Journal of Modelling in Management

Emerald Article: An application of analytic hierarchy process for the

selection of a methodology to improve the product development process
Anand Gurumurthy, Rambabu Kodali

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To cite this document: Anand Gurumurthy, Rambabu Kodali, (2012),"An application of analytic hierarchy process for the selection
of a methodology to improve the product development process", Journal of Modelling in Management, Vol. 7 Iss: 1 pp. 97 - 121
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Methodology to
An application of analytic improve product
hierarchy process for the development
selection of a methodology
97
to improve the product
development process
Anand Gurumurthy
Quantitative Methods & Operations Management Area,
Indian Institute of Management, Kozhikode ( IIMK), Kozhikode, India, and
Rambabu Kodali
Mechanical Engineering Department,
Birla Institute of Technology & Science ( BITS), Pilani, India

Abstract
Purpose – According to the literature, on an average, it takes around three to four years to develop a
new product and about 50 percent of the costs incurred in product development (PD) tend to be spent
on waste that occurs during the PD process. Hence, organizations are implementing various
alternative methodologies such as Concurrent Engineering (CE), Lean Product Development
(LPD)/Lean New Product Development (LNPD), and Agile Product Development (APD)/Agile New
Product Development (ANPD) to improve their existing PD process. However, it is not clear: how does
an organisation or a PD manager choose between these alternative methodologies for improving their
PD process?
Design/methodology/approach – Since the above-mentioned problem requires multiple
factors/criteria/elements (in short, it will be called as “attributes” for the sake of simplicity) to be
considered simultaneously; the use of a Multi-Attribute Decision Making (MADM) model is warranted.
The most commonly used MADM model, namely the Analytic Hierarchy Process (AHP) is utilized to
model the above problem using a hypothetical case situation.
Findings – In this paper, the different attributes that are to be considered while making a decision of
selecting a suitable PD methodology were identified. Furthermore, the results of AHP indicated that
LPD is a better alternative for the case situation under consideration.
Originality/value – According to the authors’ knowledge, no paper exists in the literature of AHP or
PD or LPD/LNPD that discusses the application of AHP for the selection of a product development
methodology, especially for making a strategic decision in a product design and development
department of an organisation.
Keywords Product development, Decision making, Lean product development,
Lean new product development, Agile product development, Agile new product development,
Analytic hierarchy process, Multi attribute decision making model
Paper type Research paper

A condensed version of this paper was presented in the PDMA India IV Annual International
Journal of Modelling in Management
Conference on New Product Development: Challenges in Meltdown Times (NPDC, 2009), Vol. 7 No. 1, 2012
organized by Department of Management Studies and Department of Mechanical Engineering, pp. 97-121
q Emerald Group Publishing Limited
Indian Institute of Technology (IIT) Madras, Chennai, India and Product Development and 1746-5664
Management Association (PDMA), Chennai, India during December 17-19, 2009. DOI 10.1108/17465661211208820
JM2 1. Introduction
7,1 Contemporary organizations are under tremendous pressure to bring new products to
market more and more quickly. However, the task of product development (PD)
requires significant investment and time in addition to making various decisions
during the PD process. According to Holman et al. (2003), most of the companies are
still adopting standard PD processes with disciplined time lines, strict design reviews,
98 “gates” for decision making and cross-functional development teams. On average, it is
taking around three to four years to develop a new product for such organizations.
A study by the consulting firm Kearney (2003) reveals that around 50 percent of the
costs incurred in PD are tended to be spent on wastes that occur during the PD process.
This traditional PD process which possesses the above-mentioned characteristics
exists in many organizations, and it is abbreviated as existing product development
(EPD) process for the sake of simplicity. Considering the cut-throat competition,
organizations can neither afford investments to be spent on wastes nor do they have an
extended PD time. Hence, organizations are attempting to re-engineer for improving
and accelerating their EPD process, with the assumption that it will lead to an
improvement in a firm’s competitive position. However, Davenport (1993) noted that an
organization’s new product development (NPD) process is not easily re-engineered.
Dooley and Johnson (2001) commented that NPD change initiatives may have
significantly different characteristics from those present in successful administrative
and operational re-engineering projects. They also listed out those differences, which
are as follows:
.
In the case of NPD, the process is poorly understood and documented.
.
A large component of NPD is “knowledge-work”. Hence, relevant knowledge
may be implicit rather than explicit.
.
Organizations believe NPD to be of high strategic importance. So, managers
consider it risky to change a process that is producing acceptable outcomes.

However, in recent times, many cases are getting published, which supports the fact
that organizations are attempting to implement various alternative methodologies
such as lean product development (LPD)/lean new product development (LNPD), agile
product development (APD)/agile new product development (ANPD), etc. to improve,
accelerate and re-engineer their EPD process. For instance, Uma et al. (2009) discussed
the basics of lean principles and wastes, LPD, lean tools and techniques for PD, lean
research and development structure, apart from proposing a fundamental framework
for applying lean to the PD process, especially for Indian automotive industries. They
described a case study to highlight the implementation challenges. On the other hand,
Vinodh et al. (2010) noted that concepts of APD are not yet explored in the pump
industry and demonstrated the application of APD using a case organization involved
in manufacturing pumps.
A literature review (discussed in the next section) revealed that the literature of both
LPD and APD are growing, as it demonstrates an increased implementation of these
improvement methodologies for re-engineering and improving the NPD process.
However, the following issues are not clearly addressed in the literature:
.
How does an organization or a PD manager choose between these alternative PD
methodologies for improving their EPD process?
 .
What are the factors or attributes or decision criteria (in short it will be called Methodology to
“elements” for the sake of simplicity) that might be used in making a decision of improve product
selecting a suitable PD methodology?
.
Which decision-making methodology can be used to make such strategic
development
decisions, if multiple factors are to be considered simultaneously?

Even in the general PD literature, the above-mentioned issues were not clearly 99
addressed. For instance, Krishnan and Ulrich (2001) presented a detailed review to
identify the different decisions that are made within the domain of PD. They identified
30 different decisions, which were classified into the following four categories: concept
development, supply chain design, product design and production ramp-up and
launch. Although they identified a decision, “What type of development process will be
employed (e.g. stage-gate)?”, they did not highlight or discuss over a decision of “How
an organization or the PD manager choose between alternative PD methodologies for
improving/re-engineering their EPD process?”.
Hence, an attempt has been made to address these issues in this paper, which is
arranged as follows: Section 2 deals with a brief review of LPD and APD and highlights
the research gaps, while Section 3 provides an overview about the hypothetical case
organization and the research problem. Section 4 discusses about the multi-attribute
decision-making (MADM) models and the reason for choosing the analytic hierarchy
process (AHP) model, while Section 5 demonstrates the AHP methodology for the
selection of appropriate methodology for improving the PD process for the hypothetical
case organization. Finally, Section 6 ends with conclusions.

2. Literature review
The literature review is divided into three sections. A brief overview on LPD and APD
by focusing on definitions, characteristics, tools and techniques and implementation
aspects is provided in the first two sections, while the last section describes the
research gaps in both these fields and thereby highlight the purpose of this study.

