New Product Development Performance Measurement Research Articles

The Effects of Integrative Strategies Along the Supply Chain on NPD Success

This study analyses the effects of different integrative strategies related to supply chain (SC) actors (suppliers, customers and internal manufacturing) in the early stages of new product development (NPD) on NPD success. Relying on various theories and related empirical evidence, we state three hypotheses and empirically test them using multi-country and multi-industry data from 309 manufacturing plants. The results show that different strategies of involvement explain different NPD success. We observed that integrative practices involving three distant actors have a positive impact on all NPD success indicators. We also observed that NPD success related to specific purposes, for example, market or internal processes, can be obtained with simpler combinations of collaboration. This shows the significance of choosing a differentiated portfolio of SC partners based on cognitive distance to achieve success in different NPD performance measures. Our results confirm that the types of partners are determinants in achieving different NPD success and that there are different alternatives to achieve success. These results have implications for managers to optimise the allocation of limited resources when cooperating with different agents in NPD projects.

The impact of user innovator mindset on feedback volume, feedback diversity and new product development performance

PurposeThis study examines the influence of different user innovator mindsets on new product development (NPD) performance. The current research explores the relative impact of a product-focused user innovator mindset vs a customer-focused mindset on feedback volume and feedback diversity and investigates the effect of each type of feedback on product improvement and product diffusion.Design/methodology/approachThis study examines these relationships using two distinct types of data. Data on user innovator mindset, feedback characteristics and user innovator improvisation were obtained via an online survey. Archival data on NPD performance measures were acquired directly from an online research database, and results were obtained using confirmatory factor analysis.FindingsThe authors find that while neither type of user innovator mindset directly influences NPD performance, user innovators, who are highly customer-focused, have a significant advantage in sourcing knowledge from users in the form of a higher volume of feedback and more diverse feedback. In turn, feedback volume appears to positively influence product improvement, while feedback diversity positively influences product diffusion. Finally, the effect of both types of feedback on product improvement is enhanced for user innovators who are highly improvisational.Originality/valueThis research highlights the important role that customer focus plays in directly obtaining knowledge from customers (i.e. customer feedback) and the effects of that feedback on NPD performance. This study provides evidence that a user innovator's interest in accurately understanding the needs of their peers improves their access to external knowledge and enhances their innovation efforts.

Enablers of NPD financial performance

PurposeThe purpose of this paper is to examine new product development (NPD) financial performance enablers through examining the roles of NPD capabilities improvement, NPD knowledge sharing and NPD internal learning in manufacturing organisations in Jordan.Design/methodology/approachBased on relevant literature review on NPD performance, a structured questionnaire was developed to collect data related to NPD performance measures. Questionnaires were distributed to a sample of 558 manufacturing organisations in Jordan, out of which 355 were returned and valid for the analysis. Exploratory and confirmatory factor analyses were applied to reveal NPD performance success dimensions that manufacturing organisations use to assess NPD performance success. Then, path analysis was employed to examine the research model and test its hypotheses.FindingsThe study’s findings reveal that manufacturing organisations use a multidimensional construct for assessing NPD performance success, which consists of NPD financial performance, NPD internal learning, NPD capabilities improvement, NPD knowledge sharing, and NPD marketing performance. NPD capabilities improvement exerted a positive and significant effect on each of NPD internal learning, NPD knowledge sharing, and NPD marketing performance, respectively. NPD knowledge sharing exerted a positive and significant effect on each of NPD internal learning NPD marketing performance. Each of NPD internal learning and NPD marketing performance exerted a positive and significant effect on NPD financial performance. The structural findings also indicate that 38.1 per cent (R2 is 0.381) of NPD financial performance is explained by the path of NPD capabilities improvement, NPD knowledge sharing and NPD marketing performance, which is the strongest path in the empirical model.Research limitations/implicationsThe paper’s focus on manufacturing organisations limits its contribution to the manufacturing sector only. The services sector is a rich field for understanding NPD financial performance enablers in various service industries. Further, the paper focusses on only five dimensions of NPD performance success, other dimensions of NPD performance success might add more insights to their effect on NPD performance success measures especially their effect on organisational performance.Practical implicationsThe findings of this study provide managers of manufacturing organisations with empirical insights related to the multidimensionality of NPD and their complex relationships to enhance NPD financial performance. The empirical findings assist managers to assess their NPD strategies, processes and implementation based on a results-oriented approach. The major contribution of the study is identifying the strongest paths of NPD financial performance enablers which reveals the complexity and criticality of NPD capabilities improvement, NPD knowledge sharing and NPD marketing performance on NPD financial performance. The rationale is NPD financial performance is still the most important NPD performance success dimension amongst manufacturing organisations.Originality/valueThe originality of this paper stems from developing and testing a multidimensional model of NPD financial performance enablers for the first time in emerging markets, Jordan. NPD financial performance is a function of other areas of NPD performance dimensions, namely; NPD capabilities improvement, NPD knowledge sharing and NPD marketing performance. This empirical evidence is provided to managers for the first time by this study.

