New Product Development Process

The New Product Development (NPD) Process, also known as Product Realization Process (PRP), is a company's formal process for controlling and monitoring the flow of ideas into successful product launches.  In leading organizations, this is a structured process with the following typical objectives:

  • Encourage and facilitate the review of a large number of new ideas or concepts
  • Through rigorous analysis and decision making at specific review points, prioritize these to a few appropriately resourced programs with the highest likelihood of market success.
  • Minimize the number of products that are cancelled in the later (most expensive) development stages or are released with unsuccessful results
  • Accelerate time to market and reduce break-even times for the product program
  • Continuous improvement of the development process 

The process can be visualized as a funnel with a large number of new product ideas entering the concept stage, narrowing to a fewer number of fully resourced product programs in subsequent stages.  Separating each stage is a gate or phase review where a decision is made to kill the product, enter into the next stage or redirect back to a previous stage for additional work.   A typical development process is show below:

Program Review Board

The decision making team at the phase/stage reviews are senior executives who have the authority for approving and staffing new programs.  Also called the Program Review Board or Gatekeepers, this team normally consists of the lead executive in the organization and leaders of key functional areas, including engineering, product management and manufacturing.   Through these decisions, the Product Review Board manages the development pipeline, authorizes new programs, sets and communicates priorities, and allocates the necessary resources.  

Project Staffing

Normally a champion with a new idea will schedule the initial (concept) review with the Product Review Board. He or she will informally solicit support from others in the organization as needed to prepare for the review.  The focus of the concept stage is to analyze the market opportunity for the product, and to develop a preliminary financial analysis and risk assessment.  The concept review presentation will normally include a recommended list of cross-functional team members required to take the program through the next stage, and an hours estimate.  The proposed team members should be discussed with the appropriate functional managers prior to the review.  If approved at the concept review, the next stage of the product program will be staffed and scheduled based on the availability of these core project team members. 

Development Stages and Stage Reviews

The visual illustration above shows an example product development process with five distinct stages.    To better understand the activities of each stage, and the focus of the associated stage review, click on the following:

Concept Stage/Phase 

Definition & Business Case Stage/Phase

Development Stage/Phase 

Testing Stage/Phase

Deployment Stage/Phase

In practice, organizations tailor the new product development process to their own environment, and will often combine stages (reducing the number of stage reviews) for certain types of products or for smaller product programs.   In addition, many organizations are modifying the process to facilitate agile development methods, where customer feedback is solicited throughout the development cycle to allow for quicker adjustments.   To learn more about the latest innovations in the new product development process, review the articles at the Stage-Gate Inc. knowledge center or books from the leading authors on the topic: Robert Cooper and Michael McGrath.