Full citation

ExxonMobile Chemical Company. (2004). Improving New Product Development. American Productivity & Quality Center, 137-158.

Format: Non-peer-reviewed article

Type: Experience

Experience level of reader: Fundamental

Annotation: Corporate summary of the New Product Development process. It presents a Stage/Gate model and highlights the internal best practices along with recommendations for others based on their experience.

Setting(s) to which the reported activities/findings are relevant: Federal lab, Large business, Small business (less than 500 employees), University

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Researchers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

Primary Findings

Measure: Measuring Success occurs during two post-launch reviews: 1) One to three months after launch, including comparisons of the project's costs and timing targets with actual performance, the NPD process and project execution suggestions; 2) Three to twelve months later (depending on project complexity) when there is enough commercial experience to judge the market receptivity, along with manufacturing and technology performance.
Industry experience.
Occurrence of finding within the model: Gate 8, Stage 9

Model: ExxonMobil Chemical has a formal system of NPD with stages and gates, which are close to an industry-standard model. The Stage/Gate process begins with a specific idea that enters the initial screen (start gate). The stages of the process are: preliminary assessment, detailed assessment (lab-scale studies), development (pilot scale studies), validation (in the manufacturing plant), and commercial launch. The gates, or hurdles to be cleared are: initial screen, second screen, decision to develop, entry to validation, and launch decision.
Industry experience.

Methods:

  • Exxon/Mobil lists a key lesson as: Include significant marketing resources early in the NPD cycle. This helps avoid commercial failures that were championed only by the technical side of the company.
    Industry experience.
    Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4
  • As ExxonMobil's NPD process progresses, marketing activities scale up from limited sampling with key customers to much more significant work in trials with customers using the new product.
    Industry experience.
    Occurrence of finding within the model: Step 7.13, Step 6.1, Step 5.3
  • Gate Reviews are scheduled for certain dates at which the NPD team either presents or explains why they need more time. For those projects experiencing delays, the Gate Review managers listen to the reasons for being late and help the NPD team to brainstorm solutions. Most Gate Review managers have some technical experience so they are generally helpful to the NPD team. In many cases, the Gate Review managers are one level up from the NPD technical community, so the decisions are made at a relatively low level for smaller projects. Larger projects are reviewed several levels higher and the gate review deadlines are firm.
    Industry experience.
    Occurrence of finding within the model: Gate 3, Gate 4, Gate 5, Gate 6, Gate 7
  • Exxon/Mobil lists a key lesson as: Properly resource roll-outs of NPD work processes to avoid false starts; otherwise there may be fits and starts of activity with gaps in between because of resource problems.
    Industry experience.
    Occurrence of finding within the model: Step 4.9, Step 7.3
  • NPD begins when there is a commercial target and concept in mind that is strictly development and not research. Activity that precedes NPD is called Knowledge Build where project managers need flexibility to conduct research. For technologies and products completely new to the company, the Knowledge Build team may present the project's potential in a qualitative fashion. The technical leadership will make a Gate decision about sponsoring that research project. If no, the budgeted resources go back to other Knowledge Build activities. If yes, then the team develops the technology through the next stage. If the technology is far enough along, the team transfer the project to the business side and begins the normal Stage/Gate NPD activities.
    Industry experience.
    Occurrence of finding within the model: Stage 2, Gate 2, Stage 3, Gate 3
  • ExxonMobil evaluates in detail nine elements at each successive stage of the NPD process: 1) Strategic fit of the project with the company's objectives and strengths; 2) Market attractiveness; 3) Technical feasibility; 4) Supply and entry point (there must be an idea of how to supply this new product); 5) Sources of competitive advantage; 6) Legal/public policy/safety, health and environmental aspects; 7) Financial attractiveness; 8) Killer variables - which are those events or changes in market conditions or new technologies that could dramatically alter the situation for the project; 9) Plan to proceed, at least to the next Stage/Gate.
    Industry experience.
    Occurrence of finding within the model: Stage 5, Stage 3, Stage 4, Stage 6, Stage 7
  • Exxon/Mobil lists a key lesson as: Ensure that top management values and provides appropriate resources for on-going work, as well as process support for units doing NPD.
    Industry experience.
    Occurrence of finding within the model: Gate 4, Gate 5, Gate 6, Gate 7

Tip: The company is moving away from the current practice of only relying on its direct customers for input and feedback. Almost 100% of decisions to kill a project (where NPD is stopped after the first decision gates) are the result of not understanding the end consumers — that is, the customers of our company's customers. The reality is that the end consumers have a significant role in determining a new product's value.
Industry experience.
Occurrence of finding within the model: Gate 3, Gate 3