Consumer Companies Expect New Products to Fuel Economic Rebound According to Aberdeen Group Study.

BOSTON -- More than three quarters of consumer companies view new product development as a leading driver for revenue, profit, and market-share growth, but most are uncertain that their companies currently posses the requisite organizational alignment, procedures, and infrastructure to achieve their product innovation and delivery goals, according to a new Aberdeen Group study.

Based on a survey of design, development, and operations executives at more than 215 consumer products companies, Aberdeen found that increased competition from low-cost countries, goals to target new markets, demands for more innovative products, and pressures to reduce product costs are fueling a renewed focus on product innovation within the consumer sector.

"With the global economy on the mend, consumer companies are looking to product innovation and development to fuel the recovery," said Tim Minahan, Aberdeen's senior vice president of supply chain research and author of the report. "However, product development success will require consumer firms to make significant investments to overhaul existing fragmented product development procedures, controls, and systems."

Aberdeen's Product Development in the Consumer Industries report revealed that less than a quarter of consumer products companies are confident that their companies have sufficient infrastructure to support new product demands. Most consumer products companies have not effectively aligned and standardized product development processes - with nearly a quarter of companies lacking any formal procedures. Only half of consumer firms use automation to manage product data and support product development processes. Those using automation rely on a hodgepodge of homegrown solutions coupled with a variety of commercially available computer-aided design and visualization tools.

Prioritized strategies consumer companies plan for improvements include:

--Product cost management

--Standardizing product development processes and metrics 

--Outsourcing innovation and design to external providers

--Creating feedback loop on aftermarket product performance

--Parts standardization and reuse

Consumer products companies employing these strategies have demonstrated double-digit performance advantages over their peers in the areas of costing accuracy, new product profits, and new product contributions to overall revenues.

The Product Development in the Consumer Industries report identifies the leading priorities, challenges, and prospective product development strategies and technologies employed by consumer product companies. Trends and recommendations detailed in this report are intended to aid enterprises in building a business case for action to enhance their own product development initiatives.

To obtain a copy of the report, please follow this link:

http://www.aberdeen.com/ab_company/hottopics/productdev/default.htm

About Aberdeen Group

Founded in 1988, Aberdeen Group is the trusted advisor to the Global 5000 for value chain strategies and technology advice. Through its continued benchmarking and analysis of value chain practices, Aberdeen offers a unique mix of research, tools, and services to help G5000 executives assess their value chain performance, develop improvement strategies, and select value chain solution partners.

Headquartered in Boston, Aberdeen has research and consulting divisions in Atlanta, GA; Chicago, IL; Palo Alto, CA.; and Fort Collins; CO. For more information, visit www.aberdeen.com or call 617-723-7890.