What is S-Curve (Logistic curve) in the NPI Planning?

Introduction: 

The New Product Introduction (NPI) model curve is a graphical representation or conceptual framework that illustrates the various stages and critical activities involved in bringing a new product to market. The curve typically charts a product's progress from its initial conception through development, testing, launch, and eventual market maturity.

As a planner, you can select the S-Cureve while creating an NPI plan. This helps you define the growth rate and timing of the new product's growth cycle, which helps generate the Final NPI forecast. You can edit the 'k' and 'a' parameters for the S-curve while creating the NPI plan to control the NPI product's growth rate and timing.

S Curve Logistics Equation: The most common function for S Curve is

S(x) =min+ (max-min) * {(1 /(1+exp(-k(x-x0)))^a}  

• min is the minimum market share at the start of production introduction 

• max is the maximum market share for the production 

When the min is zero, and the max is 1, the curve ranges from 0 to 1, and the curve shape remains the same independent of the min and max

• exp is exponent, in the formula used the Excel function notation for exponential

• x is time buckets; for our example, the range runs from 0 to 32

• x0 is the mean of the time buckets (for this example, it is 16

• k is a parameter that controls the shape of the curve, k>0, the larger the value, the later start into fast growth, and the steeper (larger the slope) the growth

• ^ is the Excel symbol for “to the power.”

• a is a parameter that controls the shape of the curve; a>0, the lower the value, the sooner to start fast growth, less steep fast growth

Adjustable K, A, Min & Max share values in the S-Curve

While creating an NPI plan, you can adjust the parameters K(Growth starts) and A(Growth rate) between 0.5 and 2.

• 'k' is a parameter that controls the shape of the curve; k>0. The larger the value, the later it starts to grow fast, and the steeper (larger the slope) the growth.

• 'a' is a parameter that controls the shape of the curve; a>0, the lower the value, the sooner to start fast growth, the less steep fast growth.

You can adjust 'k' and 'a' values by dragging the pointer between 0.5 and 2.

• NPIs expected market share:  You can adjust the Min and Max share values between 1% and 100%.

Ramp-up curve generation

The screenshot below shows the ramp-up curve setting for an NPI using the standard curve S-Curve (Logistic Curve)

According to the formula mentioned above, the application generates the ramp-up curve percentage for the ramp-up period. The same can be seen in the visualization on the NPI creation screen and the ramp-up curve measure in the NPI planning results view.

How is Ramp-up curve used in the "Final NPI Forecast" calculation

The following are steps in the Final NPI forecast generation when the S-curve is chosen for the ramp-up curve.

Step 1: The application computes the aggregate Base NPI Forecast during the ramp-up period. In the example below, the ramp-up period is between Jun 2023 and Feb 2024. During this period, the aggregate Base NPI forecast = 1,90,068

Step 2: Internal computation (within the NPI Plan generation logic)

During the ramp-up period, for each bucket, Internal computation = Ramp up curve % X Base NPI forecast

The application then computes the aggregate value across the ramp-up period. In the example below, the aggregate internal computation during the ramp-up period is 62,349

Step 3: Final NPI forecast = Each bucket's Internal computation x Aggregate Base NPI forecast/Aggregate Internal computation.

For example: On the week of Jun 23,

Internal computation = 21,578 x 0.341 = 736

Final NPI forecast = 736 x 1,90,068/62,349 = 2.243

Final NPI forecast calculation on Non-Ramp up periods.

For the non ramp-up periods, the Final NPI forecast = Ramp up Curve X Base NPI forecast.

In the above example, the non ramp up curves are before Jun 23 and after Feb 24.