here too, SAP xRPM
ensures the necessary transparency. Using a cockpit-like feature,
you gain an overview of all relevant resource data: employees
qualifications, availability, and key figures. You can then forecast
the demand on project resources and simulate alternatives.
In this way, you gain a sound basis on which to decide which
projects to support and to what extent, and which to cancel or
postpone to a later date. In other words, SAP xRPM enables you
to steer the best resources in the direction of the projects that
are strategically most important.
Controlling Projects and Documents
To manage projects and the documents related to them, SAP
for Consumer Products provides a function of the Collaboration
Projects (cProjects) suite in the mySAP Product Lifecycle Management
(mySAP PLM) solution. Consumer products manufacturers
thus have a tool for efficiently managing development projects within the company and in cooperation with partners
and can specifically coordinate development, marketing, sales,
and production activities. cProjects helps you do the following:
- Define project scope
- Specify project tasks, including their duration and
interrelationship
- Put together project teams and assign resources based on
employees qualifications and availability
- Set checklist items using quality gates
- Set up release and approval processes for monitored phase
handover
- Improve the cooperation between project teams
- Track the project's costs, budget, and progress in real time
Developing and introducing new products involves a lot of
documents. You can keep track of them and manage them
reliably and efficiently using the SAP Easy Document Management
application, which is connected to your Microsoft
Windows desktop. The application lets you manage documents
just as easily as files on your hard disk. Moreover, you can
implement workflow-based approval and change processes
that document every change in status (user, date, and time).
The process for handling the resulting different versions is
very user-friendly. Documents are distributed to predefined
recipients when this is triggered by particular events or by a
workflow process. Automatic conversion to various file formats
simplifies electronic communication.
Developing Products and Packaging
The recipe management functions in mySAP PLM are available
for product development itself in the consumer products industry.
The solution comprises an integrated working environment
that provides recipes, specifications, formulas, materials, and
production operations. Developers can draw on experience
gained in earlier development processes and reuse existing recipes for new products. Multilevel recipe management
supports the company-wide development of general, site, and
master recipes.
In addition, product developers can easily calculate ingredients,
data for nutritional values, and manufacturing costs. Since quality
management is inherent, the product development group can
build in quality controls during the processes. As soon as the
recipe is ready, a master recipe is created automatically.
If external partners are involved in the development process,
the Collaboration Folders (cFolders) application of mySAP PLM
supports the collaborative process. Functions in cFolders enable
product developers to send the specifications for the packaging
materials to the design agency and to develop the concept for
the packaging in cooperation with the designer - even if they
are located in different places.
If necessary, a particular schema can be used to assign access
authorizations. Both "read" and "write" authorizations are
available in cFolders. The notification and status functions
enable you to track user access to documents and maintain
an overview of the valid document versions.
Integrating Procurement
cFolders can also help involve suppliers in the development
process from an early stage. The mySAP Supplier Relationship
Management (mySAP SRM) solution enables you to carry out
bid invitations based on cFolders. This ensures that strategic
purchasing and product development groups interact closely
and remain fully informed about each other's activities. mySAP
SRM opens up the full range of functions expected from an
integrated procurement platform. All phases of the procurement process can be optimized: purchasers can develop a targetoriented
procurement strategy for the new product, qualify and
select the best suppliers, and automate the operational ordering
process right through to the supplier - with complete transparency
for everyone involved.
Optimizing the Market Launch
When a product is launched, you can see clearly whether it can
meet the expectations and needs of the market and whether it is
what retailers had in mind and required. Alongside manufacturers'
sales arguments, there are numerous marketing activities and
sales promotions you can use to promote a product's success on
the market - provided they are accurately planned and managed.
That's why SAP for Consumer Products includes the SAP Trade
Promotion Management application. This application enables
manufacturers, for example, to plan and manage marketing campaigns
and promotions for product launches, make product and
pricing information available on mobile devices, and speed the
order-handling process. It also enables demand planning using
top-down and bottom-up approaches. This lets you take into
account additional sales following special promotions and
provide reliable forecasts. It also allows the precise analyses of
revenue, profit, and yield that ensure you can precisely monitor
your success.
SAP Trade Promotion Management is tightly integrated with
SAP solutions for supply chain management because carrying
out and analyzing sales promotions measures affect multiple
departments within a company. This integration enables
you to plan processes reliably - without additional effort -
before a product is introduced, to coordinate schedules and
to concentrate on introducing the new product punctually.
Harmonizing Production and Distribution
In the consumer products industry, the processes for producing
and introducing new products are not always sufficiently aligned.
For example, expensive TV commercials present a new toothpaste
or a new video game and launch it through promotions. But if
everything is not aligned along the supply chain as it should be, a
stock shortage can result in shortfalls at the point of sale - causing
severe disruption to business.
The mySAP Supply Chain Management (mySAP SCM) solution
enables consumer products manufacturers to harmonize their
processes along the supply chain. In this way, you can avoid the
loss of sales caused by out-of-stock situations and prevent a drop
in profitability resulting from high stock levels.
Tracking Sales in Real Time
As soon as a new product is on the shelf, manufacturers want
to track sales in real time and intervene if necessary. They are
interested in market acceptance, consumers' first and subsequent
purchases, the number of units per purchase, frequency of purchase,
and the effects of this purchasing information on the
product category.
Does the price strategy need changing? Would further advertising
campaigns increase sales figures? Should production capacity be
greater? Thanks to the integration of the mySAP ERP Financials
solution and its SAP Strategic Enterprise Management application,
you have the necessary overview and decision-making
basis to respond quickly. You can use point-of-sale and market
data to compare target and actual figures more easily and quickly
than ever before. And you can analyze sales figures, costs, and
categories.
GOING TO MARKET WITH TOP-CLASS PRODUCTS
With the comprehensive functionality available through SAP
for Consumer Products solutions, you can shorten time to
market significantly. Easy to use and intuitively structured,
these solutions foster product innovation and innovation management.
They also improve process efficiency, reduce go-tomarket
costs, and accelerate production start-up.
The solutions available through SAP for Consumer Products
adapt flexibly to your corporate strategies. They support your
goal of developing products more quickly and cost-effectively
and can be tailored to precise market and customer requirements.
The solutions result in a broad range of NPDI benefits;
for example, they:
- Offer a better, simpler, and faster overview of all product ideas
- Enable objective decision making regarding ideas and
concepts
- Support the concentration of resources in strategically
important projects
- Improve the efficiency and flow of information in all areas
of the development process
- Facilitate the end-to-end management of product-related
data and information
- Enable access from anywhere to all product- and projectrelevant
data and documents
- Ensure consistency between the recipes used and developed
- Minimize the risk of false starts and flops, thus increasing
acceptance among retailers
- Ensure harmonized production and delivery processes
- Speed up response times by monitoring the market launch
in real time
For More Information
For comprehensive information on how you can optimize
the development and introduction of new products with SAP
solutions, visit our Web site at www.sap.com/consumer.
Figure 2:
The NPDI Process as an
Innovation Funnel
www.sap.com/contactsap
Contents
- Executive Summary
- Developing and Introducing New Products: No Routine Matter
- SAP: Meeting Innovation Challenges
- Evaluating Ideas
- Developing Concepts
- Managing Project Portfolios and Resources
- Controlling Projects and Documents
- Developing Products and Packaging
- Integrating Procurement
- Optimizing the Market Launch
- Harmonizing Production and Distribution
- Tracking Sales in Real Time
- Going to Market with Top-Class Products
- For More Information