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SJG:NW 4th December 1974 REVIEW OF THE N.P.C. - PRODUCT DEVELOPMENT ~he N.P.C. met first in January 1972 and has been in operation for 3 years. The writer undertook rev£ew critically its perform~ance since that time and to make some reco~aend~tions for its future. In order to do this it is necessary to step back and take a wider view of the whole field of Product Development and organisation. The N.P.C. had two objectives - to give a.push from the centre to product development and to bring the " technical resources of the U.K., the Product Development Laboratory in particular, to bear on the problems of associated companies operating in sophisticated markets but without comparable resources of their own. The second objective was believed to depend %0 some extent on the success of the Product Development Adviser appointed in Millbank. The Product Development Adviser The aim here was to provide for the co- ordination of technical advice on products - given now and then rather arbitarily by a number of individuals depending largely on the route chosen by the enquirer Over the years the leaf function had expanded from one predominantly of procurement to embrace all levels of product advice. .Marketing had also expanded in a similar way. It might have been expected ~ha~ with.the clear role of product development adviser established that leaf and marketing functions would become more sharply defined. But this has not happened. The product development adviser, the P.D.L. and R & D have contributed considerably to disseminating product knowledge but so far this has been diffused through other departments and has led to widening their scope without necessarily deepening their insight! This may be no bad thing providing we build up the departments sufficiently by providing people with the necessary background and recognise the new scope of the old departments. In practice the bu~Ik of the enquiries to The ~roduct Development Adviser have come from Leaf Department, and the route into territorial teams has been through leaf advisers. But for one reason or another the P.D.A. has not become a recognised member of Territorial teams. One logical outcome would be to transfer the P.DIA. into Leaf Department and its proper role might be recognised as Leaf Frocurement and Product Formulation. This could in due course raise the standard of product knowledge of leaf men in small companies where - without laboratory staff or'facilities - these are often the main local resource for product improvement. Similarly, the introducTign of one or two chemists into marketing services might be considered. An alternative start might wellbe the Transfer of the P.D.A. into Marketing Department. I believe we should recognise the failure to get the P.D.A. accepted in a team f~nction and then decide that he should Therefore become part of another department which is recognised. This could be Marketing, Leaf or Production. I do not think it of great importance which. Contd. BAT Industries document for Province of British Columbia 14 November 2000 BAT INDUSTRIES 00290488

- 2 - The Product Development Laboratory Progress here has not been as fast as is desired. The N.P.C. has used this facility but the imposition of the N.P.C. and the Product Development Adviser between the P.D.L. and possible users may have, in fact, limited its use. Direct contact by F.D.L. with associated companies should be encouraged and the service the laboratory can give should be allowed to expand naturally - always provided this does not increase the cost to the centre. The Laboratory, however, is still incomplete. It must have a leaf blending facility and access to the appropriate leaf inventory. This is a small but important part of sophisticated product development and is even more important for more routine product development and improvement projects. No other product development laboratory inside or outside B.A.T. works without this facility. The relationship of N.P.C. to P.D.L. could be the same as that of any other sponsor with what is essentially a contract research laboratory. The N.P.C. The N.P.C. has demonstrated that a lead from the centre can be made - particularly with highly innovative products. This should be cQntinued. Where the committee has fallen down is where projects/objectives have been poorly defined and where it has concerned itself directly with ordinary R & D projects which were not concerned with cigarettes as such. The contribution on LEATHERHEAD, BATFLAKE and CODEVAC was superfluous and not really helpful. - The Committee should be aware of research projects and prepared to use them if and wh,.:n they contribute to the total concept. It might also indicate gaps or general directions to R & D butshould not attempt to take over project management until research has finished and the research product is 'on offer' In some ways the N..P.C. gives the appearance of failure. Some decisions have been reversed and its role side-tracked. I believe this is inevitable. Line management will not and should not be replaced by the N.P.C. The role of the N.P.C. is that of a catalyst and it can best work within the existing structure. I propose therefore that all this could and should be recognised by reconstituting the N.P.C. as a working rather than directing body. The N.P.C. should be concerned with executing projects approved by the Tobacco Board. Of course, the Tobacco Board may wish to have a new products group or committee to approve projects but this would meet only occasionally. AS soon as the idea of the Board (or Board Committee) acting as the no-go body and-of a working body as-the projeci action group is conceived, it is realised that the main weakness of the N.P.C. has been that it has always covered both these functions and the fact that it has been relatively successful is therefore surprising. Specifically I recommend for consideration: i. Transfer of ~roduct Development Adviser to Marketing or Leaf Departments. 2. Reconstitution of New Products Committee - Chairman: A member of Tobacco Board, e.g. Leaf Secretary: Product Development Adviser Members: Conway, Kangis, Lowe, Short Con BAT Industries document for Province of British Columbia 14 November 2000 BAT INDUSTRIES 00290489

- 3 - New Product Proposals to be dealt with by Tobacco Board. The function of the N.P.C. should be enlarged to embrace current product improvement. BAT Industries document for Province of British Columbia 14 November 2000 BAT INDUSTRIES 00290490