Cost Of New Product Development Research Articles

Estimating the Costs of Product Development Projects Based on External Data: The New Product Development Cost Benchmarking Method

Activities for the development of new products are essential for most companies, and the investments for such activities can be substantial. Estimating the costs for new product development (NPD) projects is a challenging process as uncertainty is usually high and comparable data is scarce. While manifold work is available about general cost estimation methods, the estimation of NPD is still underrepresented in the literature. Except the few existing approaches, mostly build exclusively on internal data from within the company. In this article, we contribute to this gap by introducing an NPD cost benchmarking method. This approach faces the data availability problem by incorporating publicly available data of competitors into a regression model to estimate the average NPD costs of particular products. It is shown how specific adjustments to the data used for the model are necessary. The adjustments of input data account for macroeconomic circumstances and intercompany differences in accounting standards and development processes. Other adjustments (through a parametric model that builds on the regression results) account for company- and product-specific cost requirements. Using the method, relevant NPD cost estimations can be made for early-phase product management. The main output of this article is the introduction of the NPD cost benchmarking method as a novel solution to the challenging process of NPD cost management.

Declarative Modelling Approach for New Product Development

Abstract The paper is concerned with using constraint programming for simulating an alternative project completion of new product development (NPD). All possible variants of project completion are sought within the company’s resources and requirements for an NPD project. A company and its projects can be considered in terms of variables and constraints that constitute the systems approach for a project prototyping problem. This problem is described in the form of a constraint satisfaction problem and implemented with the use of constraint programming techniques. The paper also presents a method for estimating the NPD cost and unit production cost, and simulating variants that ensure the desirable level of costs, including the impact of granularity on the number of solutions. An example shows the applicability of the proposed approach in the context of NPD projects.

Improving the new product development using big data: a case study of a food company

Purpose Recently, the concept of big data (BD) has evolved and started to play an essential role in the advancement of new product development (NPD) in various sectors contributing to value creation, idea generation and competitive advantage. However, limited research has been done on how the food industry can exploit BD to improve the processes involved in NPD. The purpose of this paper is to understand the use of BD in new food product development. It helps to find relevant information and integrate sustainability to the early stages of the NPD process in the food industry. Design/methodology/approach This research illustrates a case study of a beverage company wherein they used BD analytics to support their NPD team to launch a two-litre lemonade drink in the market for their retailer with less than 5 g sugar per 100 ml in the shortest possible time. Findings The use of BD helps to reduce NPD costs and time without affecting the taste and on par with competitor’s products. Originality/value The research can support NPD professionals through the application of BD analytics to bring products at lower costs to the market as quickly as possible.

The role of intellectual capital in new product development: Can it become a liability?

ABSTRACTGiven the increasingly high cost of new product development (NPD), it is important for firms to terminate unsuccessful NPD projects as soon as possible. This article investigates the role of intellectual capital in the discontinuation of NPD projects. The three dimensions of intellectual capital (human, structural, and social capital) are posited to decrease the likelihood of discontinuation of NPD projects, while contextual factors such as the firm's discontinuation experience and the size of the drug development portfolio are expected to affect this relationship. The research model is tested using a unique data set of 1,168 drug discovery and development projects. The results suggest that NPD projects rich in all three dimensions of intellectual capital are less likely to be discontinued. The size of the firm's drug development portfolio, however, is found to mitigate these effects, while discontinuation experience enhances the relationship between intellectual capital and discontinuation duration. As only a fraction of new product development initiatives result in success, timely discontinuation of unsuccessful projects is critical for sustained performance of organizations. Our findings make an important contribution to this stream of work. By highlighting the role of intellectual capital in the discontinuation process, we offer an interesting twist to the literature that invariably assumes intellectual capital to be important for innovation.

Customer involvement and NPD cost performance: the moderating role of product innovation novelty

PurposeThe purpose of this study is to examine the influence of product innovation novelty on the relationship between customer involvement and new product development (NPD) cost performance.Design/methodology/approachThe authors use organizational information processing theory and adopt hierarchical regression and slope difference test to assess the relationships between constructs and test the hypotheses.FindingsThe authors evaluate the concept of product innovation novelty from the perspectives of suppliers and customers and infer that these two types of product innovation novelty exert a moderate effect on the relationship between customer involvement and NPD cost performance. First, product innovation novelty for customers strengthens the positive effects of customer involvement on the NPD cost performance. Second, product innovation novelty for suppliers weakens the positive impact of customer involvement on the NPD cost performance. The authors also find that the interaction between product innovation novelty for suppliers and product innovation novelty for customers weakens the positive impact of customer involvement on NPD cost performance.Originality/valueThe findings of this study explain the reasons for the controversies surrounding the impact of customer involvement on cost performance and discuss the role of product innovation novelty in customer involvement in NPD process. The results of this study can be used to establish whether customer involvement improves or weakens NPD cost performance and identify the role of product innovation novelty in NPD. The conclusions derived from this study can provide theoretical knowledge and managerial insights for both academicians and corporate professionals.

