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A Study of New Product Development Management Using Project Management Method

A Study of New Product Development Management Using Project Management Method

StudentJun - Ren Chiu

AdvisorRen Hong Huang

A Thesis

Submitted to Master Program of Management Science

College of Management

National Chiao Tung University

in partial Fulfillment of the Requirements

for the Degree of

Master of Business Administration

In

Management Science

June 2005 Hsinchu, Taiwan, Republic of China

i

ii

A Study of New Product Development Management Using Project Management Method

studentJun - Ren Chiu AdvisorsDr. Ren Hong Huang

Master Program of Management Science National Chiao Tung University

ABSTRACT New product development is one of the most important strategies that company

implemented for creating enterprise value. Facing the globalization trend, Taiwan industries must gradually upgrade their capabilities of new products development to compete with the international companies. Phasing rapid changing and dynamic environments, local industries have no choices but to conduct new product development through innovation to enhance product added value and create profits. Its the only way enterprise to sustain a leading position in this overwhelmingly competitive field.

There are so many companies with good concept of product innovation. These companies are abundant in funds and own a team of research and develop with highly educated engineers. Some of them also earned a big order from their customer. However they still cannot make any profit from these new products. Whats the real problem with these companiesFrom our research, we found this is the result of the poor management of the new product development process. The study proposes a systematic approach of project management to facilitate companies to manage the new product development process. From the view of project manager, try to use the framework of project management and the project management body of knowledge to upgrade and enhance the performance of the new product development.

A successful new product development management should to simultaneously consider the corporate internal, external environment and the properties of the project, to fit with the resources, technology as well as the systematically feedback using the project management method. The research expects to reinforce the management of new product development process through using project management method. It first collects and organizes the literatures of project management and to establish its framework. Then the research defines a new product and to introduce the category of the new product. By conferring the case to study the application of new product development management using project management method. Finally, propose a conceptual diagram and a flowchart for managing a new product project.

KeywordsProject management, New product, New product development

iii

iv

ii iii iv v ix x

1

1.1 ...........................................................................................................1

1.2 ...........................................................................................................2

1.3 ...........................................................................................................2

1.4 ...........................................................................................................3

4

2.1 ...........................................................................................................4 2.1.1 .......................................................................................4 2.1.2 .......................................................................................4 2.1.3 ...............................................................................5 2.1.4 ...............................................................5

2.2 ...........................................................................6 2.2.1 ...................................................................................6 2.2.2 ...................................................................................6 2.2.3 ...................................................................................7

2.3 .......................................................................................................8 2.3.1 ...................................................................................8 2.3.2 ...................................................................................9

v

2.3.3 ...........................................................................9

11

3.1 .........................................................................................................11

3.2 .........................................................................................................12

15

4.1 .................................................................................................15 4.1.1 .................................................................................15 4.1.2 .................................................................................17 4.1.3 .....................................................................18 4.1.4 .....................................................................19

4.2 .................................................................................................19

4.3 .................................................................................19 4.3.1 .................................................................................20 4.3.2 .................................................................................22 4.3.3 .................................................................................23 4.3.4 .................................................................................23 4.3.5 .................................................................................24 4.3.6 .................................................................................26

4.4 .....................................................................................27 4.4.1 .....................................................................27 4.4.2 .....................................................................28

4.5 .................................................................................................29 4.5.1 .............................................................................29 4.5.2 .....................................................................29

4.6 .................................................................................31

4.7 .........................................................................31

vi

34

5.1 .........................................................................................................34

5.2 .....................................................................36 5.2.1 .................................................................36 5.2.2 .........................................................................................36 5.2.3 .............................................................................37 5.2.4 .....................................................................37 5.2.5 .....................................................................37

5.3 .............................................................................38 5.3.1 .........................................................................................38 5.3.2 .........................................................................................39 5.3.3 .........................................................................................40 5.3.4 .........................................................................................40 5.3.5 .........................................................................................41 5.3.6 .........................................................................................42 5.3.7 .........................................................................................42 5.3.8 .........................................................................................43

5.4 .....................................................................44 5.4.1 .........................................................................................44 5.4.2 .........................................................................................46 5.4.3 .........................................................................................52 5.4.4 .................................................................................54 5.4.5 .................................................................................58 5.4.6 .................................................................................60 5.4.7 .................................................................................62