External knowledge sourcing and new product development

PurposeThe purpose of this paper is to analyze the role of external knowledge in the innovation process of firms in the food and beverage (F&B) industry and the effects of two external knowledge sourcing modes on new product development (NPD) performance.Design/methodology/approachThe paper applies a quantitative approach, relying on data from 157 Italian firms operating in the F&B industry to test the hypotheses through OLS regression models.FindingsResults suggest that the surveyed firms actively engage in open innovation with strong ties with market-based sources. Moreover, the authors found that market-based sources are associated with income from incremental innovation and time to market, while science-based sources are associated with income from radical innovation. Finally, the authors found that the R&D intensity enhances the benefits of the above external knowledge sourcing modes.Originality/valueDespite the large amount of studies assessing the effects of external knowledge sourcing on performance in the open innovation field, few studies focused on a specific industry, especially with regard to F&B. Moreover, this paper considers different types of NPD performance measures given that different external knowledge sourcing modes exert different effects.

Operation Management: Prediction of New Product Development Performance at Pre-Product Launch Stage

New Product Development (NPD) performance has increasingly been viewed as an essential indicator for organizational competitiveness and success. However, in the current literature of NPD, NPD performance measures are tends to focus on assessment of performance at the ending phase of NPD process (i.e. after product launch). Assessment of NPD performance before product launch is not widely discussed. Hence, this paper aims to address the research gap by developing models to predict NPD performance at the front end stage of NPD process. In line with this, 5 important NPD process constructs and 7 NPD management constructs were identified from literature review. These constructs were subsequently formulated into a survey questionnaire and responded by 186 Research and Development (R&D) staffs from R&D companies in Malaysia. Thereafter, the NPD process and management constructs were regressed with the perceived NPD performance to develop models for NPD performance prediction prior to product launch. Finally, discussion on researchs finding and recommendations are included at the end of this paper.

New Product Development: How Cost Information Precision Affects Designer Focus and Behavior in a Multiple Objective Setting

The development of new products that satisfy customer needs in a costeffective manner is key to survival for many organizations. The role that cost information plays in new product development (NPD), such as its effect on designers' focus and crucial NPD performance measures, is unclear. This experimental study extends existing accounting NPD research by investigating the effect of two levels of cost information precision (specific versus relative) and new products (radical versus incremental) on designers' focus and two common NPD performance measures: product cost and product features. The results indicate that compared to relative cost information, specific cost information increases designers' focus on cost minimization for incremental but not radical products. However, providing designers with specific cost information results in more cost-effective designs for both types of products. In addition, contrary to expectations, more cost-effective designs do not come at the expense of reduced product features. The results show that the role played by cost information in NPD is more complex than has been suggested in prior literature.

THE LIFE CYCLE DIMENSION OF NEW PRODUCT DEVELOPMENT PERFORMANCE MEASUREMENT

This paper is concerned with comprehensive performance measurement (PM) of new product development (NPD). The idea of "life cycle conscious" NPD performance measurement is introduced by conducting a conceptual analysis combining product life cycle (PLC) thinking and NPD Performance Measurement (NPD PM). The empirical base of the paper is six case studies that focus on product life cycles and their characteristics within different industrial environments. The paper indicates that there are several ways that NPD PM would benefit from life cycle thinking. Life cycle orientation would provide companies with a feasible framework for constructing the performance measures of NPD, and the framework is likely to reduce the short-termism typically associated with NPD PM. In addition, life cycle could provide help for weighting the criteria and the measures utilized in NPD, for finding a balance for the measurement system, and for directing proper attention towards the comprehensive effects of new products.

Use and impact of performance measurement results in R&D and NPD: an exploratory study

Performance measurement of R&D and new product development (NPD) activities is gaining increased importance because the effectiveness and efficiency of these activities not only determine a firm's competitive advantage, but its very survival. The literature is rich on descriptions of measurement techniques and methods, but pays less attention to the actual use of the performance results in operations and decision‐making. In this paper, reporting results from interviews conducted in three large companies in the electronics industry, we validate and further specify key areas of use and impact of R&D and NPD performance measurement results including ensuring better coherence and relevance of product portfolios, reorienting projects before failure, deciding on corrective actions, supporting the launching decision, enhancing staff motivation, and facilitating well‐balanced decision‐making. We identify implications for practice and research and propose a framework for future empirical work focusing on the interplay between the operation of the performance measurement system, the use and the impacts of measurement results.

