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New Product Cycle Time Reduction. Bart Gourley Supply Chain Fall 2005. Introduction. Products follow a life cycle products can be manufactured goods or services Competition in the market is forcing a decrease in new product time-to-market

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New product cycle time reduction l.jpg

New Product Cycle Time Reduction

Bart Gourley

Supply Chain Fall 2005


Introduction l.jpg
Introduction

  • Products follow a life cycle

    • products can be manufactured goods or services

  • Competition in the market is forcing a decrease in new product time-to-market

  • The time between the inception of product idea and its instantiation is the new product development (NPD) cycle time (CT).

NP CT Reduction


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Introduction (cont.)

  • Benefits of a shorter NDP CTs

    • Increased competitive advantage from faster response time to market demands

    • Increased profits from premium product prices

    • Increased organization effectiveness and productivity from improved cross functional communication

NP CT Reduction


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Introduction (cont.)

  • Challenges to NDP CT reduction

    • Process and organization strategy alignment

    • Organization acceptance of new NDP processes

    • Present organization skill sets

NP CT Reduction


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Outline

  • Tool-Defined

  • Tool Use-What NPD organization problems can this tool help solve?

  • Tool Applied-Nuts and Bolts

  • Tool-Why the tool works

NP CT Reduction


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Outline (cont.)

  • Tool Example- Real World Example

  • Tool-Exercise

  • Summary

  • Research Sources

NP CT Reduction


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Tool-Defined

  • Nine NPD CT reduction approaches

    • Supplier involvement

    • Lead user involvement

    • Speeding up activities & tasks

    • Reduction of parts and components

    • Training and rewarding employees

    • Implementation of support systems and technique

NP CT Reduction


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Tool-Defined (cont.)

  • Nine NPD CT reduction approaches (cont.)

    • Stimulating inter-functional cooperation

    • Emphasis on customer

    • Simplification of organizational structure

NP CT Reduction


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Tool-Defined (cont.)

  • Two benefits linked to the application of NPD CT reduction approaches are:

    • Increased product development speed

    • Increased product profitability

NP CT Reduction


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Tool Use- What NPD organization problems can this tool help solve?

  • NPD is slowed by difficulty in creating product designs that suppliers can produce

  • New products are meeting target profit margins

  • New products are meeting target profit margins

  • NPD is slowed by excessive development steps administration overhead, and production controls

NP CT Reduction


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Tool Applied solve?

  • The systematic steps to applying a NPD CT reduction approach are as follows:

    • Identify current problems affecting NPD CT

    • Identify which NPD CT reduction approach(es) best address(es) the step 1 problems

    • Develop a tactical plan to improve the problems based on the NPD CT reduction approach(es)

    • Monitor the results of the effort

NP CT Reduction


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Tool- Why the Tool Works solve?

  • Primary reason

    • Addresses communication

    • Addresses coordination

    • Affects development speed and cost

  • Secondary reason

    • Can be used to meet organization strategic goals

NP CT Reduction


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Armstrong World Industries solve?

Global leader in the design and manufacturing of floor ceilings and cabinets

Business units located worldwide that include 30+ project teams and 42 plants

Tool-Real World Example

NP CT Reduction


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Tool-Real World Example (cont.) solve?

  • In terms of NPD process, Armstrong’s management faced three major challenges:

    • Enforcing a standardized process,

    • Managing resources, and

    • Streamlining the current NPD process.

NP CT Reduction


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Tool-Real World Example (cont.) solve?

  • Armstrong chose the following NPD CT reduction approaches:

    • Implement a support system

    • Stimulate inter-functional cooperation

    • Simplify the organization structure

NP CT Reduction


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Tool-Real World Example (cont.) solve?

  • Tactical plan for NPD CT reduction approaches

    • Implement Clarity

      • A repository where NPD information could be stored and shared

      • A standard process methodology across the various business units

      • A resource management tool among all firm activities

NP CT Reduction


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Tool-Real World Example (cont.) solve?

  • Results of the tactical plan for NPD CT reduction approaches

    • Reduced is NPD Cycle time by half

    • Standardized and streamlined its NPD process

    • Increase the available information on resource usage and thereby management’s ability to management resources

    • Increased Armstrong’s responsiveness to customer demand

NP CT Reduction


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Tool-Exercise solve?

X5 is a global accounting firm. X5 has 40,000 employees spread across 90 business units. Each business unit is responsible for a geographic area. The work of each business unit is consistent across all units and consists of financial audits. When a global client is audited, many different business units are involved in the audit of sites located in their geographic region.

NP CT Reduction


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Tool-Exercise (cont.) solve?

  • X5 management faces several problems, some of which are:

    • Coordinating cross-business unit efforts

    • Communicating audit finding to the multi-business unit audit engagement team

    • Determining the total audit cost

NP CT Reduction


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The executive management of X5 would like to improve business unit cooperation and better track cross-business unit audit costs.

Tool-Exercise (cont.)

NP CT Reduction


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Tool-Exercise (cont.) business unit cooperation and better track cross-business unit audit costs.

  • Using the NPD CT reduction approaches, answer the following questions:

    • What approaches can be used to address X5’s problems?

    • How can the approaches be applied?

NP CT Reduction


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Summary business unit cooperation and better track cross-business unit audit costs.

  • NDP CT reduction efforts often involve more than one approach.

  • Any approach alone will not necessarily reduce CT. Instead, an approach with a tactical plan to address a NPD problem will reduce CT.

NP CT Reduction


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Summary (cont.) business unit cooperation and better track cross-business unit audit costs.

  • NPD CT reduction approaches can be applied to both manufacturing and service firm environments.

  • The key to any approach’s success is determined by how well the tactical plan addresses the identified problem and the end reduction in CT.

NP CT Reduction


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Research Sources business unit cooperation and better track cross-business unit audit costs.

Datar, Srikant; Jordan, Clark; Kekre, Sunder; Rajiv, Surendra; Srinivasan, Kannan.New Product Developm Strutures and Time-to-Market, Management Science, Vol. 43, No.4, Frontier Research in Manufacturing and Logistics (Apr., 1997), 452-464.

Ittner, Christopher D.Product Development Cycle Time and Organizational Performance, Journal of Marketing Research, Vol. 34, No.1, Special Issue on Innovation and New Products (Feb., 1997), 13-23

NP CT Reduction


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Research Sources (cont.) business unit cooperation and better track cross-business unit audit costs.

Langerak, Fred and Hultink, Erick Jan.The Impact of New Product Development Acceleration Approaches on Speed and Profitability: Lessons for Pioneers and Fast Followers, IEEE Transactions on Engineering Management, Vol. 52, No.1 February 2005

Montgomery, Frank Hull.A Composite Model of Product Development Effectiveness: Application to Services, IEEE Transactions on Engineering Management, Vol. 51, No.2 May 2004

NP CT Reduction


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Research Sources (cont.) business unit cooperation and better track cross-business unit audit costs.

Young, Mark.Case Study: Turning “Ideas into Reality”, Chief Project Officer, http://www.chiefprojectofficer.com/article/144

NP CT Reduction