Simulation of the new product development process for performance improvement

Simulation of the new product development process for performance improvement

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Article ID: iaor20073490
Country: United States
Volume: 50
Issue: 12
Start Page Number: 1690
End Page Number: 1703
Publication Date: Dec 2004
Journal: Management Science
Authors: , ,
Keywords: performance
Abstract:

This paper explores the linkages between key features of the new product development (NPD) process and NPD performance and suggests ways of designing the process to improve performance. Using a stochastic computer model, we examine, under varying uncertainty conditions, how the key features of overlapping and functional interaction affect the performance measures of development time and effort (total person-days for a project). Findings indicate that, first and foremost, whether or not overlapping occurs, increasing functional interaction eventually leads to a trade-off between development time and effort. Second, an ‘early-start-in-the-dark’ approach of increasing overlapping with no functional interaction is inferior even to an ‘over-the-wall’ approach. Third, increasing overlapping when some functional interaction exists is beneficial in low uncertainty and harmful in high uncertainty. Fourth, concurrent engineering is appropriate under low uncertainty, while a type of sequential engineering, different than the ‘over-the-wall’ approach, should be used under high uncertainty, and last, dedicated teams are suitable under high, and not low, uncertainty. We developed the model with the aid of a company and validated it against a published account of five case studies.

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