2.1 A brief review of LPD/LNPD

Baines et al. (2006) have already conducted a state-of-the-art review on lean design
engineering. Hence, a brief review of LPD is only provided in this section highlighting
the salient contributions.
Definitions. According to Reinertsen (2005), LPD is defined as a methodology that
attempts to apply the principles of lean manufacturing (LM) in the traditional PD
process and thereby create a flow which will help the PD process to go faster. He also
noted that this possibility to realize new product faster will enhance the “reactivity of a
company in the market”. McManus and Millard (2002) demonstrated the role of value
stream mapping (VSM) in PD and defined LNPD as the “application of lean principles
to the NPD process to eliminate wastes” thereby helping the companies to develop a
seamlessly flowing PD value stream with minimal waste defined and pulled by the
customer.
Characteristics. On the other hand, Radeka and Sutton (2007) noted that the term LPD
has many different meanings, which they claim have lead to lot of confusions. They
explained how lean principles and practices place customer value at the centre of PD.
Hines et al. (2006) emphasized that it is necessary to consider the external and internal
JM2 customers as critical in the first tenet of lean proposed by Womack and Jones (1996),
7,1 i.e. “define value”. Browning (2003) showed how the concept of lean can broaden from
asking “what wasteful activities can we stop doing?” to include insights from asking
“what helpful activities can we start doing, and when?” Cusamano and Nobeoka (1998)
tabulated the differences between LPD and a traditional NPD process, which clearly
shows that LNPD has better advantages over traditional NPD processes. Karlsson and
100 Åhlström (1996) conceptualized LPD as involving the following elements: supplier
involvement; cross-functional teams; simultaneous engineering; a focus on integration
of activities instead of coordination; strategic management; visions and objectives
instead of detailed specifications and black box engineering (where suppliers are
responsible for developing complete modules for the product, often without detailed
specifications). Furthermore, they commented it will be a difficult path to achieve LPD.
Haque and James-Moore (2004) criticised that despite covering a number of practices
conducive to lean, Karlsson and Åhlström (1996) had not explicitly looked at
identification of “value” in PD nor the application of the seven Toyota production system
(TPS) wastes to PD. Hence, they have demonstrated how the basic tenets of LM can be
used in NPI/NPD process, describing the key characteristics that NPI/NPD process
should possess in order to satisfy the basic tenets and explained how the lean tools and
techniques can help in achieving the same. Meybodi (2005) had shown that the principles
of just-in-time (JIT) in manufacturing can also be used to improve NPD and such
successful JIT manufacturing organizations were able to develop new products with
67 percent fewer design changes, 61 percent less development time, 74 percent more
frequency, 45 percent less development cost and 36 percent less manufacturing cost.
Tools and techniques. Smith and Reinertsen (1991) described how “pull” approach
can be applied to the NPD. They noted that if it is established in a PD team only the
downstream persons can ask for whatever information they need. Oppenheim (2004)
summarized various categories of wastes found in PD such as hand-offs information,
external quality, waiting, rework, poor communication, etc. He also discussed the use
of takt (a “German” word representing an equal interval of time/beat) periods and
noted that each takt period should end with an integrative event to review and
coordinate the work done. Pessôa et al. (2009) described a method for prioritization of
waste reduction efforts during a product development system (PDS) improvement
project. They proposed a “waste coupling”, which uses a waste set composed of ten
waste types specified into 28 subtypes. They illustrated this approach by an example
of possible causal dependencies among subtypes in which both direct and indirect
(reinforcement) waste relations are included. Walton (1999) discussed about different
strategies for LPD. Sobek et al. (1998) proposed a framework reflecting the
interdependencies of the Toyota product development system (TPDS), which they
derived based on their investigation of the PD practices at Toyota for over five years.
They noted that half of the successful implementation of TPDS is attributed to the
organization’s operational culture or integrated social processes. Anand and Kodali
(2008) developed a conceptual framework and identified various tools, techniques,
practices and procedures, which can be utilised to achieve a leaner NPD process apart
from describing how the tenets of LM can be applied for the PD. Ertay et al. (2011)
proposed an integrated methodology comprising of quality function deployment (QFD)
and fuzzy analytic network process (FANP) approach to capture the major customer
requirements effectively and transform them systematically into the relevant
design requirements. They noted that these tools can also help in accelerating the PD Methodology to
process. Ballé and Ballé (2005), who described the LPD as observed in Toyota, noted improve product
that different practices and tools such as “platform organization”, “concurrent
engineering”, “hansei (challenging the status quo)”, etc. are commonly used in the development
TPDS. He noted that Toyota uses a number of standardisation tools, such as checklists,
standardised process sheets and common construction sections and ensures that there
are “zero engineering changes” once the drawings are released. He concluded that these 101
are some of the prerequisites for the success of LPD.
Implementation. Tzortzopoulos and Formoso (1999) presented an analysis on the
application of some lean principles to building design management, considering
the three different views of design (design as conversion, design as flow and design as
value generation). They proposed a framework and used empirical studies to collect data
from two case studies in Brazil. The study indicated that their proposed models have
been relatively effective in terms of integrating the three different views of design,
although much refinement still needs to be done on those models. Freire and Alarcon
(2002) proposed the application of lean thinking for the design process in construction
projects. Their proposed methodology considers the design process as a set of three
different models: conversion, flow and value and noted that four different stages are
necessary to produce improvements and changes. Within these four stages, they
suggested the application of seven tools in accordance to specific needs on five potential
areas of improvement – client, administration, project, resources and information. They
validated their methodology using a case study and demonstrated improved results in
terms of increase of 31 percent in the share of value adding activities, 44 percent
reduction of unit errors in the products, up to 58 percent decrease of waiting times in the
process, and an expansion of the utilisation in the cycle times. Harkonen et al. (2009) used
a benchmark from the automotive industry (i.e. Toyota) to obtain ideas for improving
NPD and requirements management in the telecom sector as Toyota has been successful
in streamlining its business processes and in meeting customer needs. They clarified the
similarities and the main differences between selected telecom companies and NPD
practices at Toyota. Uma et al. (2009) highlighted the implementation challenges of LPD
using a case study.

