New products innovation is the growth mantra of the CPG industry. One estimate put the number of new products launched each year at 30,000. These include brand extensions, product variants, sub-brands, new category and fundamentally new innovative products to capture new opportunities, capitalize on trends, and leverage partnerships. They keep the CPG organization competitive and thriving. At any point of time, a CPG major could have over a hundred new products in the pipeline. It is never easy to keep tabs on where each new product is in the development stage or if they are meeting their development goals. With the COVID-19 pandemic, it has become more important than ever for CPG organizations to step up their new product development and innovation process. This is because there is evidence to show that innovating through a crisis ensures that organizations emerge stronger and stay ahead of the market average by more than 30 percent. In addition, they deliver continued growth over the next three to five years. Smart CPG organizations are therefore moving to digital platforms to stay on track with new product development and ensure they do not miss the window of opportunity.
It is never easy to stay on top of the factors that determine product development. These factors range from gathering information on what customers used in the past, their levels of satisfaction with existing products, how they can be persuaded to change their minds with a change in packaging or display, the impact of word-of-mouth on decision-making, competitive action, regulatory requirements, the intellectual property landscape, patents, available technology and ingredients, recipe suppliers…the list is long and daunting. This is where digital platforms come into play, supporting the effort to capture knowledge and let it flow into new product development.
There is an additional level of complexity involved. CPG organizations need to address a variety of time frames to get new products before consumers. Reactive changes to existing products may be required in the short-term. Some changes, such as shifting to sustainable ingredients, may be required in the mid-term. And launching a fundamentally new product, replacing existing products, may be required in the long-term. Also, long term sustainability and growth of the business would require the CPG organization to move quickly, focusing on product IP creation and raising barriers to entry. The question hounding every CEO pursuing new product development is, “Am I executing innovation and NPD process using the correct systems and methodologies, so that I can have the right products available just when required, to be used as the winning ammunition on the battlefield of the market?”
To answer that question with confidence, the CEO needs to have a digital platform that takes products from concept to launch. ITC Infotech’s PLM based Digital Platform fills the gap. The platform is enabled with stage-gate driven accelerators and templates. It integrates business functions in the organization such as engineering, testing, packaging, graphics, commercial, marketing and legal, and enables them to collaboratively contribute to the innovation process at various stages. The platform, through its interactive dashboard, provides visibility into portfolio, programs and projects, captures who is working on what activity of which project, and the stage at which each project is. What the digital platform delivers is a system of urgency, flagging delays, identifying bottlenecks, sensing what is happening in the market and bringing it to the notice of the organization, and enforcing collaboration.
The need for such a platform has been felt for long. But the urgency has grown in recent years as end-customers are going digital. They now have the tools to look for customized, personalized and improved products. In response, CPG organizations need to work faster, conceptualize products overnight, come up with prototypes, test them and get them into the market before competition does. The only way to do this effectively is with a PLM based digital platform, such as the one provided by ITC Infotech, specifically designed to manage new product development and innovation.
Author:
Debjit Banerjee
VP, Business Consulting,
ITC Infotech
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