Measuring Performance in New Product Development Projects: A Case Study in the Aerospace Industry

Upper management control of new product development projects and project performance

PurposeThe purpose of this study is to reflect upon the feasibility of agile methodologies, Scrum in particular, to supplement the procedural design and implementation of performance measurement systems (PMS).Design/methodology/approachThe study is an interventionist case study that applied agile methodologies in the PMS development. Researchers actively participated in the PMS development, e.g. researchers designed some of the performance measurement prototypes in order to facilitate the agile development.FindingsThe study outlines an agile approach suitable for PMS development. The paper answers the topical needs for adaptability and agility in management accounting, by applying agile methodologies into PMS development. PMS development does not take place only as a project or process that systematically progresses from the measure selection to measure implementation. Instead, as the requirements for the PMS change during the development project, management may reject some measures and new measures emerge as the understanding about changing situations increase. Agile methodologies are a methodological way to respond to the inevitable change and to enhance management accounting adaptability.Research limitations/implicationsThis study contributes to the PMS literature by proposing that agile development methodologies can advance organizational features that increase management accounting adaptability. As a result, the study proposes a new approach for PMS development to supplement existing ones. Agile methodologies are especially suitable for extending the PMS in new, yet relatively immature areas of performance measurement. The new approach applies Scrum principles in PMS development. By drawing from the theories of performance measurement (system) development and enabling PMS, the paper furthers academic understanding about agile development of accounting information systems.Practical implicationsCompanies can use the proposed approach in PMS development, particularly after the initial system implementation in redesigning the system. The approach may increase the PMS impact in organizations and prevent PMS implementation failures.Originality/valueThe paper identifies the potential of using agile methodologies to enhance PMS adaptability and provides preliminary evidence of the potential of such approach in supplementing processual PMS development frameworks.

Does strategic planning enhance or impede innovation and firm performance? The current literature provides contradictory views. This study extends the resource-advantage theory to examine the conditions in which strategic planning increases or decreases the number of new product development projects and firm performance. The authors test the theoretical model by collecting data from 227 firms. The empirical evidence suggests that more strategic planning and more new product development (NPD) projects lead to better firm performance. Firms with organizational redundancy benefit more from strategic planning than firms with less organizational redundancy. Increasing R&D intensity boosts both the number of NPD projects and firm performance. Strategic planning is more effective in larger firms with higher R&D intensity for increasing the number of NPD projects. The results reported in this study also consist of several findings that challenge the traditional views of strategic planning. The evidence suggests that strategic planning impedes, not enhances, the number of NPD projects. Larger firms benefit less, not more, from strategic planning for improving firm performance. Larger firms do not necessarily create more NPD projects. Increasing organizational redundancy has no effect on the number of NPD projects. These empirical results provide important strategic implications. First, managers should be aware that, in general, formal strategic planning decreases the number of NPD projects for innovation management. Improvised rather than planned activities are more conducive to creating NPD project ideas. Moreover, innovations tend to emerge from improvisational processes, during which the impromptu execution of NPD activities without planning spurs “thinking outside the box,” which enhances the process of creating NPD project ideas. Therefore, more flexible strategic plans that accommodate potential improvisation may be needed in NPD management since innovation-related activities cannot be planned precisely due to the unexpected jolts and contingencies of the NPD process. Second, large firms with high levels of R&D intensity can overcome the negative effect of strategic planning on the number of NPD projects. Specifically, a firm's abundant resources, when allocated and deployed for NPD activities, signal the high priority and importance of the NPD activities and thus motivate employees to acquire, collect, and gather customer and technical knowledge, which leads to creating more NPD projects. Finally, managers must understand that managing strategic planning and generating NPD project ideas are beneficial to the ultimate outcome of firm performance despite the adverse relationship between strategic planning and the number of NPD projects.

New product development (NPD) project studies have attempted to identify a common set of factors that will indicate whether a NPD project will succeed or fail. A recent study has shown that there is no universal set of factors; also some factors have contradictory effects on a project’s success. A framework that classifies NPD projects into different contextual groups explains these anomalies. The grouping helps in determining the appropriate weights for the different success/failure factors, and the type of management organization and approach suitable for the project. The many subjective elements make classifying NPD projects into their appropriate contextual grouping difficult. Describes a rule‐based expert system which classifies NPD projects into their appropriate contextual groupings, suggests the level of emphasis for different success/failure factors and the right approach for managing.