2.2 A brief review of APD/ANPD

Anderson and Pine (1996) provided a detailed account of APD in their book. In addition
to this, a couple of review papers related to agile manufacturing systems (AMS) were
available in the literature, which highlighted the role of APD. Gunasekaran (1999)
carried out a literature review to propose a framework for AMS. He noted that to
implement AM methodologies of “design for agile manufacturing (AM)” are needed as a
prerequisite. He quoted Kusiak and He (1997) for suggesting that design for agile
assembly is accomplished by considering operational issues of assembly systems at the
early product design stage. He also emphasized that AM requires rapid product design
systems with the objective to switch over to new products as quickly as possible. He
highlighted the work of Candadai et al. (1996) in which they discussed a variant
approach for quick design evaluation in an AM environment. Similarly, Sanchez and
Nagi (2001) carried out a detailed review on AMS. However, they reviewed only few
papers that addressed the areas of APD, which include: design for assembly (Kusiak and
He, 1997), design for re-configurability (Lee, 1997), etc. Since, various reviews
JM2 are already available, the focus of this section is to provide an overview of APD by
7,1 classifying the literature according to the categories mentioned in the previous section.
Definitions. APD is defined as the set of strategies and tools able to support the
rapid reconfiguration of product and the related processes according to the emerging
market requirements (Preiss et al., 1996). Haberfellner and de Weck (2005) noted that
agility in PD focuses on flexibility and speed in the upstream process of conceiving,
102 designing and implementing products and systems. Bullinger et al. (2000) commented
that the innovative engineering processes, which can respond to short life cycles and
offer the possibility of high-quality products which are cost-efficient on the market and
thus stand up to today’s tough competitive pressure can be subsumed under the term
“Rapid Product Development” (RPD). In simple words, APD focuses on making the PD
process more proactive to adapt to the changes in customer and market requirements.
Characteristics. Singh and Sushil (2004) quoted Ward et al. (1996) and Liker et al.
(1996) to note that Japanese firms adopt flexible development process and finalize the
product design at a late stage in the development process by purposefully using
“flexible set-based overlapping process” for PD where they start with a number of
design solutions/options. They also discussed the role of flexibility in various PD
factors on the overall project success. They utilised a questionnaire survey among
more than 90 PD firms/organizations in India – both in public and private sectors.
They prescribed a two-tier flexibility-strategy model for success in PD under dynamic
business environment. Haberfellner and de Weck (2005) explained that a generic APD
process can be characterized as being: nimble, dexterous and swift; adaptive and
response to new, sometimes unexpected, information that becomes available during
product/system development; opposite the traditional belief in engineering design that
requirements and design solutions should be frozen as early as possible. Xianfeng et al.
(2008) noted that APD is a new product-developing model based on speed competition
and listed out the following six characteristics: rapid reaction quality, digitalized
design, working initiative, management flexibility, market adaptability and
cooperation-communication quality. Apart from this, they put forth the basics of
implementing the agility in an organization through component generalization and
standardisation, product modularization and enterprise informatization.
Tools and techniques. Anderson and Pine (1996) mentioned that the application of
architecture and modularity to design results in modular product design, which are
essential for APD. A summary of different tools and techniques used in APD were
provided by BüyüKözkan et al. (2004). They attempted to underline the synergistic
impact of NPD and concurrent engineering (CE) and survey their methods and tools in
association with the AM. Graham and Ragade (1994) stressed that AM requires an
intelligent engineering design support system that can provide rapid evaluation of
engineering designs and design changes. Bullinger et al. (2000) discussed about the
requirements of RPD such as organization structure, process and resources apart from
the several tools for physical and digital prototypes for the early and cost-efficient
evaluation of different alternatives, the representation of knowledge for different
experts by means of an active semantic network (ASN) for the integration of
interdisciplinary teams, technical support of communication and cooperation within
the team by adequate synchronous and asynchronous media, etc. The literature too is
inundated with papers related to modularity, Product Family Architecture (PFA), mass
customization, etc. which contributes to APD. Tseng and Jiao (1998) proposed
a framework of design for mass customization (DFMC) based on the concept of PFA. Methodology to
They noted that the proposed DFMC framework based on PFA provides a unifying improve product
integration platform for synchronizing market positioning, soliciting customer
requirements, increasing reusability and enhancing manufacturing scale of economy development
across the entire product realization process. Jiao and Tseng (2000) also discussed the
fundamental issues underlying a PFA, which includes product information modelling,
structural implications of product families, functional variety versus technical variety, 103
class-member relationships inherent in variety, modularity and commonality, PFA
design spaces, and PFA composition. Marion et al. (2006) described a method for the
conceptual design of modular, platform-based and customizable components, which
can be adopted during the early stages of NPD. The method utilises up-front product
planning encompassing definition of customer requirements, market segmentation and
competitive product analysis, ultimately leading to product specifications. The results
from product planning are combined with tools for developing the product platform
architecture with easily customizable customer interface components, which are based
on well-defined interfaces. They demonstrated their methodology by applying it to a
family of bactericidal door handle products. O’Grady (1999) explained that the key
element of a successful APD is the definition of the modular product architecture that
can be modelled in a virtual engineering framework. Well-designed modular product
architecture can help the management of product changes and upgrades, product
variety and component standardisation.
Park et al. (2008) commented that QFD can assist in improving product quality but
does not have a function to examine the technical requirements (TRs) across the major
market segments serviced by a company’s product lines apart from providing an aid to
develop the modular product platform concept. Hence, they presented a product
platform concept development method that aids in developing the modular platform
concept as well as improving an understanding of product family design. They
demonstrated their proposed concept using electric razor example. Dai and Scott (2005)
emphasized that there is a trade-off in product family design between monetary and
technical goals, i.e. increasing commonality in the product family tends to lead to cost
savings, but also incurs some loss in product performance when compared to designing
all member products individually. They considered both monetary and technical aspects
in the commonality decision-making stage of a new method for scaled-based product
family design, which employed cluster analysis to provide guidance for commonality
decision making, as well as to significantly reduce computation time. They
demonstrated their proposed method with the design of a product family of
automotive bumpers. Farrell and Simpson (2008) introduced a method for improving
commonality in a highly customized low volume product line whose existing members
were originally developed one-at-a-time to meet specific customer requirements. The
method provides a bottom-up platform approach to redesign family members. Later in
their recent paper, Farrell and Simpson (2010) extended the above method with an
activity-based costing (ABC) model to specifically capture the manufacturing costs in
the product line, including the cost associated with implementing a platform strategy.
Implementation. Mengoni et al. (2009) focused on how to implement an efficient agile
strategy in product design. Their proposed approach is based on product modularity and
integration of computer-aided design (CAD)-based tools to support feasibility analysis on
virtual prototypes. They noted that their proposed approach also allows for the concurrent
JM2 management of possible changes in both product and process platforms by adopting
7,1 virtual prototypes for performing simulations. Feifan and Guofu (2006) proposed a basic
method of product total life cycle agile development and a framework of PD in the virtual
organization in the networked environment. They studied the implementation process of
APD that is based on the dynamic cooperation and oriented to the total life cycle
of products for the small- and medium-sized enterprises (SMEs). Finally, they suggested
104 that in the networked environment, the SMEs build virtual enterprises with the support of
information technology, and utilise the superiority in integrally developing resources of
virtual organization. Vinodh et al. (2010) noted that concepts of APD are not yet explored in
the pump industry and demonstrated the application of APD using a case organization.
To begin with, they developed a software to compute the parameters for designing the
pump components namely impeller and casing using the empirical equations. By
inputting these parameters in a Pro/E software package, they designed four new solid
models of impeller and casing, which were subjected to analysis using GAMBIT and
FLUENT software packages. Subsequently, rapid prototyping technology was adopted to
develop the prototype of one of those models of impeller. They emphasized that by simply
varying the parameters; multiple varieties of pump can be designed and produced as per
the requirements of the customer. Yang and Li (2002) proposed an assessment method for
agility evaluation for companies involved in mass customization (MC) product
manufacturing. The MC product manufacturing agility evaluation index system is
developed based on the characteristics of MC product manufacturing and the requirements
of AM. It integrates three different evaluations: MC enterprise’s organization management
agility evaluation, MC products design agility evaluation and MC manufacture agility
evaluation. They demonstrated this multi-grade fuzzy assessment method to evaluate the
agility of a case organization called the Xi Dian Casting Limited Company.

