New Product Development Pipeline Management - CEPAC

New Product Development Pipeline Management

G.V. Reklaitis J.C. Zapata

School of Chemical Engineering reklaiti@purdue.edu zapata@purdue.edu

Overview of Module

? New Product Development Management

? Pharmaceutical Product R&D Pipeline ? Decision criteria

? Break (5 min) ? Mathematical Programming Approaches ? Break (10 min) ? Tutorial on Discrete Event Simulation ? Simulation-based Approaches ? Break ( 5 min) ? PPD demonstration problems & student

exercises ? Summary & Future Directions

50 min

50 min 30 min 50 min 30 min 10 min

Outline

? New Product Development Pipeline

? Issues & features

? Pharmaceutical Product Pipeline

? Special characteristics ? Strategic & tactical decisions ? Types of Uncertainties

? Decision Criteria

? Economic ? Risk metrics ? Real Options Valuation

? Summary

Product Development Pipeline

Supply Chain for realization of new products

Discovery

Development

Commercial Launch

US Industry Average Performance ? 1 commercial success per 7 concepts in development ? 60% of new products launched are commercial success ? 50% of new product development resources spent

on failed or cancelled products

Griffin (1997)

Product Development Pipeline

Multi-stage decision problem under uncertainty

Discovery

Development

Commercial Launch Success

Failure

Resources Costs

Failure

Resources Costs

Failure

Resources Costs

Key issues: Which projects to develop? In what order? Level of resources to assign? When to terminate development?

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