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"New product development and introduction (NPDI)
– SAP provides a comprehensive set of solutions for managing your end-to-end NPDI processes."
Source : SAP
New Product Development and Introduction (NPDI)
New Product Development And Introduction (NPDI) is also known as:
new product development and introduction,
new product introduction,
new product development,
new product development introduction process,
new product launch,
new product introduction process,
new product development process,
new product launch process,
new product development and introduction process,
new product introduction process,
new product development process,
new product launch process,
trends in new product development and introduction processes,
new product development and introduction processes,
improving new product,
to assist in new product development,
to build momentum for new product development,
method for new product development,
method for new product development and market introduction,
new product development resources,
the effect of new product development acceleration approaches,
the effect of new product development,
new product development and introduction forms,
global product development,
enabling innovation for new product development.
Introduction " What
New product development and introduction (NPDI ) is probably
the most important process for many companies, but also one of the least
understood (and, perhaps, executed). Important because, as we will see, NPDI
is responsible for the revenues and margins that a company can achieve and
its ultimate value. It is the least well understood process because few
companies assign a single individual to be responsible for the whole process.
Instead, it is usually driven through a series of functional "silos," causing
delays to build up and, often, the original market requirements to get lost.
But let's start with a definition. Our definition of NPDI starts with the
identification of an opportunity in the market ("somebody needs a product to
do this") and ends with the successful launch of the product. In between are
many activities to define the requirements, develop and test a product
concept, fully define and develop the product, source for suppliers involved,
plan the manufacturing and supply chain, and prepare marketing programs. On
top of that, it's about defining the product strategy, managing the overall
product program, and monitoring all the projects and activities needed to
drive the NPDI process.
Most functional areas of the company get involved
at some time or another, including marketing, engineering, supply
management, manufacturing, finance, and so on. As the people in these
functions use enterprise systems to help them do their jobs, all of these
systems are involved in NPDI: for example customer relationship management
(CRM), enterprise resource planning (ERP),
product life-cycle management
(PLM), supply chain management (SCM), supplier relationship management (SRM),
and many others.
Our definition is important because it includes all of the
processes that "change" the company. Think of the company as a giant
machine: raw materials and parts go in one end, are turned into products by
machines and labor inside, and are shipped out to customers at the other end.
Many of the people inside of the company are solely dedicated to nurturing
and managing this "machine." All well and good until we want to "change"
what the company is making. This is what NPDI does: it changes what we buy
(and who we buy it from), changes what we make (and how we make it), changes
how it gets to the customer, and changes how we market it to the customer.
Typically, a different group of people are responsible for making the
changes. Once the changes are complete, stability is restored.
create change on a number of levels, including:
- Incremental product
changes, which may have minimal impact on sourcing and manufacturing, but may
entail a new marketing program
- New product introductions, which may
require significant market research and engineering and entail more
significant changes in sourcing and manufacturing, as well as a major
- New category introductions, which entail all of the above
plus dealing with the risk of introducing a product that the market is
completely unfamiliar with
Is NPDI the same as innovation? Innovation is
clearly part of the NPDI process, without it there would be no new products
or no new ways to make, market, and sell them. But innovation would be
useless without the ability to change how the company operates, to
successfully introduce the new product. The job of NPDI is not done until the
product is in the market, shipped at the right time, delivered to the right
customers, and in the right volumes.
Why Is NPDI Important?
Let's look now at the reasons why NPDI is important. We see four separate
drivers for NPDI.
Trends In New Product Introductions
In most markets and
especially those relating to consumer products, the number of new product
introductions per annum has increased dramatically. For example, a study into
the consumer packaged goods market showed that new product introductions had
increased around tenfold over an 18-year period (see Table 1).
|Number of ProductLaunches
|Ice cream, frozen yogurt
|Spices, extracts, seasonings
|Deodorizers, air refresheners
|Paper towels, napkins
|Milk, yogurt drinks
(Source: University of Nottingham; Cox WM, Alm R
(1998), The Right Stuff: America's move to mass customization, Federal
Reserve Bank of Dallas. Annual Report 1998, Dallas)
An 18-Year Comparison of Consumer Packaged Goods Product Launches
by consumer demand and fueled by advances in technology, companies have to
bring more and more products to market in order to remain competitive. The
companies best able to execute NPDI will clearly have an advantage. This is
partly about reducing time to market but also about making effective use of
scarce internal resources.
