What do cost-savings programs have to do with Innovation & New Product Development?

As products, markets or environments evolve, product management needs to co-exist with many elements from:

• raw material compliance
• product technology development
• product lifecycle management
• long-term product planning
• scrap reduction ideas
• cost-savings projects.

PolyBlend has long recognised that new product development (NPD) is not the only type of innovation that matters to our customers, in fact our products are used by companies around the world with many understanding early on that cost-saving programs share a number of ‘touchpoints’ with NPD initiatives. These touchpoints require coordination and prioritisation to ensure that the product can perform to requirements through their process to ensure supply continuity to required standards.

The development and launching of new; techniques, product changes, supply-chain changes, and improved manufacturing procedures; that increase profitability, go arm-in-arm with increasing revenue. Organisations need a complete view of all work that affects their products to manage their new product development projects, cost-savings initiatives and process efficiencies operating within a single portfolio of projects.

Why?

As companies strive to respond to the current unstable market conditions, cost-savings and process efficiency programs have increasingly become an area of focus.

The resultant savings often serve as “fuel” for new product development investments. When, as part of these efforts, business leaders choose to share forward-looking cost-savings objectives with external stakeholders, therefore the need for clear visibility into the state and impact of new product development projects, cost-savings initiatives and process efficiencies portfolios is vital.

So what dependencies and crossovers do you need to prevent project roadblocks or failures?

1.Cost-saving teams are challenged with cross-functional collaboration, communication, and expectation of success. This mirrors the cross-functional nature of Product design, innovation, and new product development project ownership, and presents the same communication and collaboration challenges.

2. Cost-savings and NPD projects compete for the same resources. Cost-savings projects are not executed in isolation. They often share departmental resources and therefore compete for resources with innovation projects, which in turn are impacted by cost-savings projects which are expected to support new product development projects as well.

These shared dependencies are not always explicit, but when there aren’t sufficient resources to go around, the two areas can end up quietly undercutting and competing against one another, resulting in performance lags, and missed opportunities.

3. With these dependencies and crossovers in mind, cost-savings projects should be thought of in the overall context of revenue generation and profitability. New product development is primarily about revenue enhancement – the development and launching of new products is designed to increase revenue.

4. Cost-savings is primarily about cost control and margin enhancement – the development and launching of new techniques, product changes, supply chain changes, and improved manufacturing procedures that increase profitability go arm-in-arm with increasing revenue. Organisations need a complete view of all the work that affects their products to manage their cost-savings and new product development projects as a single portfolio of projects.

5. In the dynamic environment we’re in right now, we need to recognise that customers are re-evaluating everything. However, one area that can be overlooked is the supply and demand of raw materials. With no end in sight for the ongoing raw material availability crisis, the latest statistics confirm further sharp increases in raw material prices for our industry.

I’ve said this before, and I can say it again, but; I can honestly say that in my 34 years within the polymer industry I have never seen supply issues and price increases on the scale we currently face.

So, innovation and New Product Development, Cost-Savings Programs including process efficiency are key projects to offset this continued wave as there are not really any raw materials in our industry that are not affected. **In today’s environment, it pays to be smart, work closely with your suppliers to be informed of the market and opportunities as they arise.

PolyBlend offers its customers end-to-end solutions for defining and managing activities across the entire innovation and new product development process. Not only do we work in collaboration to understand what our customers need, but we work to build a partnership to support our customers. We can provide our expertise, materials knowledge, and trained personnel to support your project, whether it be on your product development, testing criteria, specifications or optimising your product process and operational efficiency.

Taking a systems approach, we fully integrate our customer’s product design or development brief, and that data is then translated to form an innovation pipeline that contains three major types of projects—new product development, materials development, and cost savings, which can be critical to providing the decision-support and visibility needed to effectively manage your business in challenging times.

PolyBlend can support you with these projects as part of your complete innovation and new product development portfolio. We encourage you to engage us in a further discussion of these possibilities.

If you’re interested in learning more about how Polyblend can support your new product design and development needs or can support your product offerings, don’t hesitate to contact myself directly at mark.stewart@polyblend.co.uk