2.3 Research gaps

Thus, a brief review of LPD and APD revealed some of the fundamental differences
between these two methodologies for improving the EPD process. Table I list out the
differences between LPD/LNPD and APD/ANPD.
Furthermore, it can be found that most of the papers dealt with various issues such
as: theory and concepts; tools and techniques; case studies discussing the
implementation of above-described PD methodologies. These case studies revealed
that organizations are adopting these improvement methodologies such as LPD, APD,
etc. However, none of the papers explained how the decision makers in such
organizations arrive/zero-in on one particular methodology to be used for improving
the existing PD process of the organization. As mentioned earlier, it is not clear, how a
decision is made in an organization to choose a particular methodology from different
available alternatives for re-engineering/improving the PD process. There is no paper
in the realm of LPD or APD, which addressed the following:
.
What are the methodologies that can be utilised to make such decisions?
.
What are the factors that need to be considered while making a decision of
choosing a suitable PD improvement methodology?

These questions are relevant for any organization carrying out PD activities, as the
problem of selecting a suitable methodology for improving the PD process fall under
the category of strategic decisions. Furthermore, re-engineering the EPD process using
 Methodology to
S.No. Criteria LPD/LNPD APD/ANPD
improve product
1 Focus Is to eliminate wastes thereby help Is to support the rapid development
the companies to develop a reconfiguration of product and the
seamlessly flowing PD value stream related processes according to the
pulled by the customer (McManus emerging market requirements
and Millard, 2002) (Preiss et al. 1996) 105
2 Objective To place customer value at the centre To provide a flexibility in PD to have
of PD (Radeka and Sutton, 2007) a family of products and support MC
(Anderson and Pine, 1996)
3 Responsiveness Has the possibility to realize new Makes the PD process more proactive
to market product faster will enhance the to adapt to the changes in customer
reactivity of a company in the market and market requirements
(Reinertsen, 2005) (Haberfellner and de Weck, 2005)
4 Characteristics Supplier involvement; cross- Rapid reaction quality, digitalized
functional teams; simultaneous design, working initiative,
engineering; a focus on integration of management flexibility, market
activities instead of coordination; adaptability and cooperation –
strategic management; visions and communication quality
objectives instead of detailed (Xianfeng et al., 2008)
specifications and black box
engineering (where suppliers are
responsible for developing complete
modules for the product, often
without detailed specifications)
(Karlsson and Åhlström, 1996)
5 Tools/ VSM, use of standard parts, group Modularity, platform products, Table I.
techniques/ technology, supplier involvement in common parts, postponement, mass Differences between
practices/ design, reuse of designs, etc. customization, design for re- LPD/LNPD and
procedures configurability, etc. APD/ANPD

any of these methodologies requires huge investment, effort and time. Apart from this
the risk associated with such decisions is high. Hence, a proper decision has to be made
by analyzing various perspectives before justifying the selection of particular
improvement methodology. In this paper, an attempt has been made to address this
issue by presenting a hypothetical case study, which experiences such a situation.

3. A hypothetical case study

To explain and demonstrate this problem of selecting a suitable PD methodology,
a hypothetical case study described in our earlier paper (Anand and Kodali, 2007) is
used. However, the circumstances and situation for the same has been adequately
modified. The organization considered is a two-wheeler manufacturing organization
which aspires to be the market leader in India. It is poised for growth in terms of
increase in number of customers and volume. The product managers and marketing
executives are interested in expansion of their product portfolio through the
development of various new motorcycles to cater to the different market segments.
They are in the process of developing the following new products:
.
A cost effective bike with improved mileage and additional features such as
auto-clutch, improved fuel injection, etc.
JM2 .
A heavy duty bike with high engine power and aesthetic appeal targeting youth.
7,1 .
An improved version of the existing model, which is the major revenue generator
in recent times.

They have invested nearly 10 percent of their sales towards R&D expenses. However,
the EPD process of the organization takes around 3.5-4 years to come up with a new
106 bike, while around 1-1.5 years to introduce a variant for the existing models. Hence, the
top management of the organization are very much interested in re-engineering their
existing PD process through the above-mentioned methodologies (i.e. LPD and APD) to
acquire necessary competitive advantage. But, they were in a dilemma to identify a
particular methodology for improving their EPD process. The authors attempt to
model the above case situation and act as “decision makers” to identify a suitable
decision. It should be understood here that the purpose of this hypothetical case is to
demonstrate a decision-making process for a situation which is not yet addressed in the
literature.
To make an informed decision in the above situation, various factors have to be
considered. Ertay and An (2002) provides support to this argument, by emphasizing that
“the incorrect technology selection not only causes the company expose to physical
losses but it also declines the competitive advantage in favour of competitors”. However,
as evident from the literature review on LPD and APD in the previous section, it was
found that none of the papers in the realm of PD or LPD or APD has addressed such an
issue. Naturally, none of the papers have enumerated the factors, which are to be
considered while making a decision of choosing between the alternative methodologies.
A practical approach to decision making might be based on considering a few decision
factors related to cost or time such as “cost involved in switching over from one
methodology to another” or “time taken to changeover”, etc. But, strategic decisions such
as this one cannot be made only based on time and cost, as the decisions obtained might
be myopic. In such cases, consideration should also be given to other factors and aspects
in addition to time and cost. Hence, various factors to be considered for selecting a
suitable PD methodology were identified based on the diverse literature and the domain
knowledge of the decision makers. The identified factors were grouped into different
categories. Since many factors are to be considered in making a decision of selecting a
suitable PD improvement methodology, the use of MADM models is warranted.
According to the terminologies in MADM, the category names were referred as
main-attributes, while the factors which are grouped under particular category are
called sub-attributes. Table II lists the main-attributes and sub-attributes considered for
decision making. Due to space limitations, an explanation about each main-attribute and
sub-attribute is not provided. Furthermore, it is assumed that the identified
main-attributes and sub-attributes are self-explanatory.