Partly as a consequence of
the increasing rate of new product introductions but also because of the
drive of technology advances, product life cycles are shortening. As a result,
companies are increasingly dependent on revenues from new products to drive
their top lines each year. A recent study by Deloitte showed that, for the
companies most dependent upon new products, the proportion of their revenue
derived from these products will increase from around one third to nearly a
half over the next three years (see Figure 1).
|New Products = New Revenue Streams
||+ 3 years
The implication is that companies
good at NPDI will see the benefits sooner, those who are less effective will
feel the pain sooner. In the future companies will have fewer opportunities
to live on past successes.
Growth And Balance
NPDI allows companies to
grow revenues and retain high margins by launching new products and creating
new customers in new markets. Even when a company's top line isn't increasing,
it needs NPDI to replace existing products that are reaching the end of their
life. Newer products typically command higher margins in the market while
older products are impacted by competitive challenges and waning customer
interest. Wellexecuted, NPDI keeps a pipeline of new, high-margin products
flowing to the market.
Successful companies have higher
stock market valuations than their less successful counterparts. This is
because the market factors in the value of future growth and margins. And, as
we have seen, this is largely a function of the NPDI process. Put directly:
NPDI drives growth, which drives value. By investing in the NPDI process,
companies are directly investing in themselves " and the returns are high. A
recent study by CSFB/HOLTand Deloitte Consulting, published in the book The
Innovator's Solution by Christensen and Raynor, shows how successful
companies have valuations that far exceed the value of their underlying
assets (see Table 2).
|% of Valuation Based on:
|Johnson & Johnson
|Procter & Gamble
||Past Cash Cows
Sources: CSFB/HOLT; Deloitte Consulting Analysis, from The Innovator's
Table 2: Stock Market Valuations Exceed Existing Asset
High valuations allow companies to raise money in the markets at
the best rates, acquire competitors, and attract the best people. All of
these companies have one thing in common: a track record of growth and
margins fueled by new products.
Who Cares About NPDI?
Given the importance of NPDI, it's not
surprising to find out that most people in business care about it. A recent
study conducted by AMR Research showed this clearly. Asked what initiative
would have the most impact on the overall business, NPDI was the clear
winner, ahead of more established investments such as CRM and SCM (see Figure
||NPDI excellence is key to managing brand equity
||NPDI makes my business more
||NPDI is all about hitting the target
||Excite customers with
||NPDI must meet consumer quality needs
||NPDI best practice is
designed for supply chain
||NPDI has to meet my business goals
Table 3: What
Different Functions Within a Company Say About NPDI
And when people care
about the same thing but for different reasons, conflicts may arise.
NPDI Needs Help
Put bluntly, for all its importance, the NPDI process
is in trouble. For example, according to AMR Research:
- 95% of new
consumer products (1996-2001) lost money or broke even
- Mean new vehicle
development costs are $500 million higher than best in class
- Poor NPDI
costs apparel makers 30% of annual revenue in markdowns
- Food retailers
spend $957,000 per store on new products that fail
No company would today
tolerate a manufacturing operation or supply chain that was wasteful,
unreliable, and unpredictable. And yet, for many companies, that's what NPDI
Top CEOs Recognize The Importance Of NPDI
The CEOs of top
companies have long recognized the importance of NPDI. Here are two recent
"The companies that know how to develop things are ultimately
going to create the most shareholder value. It's as simple as that."
Jeffrey Immelt, Chairman and CEO, General Electric MIT Technology Review,
"You only get a position in the future by investing, creating
something new, and staying ahead of the competition. So it's simple: invest
or die." Craig Barrett, CEO, Intel Business 2.0, January/February 2004
What's Going Wrong?
In order for a product launch to be successful,
many different factors have to come together in just the right way. If one is
wrong, it's likely the whole launch will fail. For example:
- The product has
to meet the customer's requirements " it has to do the job.
it has to meet the customer's aspirations " it has to feel right.
manufacturer's reputation for quality, reliability, and service may also be
- And, of course, it has to be available at the right time and
the right price.
The challenge of NPDI is to make sure that all of these
things are achieved all of the time.
NPDI is Difficult To Manage
One of the often heard comments is that the NPDI process is difficult to
manage and this is certainly true for two reasons:
- At the beginning of a
project, the outcome and the work that will have to be undertaken are often
- For many groups in the company, such as supply chain management
and manufacturing, NPDI is disruptive, causing them to interfere with
processes that have been painstakingly optimized.
