NPI Supply Chain Craft

A resource for new Buyers and Planners who purchase for New Product Intro and Development programs.

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Welcome! In case you’re unfamiliar with NPI programs, here is a brief explanation. Most SCM professionals (specifically Buyers, Purchasing Agents, Procurement Specialists, Planners, Materials Program Managers, and the like) support Production or Distribution. Basically, they buy or plan for customer product of which the design is already frozen. In other words, the product design has already undergone all the work to develop and qualify it for mass production and to sell for consumer use. Meanwhile, the NPI phase covers all the work that’s needed to get the product design to the point where it can be frozen.

The NPI phase covers the following activities. (These are from an NPI Buyer/Planner perspective in manufacturing environments. We get involved in the highlighted ones).

• Request For Proposal (RFP). A Customer requests a Proposal Quote from your company to manufacture a new or updated product. The RFP may be for a one-off delivery or for follow-on production units.
• Cost Estimation. The Proposal Team estimates material, outside service, and internal labor costs.
• Proposal Submittal & Award. With cost estimation embedded, our Business & Development (B&D) Professionals submit the proposal to the Customer for a hopeful award of a contract/purchase order.
• Preliminary Design. Primarily an Engineering activity that may require particular input and/or collaboration from Procurement and/or particular Suppliers.
• Prototype Build & Test. A quick build and shortened testing of Simulation units mainly to prove critical functions and design.
• Detailed Design. Wherein the final design is agreed and released, including assembly and component drawings, a Bill of Material (BOM), assembly and testing procedures, supplementary specifications, and inspection criteria.
• Qualification Testing. Specific units are built and tested to ensure that they meet all Customer’s specifications, your company’s quality criteria, and other industry regulatory requirements. Any test failures will likely lead to another round of re-design and re-qualification testing.
• Manufacturing and Delivery. The Customer’s deliverable product is built and tested (if required). If they pass inspection, they are delivered to the Customer.
• NPI Transition to Production. Assuming our new product functions perfectly in the Customer’s hands and if there are follow-on orders for mass production, the NPI Team works with Production personnel for the latter to take over supply chain activities.

Effective purchasing for NPI programs tends to be a difficult and challenging job, especially if you are the sole NPI Buyer. Successful program deliveries often breed increased Customer order volume for more new programs. NPI Buyers usually have to juggle different program schedules, material requirements, and urgent activities. Unlike Production Planners and Buyers, we don’t have the convenience of MRP and released drawings/specifications at project start. As there will be enough external risks and obstacles to threaten on-time NPI deliveries to our customers, we must proactively embrace and carry out diverse strategic and tactical actions to ensure that we (Procurement) will not be the reason for failed Customer delivery. Unusual problems pop up in new projects that a typical production buyer will never encounter.

Because of both the abnormal and recurring obstacles that I faced frequently throughout my career, I often wished that there was a resource that I could turn to for instantaneous and practical advice. Internet search engines and video sharing services (i.e. Google and YouTube) are my favorite methods for finding “how-to” answers, but I’ve found these methods to be severely lacking. It is hard to find good details specifically in the niche of NPI procurement and planning. Most of what I’ve found seems too general and makes me wonder if most content out there was written by A.I. I’ve also tried finding relevant books and magazines without much success.

Besides the resource issue, I’ve also learned that SUCCESSFULLY managing the supply chain for NPI programs requires not only logical skills but also creative craft. If a problem occurs that could ultimately cause late shipment to the Customer and you are DETERMINED to do your part within your responsibility to prevent or lessen this risk, then you have to dig deep and may have to come up with a creative solution. This may require collaboration, cooperation, and/or approval from or with suppliers, other project team members, other departments in your org, managers/executives, maybe even the Customer. When you or your team solve seemingly insurmountable problems with unconventional solutions, the successful result can appear to outsiders to have been solved by magic.

And thus, the purpose of this blog. If you are a fellow NPI Supply Chain Professional (whether experienced or rookie), this will be a place to come to for SPECIFIC advice and details. I will try to cover every challenge that I’ve encountered as well as others that you may encounter. I firmly believe this job to be one where you need to step up or step aside. You can influence the success of a new program literally from the very beginning. There have been many times where I’ve felt that I had to be a magician to help fix quality, supplier, delivery, administrative, design, cost, or other issues. How often I’ve been told that “you need to make a miracle happen”. I hope that I can help you improve your niche craftwork and become an NPI Magician!