The Quick-Fix Effect: Understanding the Role of Mean Time between Failures on the Related Reliability of Subsequent New Products

48 Pages Posted: 2 Jan 2016

See all articles by Manpreet Hora

Manpreet Hora

Georgia Institute of Technology; Georgia Institute of Technology - Scheller College of Business

David Maslach

University of Western Ontario - Richard Ivey School of Business

Date Written: December 31, 2015

Abstract

Much evidence documents the high failure rates of new product introductions. Some of these product failures can provide opportunities for learning and improvement of subsequent products. In this study, we examine the role of mean time between product failures and their influence on subsequent product introductions and their related reliability. Our panel data analysis of 136 firms from 1998 to 2012 in the medical devices industry provides evidence of myopia in learning from failures that happen too close-in-time. There are two parts to what we call the quick-fix effect in new product development. First, firms have a greater probability of introducing a new product when they experience a low mean time between product failures (MTBF) than a high MTBF. However, there is also a greater probability of introducing a new product when the MTBF reaches a certain inflection point. Second, the related reliability of future new product development activities is contingent on this past MTBF. We believe the findings suggest that fast innovation and short-cycle times in product development can lead to chronic quality and operational problems if firms do not afford enough time to fix the underlying causes to the failures.

Keywords: mean time between failure, learning, new product development, medical devices

Suggested Citation

Hora, Manpreet and Maslach, David, The Quick-Fix Effect: Understanding the Role of Mean Time between Failures on the Related Reliability of Subsequent New Products (December 31, 2015). Georgia Tech Scheller College of Business Research Paper No. #33, Available at SSRN: https://ssrn.com/abstract=2709639 or http://dx.doi.org/10.2139/ssrn.2709639

Manpreet Hora (Contact Author)

Georgia Institute of Technology ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

David Maslach

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

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