So NPDI is not "business
as usual." As a result, the NPDI process is out of control in many companies.
A recent study by AMR Research asked companies if their NPDI process was
under strategic control (are we developing the right products?) and
financial control (are we on time and within budget?) and found that less
than one third could claim to be both (see next page, Figure 3).
Lack Of Process Ownership And Executive Sponsorship
Many companies lack
an overall process for NPDI. Instead, the new product passes through a number
of organizational "silos" with no single individual or group being
responsible for the outcome. Each function in the company makes its best
efforts, but also applies its own views on priorities and so on. The result
is often that the opportunity in the market is missed. For example:
marketing sees an opening in the market for a variant of an existing product
" the opportunity is significant if the company moves quickly, however:
- Engineering reinterprets the marketing requirements to allow them to
introduce an unproven concept that they have been working on " resulting in
an overpriced product with features the market is not really looking for.
- Or, manufacturing and supply chain management are unwilling to divert
capacity from existing products " resulting in insufficient products being
available to meet the demand in the market.
Successful NPDI requires clear
strategic objectives and priority setting and effective execution across the
But even if the priorities are clear,
poor communications can still frustrate the NPDI process. This is even more
likely today as product teams work across distributed locations and with
far-flung partners and suppliers.
The following are some examples of poor
communication during the NPDI process:
- Marketing did not follow up with
engineering to ensure that the requirements were being met.
introduced many new parts at the last minute, causing headaches for
manufacturing and procurement.
- Supply chain management was not fully aware
of what was coming down the line and was unable to get enough capacity
with key suppliers.
Economies Need NPDI As Well
create successful economies. By creating environments in which company
leaders are able to invest their profits back into their businesses and
develop the next generation of high-margin products, politicians and leaders
can drive the economic prosperity of their region.
". . . the real engine of
productivity growth, which leads to long-term sustainable GDP per capita
growth, is innovation."
Diana Farrell, Director of the McKinsey Global
Institute International Herald Tribune, December 6-7, 2003
NPDI Be Fixed?
So how can companies improve their NPDI process and access
to the benefits it brings? There are three critical capabilities required:
- Better portfolio strategy
- Better product management
Better Portfolio Strategy
Portfolio strategy is the
top priority for the NPDI process. Driven from the top of the company, it
sets out such things as:
- The markets that a company wishes to be in and the
- Technologies and products that it wishes to develop and
- The basis of competition (such as features, style, value,
reliability, and so on)
Most companies have a process for capturing product
ideas and market opportunities and developing them into products. This
process needs to be well organized and subject to regular management review
to ensure alignment with company objectives and that the most promising ideas
are getting through the filtering processes.
Typically a company will have
a portfolio of NPDI projects running in parallel and all at different stages.
Companies with good strategic control are constantly looking at the health of
their active and future products " constantly reassessing the opportunity
and risk in each of them. This allows them to make tradeoffs between
concepts, projects, and products " cutting back on one in favor of increased
investment in another, for example.
Good portfolio strategy helps a company
to build and maintain a good cross-functional consensus. When an opportunity
presents itself in the market, several functions in the company may offer
an opinion on how best to address it " from a partnership suggested by
marketing to an innovative technology offered by engineering. But, through
discussion and review of alternatives, a company with good strategic control
can arrive at a consensus that is maintained as the product is brought to
Portfolio strategy is also about guiding a product through the
key stages of the NPDI process, ensuring that it stays strategically on track
" but also being able to react to new and evolving information, for example:
- A competitor brings a similar product to market
- Marketing reduces its
estimate of the potential market
- A critical technology will take three
months longer to bring to market than forecasted
Better Product Management
Good product management is about ensuring that NPDI projects are on time and
on budget. To implement effectively, product management requires cross
functions working to roll up cost and status information to a single project.
Status information must be collected frequently and reported quickly,
allowing management to see all aspects of a project at one time. In this way,
delays and overspends can be easily seen and management can quickly "drill
down" to find the underlying cause. Decisions are made at the project level
and implemented within the relevant function.
Financial control is also
critical in the planning phase. Even though a business opportunity may have
been identified, the availability of constraining factors, such as financial
and human assets, must be checked.