Performing New Product Development (NPD) projects requires collaboration of lots of engineers, designers and managers. Companies run frequently such projects but not all of them are able to transform ideas into business success. One of these success factors is closely related to the efficiency of project coordination and management. This article deals with specific performance measures, namely, conformity measures, which can be used as a powerful parameter for NPD projects management. We consider an NPD project as a network of services provided by actors to each other. According to this idea, a given conformity measure, defined for every couple of actors, qualifies the quality of the service provided by an actor to another. Conformity measures appraise then the satisfaction degree of an actor who contributes to NPD project workflows regarding his/her collaborators. These service-links among actors allow to define four main parameters: forward, backward, upward and downward conformity measures. Once defined, two of them are illustrated through case studies. The first one concerns bicycle design process. The second one refers to a very simplified linear manufacturing procedure of a French car manufacturer, PEUGEOT™. For both the cases, we propose a visual aggregation method, which qualifies the global quality of the considered process.

Summary form only given. For continued success in the market place firms should introduce new successful products into the market, and gradually retire older mature products. The introduction of new products should be timed properly; it should also produce an appropriate product mix so that the strategy of the firm is continued and strengthened. The portfolio of R&D and new product development (NPD) projects should be structured such that the goals of the firm are met. There has been considerable interest in this field. Firms want to optimize the use of their resources invested in R&D and new product development projects. The R&D and NPD portfolio should fit the strategic vision of the firm in terms of-technology, growth and areas of business. Once the projects in the portfolio are plotted in the contextual model it is relatively easy to see where the holes in the portfolio are, and where the over representation of projects is. With such an understanding one can develop an optimum portfolio of NPD projects consistent with the strategy of the firm, and determine the appropriate number and type of projects one should have in each of the cells of the contextual cube. The type of mix of projects in the portfolio for a specific strategy has to be determined based on the strengths and weaknesses of the firm, as well as the managerial style of the organization. A very general set of guidelines is proposed in the paper. These guidelines take into account the nature of the projects, the type of effort involved and the strategic fit of the projects with the firm's strategy.

To successfully develop a complex product, a firm must answer two critical questions: how to “develop the right product” and how to “develop the product right.” Motivated by the real practice of Xiaomi’s new product development (NPD) projects, this article responds to these calls in the following ways. To design the right product, using an enhanced PageRank algorithm to investigate customer needs, NPD managers can select appropriate function modules of the new product to meet customers’ demand. To develop the new product in the right way, NPD managers should optimize the NPD organization. This article applies the multi-domain matrix (MDM) to identify the technical coordination dependency strength among different teams and then to measure the NPD organization’s complexity according to its entropy. By proposing the External Entropy of Cluster (EEC) and Internal Entropy of Cluster (IEC), we develop an entropy-based two-stage clustering criterion of design structure matrix ( DSM) to optimize the NPD organization. The first-stage clustering criterion maximizes the added average dependency strength of DSM, and the second-stage clustering criterion minimizes the Weighted Total Entropy, including the IEC and EEC. An industrial example is provided to illustrate the proposed model. The results indicate that the clustered DSM can reduce the organization’s complexity.

Lean holistic fuzzy methodology employing cross-functional worker teams for new product development projects: A real case study from high-tech industry

Purpose– The purpose of this paper is to investigate the influence of technical and management practices of a new product development (NPD) project on the project success in terms of observed value-added time. The authors address the research questions: “How do the product innovation aspects, information process, suppliers integration and project team aspects influence the success of NPD projects in terms of observed value-added time?”Design/methodology/approach– Specific hypotheses are posed based on literature research and semi-structured interviews with project managers used for the pilot study. In total, 40 projects carried out by multinational corporation, concerning NPD, are analysed, comparing product and project features with results obtained in terms of performance indexes usually used in “Lean Production” sector: “waste time”; and “type of wastes”.Findings– This research highlighted that “over-processing” is the most important waste made in the projects when the product concept is Completely New. Great support has been found for the hypothesis that a clear definition of products’ concept can reduce waste time. Unexpected result has been obtained analysing “Information process aspects” category where the more frequent use of support systems (i.e. quality function deployment, computer-integrated manufacturing, computer-aided design, etc.) tended to increase waste time. Important connections have also been found between project team aspects and low waste time.Practical implications– The identification of sources of waste can help managers to assess their current innovation practices, identify gaps between their current practice and best practice, and define action plans to close those gaps.Originality/value– In literature, researches exploring the effects that both organizational and managerial factors have on value-added has received only scant attention. This study attempts to bridge this gap, and takes a first step to investigate the role of product innovation aspects, information process, supplier integration and project team aspects in “value-added time” in a NPD project.