Applied rheology and architectural coating performance

Paint rheology is understood to play a vital role in both product performance and customer acceptance. Consequently, the ability to formulate paints having the necessary flow properties is essential for paint technologists. Experienced formulators have said that as much as half the cost of new product development can be consumed in getting the rheology right. In fact, the quality-control viscosity measurement devices in everyday use in the development laboratory are of little help in this endeavor. Among other shortcomings, most such instruments apply shear stresses which are far from those involved in important coating flow processes. The rheological properties required for a successful coating must be defined with due regard to the prevailing conditions of stress involved in application and film formation. This requires that measurements should be taken over a wide range of shear stress and timescales. The task for the applied rheologist is to bridge rheology and technology, but it is often unclear how to connect rheological data with the “real-world” performance of paints, due to the complexity of coating flows. This review in part discusses the use of controlled-stress rheometry to characterize coatings, and presents ways of applying the results effectively to the analysis of paint flow. The methodology is fundamental but not unduly time-consuming, since the objective is to provide sound yet timely guidance to formulators. Thirteen commercial semigloss latex paints were analyzed rheologically to develop correlations to paint performance. Using the method of shear stress mapping, key regions of the non-equilibrium flow curve are identified for the control of paint flow processes. With this approach, simple but strong correlations were obtained of paint flow metrics to viscosity chosen at the relevant stresses. The fact of high correlation means one can expect that an appropriate viscosity adjustment will correspondingly improve performance. It is argued that shear stress, not shear rate, is the correct independent variable both for experimentation and for the graphical presentation and analysis of viscosity data. The yield stress parameter, particle flocculation, and sedimentation are also discussed, and an oscillatory shear method of direct measurement of yield stress is described.

Design, stiffness analysis and experimental study of a cable-driven parallel 3D printer

Although additive manufacturing (AM) has been developed rapidly and become an absolutely necessary tool for reducing the cycle and cost of new product development, the mechanical structures of most 3D printers based on Fused Deposition Modeling (FDM) technology are still traditional serial or parallel mechanisms with rigid components. In this paper, a novel cable-driven parallel 3D printer (CDPP) is developed. Compared with the traditional rigid mechanisms, CDPP has the advantages of larger workspace, higher payload-to-weight ratio, easier modularity and reconfigurability. A cable-driven module with three translational degrees of freedom and a follow-up tensioning module with a spring are adopted for positioning. Firstly, the inverse kinematics of the CDPP is derived considering the cable length constraint. The inverse dynamics model of the CDPP is established based on the Newton–Euler equation and the kinematics. Secondly, the system stiffness of the CDPP and stiffness along three coordinate axes are derived, respectively. The system static stiffness with respect to the stiffness constant of the spring and the coordinates of the moving platform are obtained. Finally, the experiments are performed based on numerical simulation. The results of experiments without executing extrusion demonstrate the simulation results about the static stiffness. The feasibility of the CDPP is verified via the experiments while executing extrusion.

A case-based reasoning approach to cost estimation of new product development

New product development (NPD) is a crucial process in maintaining a company’s competitive position and succeeding in dynamic markets. One of contemporary trends in the global economy is mass customisation that bases on modifications of existing products instead of designing everything anew. The advancement of information technology helps today’s enterprises in managing business processes and collecting data in enterprise systems that can be a potential source of information. Specifications of previous products deliver information of design, cost and time of past NPD projects that can be the basis for developing new products. A promising methodology for assisting conceptual product design and monitoring a NPD project is case-based reasoning. This paper is concerned with developing a case-based reasoning approach towards using neural networks to estimate the cost of NPD in one-of-a-kind production companies.

Multi-generation pricing and timing decisions in new product development

When planning for the introduction of a stream of new products into the marketplace, managers must consider both the timing and dynamic pricing decisions to determine an appropriate entry strategy into the marketplace. Literature in new product development (NPD) typically addresses optimal timing and pricing decisions independently. We develop an analytical model of coordinated product timing and pricing decisions when there are two generations of a new product under consideration. Factors driving the timing and pricing decisions include the unit sales and cost relationships for each generation as well as NPD costs for introducing the next generation of products. We derive analytic results that characterise the optimal timing and pricing strategies for a single product rollover scenario. We analyse several numerical examples to illustrate the interplay between optimal pricing and time-to-market strategies under more general settings.

