Innovation and NPD have already become the key drivers of sustainability and competitiveness for many companies, especially SMEs. Franks guided me with innovation and engineering management which added great value to my studies. Impact of continuous improvement on new product development within SMEs in the Western Cape, South Africa.
GENERAL ORIENTATION OF THE STUDY
INTRODUCTION
BACKGROUND OF THE STUDY
SMEs are increasingly recognized as "the lifeblood of modern economies" (Ghobadian and Gallear, 1996). In addition, Cooper (1997) stated that unclear product strategy is one of the most common problems in NPD. NPD is one of the key drivers of sustainability and competitiveness for many companies, especially SMEs.
STATEMENT OF RESEARCH QUESTIONS
In this regard, understanding the key elements and identifying minimum requirements for successful NPD is therefore crucial for SMEs. So, if companies want to maintain competitiveness and grow steadily, they must adhere to a basic NPD model that encompasses key components for effective NPD management.
SOUTH AFRICA’S ECONOMY
- GDP Trend in South Africa
- The Key Economic Sectors in South Africa
- Primary Sector
- Secondary Sector
- Tertiary Sector
- Non-agricultural Sector
- Employment in Manufacturing Sector
Further, the report showed that in the first half of 2009, real gross domestic product contracted at an annual rate of 4.5 percent. The SARB (2008/09) indicates that the relative stability of the tertiary sector stemmed from strong growth in real value added by the community of the sub-sector, social and personal services, which grew at an annual rate of 3 percent in the first half of 2009. However, real value added by the transport, storage and communication supply sectors, as well as financial services contracted moderately in the first half of 2009.
CHARACTERISTICS OF SMES
Survivalist enterprises: the income generated is below the minimum income standard or the poverty line. Micro-enterprises: Turnover is less than the VAT registration limit (i.e. R150,000 per annum). Medium Enterprises: The maximum number of employees is 100, or 200 for the mining, power, manufacturing, and construction industries.
AIMS AND OBJECTIVES OF THE STUDY
In this study, currently in the Western Cape, South Africa, many manufacturing companies are involved with NPD in their operations.
SIGNIFICANCE OF THE CURRENT RESEARCH
Among these factors, one of the key factors is how a company manages for new products. First, SMEs will be able to realize the importance of the key components in managing their NPD processes, such as management commitment, employee involvement, new product strategy, product quality and customer satisfaction. Second, this study aims to provide a guideline for SMEs to improve their performance in managing their NPD process.
PROPOSITIONS
Proposition 2.1: Employees in successful SMEs are more likely to contribute product ideas than less successful SMEs. Proposition 2.3: Employees in successful SMEs are more likely to communicate with management more easily than less successful SMEs. Proposition 3.6: Successful SMEs are more likely to seek input from customers for NPD than less successful SMEs.
FORMULATION OF RESEARCH PROBLEM
- Problem Statement
Proposition 6.2: Successful SMEs are more likely to enable continuous improvement through feedback from the quality assurance process than less successful SMEs.
RESEARCH PHILOSOPHY
- Dimensions of NPD Management
RESEARCH DESIGN AND METHODOLOGY
- Selecting research design or paradigm
- Methodology
The empirical study investigated the importance of relationships between these key components for NPD management in SMEs in the Western Cape. The questions from the questionnaire were developed based on the results of the literature review. Some questions were used to enable triangulation to test the reliability of the survey.
ETHICAL ISSUES
DEFINITIONS OF KEY CONCEPTS
ORGANISATION OF CHAPTERS
It provides a discussion of the findings and conclusions regarding the research problems of the research; several recommendations were made based on the research results.
