Performance and Time-to-Market: Accelerating Cycle Time with Overlapping Stages
IEEE Transactions on Engineering Management, Vol. 47, No. 2, pp. 232-244, May 2000
Posted: 4 Apr 2006
Windows of opportunity and product life cycles have been shortening in recent years, placing pressure on firms to stay competitive. Many firms have responded to this pressure by setting goals of reducing new product development (NPD) cycle time and/or improving product performance, often by setting up fuzzy gates between stages, cross-functional teams, or both. This study examines the tradeoff between product performance and time to market, focusing on the effect of overlapping stages during which marketing, design, and manufacturing engineering are jointly working on performance improvement. An NPD process model comprising a design stage, a process stage, and an intermediary overlap stage representing the interaction between design and process personnel is developed. Key findings include the following. 1) Overlapping stages reduces time to market, but the marginal returns to lengthening the overlap stage yield progressively smaller improvements in time to market. 2) The longer the market window is open, the less is the pressure to rush the product to market, and product performance can be further improved by leaving the product longer in development. 3) It is better to keep the product longer in development rather than accelerate time to market if the base product performance is low. 4) If the productivity of the overlap stage is increased, it is more profitable to keep the product in development longer and boost product performance at launch than to rush the product to market quicker. 5) The greater the market power the firm possesses, the faster it should bring the product to market, as long as product performance and sustainability of market power are not substantially reduced. A set of propositions is derived from the model, and is tested in a small-scale empirical study on firms in the automobile and automotive supply industry. The results are largely supportive of the propositions. Management implications and recommendations for further research are presented.
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