4. Development of AHP for the selection of an NPD methodology

One school of thought states that justification/selection problems similar to the one
above, has to become more of a policy decision rather than an accounting or financial
procedure, while another school of thought states that such justification/selection can
be performed only if all relevant costs and benefits are quantified and presented in an
easy-to-understand format (Kodali and Sangwan, 2004). However, adequate evidence
exists in the literature to suggest that the economic justification process,
 Methodology to
Main-attributes Sub-attributes In short
improve product
Costs COS development
Training cost TRC
Consultant fee COF
Re-engineering cost REC
Hardware/information technology-related cost HAC 107
Recruitment/layoff cost RLC
Consultant CON
Availability AVA
Expertise EXP
Track record TRR
Organizational issues ORI
Leadership LEA
Adaptability ADA
Past experiences PAE
Ease of fit EOF
Work culture WOC
Ability to take risk RIS
Degree of bureaucracy DOB
Type of products developed TOP
Employees/human resources HER
Enthusiasm ENT
Maturity level MAT
Education level EDL
Employee strength EMS
Pre-requisites PRE
Teamwork TEA
Degree of co-location DOC
Supplier involvement in design SID
Benefits BEN
Reduced lead time RLT
Improved communication IMC
Increase in number of products developed/ INP
introduced/launched
Reduction in re-design RIR
Reduction in product development cost RPC Table II.
Increase in market share/penetration IMS Main-attributes and
Reduction in product price RPP sub-attributes considered
Better competitive advantage BCA for decision making

which supports the second school of thought, has long been identified as the biggest
hurdle (Kaplan and Must, 1986). Several traditional financial techniques that are
already proposed are complex and exhaustive in nature and require hard-core
quantitative data that may be difficult to retrieve or formulate. Today, most major
organizations are struggling with their traditional justification procedures because
they are either wrongly applied or the information included in the calculations is
inadequate for the multifaceted problems being tackled (Kodali and Sangwan, 2004).
Under such situations, the use of MADM model plays a vital role. Second, the use of
MADM models supports the former school of thinking, i.e. justification/selection has to
become more of a policy decision rather than an accounting or financial procedure.
JM2 There are numerous MADM models available in the literature. Some examples are
7,1 Elimination and Choice Translating Reality (ELECTRE), Preference Ranking
Organization Method of Enrichment Evaluations (PROMETHEE), Technique for
Order Preference by Similarity to Ideal Solution (TOPSIS), Joint Probability
Decision-making (JPDM), Equivalent Cost Analysis (ECA), Multi-Attribute Utility
Theory (MAUT), AHP, etc. Most of these models are also applied in the field of PD too.
108 For instance, Ertay and Kahraman (2007) compared the results of different fuzzy
outranking methods such as ELECTRE, PROMETHEE, etc. to evaluate the design
requirements in the PVC windows industry. Although many models are available,
AHP has been selected for modelling the above problem for the following reasons:
.
AHP has been utilised in diverse applications. Vaidya and Kumar (2006)
provided a detailed literature review on AHP and its applications. They referred
around 150 application papers and categorized them according to the identified
themes and also the areas of applications. This shows the versatility and
capability of AHP to model any decision-making situations.
.
From the above review, it can also be hypothesized that the application of AHP is
more widespread than any of other MADM models listed above. Probable
reasons can be that, the practitioners and academicians may find it easy to
understand and use it for real-life decisions. Also, AHP has the capability to be
integrated with other methodologies such as QFD, meta-heuristics,
strength-weakness-opportunity-threat (SWOT) analysis, data envelopment
analysis, etc. Ho (2008) has reviewed the application of integrated AHP (i.e. use
of AHP in combination with other methodologies) from the year 1996 to 2007. Thus,
these reviews by Vaidya and Kumar (2006) and Ho (2008) supports our hypothesis
that AHP has wider applications than any of the MADM models.
.
Another reason for wider application of AHP can be attributed to availability of
commercially available software package called Expert Choice. Although other
MADM models too have dedicated commercial software packages (for instance,
Decision Lab 2000 for PROMETHEE, Super Decisions for analytic network
process (ANP), the algorithm of AHP permits the decision makers to develop
their own programme or use the Microsoft Excel to model and carry out
necessary computations. Other MADM models such as ANP – the upgraded
version of AHP, PROMETHEE, etc may require dedicated software packages to
model and perform the computations. Furthermore, programming using
commonly available packages are difficult, tedious and time-consuming.
.
Finally, AHP would be appropriate whenever a goal is clearly stated and a set of
relevant criteria and alternatives are available. It is one of the very few MADM
models capable of handling so many attributes/criteria, even if some of them are
qualitative. The problem under study, too, falls under this category and hence
can be easily modelled using AHP.