CONCLUSION
SMES AND ITS OPERATIONAL ENVIRONMENT
INTRODUCTION
SMES AND THE NATIONAL ECONOMY
- SMEs’ Contribution to GDP
- SMEs’ Contribution to Employment
SME AND BLACK ECONOMIC EMPOWERMENT (BEE)
MAIN PROBLEMS FACED BY SMES
- Lack of Financial Support
- Lack of business skills and Knowledge
- Poor General Performance
COMPETITIVENESS OF THE SME
THE KEY FACTORS AFFECTING SMES SUCCESS
- Marketing Orientation
- Customer Focus
- Resources Availability
CONCLUSION
PERCEPTIONS OF NPD MANAGEMENT AND
INTRODUCTION
THE NEED FOR INNOVATION AND NPD
- Innovation
- New Product Development (NPD)
- NPD Process
- NPD Success Factor
- NPD Challenges and Failure
FORCED CHANGES IN BRINGING INNOVATION TO NPD
- Forced Changes
- Bringing Innovation in NPD
TYPICAL MODELS OF NPD MANAGEMENT
- Anderson’s Simplified NPD Management Framework
- March-Chorda et al’s Conceptual Model
- Petrick and Echols’s Meta Roadmap Model
- Barclay’s Five Key Elements for NPD
- Song and Noh’s conceptual framework for NPD Success
- Takeuchi et al’s Six Characteristical Model for NPD
- Other Models for NPD Management
KEY COMPONENTS OF MANAGING NPD PROCESS
- Management Support and Commitment
- People Involvement
- Product Strategy
- Resources Availability
- R&D Facilitators
- Marketing Research
- Supplier involvement
- Continuous Improvement (CI)
- Customer Satisfaction in NPD
- Quality Assurance
- Feedback
CONCLUSION
RESEARCH DESIGN AND METHODOLOGY
INTRODUCTION
RESEARCH DESIGN
- Classification of research design
- Sampling
- Research Instruments and Data Collection
- Analysis Methods
DEFINITION OF THE VARIABLES TO BE VALIDATED
- Management Support and Commitment
- People Involvement
- Product Strategy
- Resources Availability
- Marketing Research
- Supplier involvement
- Continuous Improvement
- Quality Assurance
- Customer Involvement
- Feedback
A PROPOSED NPD MANAGEMENT MODEL
- The Description of the NPD Management Model
PERSPECTIVES OF THE KEY COMPONENTS OF THE NPD MODLE
- Management Support and Commitment
- People Involvement
- Product Strategy
- Resource Availability
- Market Research
- Supplier involvement
- Continuous Improvement (CI)
- Quality Assurance
- Customer Satisfaction
- Feedback
CONCLUSIONS
CASE STUDIES ON INNOVATIVE APPROACH IN NPD
INTRODUCTION
This chapter presents two case studies discussing the application of innovative approaches to the NPD process. It is therefore a case study that surveyed 45 SMEs in the Western Cape to determine the validity of key components for the proposed NPD management model. These key components are drawn from a number of studies most frequently reported as consistent correlates of new product success (e.g. Cooper, 2005; Bayo-Morines and Merino-Diaz de Cerio, 2004; Kahn et al; 2006; Cooper and Kleinschmidt, 1995; O'Dwyer and Ledwith, 2009; Moore and Pressmier, 1993; Bessant, 2003).
These key components include top management support and commitment, people involvement, product strategy (resource availability, NPD capabilities, marketing research, suppliers and continuous improvement), customer satisfaction, quality assurance and new product launch feedback. After applying an innovative approach in the NPD process, the impact of the existing product on the perceived value of the new product must be assessed. Thus, the second case study will use a mathematical model to analyze the long-term impact of existing products on the perceived value of new products.
CASE STUDY 1: AN INNOVATIVE NPD MANAGEMENT MODEL
- Case Sampling and Instruments
- Demographical data
- Gender
- Positions held in the company
- Year of working experience
- Employees size regarding SMEs’ category
- Education
- Results and discussions on the response of management
- Results and discussions on Close-ended questionnaire
- Results and discussion of Interviews questions
- Results and discussions on the responses from employees
- Results and discussion on close-ended questionnaire
- Results and discussion on open-ended questionnaire
- Summary
The closed questionnaire collected responses related to their views on key components of the NPD management model. More than half of SMEs did not seek ideas for continuous improvement from the relevant industry (MAN11). In addition, they also develop new products based on the improvement of the existing products.
Based on the results, the detailed annual turnover results of 45 SMEs are shown in Appendix G. This enables us to make the right decision about the product.” One of the leading managers said. The results of the survey will be discussed at the company's internal R&D meetings.
These questions are designed to gather opinions from employees about the key components of the NPD management model. 66 percent of employees agree that management keeps them informed about the development of a continuous improvement project (EMP10). This can be one of the main barriers to influencing idea generation for the NPD process.
For example, one of the employees complained: "the open door policy is not always present, because we are afraid of the leaders.
CASE STUDY 2: A MATHEMATICAL APPROACH IN NPD
- The Uniqueness of the Mathematical Model
- Assumptions of the Mathematical Model
- Development of the Mathematical Model
- Numerical Result and Discussion
- Summary
The long-term impact of existing products on the perceived value of new products is a necessary component that companies must consider in order to maintain the desired profit margin. Innovation, continuous improvement and changes forced by economic factors and marketing conditions are essential elements for successfully bringing new products to market; however, market competition with existing products can have a long-term impact on the perceived value of new products. How companies optimize the perceived value of new products and make more profits.
