Millson, M.R. & Wilemon, D. (2006). Innovation in Heavy Construction Equipment Manufacturing: An Exploratory Study. International Journal of Innovation Management, 10(2), 127-161.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Fundamental

Annotation: The authors surveyed managers of heavy construction equipment firms in the US to determine the impact of organizational integration and proficiency of the new product development process on the success of new products in the marketplace. Their findings reveal that consumer involvement throughout the NPD process is essential to new product success. However, integration of suppliers in the NPD process often resulted in poorly performing new products. None of the findings related to NPD process proficiency were significant. It was also noted that quality test marketing and financial analyses activities were lacking among survey respondents.

Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees)

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

• A sample of measurement items for new product development proficiency and organizational integration are shared. All items are rated on a seven-point Likert scale. See tables within the text for actual measurement items.
  Survey of 45 firms in heavy construction industry.
  Occurrence of finding within the model: Stage 1, Stage 2, Stage 4, Stage 9

• New product success — Dimensions include degree to which a new product’s profits exceeded or fell short of expectations; degree to which sales exceeded or fell short of expectations; degree to which a new product provided an entry point into an existing market for a new line of products; degree to which a new product created a market that was new to the industry.
  Survey. Reported in Tables 1, 3 and 4 in the text; (see supporting literature in the next section).
  Occurrence of finding within the model: Gate 9, Step 9.3

Model: Foster a team approach to product development by including consumer involvement throughout the entire new product development process, including the post launch stages.
Survey.

• Detect problems early and communicate “fixes”
  Survey.
  Occurrence of finding within the model: Step 8.4

• Develop and offer training programs
  Survey.
  Occurrence of finding within the model: Step 8.1

• Consider durability and product quality of materials from suppliers
  Survey.
  Occurrence of finding within the model: Step 7.1

• Follow up on customer suggestions; conduct formal interviews, review warranty reports, conduct on-site meetings and product reviews
  Survey.
  Occurrence of finding within the model: Step 9.1

• Include consumers in Beta prototype testing activities
  Survey.
  Occurrence of finding within the model: Step 6.3, Step 6.1

• Have technical NPD team member present during sales presentations
  Survey.
  Occurrence of finding within the model: Step 8.1, Step 7.13

• Involve consumers in specifying customer product needs
  Survey. Significant correlations with (a) product success dimensions: profits and sales; and also (b) with post launch NPD stage proficiency. Spearman correlation coefficient, and p value [profits r=0.537 p=0.048; sales r=0.533 p=0.0498]
  Occurrence of finding within the model: Step 1.1

• Assign more than one financial staff member to the NPD team
  Survey.
  Occurrence of finding within the model: Step 3.1

• Involve consumers in product benchmarking and visits to view competitive products
  Survey. Significant correlations with (a) product success dimensions: profits and sales; and also (b) with post launch NPD stage proficiency. Spearman correlation coefficient, and p value [profits r=0.537 p=0.048; sales r=0.533 p=0.0498]
  Occurrence of finding within the model: Step 2.2

• Involve consumers in team creation
  Survey. Significant correlations with (a) product success dimensions: profits and sales; and also (b) with post launch NPD stage proficiency. Spearman correlation coefficient, and p value [profits r=0.537 p=0.048; sales r=0.533 p=0.0498]
  Occurrence of finding within the model: Step 3.1

• Pay particular attention to allocation of time for alpha and beta testing as well as test marketing of final products.
  Survey.
  Occurrence of finding within the model: Step 4.10

• Involve consumers in reviewing detailed design parameters
  Survey.
  Occurrence of finding within the model: Step 4.12

• Provide product requirements to suppliers, and obtain feedback from suppliers regarding interface and implementation of the supplied material
  Survey.
  Occurrence of finding within the model: Step 4.12

• Obtain early commitment from suppliers, establish clear definitions and expectations, understand suppliers’ alternatives
  Survey.
  Occurrence of finding within the model: Step 4.6

• Maintain contact and involvement with consumers
  Survey.
  Occurrence of finding within the model: Stage 4, Stage 8

• Be flexible with product pricing at launch
  Survey.
  Occurrence of finding within the model: Step 7.1

Barrier: External environmental factors that are not controllable by management — market dynamism, market hostility, market complexity (Miller and Friesen 1982)

Measure: Measures of Organizational Integration, NPD Proficiency and new product success (Price, 1972; Pinto & Pinto, 1991; Ruekert and Walker, 1987a, 1987b; Miller and Friesen, 1982; Souder, 1981.)
Occurrence of finding within the model: Stage 1, Stage 2, Stage 4, Stage 9, Gate 8, Gate 9

• 13 step sequence for NPD: Initial screening, preliminary market assessment, preliminary technical assessment, detailed market study/market research, business/financial analysis, product development, in house product testing, customer product tests, test market/local sell, trial production, pre-commercialization business analysis, product start-up and market launch (Cooper and Kleinschmidt, 1986)

• Sequence of NPD steps: New product strategy development, new product idea exploration, screening, business analysis, development, testing and commercialization (Booz et al 1968, 1982)

• Educating customers, avoiding “over-engineering”, performing market research (Hopkins 1980)
• Quality Function Deployment — considered a good tool for communication between Marketing, Engineering and NPD teams (Hauser and Clausing, 1998; Griffin and Hauser, 1993)
• 8 step process of relationship between NP survival and the characteristics of project management (Thieme et al. 2003)
• Understanding customer needs proficient design and manufacturing activities, close contacts with end user (Rothwell 1974, Cooper 1980, Zirger & Maidique 1990)
• 7 prominent factors influence innovative success (not defined — just mentioned) (Eanne et al. 2004)
• Integration of new product development teams (Akgun 2003)
• Proficient R&D, technical entrepreneurs acting as information bridges (Globe, et al, 1973)
• Association between successful NP efforts and high levels of co-operation and communication (Vander Panne 2004)