Ensuring that projects are on time and
on budget means having good resource management (for both human resources and
capital assets). This requires a complete and consolidated view of resource
supply and project demand, thereby enabling resource managers to have a
detailed and up-to-the-minute look at capacity across different organizations
as well as job functions. This enterprise-wide view of resource capacity
ensures that organizations are deploying their scarce talent in the optimal
Better Functional Execution
Although many of the benefits of improved
NPDI will result from improved portfolio strategy and the implementation of
improved methods for product management, the ability to execute effectively
and to avoid costly errors is the final essential step.
business functions rely on one or more enterprise systems to manage the
business processes for which they are responsible. For example, the
engineering function will use a PLM system to manage product information and
processes; the manufacturing function will use an ERP system to manage
processes, such as scheduling and purchasing. In order for different
functions to be able to work together through the NPDI processes, these
systems need to be configured to work together.
Enterprise systems that are
configured to work together will allow information to flow smoothly through
the NPDI process and give the company the ability to react quickly to
changes. For example: marketing can update the market requirements that
engineering is using as soon as new information is available; engineering can
release an updated bill of materials to manufacturing as soon as it is
Excellent functional execution is only possible if everybody
involved in the process has direct access to the same, up-to-date
information. Therefore, the data has to be consistent within systems as well
as across systems. This is especially critical for ongoing change processes
that affect multiple disciplines, for example, from design to purchasing and
Better Process Visibility
In addition to the capabilities
described above, good NPDI requires timely information: about the size and
nature of the market opportunity, the activities of competitors, the progress
of product development, or the readiness of the supply chain and
manufacturing organizations. An NPDI dashboard is needed. A dashboard should
present management with all of the critical information needed to provide
proper strategic control. The majority of the information shown on the
dashboard must be extracted from the company's enterprise systems,
ensuring that it is accurate and up-to-date. Management no longer has to rely
on painstakingly crafted presentations or spreadsheets (which may be biased
towards a certain point of view) but, instead, can "see the world as it is."
With an NPDI dashboard, management has at its fingertips all of the
information required to provide good management of the NPDI process.
How Not To Fix NPDI
Over the years, companies that recognize the
importance of NPDI have tried a number of different approaches to making it
work more effectively. Here are two of the more common approaches along
with the reasons that they don't work.
Increase the R&D Budget
tempting to believe that a simple increase in the R&D budget will magically
improve NPDI success. However a recent study by AMR Research found that
manufacturers are unable to consistently drive revenue increases with
increases in R&D spending. The reason is fairly straightforward and is
that no amount of good R&D can account from failures elsewhere in the R&D
process, for example: failure to match the product features to the market
requirements, failure to meet the target price or launch date; poor quality
or insufficient products on the shelves.
Implement a Stand-Alone PLM
Product life-cycle management (PLM) systems help companies bring
products to market faster by managing the information and processes involved
in product development. They make a great contribution to improving the
productivity of engineers. But this benefit can only be fully leveraged if
the PLM system is fully integrated with other enterprise systems, for
example: ERP, SCM, and CRM. Stand-alone PLM systems come from suppliers
who do not provide these other enterprise systems and leave the integration
problem with the customer. Experience has shown that many companies lack
the resources to do this effectively; those that do can spend large sums of
money and lose out on valuable business benefits while they attempt to tie
their systems together.
SAP'S Solution Support For NPDI
can provide all of the critical elements required to support the entire NPDI
business process. SAP's solution for the NPDI process is shown in Figure 4.
|Portfolio Strategy ►►
|Product Management ►►
||.Project Resource and Cost Management
|Functional Execution ►►
The critical elements of SAP's NPDI solution are:
- NPDI process
visibility " The NPDI dashboard enables management to monitor and control the
overall product portfolio and pipeline, as well as NPDI-related key
performance indicators. An example screen shot from the dashboard is shown
in Figure 5.
- Portfolio strategy " The portfolio management capabilities
allow companies to make the right decisions about which concepts and products
to develop and how to prioritize the use of resources.
management allows companies to improve the way that they identify and
prioritize business opportunities and align them with promising product
concepts. Ideas for new products can be collected, classified, and linked
to new product concepts. Concepts then progress through a business filter
process and go/no go decisions are made based on expected commercial
- Portfolio management is used to bring improved rigor to the
process of prioritizing products for development and monitoring the
performance of the overall portfolio. Companies can define critical success
factors (objectives) for their business and determine the potential impact of
each proposed and active project on achieving the objectives. They can then
evaluate the entire portfolio or individual projects using various key
- Resource management manages the demand for resources across projects and
optimizes their use. Companies can report and consolidate demand for
resources across multiple projects via global roles. In addition, they can
perform simulations by varying resource demand and allocation, budget
allocations, and time frames.
