Managing NPD: Cost and Schedule Performance in Design and Manufacturing

Previous work in the area of new product development (NPD) has focused mainly on the role of design in downstream value chain activities. In this field study, conducted at a leading avionics guidance systems manufacturer, we gathered primary data on time and cost performance of both the design and manufacturing phases of customized systems. We modeled the impact of the management levers relating to oversight, the intensity of specialization in design and the level of interaction with the customer. Our model recommends appropriate managerial strategies based on the relative resources required in the design and manufacturing phases. The study highlights the necessity of leveraging the interdependency between the design and manufacturing phases to achieve superior performance in both financial and time metrics.