AHP was developed by Saaty (1980) as a practical approach in solving relatively

complex problems. It enables the decision maker to represent the simultaneous
interaction of many factors in complex, unstructured situation. Wabalickis (1988)
noted that the AHP has been well received by the researchers and it has been applied in
the diverse traditional fields such as technology selection, logistics, manufacturing,
supply chain management (SCM), etc. Ertay and An (2002) proposed a framework Methodology to
based on AHP for analyzing a firm’s investment justification problem in selecting the improve product
best technology in mold production area, while Balasubramanian et al. (2009) utilised
AHP to determine the best welding process to hard-face boiler grade steels based on development
quantitative factors (by measuring percentage of dilution) and qualitative factors.
Bhatti et al. (2009) presented a four-stage model, which blends the AHP and the DEA
for the selection of third party service providers by the fourth party lead logistics 109
provider (LLP) who acts as an integrator in the supply chain. They used a case from
the province of Uttrakhand (India) to exemplify the postulates of the proposed model.
Similarly, many applications of AHP have been reported in the field of service sectors
too. Berrittella et al. (2009) applied the AHP to rank the operating cost components of
full service and low cost airlines. Based on the financial balance sheets and answers to
a questionnaire submitted to the managers of selected airlines, they obtained the
ranking of the costs taking into account different views: financial, management and
operative and found that rental, office equipment and other supplies costs show the
highest importance in the cost ranking, both for full services and low cost airlines.
Garcı́a-Cascales and Lamata (2009) proposed the use of AHP as a potential
decision-making method for use in management maintenance processes – especially
for the selection of a parts cleaning system for diesel engine maintenance. Tikoria et al.
(2009) utilised AHP technique to develop the framework of multiple performance
measurement criteria, deriving their respective weights and system for comparing the
performance of a group of Indian national R&D organizations involved in applied as
well as basic research in chemical and botanical sciences. The framework and the
developed system have been applied by taking an illustration to evaluate and compare
the performance of six national R&D organizations in terms of their benefit-cost ratio.
Considering all these facts and since the current problem involves more number of
quantitative and qualitative factors, AHP was found more suitable for analysis.
It should be remembered here that the decision makers are not attempting to support or
glorify the use of AHP. Rather, the purpose is to explain the underlying logic of
selecting AHP for modelling the current problem. Furthermore, a brief review of AHP
literature too revealed that none of the papers has demonstrated the application of AHP
especially for the problem of “selecting a suitable PD methodology from alternative
methodologies”. The literature review on applications of AHP carried out by Vaidya
and Kumar (2006) and Ho (2008) too supports this claim. A detailed algorithm of AHP
and its application to the problem under study is presented below.
The AHP methodology as explained by Saaty (1980) has three main phases:
structuring the hierarchy, performing paired comparisons between elements and
decision alternatives and synthesizing the results. Once the hierarchy is created, the
general approach of AHP model is to decompose the problem and make pair-wise
comparison of all the attributes in a given level with the related attributes in the level
just above to which it belongs. Pair-wise comparisons of attributes at each level were
done on a scale of relative importance: 1 reflecting equal importance and 9 reflecting
absolute importance. The details regarding the weight values are shown in Wabalickis
(1988). In this case, it is assumed that the team of decision makers will be providing the
weight-values for various factors after reaching a consensus during a real-time
meeting. To illustrate the use of the AHP for the selection of a suitable PD
methodology, a step-by-step approach of the algorithm is presented.
JM2 Step 1. Define the problem. Determine the objective and alternatives along with the
7,1 identification of the important elements involved.
The problem identified in our case is the selection of a best or suitable PD
methodology from the alternatives considered by the case organization.
Th main-attributes and sub-attributes (in other words, elements) considered for
decision making were already presented in (Table III). The alternatives correspond to
110 the PD methodologies namely the LPD and APD, which were discussed earlier. CE is
not considered as another potential alternative, as some of the researchers such as
BüyüKözkan et al. (2004) noted that it is a part of APD, while Karlsson and Åhlström
(1996) emphasized that CE is also a part of LPD. Since, the decision makers are
interested in quantifying how much the new PD methodologies are better than the
existing one; they are interested in comparing the alternatives with the EPD process.
These alternatives were evaluated and compared with respect to the main-attributes
and sub-attributes listed in Table II.
Step 2. Structure the identified elements in a hierarchy from the top through the
intermediate levels to the lowest level.
Figure 1 shows the schematic of AHP model for evaluation of PD methodologies.
In this figure, the objective or problem definition is in the first level, main-attributes or
elements are in the second level, sub-attributes or sub-elements are in third level, while
the alternatives are at the last level.
Step 3. Construct a set of pair-wise comparison matrices for each of the levels.
An element in the higher level is said to be a governing element for those in the lower
level, since it contributes to it or affects it. The elements in the lower level are then
compared to each other based on their effect on the governing element above. This yields
a square matrix of judgements. The pair-wise comparisons are done in terms of which
element dominates another and these judgements are expressed as integers. If element
A dominates over element B, then a whole number is entered in row A, column B and its
reciprocal is entered in row B, column A. If the elements being compared are equal, then
“1” is assigned to both positions. Thus, there are n(n 2 1)/2 judgements required to
develop a single pair-wise comparison matrix (as reciprocals are automatically assigned
in each pair-wise comparisons). For entering the integer values, the scale of relative
importance (which varies from 1 to 9) prescribed by Saaty (1980) should be used.
Table III shows the pair-wise comparison matrix for level 2. It represents the
importance of these main-attributes/factors with respect to objective of the problem.
For instance, pair-wise comparison is carried out between the factors “cost (COS)” and
“consultancy (CON)”. It is assumed that the team of decision makers considered COS to be
more important than CON. Hence 5 is entered in the row 2, column 3, while 1/5 is entered

COS CON ORI EHR PRE BEN Principal vector

COS 1 5 1/6 1/5 1/3 1/7 0.062

CON 1/5 1 1/7 1/5 1/3 1/8 0.03
ORI 6 7 1 4 4 1/2 0.284
EHR 5 5 1/4 1 3 1/4 0.15
Table III. PRE 3 3 1/4 1/3 1 1/5 0.084
Pair-wise comparison BEN 7 8 2 4 5 1 0.391
matrix – level 2 SUM 22.2 29 3.81 9.733 13.667 2.218
 SELECTION OF BEST PD METHODOLOGIES LEVEL 1
Methodology to
improve product
development
MAIN
ORI CON COS HER PRE BEN ATTRIBUTES
LEVEL 2 111

LEA ADA PAE EOF WOC RIS DOB TOP

SUB-ATTRIBUTES Figure 1.
LEVEL 3 Schematic of AHP
ALTERNATIVES model for the selection
EPD LPD APD of PD methodologies

in row 3, column 2 in Table III. Similarly, the values for the rest of the matrix were filled
based on the judgements of the decision makers. It is also assumed here that the values
are provided only after adequate discussion and a consensus among the team members
is arrived, while assigning the values.
Step 4. Having done all the pair-wise comparisons for the attributes above, the
consistency is determined using the Eigen value. To obtain the Eigen values, the
column of numbers is normalized by dividing each entry by the sum of all entries.
Then, each row of the normalized values is summed up and the average is calculated,
which provides the principal vector (PV) or Eigen value. Refer Table III for details.
Step 5. The next step is to check the consistency of the judgements of the decision
makers. The following steps are utilised to check the consistency of judgements:
.
Let the pair-wise comparison matrix be denoted as M1 and PV be denoted as M2.
.
Define M3 ¼ M1*M2, while M4 ¼ M3/M2.
.
lmax ¼ average of the elements of M4.
.
Consistency Index (CI) ¼ (lmax 2 N)/N 2 1.
.
Consistency Ratio (CR) ¼ CI/RCI corresponding to N, where RCI: Random
Consistency Index (see Wabalickis (1988) for details), N: Number of elements.

If CR is less than 10 percent, judgements are considered consistent and if CR is greater

than 10 percent, the quality of judgements should be improved to have CR less than or
equal to 10 percent.
The CR is found to be less than 10 percent for the pair-wise comparison of factors
(main-attributes), which is shown in Table III. Hence the judgements are consistent.
Step 6. Steps 3-5 are performed to have relative importance of each attribute for all
levels and clusters in the hierarchy.
Table IV illustrates a sample sub-attribute analysis under the attribute “cost (COS)”.
It can be found that training cost (TRC) is most important compared to the consultant
JM2 fees (COF) and hence a value of “4” is provided. As mentioned above, the PVs and the
7,1 consistency of the judgements are computed and it was found that the judgements
were consistent for all the sub-attribute analysis. Similar to Table IV, five more tables
were obtained for each main-attribute. However, they are not shown due to space
limitations.
Step 7. The alternative analysis for the lowest level of sub-attribute is to be carried
112 out in the similar manner as above (i.e. Steps 3-5).
Table V illustrates a sample alternative analysis for the sub-attribute “training cost”.
It can be found that TRC is not significant for the EPD as the members were well-versed
with the same; however, in the cases of APD and LPD, significant investments for
training have to be made. Hence, EPD is preferred over APD and LPD. In a similar
manner, the alternative analysis is carried out for the remaining sub-attributes yielding
another 30 tables. But due to space limitations, they are not shown.
Step 8. The PVs (or weight values) for each attribute, sub-attribute and alternative
were consolidated. Each value in “weight of sub-attribute” column (L3-Wt) is
multiplied by the respective value of “attribute weight” column (L2-Wt), which is again
multiplied by the value for each respective alternative to get the desirability index of
the alternative for each sub-attribute. Finally, the obtained desirability index for each
of the sub-attributes is summed up to get the overall desirability index for each
alternative.
The data summary of the complete analysis as well as the overall desirability index
is shown in Table VI. The PVs obtained at each level of pair-wise comparison are
consolidated to calculate the desirability index of alternatives for each of the
sub-attributes. In this case, the PV obtained at level 2, i.e. main-attributes analyses
(L2-Wt) is multiplied with the PV obtained at level 3, i.e. sub-attributes analyses
(L3-Wt). The obtained values are again multiplied with the PVs obtained for each
alternative at level 4 to obtain the desirability index of alternatives for each
sub-attributes.
For example, in Table VI, under the sub-attribute, “Availability of Consultants
(AVA)”, the PV at level 2 is 0.03, which is multiplied with 0.096, the PV at level 3.