- Product management " Project, cost, and
resource management capabilities help companies improve the management of
the entire product development and introduction process.
- Project management
capabilities allow projects to be managed actively with current schedule
information and for formal project status reviews to be conducted
periodically. Project templates for methodology-based development
processes can be used to structure new projects. Managers can then define the
development phases, tasks, and task hierarchies. The outputs from each phase
can be used as a checklist to drive project status reviews.
management allows likely project resource demand to be forecasted and for
specific resources to be assigned to projects. Project managers define
project roles based on time demand and a qualifications profile. Resource
managers can then assign resources to roles according to their availability
and qualifications. The high-level resource demand on a project level can
then be reviewed before approval of resource assignments. Planned resource
demand can also be considered in what-if simulations.
- Cost management
allows the creation of realistic project cost estimates based on past
experience and for active project management based on current cost
information. The solution for internal controlling requirements is based on
mySAP' ERP. Projects costs and revenues can be planned using the Easy Cost
Planning interface. Actual costs can be collected using internal orders in
- Functional execution " Support is provided for all process
steps at the functional level from initial ideas capture through product
development, strategic sourcing and supply chain planning, down to
prototyping and production ramp-up and market launch. In addition, the
underlying infrastructure provides everything for the management of the
product related data and information, including quality engineering as well
as change and configuration management. More details may be found in the
The NPDI solution portfolio is fully integrated with the mySAP
ERP backbone and utilizes the full scope of mySAP Product Lifecycle
Management (mySAP PLM) capabilities and the related new SAP® xApps' packaged
composite applications. It makes use of the NPDI-related capabilities of the
other enterprise solutions from SAP, including mySAP Customer Relationship
Management (mySAP CRM), mySAP Supplier Relationship Management (mySAP SRM),
and mySAP Supply Chain Management (mySAP SCM) to build up the most complete
NPDI solution offering in the industry
Across different industries there are many similarities, but also significant
differences. These differences have an influence on the NPDI process on two
levels: variations in the processes themselves and variations in the
capabilities required to support these processes.
For industries like consumer products or pharmaceuticals, with a make-to-stock
environment, the product-definition phase and the monitoring of the overall
project and product portfolio are extremely important. Another focus area in
this environment is the market launch where campaigns and trade promotions
have to be managed.
For industries with more complex products and a make-to order
or assemble-to-order environment, such as automotive, high tech, or specialty
chemicals, the sequence is similar, but other areas deserve more attention.
In particular, there is a strong emphasis on product development where the
product with its features and options is defined as well as prototyping
and production ramp-up, where concurrent engineering is key.
industries with highly customer-specific products, like industrial equipment
or ship building where we find a typical engineer-to-order environment, NPDI
starts to a large extent with the customer order. Order-specific development
and engineering are essential and project management is very important.
Capability variations are found most in the product
development and process engineering area. While discrete industries need
tight integration of mechanical and electronic CAD systems, product structure
management for configurable products, routings, and engineering change
management, the process industries count on specification and recipe
management, with its capability to create enterprise-wide general recipes
that can be transferred into area-specific site recipes, and machine-related
When it comes to prototyping, discrete industries will use
project-specific purchasing and production while process industries need
trial management. Even in areas like quality management, specific
requirements have to be taken into account, for example, the automotive
industry needs advanced product quality planning (APQP),
chemicals industry needs stability studies.
Since requirements are so
diverse, only a company like SAP with its broad solution offering and its
unique industry experience is able to provide a solution that fits all
Regulatory Drivers For NPDI
Having a strong NPDI process
is not just about getting the right products to market. It's also about
making sure that they are safe products " for all of the people involved from
users, to manufacturers, service personnel, and so on. Proactively, companies
need to and are required to do more and more to make sure that their products
are safe at all stages in their life cycle.
A good NPDI process can help
ensure this and the right systems will generate the necessary regulatory
documentation to demonstrate compliance. They also have to be able to react
quickly when something does go wrong whether it's in the factory or the
field, to assess the problem and deal with it. And when matters end up in
court, being able to show that all of the right steps were taken can save
companies from costly and damaging lawsuits and fines.
