AN ANATOMY OF A DECISION-SUPPORT SYSTEM FOR DEVELOPING AND LAUNCHING LINE EXTENSIONS

For most firms producing fast-moving consumer packaged goods, line ext ension is central to their new product development (NPD) strategy. The authors present a decision-support system for managing the NPD proces s in this industry, which explicitly evaluates the financial prospects of new line extension concepts. The system developed is based on an i n-depth analysis of 51 new product projects launched over a three-year period at a major food manufacturer. It embodies historical knowledge about the productivity of the firm's NPD process and captures some ke y research and development resource inputs that can affect this produc tivity. It also provides shipment forecasts at various stages of the N PD process and thus can be used at new product project review gates to evaluate line extension concepts systematically. Finally, the system also can be used to improve the practice of the NPD process by enablin g its users to take a product line perspective, using incremental sale s evaluation, and by facilitating cross-functional and inter-project l earning. Although the system has been developed specifically for a pac kaged food company environment, its underlying design principles are g eneric and applicable to a wide range of industries.