A new product concept formulation [framework] for the Hong Kong/Pearl River Delta consumable electronics and electrical products industry
Student thesis: Doctoral Thesis
The current business environment in mainland China presents difficult challenges, particularly for the electronic and electrical (EE) consumable product enterprises located in the Hong Kong and Pearl River Delta (HK/PRD) region. Many EE consumable product enterprises located in the HK/PRD region are facing difficulties due to the increase on product complexity, ever-changing safety standards and environment regulations. Furthermore, the enforcement of labour contract law, the appreciation of the Renminbi, adjustments in processing trade policy etc., are all factors that create further business difficulties. In such a critical environment, the EE consumable product enterprises located in the HK/PRD region need to find ways to maintain business. The HK government and many industrial organisations suggested, the enterprises should transform their business operations from Original Equipment Manufacturing (OEM) to Original Design Manufacturing (ODM). It is because ODM is associated with the development of higher value-added products. The suggestion arises from the effects of keen local competition, especially the impact of product imitation and rapid changes to product safety standards and environmental regulations for EE consumable products. Switching business operations to ODM products can benefit enterprises by helping them to remain internationally competitive and ensure their survival. Although changing business operations is suggested as a means of survival, few HK/PRD EE enterprises switched to ODM production. The top management of most HK/PRD EE enterprises state that changing their style of operation is difficult. Some of them argue that they have no experience in developing new products, and some point out the lack of operational guidelines for execution and the high failure rate in NPD. To reduce the failure rate and enhance the efficiency of NPD, most of the top management on EE industry enterprises indicate the needs of a systematic NPD process. Many NPD process models have been developed. These models begin with idea generation and end with production and market launch. Most of them are designed with a stage-gate structure, in which the gates represent the decision-making points. Thus, the NPD process models provide a generic structure for enterprises only. As stated by the industry's top management, the models do not include operational guidelines for implementing the NPD process. Based on the necessity for a systematic NPD process, especially the early development process (from idea generation to preliminary assessment), this report develops a new product concept formulation framework and an NPD implementation roadmap, based on a two-phase NPD model. The proposed two-phase NPD model simply divides the NPD process model into two phases: the concept formulation phase and the product development phase. There are gates throughout the proposed model; however, a consolidation gate is specifically indicated between the two phases due to its importance on NPD decision-making. Based on the above concept, a new product concept formulation framework is developed. The new product concept formulation framework outlines a systematic process for the first phase (concept formulation phase) of the proposed two-phase NPD model. The framework specifies the steps in the NPD process and proposes a set of NPD tools required for generating new ideas. The framework and the proposed NPD tools enhance the efficiency of the NPD process by specifying a set of implementation guidelines. A roadmap for implementing the NPD process is required for enterprises that have no experience of NPD. The roadmap outlines the steps for implementing the NPD process, which starts with enhancing the awareness of NPD in the company. This is followed by the preparation and planning stage. In this stage, responsible parties - such as the top management, the NPD steering committee and the functional department - prepare the task for implementation and plan its execution. After the preparation and planning work, operational staffs undertake the tasks in the new product concept formulation framework. When the new product concept formulation framework operation is completed, the NPD steering committee reviews and, if necessary, modifies the NPD process and the team structure. The new product concept formulation framework, NPD implementation roadmap, and the proposed NPD tools were developed and verified in a HK/PRD EE enterprise, Techworld Industries Limited. The company was selected for implementation because it wished to enhance its NPD process. A tailor-made, 21-step implementation roadmap was developed for Techworld Industries Limited. The NPD implementation roadmap has been executed in Techworld for 2 years. Following the implementation, a questionnaire was distributed and the results are summarised below. The interviewees agreed that the roadmap enhanced their efficiency and effectiveness while working on the NPD process, because the implementation roadmap and proposed NPD tools provided guidelines for execution. An action plan was determined to guide the operational staff and enhance efficiency. The proposed NPD tools are simple, thus allowing the NPD team to complete the process of new product concept development. It allows top management to make decisions easily, as all of the necessary information is included. Finally, the success rate in transforming new product ideas to the product development phase was enhanced. The number of ideas that were selected for further development increased from one to three, and one of these product ideas has been successfully launched on the market. The results suggested the new product concept formulation framework facilitated the execution of NPD in Techworld and enhanced the success rate of transforming new product ideas into production or market launch. With the implementation of this new product concept formulation framework, the company has benefited from the success of a new product and enhanced the company's competence. In this research, several significant are made: (1) early decision making enhance the NPD efficiency and successful rate, (2) new product formulation framework and implementation roadmap for HK/PRD EE industry is developed, and (3) four dominant factors for HK/PRD EE industry are determined. To conclude, a systematic NPD framework and implementation roadmap are established for the HK/PRD EE industry. Such establishment helps the HK/PRD EE enterprises in executing their business strategy to ODM production. A set of NPD tools are established. The NPD tools are comparatively simple and user-friendly. The NPD tools consist of sufficient information for top management's decision making.
- Management, Household electronics industry, Hong Kong, Electric household appliances industry, Pearl River Delta, China, New products