Evaluating new product development performance in small to medium sized manufacturing firms

The purpose of the research undertaken for this thesis was to examine management practices relating to new product development processes in small to medium-sized manufacturing firms (SMEs). The thesis topic has its origins in a European Community funded research project carried out during 1997-9 and designated CIMA (Continuous Improvement in Global Innovation Management) ESPRIT project 26056. The CIMA project had as its objective the development, testing and dissemination of a methodology to support knowledge transfer in the product innovation process. The CIMA model suggested a relationship between management behaviours and performance outcomes that used literature from a variety of research areas including continuous improvement, product innovation, performance measurement, and inter-project learning. This literature was centred largely on research undertaken in large organisations, with little information available on the new product development (NPD) practices in SMEs. This thesis sought to examine the management of NPD activities in SMEs across a range of important variables as identified in larger organisations in an effort to evaluate whether they were as relevant in smaller organisations. The literature review reduced the research to four broad questions: 1.what is the relationship between a business unit’s competitive strategy and its new product development strategy, 2.how management involvement in improving NPD performance, 3.does a more systematic approach to management of NPD projects would lead to better outcomes, and finally 4.how new product development performance is measured in SMEs. A two-stage, field based research methodology was used to gather data for this thesis. Firstly, a quantitative survey instrument was used to collect data across a broad range of variables. The data thus gathered were supported by a subsequent set of interviews in three SMEs that. In each of these firms, employees from the broad functional areas of sales, operations, and design, were interviewed to gain a greater understanding of the issues that might emerge in the quantitative survey. Thematic analysis was used to examine the qualitative data. Descriptive statistics, in the main were used to evaluate the quantitative data. Findings relevant to each of the research questions provide valuable insights into NPD practices in SMEs. For instance, strategies tend to be hazy, and have a short term emphasis. The qualitative interviews in particular showed a lack of certainty and direction when it came to strategy. With regard to management involvement, there was more emphasis on individual effort rather than team-based activities. Managers tended not to look for external sources to improve their NPD performance. The approach taken in managing NPD activities, whether it was systematic or informal, did not appear to affect innovativeness, though it did appear to impact other variables such as time-to-market. Finally, performance measurement in SMEs tended to emphasise cost outcomes as opposed to variables critical to customers such as conformance quality or time-to-market. Further, outcomes in those performance dimensions did not appear to influence future strategy or actions within the organisations. A detailed review of the data is provided in chapters five, six and seven