Beauty NPD Acronyms Explained: From R&D and MOQ to GMP and ERP

Every time you enter a new industry, or even a new company, it feels like you have to learn a completely new language.

And a big part of that language is acronyms.

The beauty industry is certainly no exception. R&D, PD, COG, MOQ, PET, HRIPT, GMP, ERP, BOM...sometimes a project meeting sounds like someone is reading random letters from the alphabet.

Of course, knowing more acronyms does not automatically make someone an expert. But understanding the terminology does make it much easier to follow conversations, communicate confidently, and understand how all the different pieces of product development fit together.

I could never cover every acronym used in the cosmetic industry in one article, but hopefully this will be informative, or at least entertaining.

Ready to challenge your beauty NPD vocabulary?

Let’s go.

First Things First: NPD

NPD stands for New Product Development.

You may also hear NPL, or New Product Launch. The two are closely related, although NPL generally focuses more specifically on the activities required to successfully commercialize and launch the product, while NPD covers the broader development process.

Most projects begin with an idea that eventually becomes a product brief or PDR — Product Development Request.

A PDR translates your vision into something actionable. It may include the desired product benefits, benchmark, packaging, claims, launch timing, target market, quantity, and target COG, or Cost of Goods. You may also hear COGS, or Cost of Goods Sold, depending on the company and context.

Another important number is the MOQ — Minimum Order Quantity. Your dream product may sound amazing until you discover that the custom bottle you selected requires an MOQ of 50,000 pieces.

Once you are ready to approach a manufacturer, you may submit an RFQ — Request for Quote.

And congratulations, you may have just entered their CRM — Customer Relationship Management system.

If you want a deeper look at this entire process, we have another article dedicated specifically to the NPD process.

It Takes a Village

Commercializing a beauty product involves a surprisingly large number of disciplines.

PD — Product Development or BD — Business Development may help develop and manage the initial concept.

R&D — Research and Development turns that concept into an actual formula.

PM — Project Management tries to make sure everyone does what they promised to do by the date they promised to do it.

Once the formula begins moving from the laboratory toward manufacturing, a PE — Process Engineer may become heavily involved in scale-up.

Meanwhile, RA — Regulatory Affairs, QC — Quality Control, and QA — Quality Assurance help make sure that the product, documentation, testing, manufacturing, and release processes meet applicable requirements and company standards.

Are we having fun yet?

We are just getting started.

Now Let's Test It

Once a formula is approved, or at least preliminarily approved, it is time for testing.

One common microbiological test is the PET — Preservative Efficacy Test, also commonly referred to as an AET — Antimicrobial Effectiveness Test, depending on the test method and organization.

For safety substantiation, you may encounter HRIPT — Human Repeat Insult Patch Test, often shortened in everyday conversation to RIPT.

So technically, when someone says “PET test” or “RIPT test,” they are saying “Preservative Efficacy Test test” or “Repeat Insult Patch Test test.”

It is a little like saying “ATM machine.”

We all do it anyway.

What Exactly Is In This Formula?

Whether you are evaluating an RM — Raw Material or releasing FG — Finished Goods, documentation becomes extremely important.

One document you will encounter constantly is the COA — Certificate of Analysis, which provides lot-specific test results and specifications.

Another is the SDS — Safety Data Sheet. You may still hear people call it an MSDS — Material Safety Data Sheet, especially if they have been in the industry for a while, but SDS is the current terminology under the globally harmonized system.

Then there is INCI — International Nomenclature of Cosmetic Ingredients.

INCI names provide standardized names for cosmetic ingredients and are maintained through the Personal Care Products Council's (PCPC) international nomenclature system. They allow formulators, regulators, suppliers, and brands to talk about ingredients using a common language.

From the formula, Regulatory Affairs may create different types of ingredient documentation. Depending on the organization, you may hear terms such as PIL — Preliminary Ingredient List, FIL — Final Ingredient List, QIL — Quantitative Ingredient List, or a QQ — Qualitative and Quantitative Formula.

The exact terminology varies between companies, but the concept is similar. Some documents show the consumer-facing INCI declaration, while others provide increasingly detailed information about percentages, raw material trade names, suppliers, and composition.

That difference becomes very important when entering regulated markets.

For example, products marketed in the European Union require an EU RP — Responsible Person, notification through the CPNP — Cosmetic Products Notification Portal, and a PIF — Product Information File.

The PIF contains important technical and compliance information, including the CPSR — Cosmetic Product Safety Report, manufacturing information, evidence of GMP compliance, product and ingredient information, and supporting documentation for claims where applicable.

You may also encounter PAO — Period After Opening, which is the familiar little open-jar symbol telling consumers how long the product is intended to remain suitable after opening.

