How to use SIPOC to standardize New Product Launch

1. SIPOC and New Product
Launch
by
Vivek Naik
http://viveknaik.net

2. How to we launch new products
without disturbing the flow of our
current products and
processes?

3. Is this new product(s) right fit
for our business?

4. Hot Lead will
buy
thousands
NeedSamples
Parts available ?
Manufacturing
Drawings
Costing
Process
Capacity
QUALITY
Marketing
MATERIAL
Kanbans
DELIVERY
Size of opportunity
TRAINING
Demand
Setup
Required
Competition
ASSEMBLY
DRAWING
Procurement

5. overwhelmed?
What about stable
operations?
getrightproductstomarketontime
Very short window of
opportunity

6. What is the solution?
Where do we
start?

7. Focus

8. We need to Focus on the
Right type of Products,
Follow a Standardized
Process
And
Communicate

9. How do we accomplish this
without wasting too much
time?

10. DEFINE
Right Type Products
Product Platforms and their extensions
Select Products that uses existing process flows

11. DEFINE and AVOID
Wrong Type Products
Product which are not part of the platform
Products with just onetime demand
Products which may violate certain regulations
or copyrights

12. How to
Standardize the Process
Of new product launch?

13. SIPOC

14. SIPOC ustomer

15. What does the Customer want?
Does it fit into our definition of right
Type of product?
What is the opportunity size ($)?
What is Demand?
What is the profit margin?

16. SIPOCutputs

17. What is the Product Definition?
Do we need to have FGI?
how many (quantity)?
What are the quality requirements?
What is are delivery requirement?
What is maximum allowed cost?

18. SIPOCrocesses

19. Which Processes are needed to produce this
product?
What are the cycle times?
Do we need new process, tooling or setup?
Do people need training, SOP?
Does process have capacity to meet the
demand?
What process setup cost and running cost?

20. SIPOCnputs

21. Which parts/items are required?
Are these existing parts or new parts?
What is the BOM Qty. and Inventory Qty.?
What is unit cost and in process inventory cost?
What is minimum order qty.?

22. SIPOCupplier

23. Are these existing suppliers or new suppliers?
What are their lead times?
What are their freight terms and cost?
How is their quality?
How reliable are they for on time delivery?
What is the frequency of price fluctuation?

24. S I P O C
Communicate

25. Communicate
We need to share all the
know facts about the
Product and its setup with
the entire Team During
all the Project phases

26. How to Communicate and
What Information is needed
during different phases of
new product launch?

27. Let’s take a look at a story
of new product launch

28. “would you like to buy our
great product?”
Mike the
salesman visits a
customer

29. But Alan the
Customer has
a Different
need
“Actually we needed to
solve this problem, can
you help us?”

30. “We don’t have that right now……
But we can develop a new product
just for you!”
And so starts the project to
launch a new product in
shortest possible time

31. The new product
promises a great
Increase in revenues
Sales presents the
idea back at the
Company

32. Jerry the CEO wants to
make a good business
decision
“Do we really need this now?”
“How many units can be sold?”
“Are we capable?”
“Do we have capacity?”
“How soon can we realize ROI?”

33. Opportunity Assessment Phase

34. Opportunity Assessment Phase
What we need to know
1. Product definition
2. Does it match our right type
product
3. Potential Demand and time to
reach that maximum demand
4. Expected selling price and profit
margin

35. Mike the salesman fills out all the
details about this opportunity to prove it
is worth selling this new product

36. S I P O C
Use SIPOC to get understanding of
what is involved and potential
Capability, Capacity, and Cost Risk
Opportunity Assessment Phase
30 Minute SIPOC evaluation

37. Operations and Engineering Prepares
the SIPOC for evaluation

38. Jerry the CEO makes
a good business
decision based on
the Report of the
Opportunity
Assessment

39. Initiation Phase

40. If project is approved
Initiation Stage starts
In-depth SIPOC begins to evolve
Procurement is initiated
Prototype is built

42. Output of Initiation Stage
Prototype Ready for customer testing
Precise Costing
Manufacturing Capacity verified
Quote is prepared

43. Approval Phase

44. Mike the salesman visits the
Customer and presents them
the prototype/ Sample along
with the Quote

45. Changes may be made to the
product and pricing till the
Customer approves and it is
profitable for the company

46. Once approved……

47. Setup Phase

48. If Product is approved
Setup Stage starts
Parts are ordered
Tooling/fixtures designed and
fabricated
Inventory is setup in its location
Production run is carried out

49. Output of Setup Stage
Production Ready
People trained
Manufacturing operation’s SOPs and
pull systems in place
Production schedule adjusted

50. Once Setup is complete
regular Production begins

52. Sales Process Phase

53. Sales Process is setup to track
and meet the target sales goals
All potential location are Identified
Sales and profit forecast is made
Action plan is setup to reach the
maximum sales potential of this
product

54. Output of Sales Process
All potential location are reached
Sales and profits tracked against the
forecast
Demand is adjusted based on
learning
Monthly Reports of sales growth for
this product

55. When properly launched New
Products can lead to steady increase
in revenue

56. Vivek Naik
Email: viveknaik@viveknaik.net
Web: http://viveknaik.net
Twitter: @viveknaik
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