By Robert G. Cooper
Artificial Intelligence (AI) is poised to revolutionize all aspects of business, particularly new product development (NPD). While AI might still resemble science fiction to many, that future is no longer fiction – it’s here now. AI has arrived in full force! Here are some of the applications in NPD.
AI for Idea and Concept Generation
AI directly generates ideas for new products for a product-market category when given the right prompts, ideas that are more novel than humans can create [2]. AI tools also analyze data from various sources, such as customer feedback, social media, and online forums, to identify market gaps, emerging customer needs, and areas of untapped potential. Nestlé even employs an AI “concept engine” which transforms these scanning insights into concept proposals. One concept AI tool (Ai Palette) even does concept testing.
Concept Development
Generative AI algorithms create realistic 3D renderings of concepts. Mattel uses an AI image-creation tool to create concept designs for new Hot Wheels cars, based on text prompts. General Motors working with MIT employs generative AI to create new car designs based on prompts from designers, and then an AI predictive model forecasts how car-buyers will rate the car designs.
Product Development and Testing
By creating digital prototypes or models, AI permits the rapid testing of multiple product design iterations quickly during development. Siemens uses AI to create virtual prototypes that can be quickly tested and refined. GE researchers, using Machine Learning, trained a surrogate model to determine the optimum shape for the crown of a piston in a diesel engine. The model evaluated one million design variations in what would normally take two days with a team of design experts using a supercomputer – an increase in speed of 5 billion times. Digital twins, which are digital prototypes that mimic the real product, are used to monitor and accelerate customer field trials of physical new products.
In process industries, AI is used to discover and create new products. BASF uses its Emollient Maestro to identify molecules with just the right properties and predict their performance, while Unilever’s AI tool developed new enzymes for household cleaners with better performance, but five times faster than previously possible.
Launch and Beyond
AI tools guide the development of the market launch strategy and tactics, including executing dynamic pricing, targeting advertising, and optimizing salesforce calling. AI tools also facilitate production start-up (optimizing processes) and manage the supply chain.
AI plays a key role in the post-launch period too, to maximize customer satisfaction. Digital twins are used to monitor product performance in use. And AI evaluates unstructured text from customer feedback to spot product issues. Across the entire idea-to-launch process in Figure 1, AI facilitates project management, portfolio management, risk assessment, building and updating the business case, and even plays a role in making go/no go gate decisions.
AI Positioning in NPD
These examples are but a few of the more than 40 real-life applications of AI in NPD in Figure 1. The overwhelming number and diversity of models and tools make the AI-NPD landscape complex for potential users. To help navigate AI in NPD, Figure 1 maps “where and how” AI is applied in NPD. The horizontal axis shows the position of the AI application in the innovation process, which is depicted across the top of the figure, from idea to launch. For example, idea generation is at the front end of the innovation process in figure 1, while developing the market launch plan is at the back end. The vertical dimension is the role the AI tool plays: as an originator or creative tool (for example, molecular discovery), or as a facilitator (for example, handling data processing [1].
Figure 1: The AI-NPD map positions AI in NPD – where AI is used in the NPD process and the role of AI as a facilitator or originator
Time to Act!
AI has already created dramatic changes in the speed, efficiency, and quality of NPD for a handful of early adopter firms. However, most firms have yet to integrate AI into their NPD effort. The adoption window is short…. the time to act is now.
Digging Deeper:
- [1] Brem, Alexander, Ferran Giones, and Marcel Werle. 2023. “The AI digital revolution in innovation: A conceptual framework of artificial intelligence technologies for the management of innovation.” IEEE Transactions on Engineering Management 70(2): 770–76. Available at: https://ieeexplore.ieee.org/document/9590499
- Columbus, Louis. 2020. “10 ways AI is improving new product development.” Forbes, July 9. Available at: https://www.forbes.com/sites/louiscolumbus/2020/07/09/10-ways-ai-is-improving-new-product-development/?sh=27a90ce45d3c
- Deeb, George. 2023. “Artificial Intelligence is taking over marketing.” Forbes, Sept. 6. Available at: https://www.forbes.com/sites/georgedeeb/2023/09/06/artificial-intelligence-is-taking-over-marketing/
- [2] Filippi, Stefano., 2023. “Measuring the impact of ChatGPT on fostering concept generation in innovative product design.” Electronics 12(16): Aug. 21, 3535, Available at: https://doi.org/10.3390/electronics1216353
.
- Nieto-Rodriguez, Antonio and Ricardo V. Vargas. 2023. “How AI will transform project management.” Harvard Business Review, Feb. 2. Available at: https://hbr.org/2023/02/how-ai-will-transform-project-management.
About the Author
Robert G. Cooper, Creator of the Stage-Gate Process; Distinguished Research Fellow, Institute for the Study of Business Markets, Pennsylvania State University, USA; Professor Emeritus, McMaster University, Canada. You can reach him at robertcooper@cogeco.ca.