SAP's solution for NPDI is built on the SAP NetWeaver'
platform. It is a comprehensive, best-in-class, integrated technology based
on SAP's long-standing experience in developing mission-critical business
solutions. SAP NetWeaver helps leverage a company's existing IT investment
and provides the foundation for future innovative cross-enterprise processes.
Based on open standards and Web-based architecture, it supports a
heterogeneous IT landscape and is fully interoperable with Microsoft .NET and
Java 2 Platform, Enterprise Edition (J2EE) environments.
benefits SAP's NPDI solution in a number of ways, as shown in Table 4.
|Innovative Business Processes
||Flexibility in Business Strategies
||Sustainable Cost Structure
- End-to-end processes Across system
and organizational boundaries
- Better business decisions Analytical
insight from across the company
- Strategic advantages Harmonized
master data across system
- Reaching every individual Role-specific,
easy access to all systems
- Configure projects quickly Across system and organizational
- Add new suppliers Link with suppliers' systems for easier collaboration
- Involve customers Get direct customer feedback on designs and
- Optimize global resources Utilize all of the resources
the extended value chain 24x7
new systems Across system and organizational boundaries
- Reach new
users Provide reliable access to information and processes
consistent data Harmonize data across multiple systems
To completely benefit from a fully supported,
integrated NPDI process, some companies may implement the entire solution
offering, whereas others may want to focus on closing some gaps in their
current environment. In either case, there are different ways to implement an
NPDI solution on a step-by-step basis. Possible starting points include:
- The project and resource management area as the central hub for the
management and coordination of the NPDI process
- The product development
area to ensure that the results of the work of research and development (R&D)
and design are available to anybody in the enterprise immediately for the
subsequent steps in production, purchasing, and sales
From each starting
point, natural extensions exist, for example, from project management to
portfolio management or from development towards the early phases of product
definition including idea and concept management.
SAP's field organization
with its solution consulting groups can help companies decide how individual
requirements are translated into an implementation road map. Packaged
applications, such as SAP Easy Document Management, SAP Recipe Management,
SAP Collaborative Product Development, or SAP Collaborative Project
Management can also be used to speed up the process.
What Happens When
NPDI Is Managed From Within The Organizational Silos
Financial control of
NPDI is about making sure that NPDI projects are on time and on budget. Many
companies are limited today to doing this within their functional silos.
Getting an overview of where a project stands requires a significant amount
of data gathering and analysis. Project status information is reported
infrequently and is often weeks out of date by the time management sees it.
As a result, most management decision making takes place within the
organizational silos and based on the objectives and priorities of that
function. Thus the different functions (marketing, engineering, manufacturing,
and so forth) can become significantly misaligned.
In situations where the
company also lacks strategic control, trade-offs between projects also happen
within the functional organizations. In the worst case, each function in the
company could be said to have its own product plan " allocating budgets and
resources based on its own priorities.
Appendix: Functional Execution Capabilities Of Sap'S NPDI Solution
The key capabilities of the functional execution layer of SAP's
NPDI solution are listed in Figure 6 and are explained further below.
•RFQ and auction management
•Prototype building and testing
•Hand over to sales
•Configuration and pricing
•Supply network planning
•Hand over to production
|Change and configuration
•Order change management
and quality planning (APQP)
•Production part approval process (PPAP)
Life-cycle data management
•Product structure management
•Variant configuration management
Based on the available product definitions and
specifications, requirements have to be transformed into features, product
concepts, and finally into the product structure. For discrete industries it
is key that CAD systems are seamlessly integrated to provide all documents
and bill of materials for subsequent processes like creation of routings,
definition of tools, and product costing. In process industries, recipes are
defined based on raw material specifications and consist of both the product
composition and the product formulation process. In all environments,
external development partners such as suppliers have to be more and more
integrated: Web-based exchange platforms enable closed-loop collaboration in
a secure environment.
Product development is mainly based on central
components of the mySAP PLM solution, such as: Document Management,
Products Structure Management, Variant Configuration, CAD Integration,
Specification Management, Recipe Management, and Collaboration Folders (cFolders).
