Developing Measurements For New Product Design To Improve The Innovation Capability Of New Product Development Companies

Abstract

The capability to continuously innovate is critical to a business’s survival in today’s business environment. To improve this capability, a company first needs to be able to measure it. Many different input and output indicators are used in literature and practices, including a company’s research and development expenditures, the number of ideas submitted by the company’s employees in a certain time period, the level of internal learning, the level of training for new designs and processes, the number of new products introduced in a certain time period, number of awards and honors a company receives for its new product development (NPD), market share and customer satisfaction of the company, etc. While the factors listed as the input indicators are the ones that can be managed and controlled by the company, they are not the preferred ones to use as the input does not always get translated into a company’s innovation capability. Besides the list of the indicators, literature on the measurement of a company’s innovation capability also include different methods and models that are developed to effectively combine those indicators together. However, when looking into the possible sources to collect real-world data to use for each innovation capability measurement factor, it was found that it is very hard to get valid data for the majority of the indicators. Since the factors that are associated with new product development and new product design are the ones regarded as very important but at the same time very difficult to measure (getting real-world data), this research then focuses on developing measurements for companies to use to assess their new product design process and practices. Using literature review, key factors and best practices at each stage of the new product design process are identified. As a result, 23 factors in 8 main categories together with the methods in which data can be acquired are suggested in this thesis for companies to use to measure its new product design process.