This study addresses the role of visual representations in supporting communication between an R&D team and geographically distributed suppliers for a new product development (NPD) project. It specifically focuses on the design and use of visual representations as a feasible way for communication between the distributed actors when they face communication challenges originating from differences in skills in the English language, but also from differences in work experiences. Relying on empirical materials from a Swedish manufacturing company in the mechanical engineering industry, this paper makes the following contributions to the literature. First, it shows that visual representations are effective boundary objects able to support process-oriented and product-oriented communication in distributed NPD projects. Second, it illustrates that visual representations do not necessarily have to follow graphic design principles, but can still be effective if distributed actors share the same project context. Finally, it highlights the need for a dynamic and context-dependent perspective on communication in NPD projects.

This research investigates the intricate dynamics between New Product Development (NPD) front-end Technical Fuzziness (TF), Team Learning (TL), and Project Performance (PP) within a high-tech Research and Development (R&D) foundation in northern Taiwan. Employing a quantitative research approach, data is systematically gathered through structured questionnaires, enabling statistical analyses to test hypotheses and uncover correlations. The study has a novel approach in its comprehensive examination of the interrelated factors shaping the NPD process. The findings posit a significantly negative correlation between NPD front-end TF and PP. The investigation delves into the complexities that arise from technical uncertainties during the early stages of product development, as well as the implications for overall project success. The examination asserts a significantly positive correlation between TL and PP. The research presents the moderating influence of TL on the connection between front-end TF and PP. This novel aspect aims to unravel how TL may mitigate or amplify the challenges posed by technical uncertainties in the NPD process. The findings of this investigation improve understanding of the interaction between NPD front-end dynamics, TL initiatives, and PP, offering valuable implications for practice and theory in the realm of novelty management.

Knowledge integration in IPPD project: role of shared project mission, mutual trust, and mutual influence

The paper discusses the success factors influencing product development design and product launch projects. The lives of people and businesses have been threatened and affected by the global COVID-19 pandemic for more than two years. Knowing these factors can help us make the right decisions and develop an effective project plan and matrix. Nowadays, project management is a very important part of work in companies of different sizes. Project management can be seen as applying innovation processes in an enterprise. The authors conducted quantitative and qualitative research on 544 companies in the Slovak Republic. The research focuses on aspects of project management and individual success factors. The data obtained by the questionnaire survey were processed by statistical methods, where the authors chose the nonparametric Kruskal-Wallis test as the basic method and the Wilcoxon two-tailed test for independent sample data sets. An essential variable in the sample of enterprises surveyed was, in particular, the sector of the economy in which the enterprise surveyed operates. Two key factors were considered when developing the product – employee education and the implication of social responsibility. The study’s uniqueness lies in surveying all types of enterprises, irrespective of their size, line of business, and financial turnover. The percentage distribution of the maximum use of CSR among the surveyed companies in each sector was most positive in the Logistics industry. Training and certification of employees are primarily one of the most important factors to ensure an increase in the success of those projects aimed at launching new products on the market; in the case of the surveyed sample, this is more than 40% of enterprises. Based on the sub-results, we can conclude that enterprises place more emphasis on new product development projects and the environmental concept of CSR. Still, the launch of new products or services is underestimated by the project management of enterprises. After more than eight years, the research has shown an increase in the importance of using social responsibility in management processes for new product development. A breakthrough finding is comparing the use of CSR in small businesses in Slovakia to global trends in which we perceive the dominance of multinational corporations. Enterprises are advised to focus specifically on new product launches and detailed planning.

This study inductively explores the interplay among different contractual functions and their impact on project performance in collaborative new product development (NPD) projects. Applying a configurational perspective, contracts are conceptualized as bundles of different functions. In line with the notion of discriminating alignment, an explicit distinction is made between different contextual settings in terms of innovation objectives (i.e., incremental versus radical) and relational embeddedness (i.e., presence versus absence of prior collaboration) in the exploration of the project performance implications of different contractual configurations. Fuzzy set qualitative comparative analyses on a sample of 125 collaborative NPD projects helped to generate propositions on the interplay between different contractual functions across different contextual settings. The results indicate that the contractual coordination function is an important function in achieving high project performance in collaborative NPD projects. However, the research findings demonstrate that it is not a sufficient condition and needs to be complemented with discrete safeguarding functions depending on the particular context. Together, these findings provide new insights into how particular combinations of contractual functions can help address the core governance challenges of collaborative NPD. They also point to the relevance of applying a configurational perspective to the study of the role of contracts in management research. Finally, they provide practitioners with specific recommendations concerning the design of contracts for collaborative NPD projects.

Towards an integrative framework of performance in product development projects