Supply Chain Planning
As soon as first versions of the product structure
are known, demand planning and supply network planning help to identify
the best locations for in-house production or suitable suppliers. Make-or-buy
decisions are supported, and new purchasing parts are identified, for which
suppliers are needed. Supply chain planning is mainly based on central parts
of the mySAP SCM solution and its integration with mySAP PLM and mySAP
This includes sourcing analytics, supplier
evaluation, requests for proposal and quotation, and auctions as well as
contract management. As soon as potential suppliers are identified, tight
integration between SAP's sourcing and engineering collaboration capabilities
allow for parallel commercial and technical negotiations throughout the
request for proposal (RFP) and request for quotation (RFQ) processes. By
bringing engineering and sourcing closely together, companies can better
optimize product costs at the early design stage and significantly shorten
the strategic sourcing process.
Strategic sourcing is mainly based on central
parts of the mySAP SRM solution and its integration with mySAP PLM "
Prototyping And Production Ramp-Up
In parallel to the
development process, prototyping is used to ensure technical feasibility and
to optimize the production process. Therefore product structures, recipes, or
routings are released for prototyping or trials. Test results are used to
optimize the product in an iterative process. As soon as regular
production should be started, the production or assembly lines are prepared
step by step for the production or larger volumes. If necessary, running
production orders can still be changed according to product or sales order
changes due to the integrated order change management capabilities.
Prototyping and ramp-up is based on central parts of the mySAP PLM, mySAP
ERP, and the mySAP SCM solutions.
All the work comes to
fruition when the market accepts a new product. Market launch includes
planning and definition of marketing campaigns and trade promotions. The
solution equips sales reps with collateral materials and sends pricing
information to their mobile devices. An online and offline order management
system provides fast, efficient order processing. Top-down and bottom-up
demand planning deliver the best possible forecast. For configurable products
the product structure is provided to sales to include pricing information as
well as conditions for available features.
Market launch is mainly based on
central parts of the mySAP CRM solution and its integration with mySAP PLM.
Appendix :SAP NetWeaver
The SAP NetWeaver platform combines best-in-class components (such as an
enterprise portal and business intelligence) into a business-ready platform.
Figure 7 shows the SAP NetWeaver technology stack.
|Master Data Management
|DB and OS Abstraction
All solutions are built on the SAP Web
Application Server (SAP Web AS) component and common development,
administration, and security environments are used across all components.
Although SAP NetWeaver's Web Dynpro environment is used to develop and run
the user interface for applications across the platform, the portal is the
information delivery framework for all applications " SAP or non-SAP. The
Integration Broker and Business Process Management components provide
process-centric integration for SAP and non-SAP systems within and beyond
enterprise boundaries based on open standards such as Extensible Markup
Language (XML), Java, and Web services standards. SAP NetWeaver integrates
and harmonizes both structured data (with best-in-class business intelligence
and master data management capabilities), and unstructured data (with
knowledge management capabilities). Business intelligence (BI) capabilities
include a robust BI platform a complete suite of BI tools (including
reporting, analysis, and information delivery); data warehouse management and
administration; and extract, transformation, and loading (ETL) capabilities.
SAP Master Data Management (SAP MDM) enables companies to store, augment, and
consolidate master data, while ensuring consistent distribution to all
applications and systems within the IT landscape. Working across
heterogeneous systems at multiple locations, SAP MDM leverages existing IT
investments in business-critical data, delivering vastly reduced data
maintenance costs through effective data management. And, by ensuring
cross-system data consistency, SAP MDM accelerates the execution of business
processes, greatly improves decision making, and helps companies maintain
their competitive advantage.
The new SAP Composite Application Framework
(SAP CAF) built into SAP NetWeaver enables SAP to create new applications
targeting cross-functional business processes. These include, for instance,
an object access layer that allows customers to abstract from the underlying
heterogeneity and to create a unified development and deployment environment.
©Copyright 2004 SAP AG. All rights reserved.
- Introduction " What is NPDI?
- Why is NPDI Important?
- Who Cares About NPDI?
- NPDI Needs Help
- What's Going Wrong?
- How Can
NPDI be Fixed?
- SAP'S Solution Support for NPDI
- Industry Applicability .
- The Architecture Impact
- Implementation Scenarios
Execution Capabilities of SAP'S NPDI Solution Support . SAP NetWeaver .
- Top CEOs Recognize the Importance of NPDI .
- Economies Need NPDI
as Well .
- How Not to Fix NPDI .
- " Increase the R&D Budget
- " Implement
a Stand-Alone PLM System.
- Regulatory Drivers for NPDI
- What Happens When
NPDI Is Managed from Within the Organizational Silos