5.5 .....................................................................63 5.5.1 .................................................................63 5.5.2 .................................................................64 5.5.3 .................................................................65 5.5.4 .....................................................................................65

5.6 .........................................................................................................66

vii

68

6.1 .............................................68

6.2 .............................69

71

7.1 .................................................................................................................71

7.2 .................................................................................................................71

7.3 .................................................................................................72

73

75

viii

1 .........................................................16 2 .....................................................16 3 A .................................................................22 4 A .................................................................23 5 A .................................................................24 6 A .................................................................25 7 A .................................................................25 8 A .................................................................26 9 A .....................................................................27 10 A .....................................................................28 11 .........................................................35 12 .........................................................................................57 13 .....................................................67

ix

1 ...............................................................................................6 2 ...............................................................................................7 3 ...............................................................................................8 4 .....................................................................................................14 5 .................................................................................17 6 A .....................................................................18 7 A .....................................................................19 8 .....................................................................................30 9 A .....................................................................31 10 .................................................................................................45 11 .....................................48 12 .....................................................................................................49 13 .................................................................................51 14 .................................................................................54 15 .....................................................................................55 16 .................................................................................................56 17 .....................................................................................59 18 .....................................................................................61 19 .................................................................................63 20 .....................................................................66 21 .....................................................68 22 .........................................70

x

1

1.1

[6]1

2

3

60

2

1.2

1.3

3

1.4

1.

2.

3. 4.

4

2.1 2.2 2.3

2.1

2.1.1

Newman, Warren, McGill1987[38]

performance capabilitylife cycleideadesignengineeringmanufacturingconstructionProject Management Institute PMI[39]A project is a temporary endeavor undertaking to create a unique product or service[40]Finite

2.1.2

[40]123

45

5

2.1.3

Paul O. Gaddis1959[26]Cleland & King 1983[17](Project Management Institute, PMI) (PMBOK Guide)[10]

(Stakeholder)(1)(2) (Stakeholder)(3)James P. Lewis (1998) [21]

2.1.4

Thamhain, Wilemon1982[19](Human skills and competence)

James, Gray, Joseph1996[20](Critical Success Factors; CSF)(timing)

(troubleshooting activities)1997[2]12345Robert K. Duke1997[30]

6

2.2

2.2.1

(Project Management Institute, PMI)(PMBOK Guide)NewApproveReleaseFrozenDeleteScrapJames P. Lewis (1995) [22]

12

3

1

2.2.2

93 [8]

: ES : CS : PP :

1 93 [10]

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2.2.3

. 87 [5]

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93 [8] 3

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2 93 [10]

8

2.3

2.3.1

Sampson1970[32] 84 [3]

84 [3]Souder1988[33]

84 [12]Trott1998[27]

3() . 87 [5]

9

2.3.2

Crawford1997[16]brand new productupgradecost reductioncustomizationBoozAllen Hamilton1982[13]1New to the world products2New product lines3Additions to existing lines4Improvements and revisions to existing products5Repositioning6Cost reductionsClark & Wheelwright1993[37]

2.3.3

92 [4]1

2

34

56

Cooper1993[15]Product Life Cycle12

10

3

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56

7

[1]

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3.1

[9]

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4.3.4 Design Verification Test Stage, DVT

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( BOM )

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4.3.5 Manufacture Verification Test Stage, MVT

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25

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4.3.6 Production Verification Test Stage, PVT

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Exit meeting

4.4.1

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U: results in an Unsalable or Unproducible product not accepted by any customer D:

results in a product which is salable or producible with Difficulties, i.e. not accepted

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from a customer 4 3 2 1

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29

4.5 Engineering Change Notice Management

4.5.1

1

2

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4.5.2

Engineering Change Request, ECREngineering Change Notice, ECN

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Reject

Approve

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5.1 Organization Design

FunctionalProjectized

A Functional Organization Structure

B. Projectized Organization Structure

35

C. Weak Matrix Organization Structure

CoordinatorExpediter

D. Strong Matrix Organization Structure

E. Balanced Matrix Organization Structure

11([10])

(Week) (Balanced) (Strong)

0% 0 - 25% 15 - 60% 50 - 95% 85 - 100%

/

/

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(Matrix)

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5.2

5.2.1

//

[14]

5.2.2

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37

5.2.3

90 [18]

