Global New Product Introduction Challenges And Countermeasures

NPI (New Product Introduction) requires enterprises to deliver new quality products at right time. Reliable NPI process is critical to the success of new product projects. Facing the opportunities and challenges brought by market globalization, companies have to optimize the NPI process, in order to achieve higher working efficiency, further cost reduction, and continuous quality improvement.Based on concurrency engineering principle, gateways management process is an advanced methodology and an effective approach in NPI implementation. The practice and the challenges of Caterpillar's NPI process are described. The discussion is focused on new product cost, as well as global purchasing and supplier collaboration in NPI programs.Cost of new product directly impacts on project finance. The uncertainty of the parts cost brings difficulty to the control of new product cost. Target cost management requires setting cost target at the beginning of development phases. Through regression analysis, should-cost modeling is applied to the cost estimation of parts and components. Should-cost molding is also integrated into Caterpillar's NPI process. "Crystal ball", a valuable statistical simulation tool, is introduced to the cost simulation and cost sensitivity analysis.Based on lean supply, global purchasing and supplier management is the important approach to control cost of new products. With the collaboration relationship, strategic suppliers support companies to provide more value-added products and services to customers, as well as the control of cost. Total cost of ownership is the measurement of products' whole-life-cycle cost in term of NPV. With TCO study, the supplier evaluation and selection not only optimize the supply chain, but also enhance the cost control of new products.