An exploration of the pre-development phase of new product development in New Zealand manufacturing small and medium enterprises : a thesis presented in partial fulfilment of the requirements for the degree of Master of Engineering in Product Development at Massey University, Auckland, New Zealand
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Date
2008
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Massey University
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Abstract
Developing successful new products in New Zealand Small and Medium Enterprises
(SMEs) is difficult due to several factors. These include greater expectations, new
technology, reduced product lifecycles, high project failure rates, and the pressures
from competition. This presents a significant challenge for a product development
team as it leaves companies searching for opportunities to gain an advantage in the
market place.
The low level of research performed in relation to SMEs over the past number of
years, especially in the field of New Product Development (NPD), has resulted in an
increase in interest by practitioners and academics.
This research was aimed at exploring the pre-development phase currently employed
by SMEs within the New Zealand manufacturing industry. The purpose was to gauge
the understanding and importance of this early stage in NPD amongst practitioners
from these SMEs, as the literature highlighted this as an area of weakness requiring
empirical research. Specifically, the objectives set for this research investigation were
to survey manufacturing SMEs in New Zealand, compare the findings with past and
current research on a national and international level, and make conclusions in
relation to:
• The nature and complexity of the pre-development activities performed by
New Zealand manufacturing SMEs.
• The difficulties and/or limitations New Zealand manufacturing SMEs
encounter whilst implementing the pre-development activities.
• The importance of and attitude towards the pre-development phase with
regards to the overall NPD process and the company’s product
development efforts.
The study consisted of a questionnaire survey, run during June and July 2007 with
twenty-two SMEs representing the light engineering/manufacturing, electronics, and
food industry sectors. The questionnaire survey was followed up with one-on-one
interviews with some of the participating companies allowing for both quantitative
and qualitative data to be obtained.
The research investigation found that the difficulties in carrying out the five predevelopment
activities studied were common, compounded by the lack of skills inhouse
to do so. Of the five pre-development activities studied, the preliminary
technical analysis was found to be given the most attention by the companies with
regard to overall project time, with lesser emphasis placed on the other four activities.
Many of the companies developed ‘new to the world’ products or entered new
markets with existing products where they primarily took part in the business-tobusiness
market. Good relationships existed between the manufacturing SMEs and
their suppliers, distributors and customers.
Management were found to have a high level of involvement in product planning, as
they tend to be involved in key decision making in NPD in SMEs. Many of the
companies had difficulty when it came to identifying opportunities and customer
needs, with the addition of numerous barriers limiting the implementation of NPD.
The greatest difficulties arose during the practical implementation of tools and
techniques due to several challenges, such as limited budgets, lack of time and
resources as well as incompatibility within the existing company culture.
Clearly, the pre-development phase is the basis for the remainder of the NPD process
with essential development decisions being made here. This phase is therefore crucial
in determining the likely outcome of NPD projects. The research findings suggested
that greater consideration and effort should be placed on the pre-development phase,
even more so with the cost increasing exponentially when mistakes are made later in
development. The study highlighted the need to improve the tools and techniques
available for use during the pre-development phase, as companies are aware of its
importance but find it the most difficult to undertake. High new product failure rates;
over-expenditure of project time; lack of awareness, commitment, and formality; and
the high level of difficulty experienced by the New Zealand SMEs studied, suggests
there is a need for the implementation of better tools and techniques during the predevelopment
phase to aid successful NPD in New Zealand manufacturing SMEs.
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Keywords
New product development, SMEs, Pre-development activities, Product planning