5.2.4

5.2.5

38

5.3

Project integration management

a

WBSb

c

Primarily Integrative

1. Project Plan Development

2. Project Plan Execution

3. Integrated Change Control

abc

, 2000 Edition

5.3.1 Scope Management

39

WBSWork Breakdown Structure

WBS

5.3.2 Time Management

1. Activity Definition WBSWork Breakdown Structure

2. Activity Sequencing

3. Activity Duration Estimating

40

4. Schedule Development

5. Schedule Controla

bc

5.3.3 Cost Management

1. Resource Planning

2. Cost Estimating

3. Cost Budgeting

4. Cost Controla

bc

5.3.4 Quality Management

41

1. Quality Planning

2. Quality Assurance

3. Quality Control

5.3.5 Resource Management

WBS

WBS

WBS

1. Resource Planning

2. Resource Acquisition

42

3. Resource Controla

bc

5.3.6 Communications Management

1. Communications Planning

2. Information Distribution

3. Performance Reporting

4. Administrative Closure

5.3.7 Risk Management

43

1. Risk Management Planning

2. Risk Identification

Iterative

3. Qualitative Risk Analysis

4. Quantitative Risk Analysis

5. Risk Response Planning

6. Risk Monitoring and Control

5.3.8 Procurement Management

44

1. Procurement Planning

2. Solicitation Planning

3. SolicitationQuotationsBidsOffersProposals

4. Source Selection

5. Contract Administration

6. Contract Close-out

5.4

5.4.1 Project Communication

45

A.

10 1234567

B.

1. 1

10 Stephen P. Robbins 93 [36]

46

2

3

2.

3. 1

2

3

4. 1

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group

47

[36]

1

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B.

Leadership

[7]123

1. Autocratic leadership

48

2. Participative leadership

3. Consultative leadership

4. Democratic leadership

5. Free-rein leadership

,

/

/ /

/

11 . 87 [5]

49

Situational leadershipreadiness

Paul HerseyKenneth Blanchard[24] 12

R1 R2 R3 R4

R1

R1 R2 R2

R2 R3

R 4 R 3 R 2 R 1

R 4 R 1

R 3 R 2

12 ( Stephen P. Robbins Management7th edition)[34]

50

R4 R4

R4 R4

C.

1

2

3

4

5

51

6

13 1

2

13 Stephen P. Robbins 93 [36]

52

3

4

5

6

7

5.4.3 Conflict Management

Constructive Conflict

Negative ConflictConflict Management[35]

53

A.

1

2345

67

B.

1Avoidance

2Forcing

3Accommodation

4Compromise

5Collaboration

14

54

5.4.4 Project Schedule Control

1234 15

14 Stephen P. Robbins 93 [36]

55

A.

N o

Y e s

15 93 [8]

56

16

B.

W 1 W 2 W 3 W 4 W 5 W 6 W 7 W 8 W 9 W 10 W 11 W 12 W 13 W 14

Kick o ff meeting 5

Team member list 5

Key parts vendors selection 5

M ask tape out 15

EE draw ing 20

O M draw ing 20

D RB meeting 5

M aterial preparation 25

machine teaching 5

trial run 5

test report 5

documents 5

EV T exit meeting 5

1

2

3

16 ( )

57

Bentley1976[25] 12

12 Philip BentleyInformation, Communication and the Paperwork Explosion1976[25]

/

58

5.4.5 Project Quality Control

A.

1quality policy

2quality objective

3quality assurance

4quality control

5quality audit6quality plan WBS [23]

B.

quality function deployment, QFD 1972

59

Toyota QFD 17 QFD

123engineering characteristics

45target values6 QFD12 QFD

17 86 [2]

60

34

123

5.4.6 Project Cost Control

A.

1234 18

B.

Earned ValueEV[21] EV

1. schedule performance index, SPI 2. cost performance index, CPI 3. budged cost for work performed, BCWP

4. budged cost for work scheduled, BCWS

5. actual cost for work performed, ACWP

61

SPI = BCWSBCWP

CPI = ACWPBCWP

100% 100% 100 90 0.9 SPI CPI critical ratio,

No

Yes

WBS

/

18 93 [8]

62

CR

CR = SPI SPI

1.0 1.0 CPI SPI CR 1.0

5.4.7 Project Document Management

A.

1

2EVTDVTMVTPVT 3

456

78

B.