And if your supply chain involves palm-derived ingredients, you may hear RSPO — Roundtable on Sustainable Palm Oil. RSPO is a sustainability certification framework rather than a general EU cosmetic regulatory requirement, but it has become increasingly important for many brands and retailers with responsible-sourcing commitments.

Who Is Actually Making the Product?

If you do not own a factory, you will probably work with a CM — Contract Manufacturer.

Depending on the geography, business model, and scope of service, you may also encounter CDMO — Contract Development and Manufacturing Organization, OEM — Original Equipment Manufacturer, or ODM — Original Design Manufacturer.

People sometimes use these terms interchangeably, although technically there are differences between them.

Regardless of what you call them, these are the companies turning formulas, packaging components, and purchase orders into actual finished products.

And hopefully doing it well.

Welcome to the World of GxP

A good manufacturing organization should operate under established quality systems and appropriate good-practice standards.

The most familiar is GMP — Good Manufacturing Practice.

You may also hear the broader term GxP, representing different types of “Good Practice,” including GLP — Good Laboratory Practice, GCP — Good Clinical Practice, and GDP — Good Distribution Practice.

Different regulations and standards apply depending on the product and industry. For cosmetics, ISO 22716 is one widely recognized international guideline for cosmetic GMP.

Organizations such as the FDA — U.S. Food and Drug Administration, WHO — World Health Organization, and ISO — International Organization for Standardization also publish or administer different regulatory frameworks, standards, and guidance relevant to various parts of the supply chain.

And then there are OTC — Over-the-Counter drug products.

In the United States, products making certain drug claims are subject to FDA drug requirements. These formulations contain drug active ingredients, and applicable standards may reference the USP-NF — United States Pharmacopeia–National Formulary.

For cosmetics, another acronym everyone in the U.S. industry should now recognize is MoCRA — Modernization of Cosmetics Regulation Act of 2022, which significantly expanded FDA's authority and established new requirements for the cosmetic industry.

Quality Has Its Own Alphabet

Behind GMP is usually a QMS — Quality Management System, supported by lots and lots of SOPs — Standard Operating Procedures.

And when something goes wrong?

Welcome to CAPA — Corrective and Preventive Action.

A CAPA investigation may involve RCA — Root Cause Analysis to determine why the problem happened in the first place.

If the problem originated with a supplier, you may issue a SCAR — Supplier Corrective Action Request.

The idea is not simply to fix today's problem. A good quality system asks: Why did this happen, and what are we changing so it does not happen again?

And Then There Are the Systems Behind Everything

Your manufacturer probably operates some form of ERP — Enterprise Resource Planning system.

ERP can connect purchasing, inventory, manufacturing, finance, sales, quality, and other business functions.

Within that environment you will often encounter MRP — Material Requirements Planning, which focuses on what materials are required, how much is required, and when they are needed to support production.

A customer submits a PO — Purchase Order.

From the manufacturer's perspective, that usually becomes an SO — Sales Order.

Production requirements are then calculated using the BOM — Bill of Materials.

The BOM is essentially the recipe for everything needed to make one finished product, not just the formula itself, but potentially the bottle, pump, cap, label, carton, shipper, and other components.

Multiply those requirements by the production quantity, add the appropriate scrap or yield assumptions, subtract usable inventory already on hand, and Procurement starts figuring out what needs to be purchased.

Simple, right?

Well...in theory.

Congratulations! Your Product Is Finished. Who's Picking It Up?

One last family of abbreviations can suddenly become very important when your pallets are ready to leave the factory: Incoterms.

These internationally recognized commercial terms help define where responsibility, cost, and risk transfer between buyer and seller.

For example, EXW — Ex Works generally places most transportation responsibility on the buyer beginning at the seller's premises.

FOB — Free On Board is used for sea or inland-waterway transportation and generally means the seller delivers the goods aboard the vessel at the named port of shipment.

And DDP — Delivered Duty Paid places extensive responsibility on the seller, including transportation to the named destination and import duties where applicable.

Incoterms can also be incorporated into certain domestic transactions, but the exact rule and named location should always be clearly stated because domestic shipping terminology may be used differently.

You do not want your finished goods sitting on a loading dock while both sides are asking:

Wait...I thought you were arranging the truck?

How Did You Do?

Overwhelmed?

Or were you reading this thinking, These are way too easy?

Either way, hopefully you learned a few new acronyms, or at least refreshed your memory on some you have not used in a while.

And if NPD alphabet soup just isn't your forte, no problem.

That is exactly why different experts exist.

At Peachtree Beauty, we help connect the pieces of product development and commercialization, so you can spend more of your energy on the parts of the business you enjoy and do best.

Have a project, an idea, or simply a question you cannot translate from industry alphabet soup?

Let's connect. We're here to help.