Impact analysis of FFE practices of New Product Development in Japanese companies

Abstract

Recently, increased attention has been paid to the front end of New Product Development (NPD). In this paper, we report on the key factors for success with regard to the front end activities of NPD in 513 Japanese companies. We develop and test a causal model of relationships among key variables relating to the front end factors and success. The causal model is tested with AMOS using information from 513 completed NPD projects from Japanese manufacturing firms. The results of this study are summarised as follows: First, the more both market uncertainty and technical uncertainties are reduced during the front end, the higher is the effectiveness of NPD projects. Second, the more intensively new projects are planned prior to the start of development, the more both market and technical uncertainties are reduced. Finally, in the industry goods firms, it is easy for managers to develop the initial planning, and it has a greater impact on reduction of market uncertainty compared to the consumer goods firms. In contrast, as it is very difficult for managers in consumer goods firms to develop an initial plan, managers involve several function members within their project team, and often bring in external resources to reduce market uncertainty.