19

63

A

5.5

5.5.1

1

19

64

2

3

5.5.2

[29]

65

1.

2.

exit meeting

5.5.3

Project transfer

5.5.4

1

2

66

3

4

5.6

20

13

Approve

Reject Reject

Reject

ApproveApprove

New

Approve

Release

Frozen

Delete

Scrap

Star

End

20

67

13

,,,,

1.,,,,

2.,

,

1.,

2.,3.,,

4.

1.,,2.,

3.

WBS,,

,

1.2.

3.

1.,2.

,

68

6.1

21

21

69

6.2

22

70

22

71

7.1

7.2

72

7.3

73

[1] 91 [2] 86 [3] 84 [4] 92 [5] . 87 [6] 83 [7] 82 [8] 93 [9] N

89 [10]

93 [11]

90 [12] 79 P83~ P108 [13] Booz, Allen, HamiltonNew Products Management for the 1980sNew York1982 [14] Charles W.L.Hill & Gareth R.Jones

88 [15] Cooper, R. G. and E.J Kleinschmidt" Uncover the Keys to New Product Success"

Engineering Management Reviewpp. 5-181993 [16] Crawford C.M.New Product ManagementIRWINNew York1997 [17] David I. Cleland & William Richard KingSystem Analysis and Project Management

Mcgraw-Hill college; 3rd edition1983 [18] Dennis Lock .

90 [19] H. J. Thamhain and D. L. Wilemon"Developing Project/ Program Managers"

Proceedings, PMI Seminar/ SymposiumToronto, Ontario, P II-B2October 1982 [20] James J. Jiang, Gray Klein & Joseph Balloun"Ranking of System Implementation

Success Factors"Project Management Journalpp. 49-53December 1996 [21] James P. LewisMastering Project Management New YorkMcGraw-Hill Companies.

Inc1998 [22] James P. LewisProject Planning, Scheduling, and ControlNew YorkMcGraw-Hill

Companies. Inc1995 [23] John Hauser" House of Quality"Harvard Business ReviewMay.- Jun.pp. 63-73

74

1988 [24] P. Hersey and K.H. BlanchardManagement of Organizational Behavior : Utilizing

Human Resources,6th ed.Upper Saddle River, NJ : Prentice Hall1993 [25] Philip BentleyInformation, Communication and the Paperwork ExplosionLondon

McGraw-Hill1976 [26] Paul O. Gaddis"The Project Manager"Harvard Business Review, May.- Jun. 1959 [27] Paul TrottInnovation Management and New Product DevelopmentTrans-Atlantic

Publications July 1998 [28] Philip Kotler 89 [29] Robert G. Cooper " Stage-Gate SystemsA New Tool for Management New Products

"Business HorizonsMay.- Jun.pp. 44-541990 [30] Robert K. Duke,H. Frwderick Wohlsen, and Douglas R, Mitchell " Project

Management at Flour Utach, Inc."Project Management Quarterly, vol. 3pp. 3September 1977

[31] Robert K. YinCase Study Research : Design and MethodsSAGE Publications 3rd editionDecember 2002

[32] Sampson, P." Can Consumer Create New Products"Journal of the Marketing Research Society.Vol.12,No.1pp. 40-P521970

[33] Souder,W.E." Managing Relations Between R&D and Marketing in New Product Development Projects"Journal of product innovation management No.5pp. 6-191988

[34] Stephen P. RobbinsManagementPrentice-Hall International, Inc.7th edition2002 [35] Stephen P. Robbins 81 [36] Stephen P. Robbins 93 [37] Wheelwright, S. C. and K. B. Clark" Creating Project Plan to Focus Product

Development "Harvard Business Reviewpp. 70-83Mar.- Apr.1993 [38] William H. Newman, E. Kirby Warren, and Andrew R, McGillThe Process of

Management: Strategy, Action, Result Englewood Cliffs, NJ: Prentice Hall; 6th edition1987

[39] : http://www.pmi.org/info/default.asp [40] : http://www.npma.or

75

2004 / 11/ 02 2005 / 01/ 28 2005 / 02/ 17 2004 / 03/ 14 16

1. 2. 3. 4. 5. 1.

2.

3. 1

234ES5CS6

76

4.

//

5.

Exit meeting

6.

1)

2)

3)

4)

5)

6)