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New Product Development

29 August 2011

Product development has become a key differentiator for companies in the market and Product Lifecycle Management can play a important part in the product lifecycle, writes, Chris Wright for The Meat Site.

There is a dearth of big ideas and breakthrough products in normal corporate life. Trying to find that breakthrough product must be balanced with day to day company operations, said Fred Brown, from Kalypso, during AMI in Chicago earlier this year.

Keeping the business going every day must be balanced with the "big idea". The challenge is to come up with new products every year to keep customer happy. Breakthrough products in the food and beverage sector are rare.

Mergers are happening every day. You either buy or get bought. Growth comes from new product development or acquisition. Companies need a corporate information system that can adapt to different data formats from around the world.

Traceability is a critical issue today in the food industry. The government doesn't really know how to do traceability, so it looks to companies to provide information and solutions.

Things such as labeling and artwork oversights cause product launch delays. In one out of three items in the store today in the US, the label does not match product.

Regulatory experience is critical for product development teams. Product and design traceability means: what lot or batch is this from? Design traceability means that you followed the rules when you developed the product.

Product Lifecycle Management

Product Lifecycle Management (PLM) is a platform for developing and maintaining the product. Manitaining product records is the central point of this process.

There is a PLM "bundle" that includes: Product Data Management, Formulation Management, Specification Management, Quality Management and Collaboration Management (information sharing).

PLM are not big systems, rather it requires a small net of dedicated systems.

Most food companies use PLM systems or something similar. Some have Packaging Art and Management. More than half of US food and beverage companies use Product Portfolio Management Systems.

PLM strategies must support design for value and collaborative innovation while protecting consumer safety. In the end it's about protecting your company from risk.

However, when a new product is developed, you need to reduce the risk to the consumer.

One of the challenges in developing new products is in bringing suppliers into the family - into the design process, said Mr. Brown. As an example, he mentioned that the Chick Fil A restaurant chain has a supplier portal.

Product Data Syndication

Product Data Syndication is a way of having the information needed easily accessible. Companies want to publish nutritional information online, which keeps the customers informed. Mr. Brown noted that 50 per cent of Research and Development (RD) time is spent on answering questions. Your own sales force is also a customer.

The traditional objectives of data syndication are to aggregate spending with improved data and to replace data silos into integrated sources of information, meaning that you have reusable data.

For a new product development team, this means that there is quick access to existing formulations, ingredients, and nutrition compliance data.

Nutrition compliance screening needs be done "during" formula interaction, Mr. Brown emphasized. He also said that labeling is an output of the formulation, not a separate effort or process.

Product information requests are reduced via data syndication and releasing projects is less disruptive, while Ingredient change impacts are immediately visible.

Global Design

The Global Product Data Record needs to be defined during design phase. This needs to be rolled out through the "entire" company, emphasised Mr Brown.

Indentify and harmonize the business process to be managed by PLM. There are 18 to 20 business process steps in developing a new product. Use technology to reduce the number of steps.

Use a pilot location to do this. Design across the enterprise. The optimal roll out plan is a balancing act between time to value and organizational risk.

Data migration is the most frequently underestimated implementation task.

There are many common misconceptions in this whole process:

  • Data can be migrated with a magical tool
  • Data is structured (it's not)
  • Data is clean (no one thinks that)

The truth is that all the data must be migrated and this means collaboration and a lot of hard work.

A future state featuring shared information and frequent collaboration is not the natural inclination of creative people. Nor is this the working environment for which they have been trained.

Charging your own company culture is hard. Changing your supplier's company culture is even harder. Bring them along slow and easy.

It takes a long time. Start with your top five suppliers for six months and then go on, said Mr Brown.

Companies need a structured but responsive new product development process. Every process must be seen as a go/no go decision. Do we go forward or drop the product?

A simple, logical, stage/gate process is needed for each of the different teams: management-operators-maintenance. But don't overcomplicate the teams responsibility.

Performance must be measure. "How did it do?" "We don't know," is the common answer, said Mr Brown. Budgeted sales to actual sales, margin performance, adjust your guidelines and limits based on performance.

PLM is fundamental part of company innovation strategy and infrastructure. Results have been transformational.

However poorly managed new product development has led to well publicized failures.

Think big, start small, build incrementally and rapidly, concluded Mr. Brown.

July 2011

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