Therefore, companies must constantly develop new strategies to attract customers to maintain the perceived value of the new products. Yan and Makinde (2009) developed a mathematical model to theoretically investigate the long-term impact of market competition with existing products on the perceived value of the new product. The first result in Eq. 4) predict zero long-term operating profit for both new and existing product.. reveal zero operating profit only for the new product.
In an industrial setup, this scenario can only be viable, provided that the perceived value of the new product is still higher than the existing product. The operating profit of the new product gradually drops to its residual value, while the existing product gradually dies out. This scenario resulted in a positive increase in the perceived value of the new product, as shown in Figure 5.11.
However, due to the significant influence of the existing product on the perceived value of the new product in the market, companies should consider adopting an effective strategy.
CONCLUSION
CONCLUSION AND RECOMMENDATIONS
- INTRODUCTION
- CONCLUSIONS RELATED TO RESEARCH QUESTIONS AND TESTING THE
- Conclusions related to body of knowledge regarding innovation and NPD impact
- Conclusions related to SME cope with relatively limited resources when attempting
- Conclusions related to informal nature of a SME impact on NPD
- Conclusions related to identification of the key components in managing NPD
- Conclusions related to the importance of SMEs to follow a structured process for
- GENERAL CONCLUSION AND RECOMMENDATIONS
- Conclusion
- Recommendations
- IMPLICATIONS OF THE RESEARCH STUDY
- IMPLICATIONS OF FOR THE FURTHER RESEARCH
One of the key factors identified is the impact of the new product launch strategy. CI is one of the core values of quality management (QM), which is a people-centered system that aims to continuously improve performance by emphasizing learning and adaptation as the key to organizational success (Evans Lindsay, 2001). Speed to market is often considered as one of the key quality measures of NPD management (Sun, 2009).
General Data of the 45 SMEs
According to Berry et al. 2002), it is estimated that 91 percent of formal business units are small, medium and micro enterprises (SMMEs) in South Africa. According to Ntsika (2002), SMEs contribute 56 percent of private sector employment and 36 percent of gross domestic product in South Africa. Overall, lack of innovation is one of the main reasons for the failure of SMEs in the current competitive environment.
This means that the SME sector is considered to be one of the most viable means of creating employment and well-being in the South African economy. Since 1994, Black Economic Empowerment (BEE) has been one of the primary issues on the agenda of the South African government. In summary, factors for the competitiveness of South African SMEs can be cost efficiency and productivity, which are key to the country's economic growth.
Their proposition indicates that the idea generation techniques are one of the critical success factors of NPD. Rainey (2005) explains each element of the standard NPD process and the linkage between these elements to form a coherent new product strategy. With the exception of “product life cycle management”, Deszca, Munro and Noori (1999) introduced a deterministic phase model for the new product development process (Figure 3.7).
Companies can communicate these ideas to target audiences to further determine product development. NPD efficiency is a key driver for the company's long-term development. The link between research and development and marketing represents one of the most serious obstacles in the process of successful NPD.
Many companies are realizing that supplier involvement in NPD can be beneficial to the cost and quality of new products. The quality of new products is one of the critical factors to determine the life cycle of new products. Internal feedback in the NPD process includes prototyping, total quality testing, and trial use of the product prior to commercialization.
Data was collected from phase 2, phase 3 focused on the development of the NPD management model for SMEs. The responses from both management and employees were compared to identify the importance of the key components of the NPD management model. CI is one of the core values of quality management (QM), which is a people-focused system that aims at continuous improvement in performance by emphasizing learning and adaptation as keys to an organization's success (Evans and Lindsay, 2001).
They also emphasized that one of the important measurements was the relationship between customer satisfaction and new product quality. Cooper and Kleinschmidt (1997) stated that resource availability is one of the key success factors in NPD process. Kleinschmidt (1995) found that resources are one of the cornerstones, which determine the success of product development.
According to Barclay, percent of the organizations surveyed stated that the product development process needs continuous improvement. In addition, feedback as one of the essential components for continuous improvement embedded in the NPD process in successful SMEs. Employees were not well informed by management about the progress of a continuous improvement project.
An exploratory analysis of the impact of market orientation on new product performance: A contingency approach. A study of the relationship between customer satisfaction and willingness to pay, Journal of Marketing, 69 (April). Consumer research in the development process of a major innovation, Journal of the Market Research Society, 35(4), pp.