Organisational factors for success in new product development

This paper describes an attempt to produce an evaluation taxonomy and framework to enable companies to assess their new product development (NPD) performance and the factors leading to success. This framework is based on a product's complexities (structural and functional) and related factors and commercial constraints. In particular, it looks at the management and organisational factors involved in NPD and how these may be enhanced to increase NPD success rates. An assessment tool and methodology (ATM) is described which evaluates a company's NPD activities and process performance. Significant findings relating to success in product development are shown from the initial results comparing successful product developments from a variety of companies. Also described are the results of a survey of company based NPD performance improvement approaches and the related NPD performance measurement systems and metrics being used. The results from the use of the ATM with Japanese companies within Japan are also included as a comparison.

Performance Measures and Management Control in New Product Development

An exploratory study was conducted to examine management control issues in new product development (NPD). The study focused on three management control aspects that NPD managers considered important: (1) position of NPD in the firm's organizational structure; (2) NPD process; and (3) NPD performance measures. Primary data were collected from NPD managers via interviews, workshops, and a questionnaire. For each management-control aspect studied, we examined current practice, recent changes, and how the control links to strategy.The NPD function reported fairly high in the organization. The need to integrate NPD and strategy encouraged higher reporting levels, and shifts in reporting from engineering to marketing. The need to integrate NPD and strategy also drove the addition of NPD/strategy steps into already well-defined, phased NPD processes. However, NPD/strategy integration was not well reflected in performance measures. The firms studied used varied financial and nonfinancial performance measures, yet relatively few firms reported that their performance measures reflected key aspects of their strategies. NPD managers generally expressed dissatisfaction with the performance measurements, and firms appeared to be searching for more effective alternatives.

Management and Organisational Factors in New Product Development (NPD) Success

The desire to improve the performance of their new product development activities and process is firmly established within companies. This paper describes an attempt to produce an evaluation taxonomy and framework to enable comparisons to assess their NPD performance and the factors leading to success. This framework is based on a product's complexities (structural and functional) and related factors and commercial constraints. In particular, it looks at the management and organisational factors involved in NPD and how these may be enhanced to increase NPD success rates. These factors were investigated during a three-year Engineering and Physi cal Sciences Research Council (EPSRC) funded research programme. The outcome of this research programme is the Assessment Tool and Methodology (ATM) which evaluates a company's NPD activities and process performance. The various ways in which the ATM may be used are explained. Significant findings relating to success in product development are shown from the initial results comparing successful product devel opments from a variety of companies. Also described are the results of a survey of company based NPD performance improvement ap proaches and the related NPD performance measurement systems and metrics being used. The results from the use of the ATM with Japanese companies within Japan are also included as a comparison.

THE USE OF PERFORMANCE MEASUREMENT TOOLS FOR BALANCING SHORT- AND LONG-TERM NPD PERFORMANCES

In this paper, we discuss how managers can use New Product Development (NPD) assessment and regular performance measurement tools to balance short- and long-term NPD performances. Different perspectives on NPD performance are structured in an assessment profile that is applied in nine case studies. Based on these assessments, it is concluded that long-term performance, in particular, is perceived by NPD managers to be inadequate. Subsequently, the regular performance measurement procedures in place at these companies are discussed and suggestions are made as to how the case companies' NPD performance measurement systems can be more supportive in controlling and improving long-term performance.

When product development performance makes a difference: A statistical analysis in the electronics industry

Throughout the pages of JPIM and other publications, researchers and practitioners devote considerable effort to identifying the dimensions of new-product development (NPD) performance that relate most closely to business success. Although we may hope to unveil a set of universal truths about the relationship between NPD performance and business success, the relevant NPD performance measures appear to depend on the industry in which a firm competes. In fact, Christian Terwiesch, Christoph Loch, and Martin Niederkofler suggest that the overall relevance of NPD performance to business success depends on the firm's competitive market environment. In a study of 86 business units operating in 12 different electronics industries worldwide, they develop a market contingency framework for understanding the impact of NPD performance on a firm's profitability. Their study uses data from the “Excellence in Electronics” project, a joint research effort by Stanford University, the University of Augsburg, and McKinsey & Co. They describe market context in terms of three dimensions: market share, market growth, and external stability—that is, the average product life cycle duration in the market. Looking at all 86 business units in the study, they find that industry membership accounts for 23% of the variance in profits, with 18 percent of the variance determined by industry profitability and 5% by the three dimensions of market context. For the firms in the study, development performance has the most significant effect in slow-growth markets and in markets with long product life cycles. In these stable industries, low development intensity, product line freshness, and technical product performance increase profitability. The results indicate that NPD performance plays a much more important role for explaining the profitability of dominant firms than that of the low-market-share firms in the study. NPD performance explains 30% of the profitability variance among the high-market-share business units in the study, but none of the variance for the low-market-share business units. Although the profitability of the smaller firms in the study is driven primarily by the industry environment, these firms can compete on the basis of superior technical performance. The CEO of a worldwide leading car manufacturer, after being asked for his technical vision for the next decade: “Money, Money, and again Money.”