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The Collaborative New Product Development Process

The Collaborative New Product Development Process

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Published by Ingvild Sundby
A literary review about different product development processes.
A literary review about different product development processes.

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Published by: Ingvild Sundby on Jul 22, 2008
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04/11/2012

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1. INTRODUCTION
Methods for innovating faster and better in order togain competitive advantage has been on the mind of business leaders for hundreds of years – from thescientific management of Fredrick Taylor to thecreative philosophies of IDEO. One of the mostimportant means for achieving success has been viewed as being first to market, and this particular issuehas been the subject for considerable study anddiscussion throughout the years.One of the hindrances of faster developing time hasbeen identified as the “over-the-wall” issue stemming from the sequential process where departments receivethe result from the previous department’s work withouthaving communicating before hand, resulting in timeconsuming patching-up before commencing on theiractual tasks. The efforts for dealing with this issue haveincluded collaborative new product development(NPD) methods where all participants gather at thestart of a project in order to avoid time consuming remodeling later in the process. The most knownmethods include concurrent engineering (CE),integrated product development (IPD), the Stage-Gate© model and dynamic product development(DPD). Even though largely covering the same issues,there is some dispute over how to best make use of these methods in an innovation aspect.In this paper I will describe the background andprinciples of the different collaborative methods, andreview some of their reported weaknesses andstrengths. At the end, I will discuss what impact theintroduction of these methods has had on the way today’s companies innovate. The paper is based onseveral articles and books from the fields of engineering, business, design and innovation, and is tobe regarded as a review and reflection of literature, andnot as a detailed description on how to implement acollaborative NPD method in a business environment.
The Collaborative New Product Development Process1
The Collaborative New ProductDevelopment Process
- its development, use and impact on today's innovation efforts
Ingvild SundbyDepartment of Product DesignNorwegian University of Science and Technology
ABSTRACT
 This paper explores the development and use of the collaborative new product development (NPD)methods which have emerged in companies around the world for the past 20 years. The methods, such asConcurrent Engineering (CE) and Integrated Product Development (IPD), were introduced to achieveshorter time-to-market by gathering all of the involved departments at the initial phases of the process. This early collaboration is supposed to ensure better communication and planning, thus avoiding time-consuming remodeling later. Today, the collaborative efforts are characterized by cross-functional teams,strong customer focus and use of visualization tools. Results from implementation are promising, andleading innovators like Procter & Gamble, BMW, Toyota and IBM have all in the recent years made use of collaborative principles in their NPD processes. The paper ends with a discussion of what impact thecollaborative methods have had on today's innovation efforts.
KEYWORDS
Collaboration, Innovation process, Cross-functionality, Concurrent Engineering (CE), Integrated ProductDevelopment (IPD), Dynamic Product Development (DPD), Design, Anthropology, User Experience.
 
I would also like to note that I have chosen to use theterms “collaborative new product development”,“collaborative efforts” and “collaborative innovation” when describing common features of the mentionedmethods. These are however not commonly incorporated scientific terms, and are used for thecause of convenience in this paper.
2. THE COLLABORATIVE NPD METHODS2.1 Background
How the West thinks about organization andinnovation is influenced by Fredrick Taylor’s work inthe beginning of the 20
th
century. Taylor's ideas onscientific management lead to a revolution inproduction time. The traditional way of one craftsmanmaking all the features of a product himself, as well asmaybe marketing and selling, was abandoned inadvantage of separated divisions of labor whichreduced time to market and cut manufacturing costradically 
 
