Impact of new product development (NPD) proficiency and NPD entry strategies on product quality and risk

Abstract

This research explores the variation of new product quality and risk associated with New Product Development (NPD) entry strategies (e.g. in‐house developments and joint ventures). Our first two research questions examine the quality of new products and the variation of risk across five NPD entry strategies. Our third and fourth research questions investigate the association of the proficiency with which NPD technical activities are performed with new product quality and the risk involved in developing new products. Our final two research questions explore whether the type of NPD entry strategy mediates the association between the proficiency with which NPD technical activities are performed and the quality and risk associated with the development of new products. Our study focuses on new products developed by three major industries, namely medical devices, electrical equipment, and heavy construction equipment. Our research suggests that there is no difference in the quality or the risk associated with the development of new products across NPD entry strategies. We also found that new product quality was associated with the proficient performance of many NPD technical activities whereas risk was associated with the proficient performance of fewer NPD technical activities. We found that choice of NPD entry strategy mediates the relationship between new product quality and NPD technical activity proficiency. Unlike product quality, NPD entry strategy selection appears to mediate NPD risk minimally. Our study contributes to NPD knowledge and managerial decision making by pointing out that the technical activities performed during the early stages of the NPD process are important to the attainment of a quality product and positively, not negatively, associated with perceived NPD risk. Additionally, our study extends knowledge of the association between proficiently performed NPD technical activities and the resultant product quality and perceived risk felt when individual NPD entry strategies are implemented.

The impact of organizational culture on Concurrent Engineering, Design-for-Safety, and product safety performance

“…A well-defined, high-quality NPD process is generally recognized as a critical success factor for product success (Cooper et al, 2004;Montoya-Weiss & Calantone, 1994) and product quality (Calantone & Benedetto, 1988;Millson & Wilemon, 2008;. However, whether the use of certain technical activities and methodologies in the NPD process affects product quality positively is less clear.…”

“…Design-for-Safety encompasses the NPD process and the safety management tools and methodologies used in new product development, and it has a positive causal relationship with product quality (Calantone & Benedetto, 1988;Millson & Wilemon, 2008;Song & Parry, 1997). Page 15 Safety practitioners have suggested that the issue of product safety should be addressed in parallel with the design process; however, much of the literature lacks an integrated view of product safety management methodologies and tools in the NPD process.…”

“…However, whether the use of certain technical activities and methodologies in the NPD process affects product quality positively is less clear. According to Calantone and Benedetto (1988), product quality is influenced by technical activities such as preliminary engineering, technical and manufacturing review, prototyping, in-house product testing and trial production, and, as Millson and Wilemon (2008) asserted, especially by technical activities in the early stages of the NPD process. Fynes and De Búrca (2005) found that design quality has an impact on conformance quality, product cost, external quality-in-use, and time-to-market.…”

“…Only a handful of studies on NPD include product safety when measuring product quality (Koufteros et al, 2001, Page 3 2002; Koufteros & Marcoulides, 2006;Sethi, 2000). Product safety has never been included as an independent variable, and product safety management practices and tools are not explicitly explored in any of the studies on NPD and product quality (Calantone & Benedetto, 1988;McDonough, 2000;Millson & Wilemon, 2008;Rusinko, 1997;Song & Parry, 1997;Tatikonda & Montoya-Weiss, 2001), although some (e.g., Fynes & De Búrca, 2005) have considered conformance quality (design quality, conformance quality, external quality-in-use, product cost, time-to-market and customer satisfaction) and customer complaints as measures of product quality performance.…”

Learning Quality Management for Ships’ Upkeep and Repair Environment

“…Proficiency and concentration on the end product and those involved, supported by learning or effectiveness of training is the way forward to learn quality management in organisational learning performance. Millson and Wilemon, (2008) hypothesised that, 'increased technical proficiency leads to increased new product quality' in new product development. This hypothesis was statistically supported by a statement which states that proficiency performance is significantly associated with new product quality (Millson & Wilemon, 2008).…”