TRC COF REC HAC RLC Principal vector

TRC 1 4 3 2 1 0.32
Table IV. COF 1/4 1 1/3 2 1/4 0.102
A sample sub-attribute REC 1/3 3 1 1 1/2 0.152
analysis under the HAC 1/2 1/2 1 1 1/3 0.112
attribute “cost (COS)” – RLC 1 4 2 3 1 0.315
level 3 SUM 3.083 12.5 7.333 9 3.083

EPD LPD APD Principal vector

Table V.
A sample alternative EPD 1 5 5 0.703
analysis for the LPD 1/5 1 2 0.182
sub-attribute “training APD 1/5 1/2 1 0.115
cost (TRC)” SUM 1.4 6.5 8
 Methodology to
Principal vectors
obtained at level 4 improve product
Principal Principal (alternative Desirability index for development
Sub- vectors obtained at vectors obtained at analysis) alternatives
attributes level 2 (L2-Wt) level 3 (L3-Wt) EPD LPD APD EPD LPD APD

TRC 0.062 0.32 0.703 0.182 0.115 0.014 0.004 0.002 113
COF 0.062 0.102 0.739 0.16 0.101 0.005 0.001 0.001
REC 0.062 0.152 0.767 0.09 0.143 0.007 0.001 0.001
HAC 0.062 0.112 0.739 0.179 0.082 0.005 0.001 0.001
RLC 0.062 0.315 0.739 0.101 0.16 0.014 0.002 0.003
AVA 0.03 0.096 0.767 0.143 0.09 0.002 0.0004 0.0002
EXP 0.03 0.619 0.685 0.221 0.093 0.013 0.004 0.002
TRR 0.03 0.284 0.707 0.201 0.092 0.006 0.002 0.001
LEA 0.284 0.132 0.102 0.532 0.366 0.004 0.02 0.014
ADA 0.284 0.103 0.081 0.292 0.627 0.002 0.009 0.018
PAE 0.284 0.067 0.79 0.129 0.081 0.015 0.002 0.002
EOF 0.284 0.052 0.128 0.512 0.36 0.002 0.008 0.005
WOC 0.284 0.121 0.098 0.334 0.568 0.003 0.011 0.019
RIS 0.284 0.237 0.786 0.146 0.068 0.053 0.01 0.005
DOB 0.284 0.049 0.096 0.653 0.251 0.001 0.009 0.003
TOP 0.284 0.239 0.12 0.608 0.272 0.008 0.041 0.018
ENT 0.15 0.061 0.62 0.224 0.156 0.006 0.002 0.001
MAT 0.15 0.28 0.589 0.252 0.159 0.025 0.011 0.007
EDL 0.15 0.364 0.098 0.334 0.568 0.005 0.018 0.031
EMS 0.15 0.295 0.106 0.633 0.26 0.005 0.028 0.012
TEA 0.084 0.6 0.081 0.627 0.292 0.004 0.031 0.015
DOC 0.084 0.1 0.12 0.608 0.272 0.001 0.005 0.002
SID 0.084 0.3 0.087 0.639 0.274 0.002 0.016 0.007
RLT 0.391 0.058 0.082 0.575 0.343 0.002 0.013 0.008
IMC 0.391 0.036 0.067 0.467 0.467 0.001 0.007 0.007
INP 0.391 0.125 0.081 0.292 0.627 0.004 0.014 0.031
RIR 0.391 0.13 0.093 0.685 0.221 0.005 0.035 0.011
RPC 0.391 0.139 0.087 0.639 0.274 0.005 0.035 0.015
IMS 0.391 0.219 0.09 0.556 0.354 0.008 0.048 0.03
RPP 0.391 0.106 0.082 0.575 0.343 0.003 0.024 0.014 Table VI.
BCA 0.391 0.185 0.066 0.571 0.363 0.005 0.041 0.026 Data summary of the
Overall desirability index 0.2351 0.4529 0.312 complete analysis

The result of this multiplication (0.00288) is again multiplied with the PVs for each of
the alternatives (0.767 for EPD, 0.143 for LPD and 0.09 for APD), respectively, to
calculate the desirability index for each alternative, which are 0.002 for EPD, 0.0004 for
LPD and 0.0002 for APD, respectively. Once this desirability index for every
sub-attribute is calculated for each of the alternatives, they are summed up to get the
overall desirability index. For instance, in Table VI, the sum of all values in column 9
will result in 0.312, which represents the overall desirability index for APD.

5. Results and discussions

Tables III-VI will help the managers’ understand the importance of each main-attribute
and sub-attribute. For instance, in Table III, the PV/Eigen vector depicts the importance
of each main-attribute with respect to the goal. In this case, the managers
JM2 are more concerned about the benefits obtained (BEN) and the organizational issues
7,1 (ORI). Similarly, Table IV establishes the relative importance of the sub-attributes
(i.e. the different cost factors considered) within the main-attribute – cost (COS). In this
case, the decision makers judged that the TRC and recruitment and layoff cost (RLC) are
more important among other sub-attributes. Thus, based on the relative importance of
the main-attributes and sub-attributes apart from the performance of the alternatives for
114 each sub-attribute, the desirability index and the overall desirability index is obtained.
The results of the AHP in Table VI reveal that LPD is more suitable for the case situation
considered, as the overall desirability index is higher when compared to the rest of the
alternatives. From the obtained results, which are shown in Table VI, a graph depicting
the desirability index of the alternatives for each sub-attribute is drawn as shown in
Figure 2.
A cursory analysis of Figure 2 will reveal that for some of the sub-attributes, EPD has
performed better than other alternatives. For instance, in the case of sub-attributes –
TRC, RLC, EPD does not involve any such investments. Hence, these sub-attributes have
got a better ranking from the decision makers during the pair-wise comparisons, which
enabled EPD to perform better than the other alternatives. On the other hand, for the
sub-attributes such as adaptability (ADA), increase in number of products (INP), APD is
considered to be better. In some cases, both LPD and APD have similar desirability
index. For example, in the case of sub-attributes: improved communication (IMC), COF,
hardware and information technology costs (HAC), both the alternatives have obtained
equal scores, which shows that these factors are required and equally important for both
these alternatives. However, considering all the factors in totality, LPD has out
performed the remaining alternatives for the circumstances considered. Thus, this
graph help the managers understand how each of the alternatives performs for each
attributes/sub-attributes for the given circumstances of the case situation.