[1]. At about the same time as Taylor wrote his theninnovative works, Thomas Edison set up his famouslab in Menlo Park in New Jersey[2]. This factory of inventions characterized by a free flow of informationbetween scientists from different disciplines, produced400 patents in 6 years, and can be seen as an early example of a successful cross-functional innovationprocess. It was however the Taylor way which prevailedin the hundred years to come. Most companies today are divided in different departments dealing withspecialized tasks.For some time though, weaknesses of division of laborhave become increasingly evident[3]. In a world whereeverything happens so fast that change in productionprocedures may occur within a few weeks, rigidbureaucracy and operations are more of hindrancesthan boosters for growth. The expense of the timeconsuming “over-the-wall” approach where onedepartment does their work on a project and then“throws it over the wall” to the next department in afairly Tayloristic manner, is a problem that businessleaders and researchers have become more and moreaware of. The realization has lead to the developmentof new collaborative product development methodscharacterized by cross-functionality, customer focus,use of information- and communications technology (ICT) and visualization techniques like rapidprototyping.
2.2 Concurrent Engineering (CE)
 The western introduction to the collaborativeinnovation process may be related to Ford'sdevelopment of the Ford Taurus in the early 80s whichincluded aspects like cross-functional teams andgeographical collocation. The process was inspired by development methods in the Japanese car industry  which at the time was considered a serious threat to the American industry. Fortunately for Ford, the result of the new process was a highly holistic product whichturned out to be the most sold car of its time in the US. The project was however 6 months late, and themanager got fired because of it. The next versionunderwent a lot more sequential based developmentprocess with strict time control, and although finishing according to plan, the car was by far not the same sale-success as its predecessor[4]. Consequently, one may say that the first collaboration effort at Ford was amixed success.In 1987, The Defense Advanced Research Projects Agency (DARPA) followed up with an extensive survey on the matter, naming the process ConcurrentEngineering and created a definition[5]:
Concurrent engineering is a systematic approach to the integrated, concurrent design of products and their related  processes, including manufacturing and support. This approach is intended to cause the developers, from the outset, to consider all elements of the product life cycle from conception through disposal, including quality, cost,schedule, and user requirements.
 The DARPA-project resulted in wide implementationof concurrent engineering in government departments,like defense, aerospace and automobile. This initiated achain reaction among the industries suppliers andsubcontractors, and led to a wide recognition of themethod in the U.S. [6]. Since then, the term hasundergone several interpretations, and understandingsof the method seems to vary quite a lot. In her book “Implementing concurrent design in small companies”[7], Susan Carlson Skalak suggests the following characteristics for describing the CE process:
Customer focus and involvement 
Early and continual involvement of suppliers in the 
The Collaborative New Product Development Process2
 
design process 
Cross-functional, self-directed, empowered teams 
Incremental sharing and use of information 
Life-cycle focus 
Systematic and integrated approach 
Concurrent (parallel) design teams 
Early use of X (DFX) tools 
Use of modern tools such as CAE, CAD, CAM, finite element analysis etc 
Continuous improvement of all processes 
 All of these ingredients may help reduce developmenttime. Early customer participation can lead to less timespent on support and service, thus making more roomfor new projects. Bringing in the suppliers will revealimportant aspects of the needed components, and theuse of visualization tools minimizes the time spent onreaching a common understanding of the productfeatures. The US Air Force conducted a study in 1987 showing that CE led to an average of 40% reduction in overalldevelopment time (figure 1). An interesting aspect of the survey, is the extended time spent on planning -about 10 times more than in a sequential one[8]. This isa fairly logical outcome for a process which aim is tomake the later stages run as smooth and swift aspossible. More time spent in the initial phases ensuresless confusion and remodeling later.
Figure 1: Time difference between sequential engineering (SE)and concurrent engineering (CE) (from Skalak, 2002).
Hewlett Packard, Northrop, AT&T and IBM have allreported very positive results from using CE as a way to reduce cost of manufacturing and repair (table 1).
Company NameCost-related Savings(Direct/Indirect)
Hewlett Packard:Instrument Division42% reduction in manufacturing costNorthropApprxm. 30% savings on bid ona major ticket item/product AT&TAt least 40% reduction in thecost of repair for new circuitpack productionIBM45% reduction in product directassembly labor hoursMcDonnell DouglasApprxm. 60% in savings on bidfor reactor and missile projectsDeere and CompanyApprxm. 30% reduction indevelopment cost forconstruction equipmentBoeing BallisticSystems DivisionReduction in labor rates by $28per hour; reduction in cost by 30% to 40%NCR44% reduction in manufacturincosts with respect to NCR's2760 electronic cash registerCisco SystemsRevenue increased from $27million in 1989 to $70 million in1990
Table 1: Savings in Cost Due to Concurrent Engineering in Various U.S. Companies (from Dhillon, 2002).
Despite huge reductions in developing time, themethod has been criticized for not being very usefulfor radical innovation purposes. Some claim that eventhough bringing together engineers of differentdisciplines, the method rarely include non-technicians[9]. This is reflected in the mentionedexamples which mostly consist of incremental internalimprovements to manufacturing facilities and laborhours. Whether the process is truly cross-functionalmight therefore be questionable. It is howeverimportant to point out that this issue is somewhatdisputed – some literature does in fact describe theCE-team as highly multidisciplined (like the mentionedcustomer involvement in Skalak’s list), with personnelfrom several different departments - including marketing and design[10]. This inconsistent use of terms might be due to the relatively young age of collaborative NPD research.
 
The Collaborative New Product Development Process3

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