Using Principles of Just-in-Time to Improve New Product Development Process

Abstract

ABSTRACT Quick new product design and development is crucial for companies to be competitive in a global market. This article shows that the principles of just-in-time (JIT) in manufacturing can be used to improve new product development (NPD) process. Analysis and comparison of key factors show a high degree of consistency between traditional manufacturing and sequential NPD. Likewise, comparison of the same factors shows remarkable similarities between JIT manufacturing and simultaneous engineering. Statistical results indicate that compared with traditional organizations, companies who adopted JIT principles developed new products with 61 percent better quality, 52 percent less development time, 38 percentage less development cost, and 33 percent less manufacturing cost. Also, frequency of new product introduction for JIT organizations is 71 percenta faster than the traditional companies. Five tests of hypotheses were conducted to test the statistical significance of NPD performances before and after JIT implementation. The data from 51organizations strongly support the hypotheses. The P-value for all five tests is less than 0.05 percent. Key words: New Product Development, JIT INTRODUCTION In today's global market, price, quality, and manufacturing speed are not sufficient to stay ahead of competition once the product reaches the maturity stage of its life cycle. World class manufacturers understand that to sustain their competitiveness in the market, in addition to price, quality, and manufacturing speed, they must develop competencies to innovate, design, and introduce new products to the market quickly. Creating new product ideas that are consistent with organizational strategy, and moving these ideas through the stages of design, development, and introduction quickly has been the hallmark of successful world class organizations (Bebb, 1989; Chase, Aquilano, and Jacobs, 2001; Towner, 1994). Introducing new products to the market ahead of competition has several strategic and operational advantages. It often means charging premium price, building name recognition, controlling a large market share, and enjoying the bottom line profit. Better competitive position in the market makes it also difficult for competition to enter the market (Blackburn, 1991; Bayus, 1997; Cooper and Kleinschmidt, 1994; Crawford, 1992; Franza and Lucas, 2000; Zahra and Ellor, 1993). Who are the market leaders in introducing new products to the market fast? During the last two decades, through their JIT systems, world class manufacturers have dominated their competitors not only in the areas of price, quality, and manufacturing speed but also in new product development speed and quick commercialization of new technologies (Bebb, 1989; Dumaine, 1989a & b; Blackburn, 1991; Clark and Fujimoto, 1991; Ulrich and Eppinger, 2000). To understand the relationships between JIT manufacturing and simultaneous NPD process, let's briefly review the principles of JIT systems. Just-in-Time (JIT) has been a great force in the world of manufacturing since the early 1980's. Some of the main benefits of JIT in the area of manufacturing such as inventory reduction, lead-time reduction, quality improvement, and cost savings have been well documented (Billesbach, 1991; Cook and Rogowski, 1996; Hobbs, 1994; Inman and Mehra, 1990; Payne, 1993; Temponi and Pandya, 1995; White, 1993; Deshpande and Golhar, 1995; Handfleld, 1993; Lawrence and Hottenstein, 1995; Golhar, Stamm, and Smith, 1990; Moras and Dieck, 1992; Sohal and Howard, 1987; Schoenberger, 1986). In the simplest form, JIT requires of the right parts in the right quantities and at the right times. The core component of a JIT system is based on two fundamental principles: elimination of waste and respect for people (Chase, Aquilano, and Jacobs, 2001; Hobbs, 1994; Payne, 1993; Wantuck, 1983). Waste as defined by Toyota's Fujio Cho, is anything other than the minimum amount of equipment, materials, parts, and workers, which are absolutely essential to production (Suzaki, 1987). …

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