The influence of network characteristics on costs in pharmaceutical new product development

This paper develops a model relating prior experiences, network stability, exclusive partnership, geographical distance, and intermediation in inter-firm R&D networks to new product development (NPD) costs. The developed hypotheses are tested with unique multilevel R&D partnership data from 33% of all clinical trials in the pharmaceutical industry from 1988 to 2010. The results provide general support for the model’s predictions. Exclusive collaborations over time with the same partners that are geographically close to each other improve NPD efficiency, while involving intermediaries only becomes relevant for non-exclusive partnerships and dispersed networks. NPD costs also increase in more stable networks, reflecting the relevance of structural holes for control and information advantages. This study contributes to the network management literature by understanding the relation between specific partnership network trade-offs, intermediation, and NPD costs. This study also enhances the relational view by integrating network theory and contributing to a deeper understanding of inter-organizational competitive advantage through the analysis of longitudinal empirical partnership data and partnership structures hitherto not analyzed.

Effects of marketing–manufacturing integration across stages of new product development on performance

Our understanding on the benefits of marketing–manufacturing integration (MMI) across various stages of new product development (NPD) process is limited. Based on the resource-based view of a firm, this study empirically examines the direct and interactive effects of MMI in four stages of NPD process on three dimensions of new product performance. Survey data from 214 completed NPD projects in Chinese manufacturing firms are employed to test the developed hypotheses using hierarchical regression. The results indicate that greater MMI in each stage is, respectively, associated with faster NPD speed. Stronger MMI in business/market opportunity analysis (BMA), technical development (TD) and product testing (PT) stage is, respectively, associated with higher NPD cost efficiency. Higher MMI in BMA and PT stage is, respectively, associated with better market performance. In addition, the interactions of MMI in BMA and TD stages and MMI in PT and product commercialization (PC) stages have positive effects on NPD speed and NPD cost efficiency, while the interaction of MMI in BMA and PC stages has negative effects on NPD speed and NPD cost efficiency. The interaction of MMI in BMA, TD and PC stages is positively related to market performance; surprisingly, the interactions of MMI in BMA, TD and PT stages and MMI in BMA, PT and PC stages are negatively related to market performance. These findings have important implications for research and practice in both the cross-functional integration and NPD areas.

Supplier and customer involvement in NPD performance of Iranian dairy HTBFs

Supply chain management (SCM) and new product development (NPD) collaboration has an important role in creation of sustainable competitive advantage in companies for retaining in competitive market. One of the best strategies to obtain competitive advantage and reduce the failure rate of new product development in food industry is co-operation with suppliers and customers that in this research we have discussed. In this paper, an effect of Supplier and customer involvement in NPDP performance of Iranian dairy HTBFs is investigated. Then questionnaire was distributed among 120 Iranian managers in the dairy companies that 102 questionnaires were suitable. Based on the results, significant impact of supplier collaboration on the cost, innovation and speed of new product development was confirmed and significant impact of customer involvement on innovation and cost of new product development were confirmed serious. However, a significant impact of customer involvement on NPDS was not confirmed.

Reverse Engineering for the Purpose of Intellectual Property Protection and Accelerated Product Development in SOC and SIP Structures

Technical analysis of intellectual property (IP) is conducted for the purpose of legal protection and product development. A brief review of the process of IP analysis and associated terminology is...

Supply chain involvement for better product development performance

PurposeThe purpose of this paper is to investigate the impacts of three types of supply chain involvement (SCI) on three types of new product development (NPD) performance.Design/methodology/approachTo test the research hypotheses, structural equation modeling was conducted using data from 214 Chinese manufacturing companies.FindingsThe results reveal that internal involvement is positively associated with customer and supplier involvement. It was also found that three types of SCI influence three types of NPD performance differently. Specifically, internal involvement is important in improving NPD speed, while customer and supplier involvement have significant effects on NPD cost and NPD speed. Moreover, internal and customer involvement enhance market performance indirectly, whereas supplier involvement improves market performance both directly and indirectly.Research limitations/implicationsThis research examines the relationship between SCI and NPD performance in China. However, the effectiveness of SCI may be contingent on various factors (such as involvement timing, innovation strategy and business environment) and the relationship may be different in other cultural contexts.Practical implicationsManagers should adopt a holistic SCI perspective to manage their supply chains when developing new products, to achieve better performance.Originality/valueThis study contributes to SCI literature and practices by defining three types of SCI in the context of supply chain, examining the relationships among them and revealing the impacts of different types of SCI on different types of NPD performance.