5.1 Research implications

Since the overall desirability index for each of the alternatives are dependent on weight
values assigned by the decision makers, it is necessary to understand whether

0.06

0.05
Desirability index

0.04

0.03

0.02

0.01

0
C

EC

LC

IR

Figure 2.
ED
EN
EX

LE

PA

TE

IM

BC
TR

SI

IM

R
R
R

D
W

Desirability index
of the alternatives Sub-attributes
for each sub-attribute EPD LPD APD
the results change with the change in weight values. This can be accomplished by Methodology to
sensitivity analysis. In a software package such as Expert Choice, it can be performed improve product
easily. If the graphs as shown in Figure 2 are changed, the weight values assigned to
the sub-attributes by the decision makers will change and the corresponding overall development
desirability index for each alternative also will change automatically. However, in this
case, since a customized program developed using Microsoft Visual Cþ þ package
was used, the sensitivity analysis was performed by changing the weight values. 115
Various pair-wise comparison matrices and desirability indices similar to those shown
in Tables III-VI were obtained. However, due to space limitations, they were not shown
in this paper. Only the overall desirability index for each alternatives for changed
weight values are shown in Table VII.
From Table VII, it can be found that although the overall desirability index for the
alternatives changed, there is no change in the final results of the case situation.

5.2 Managerial implications

It is believed that this paper would have enabled the managers to understand how AHP
can be applied for a strategic decision in the R&D department. Furthermore, it would
have helped them to know about the “different factors/attributes/decision criteria” that
can be considered in such problems. But, it should be noted here that the identified
attributes are not exhaustive, rather they are indicative. Many other attributes can also
be identified or some the attributes in the existing list can also be left out as per the
circumstances that prevail in the organization. However, the approach for AHP
modelling remains the same. The step-by-step approach of AHP was presented along
with the case study. This will enable the managers to understand the nuances of this
model and apply it in the real-life situation to model similar problems and use it as a
decision support system, while making such strategic decisions.
It should be clearly remembered that the results obtained from this study cannot be
generalized for other organizations either in the same sector or in the other sector,
which face a similar situation of improving or re-engineering the PD process, as the
case study is hypothetical. Also, the decisions by the managers may vary depending
upon the circumstances that prevail within each organization as each of these
improvement methodologies such as LPD or APD has its own advantages and
disadvantages due to the differences mentioned in Table I. Second, it may help in
achieving the goal of the organization from different perspective. For instance, LPD
focuses on responsiveness to the market through reducing the time to market by
reducing the wastes in the form of unnecessary activities. However, the responsiveness
in APD is provided by developing a variety of products through modular design,
platform design, etc. Furthermore, these algorithms such as AHP can provide adequate
support to the decisions being made and it requires the experience and judgements of
the decision makers in order to arrive at a particular decision.

Alternative PD methodologies Overall desirability index

Table VII.
EPD 0.2512 Overall desirability index
LPD 0.4096 for each of the alternative
APD 0.3392 after sensitivity analysis
JM2 6. Conclusions
7,1 This paper has made an earnest attempt to demonstrate the application of AHP for
modelling one of the strategic decisions in an important function of an organization –
namely, the research and development. A literature review on LPD and APD was
carried out to provide an overview of these alternative PD methodologies apart from
highlighting the differences between them. Furthermore, various research gaps were
116 also identified. It enumerated how AHP can be utilised for selecting a suitable PD
methodology from different alternatives such as LPD and APD using a case situation.
During the course of this process, different factors that need to be considered for
making the decision were identified and finally, it was found that the LPD was found to
be the better alternative for the given circumstances of the case situation. One of the
shortcomings of this paper is that is based on a hypothetical case study. Even though
the case stud considered is hypothetical, the problem chosen for demonstrating and
applying the AHP for decision making is novel. Even, Krishnan and Ulrich (2001), who
presented a detailed review to identify the different decisions that are made within the
domain of PD, have not addressed/considered such an important decision.
Furthermore, this decision is one of the significant decisions made within the PD
department of an organization. It is highly strategic and involves significant financial
implications apart from having an effect on the entire business of an organization.
Considering the criticality of this decision, addressing such a research question is an
important practical contribution, which will definitely benefit the managers as well the
business community. Second, such decisions may have been traditionally made in
many organizations based on the wish of the CEO or the Chairman’s or the person who
is heading the PD department or based on the consultant’s advice, which may not
involve consideration of many if not any of the factors listed out in this paper. In this
paper, an earnest attempt has been made to list out some of the potential factors, which
can or may be considered by the R&D manager or the top management, while making
such crucial decisions.
Thus, in this paper, an earnest attempt was made successfully to resolve all the
research gaps identified from the literature review and the major contributions of this
paper can be summarized as follows:
.
The problem of selecting a suitable PD methodology is addressed, which is not
yet addressed in the fields of NPD, LPD and APD.
. Various factors which are to be considered in such selection process were
identified.
.
It attempted to present a novel application of AHP for a problem, which
according to the authors’ knowledge has not been addressed in the fields of NPD,
LPD, APD and AHP.

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About the authors Methodology to
Anand Gurumurthy is an Assistant Professor in the area of Quantitative Methods and
Operations Management (QM&OM) at Indian Institute of Management, Kozhikode (IIMK), India. improve product
Prior to this appointment, he was an Assistant Professor with the Mechanical Engineering development
Group of Birla Institute of Technology & Science (BITS), Pilani, India, where he completed his
PhD in the area of Lean Manufacturing and ME in Manufacturing Systems Engineering.
He received his BE in Mechanical Engineering from Sri Venkateswara College of Engineering
(SVCE), India, which was earlier affiliated to the University of Madras. He has around eight years 121
of teaching/research experience and two years of industrial experience as a Production Engineer
with one of India’s leading industrial houses – the TVS Group. He has published around 30
papers in peer-reviewed national and international journals and presented many papers at
various national/international conferences. His current research interests include lean
manufacturing, operations management, flexible manufacturing systems, maintenance
management and world-class manufacturing.
Rambabu Kodali is a Professor in the Mechanical Engineering Department of Birla Institute of
Technology & Science (BITS), Pilani, India. He was Group Leader (HOD) of the Mechanical
Engineering Group and Engineering Technology Group from 1994 and 2004, respectively, to 2010.
He has 27 years of teaching/research experience and 16 years of administrative experience as a
Group Leader (HOD). He has published around 200 papers in various national and international
journals. His research areas are: Toyota production system, lean manufacturing, manufacturing
excellence, flexible manufacturing systems (FMS), innovative product design and development,
supply chain management, and manufacturing management. He has supervised nine PhDs and
currently is supervising three more. He has completed 11 research projects in FMS, computer
integrated manufacturing systems, world-class manufacturing, and manufacturing excellence. He
has developed four on-campus degree programmes and 14 off-campus degree programmes at
BITS Pilani, India. He has developed and established the state-of-the-art FMS laboratory apart
from modernizing various Mechanical Engineering laboratories at BITS-Pilani, India.

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