Research on the Data Segmentation Technique of Large Rapid Prototyping Sample Based on Features

Because of the small workbench molding size of rapid prototyping equipment, the processing of large rapid prototyping samples is a problem during the new product development process, for example, motorcycle covering. The relative merits of accuracy engraving technique and rapid prototyping technique during processing are discussed. The method combining accuracy engraving machine and rapid prototyping machine to processing new motorcycle cover samples is proposed. And the surface data segmentation technique based on features is adopt to divide the large rapid prototyping sample reasonably, and then the small parts are collaged after respectively processing, so the problem of large rapid prototyping sample cannot once molding is solved, the speed of new product development is accelerated, the cost of new product development is decreased, the rapid manufacturing is realized. This method has been applied to the processing of new motorcycle cover samples and the application method is expounded.

Application of Accuracy Engraving Technique in the Complex Curved Surface Mould Processing

The advantages of the precise carving techniques in complex curved surface mould processing are studied. The small tools of carved machine can realize the small size processing which is unachievable for CNC and NC milling machine. The method using accuracy engraving machine to manufacture complex curved surface mould with small features is proposed, so the speed of mould processing is accelerated, the cost of new product development is decreased, the rapid manufacturing is realized and the traditional design method using only CNC and milling machine is improved. Finally, this method has been applied to the processing of a plastic mould and the application method is expounded.

Reducing Time and Cost of New Product Development in SMEs by E-Collaboration Through Project Management Approach

Reducing Time and Cost of New Product Development in SMEs by E-Collaboration Through Project Management Approach

Application of Accuracy Engraving Technique in the Motorcycle New Product Development

The relative merits of accuracy engraving technique and rapid prototyping technique during processing are discussed. Because the product dimensions are small and the strength of the rapid prototyping sample workpiece in vertical direction is too small to meet the engineering design requirements, the method using accuracy engraving machine to replace rapid prototyping machine to design product with large size and need to assemble like motorcycle cover is proposed. If the product size is too large, it can be split and every part is carved with the accuracy engraving machine, and then they are sticked together to finish the whole part. So the speed of new product development is accelerated, the cost of new product development is decreased, the rapid manufacturing is realized and the traditional design method using only RP machine is improved. This method has been applied to the development for a new motorcycle cover and the application method is expounded.

Product and Process Modularity's Effects on Manufacturing Agility and Firm Growth Performance

Modularity in product design has been hailed as a way to speed new product development (NPD), to reduce NPD cost, and to enhance customization possibilities for consumers. Modularity in process design may speed new product manufacturing setup times, reduce costs, and enhance the profitability of the lower volumes that customization often entails. However, empirical evidence is scarce that either product or process modularity—individually, jointly, or sequentially—actually produce these or other proposed benefits (e.g., performance growth). This study builds on general modular systems theory (GMST) by examining the theoretical relationship between product and process modularity and the effects of each on firm growth performance. Using structural equation modeling, partial versus complete mediation by manufacturing agility is also scrutinized. In one pair of models, product modularity and process modularity are separate direct antecedents to manufacturing agility, which is modeled to affect firm growth performance; in a second pair of models, product and process modularity are related antecedents to manufacturing agility, with product modularity preceding process modularity. Results from the best-fitting model show that product modularity directly and positively affects process modularity, manufacturing agility, and firm growth performance. Process modularity was unrelated to manufacturing agility, and neither process modularity nor manufacturing agility predicted growth performance. Consistent with GMST, the study provides empirical evidence of the power of one element of a modular system to orchestrate a fit between a firm’s product and manufacturing strategies and to directly drive system performance. Thus, modularity in product design is revealed as the key to understanding GMST effects concerning how changes in one system generate changes in other systems.

An evaluation framework for product planning using FANP, QFD and multi-choice goal programming

Technological innovation and satisfaction of customer needs are the keys to survival and success for firms, especially in global competitive high-tech industries. Since new products are usually a source of new sales and profits, the success of new product development (NPD) is essential to maintain a competitive edge and to make a decent profit in a longer term. Therefore, how to develop products that deliver the quality and functionality customers demand while generating the desired profits becomes an important task for the manufacturers. In this paper, a framework with two phases is constructed for facilitating the selection of engineering characteristics (ECs) for product design. In the first phase, quality function deployment (QFD) is incorporated with the supermatrix approach of analytic network process (ANP) and the fuzzy set theory to calculate the priorities of ECs with the consideration of the interrelationship among factors and the impreciseness and vagueness in human judgments and information. In the second phase, multi-choice goal programming model is constructed by considering the outcome from the first phase and other additional goals, such as NPD cost and manufacturability, in the attempt to select the most suitable ECs. A case study of the product design process of backlight unit (BLU) in thin film transistor liquid crystal display (TFT-LCD) industry in Taiwan is carried out to verify the practicality of the proposed framework.