by Mohammad Z. Meybodi


a peer-reviewed articleMohammad Z. Meybodi  mmeybodi@iuk.edu is an Associate Professor of Operations Management, Indiana University Kokomo.


Abstract:The focus of this article is to demonstrate the links between just-in-time (JIT) manufacturing and simultaneous new product development (NPD). Comparison and analysis of several factors show remarkable similarities between JIT manufacturing and simultaneous NPD. A set of hypotheses regarding similarities between JIT and NPD factors and the general impact of JIT principles on NPD process are developed. The hypotheses are tested using survey data from a sample of 500 manufacturing organizations. Statistical analysis of the data strongly supports the hypotheses regarding similarities between JIT and NPD factors. The general impact of JIT principles on NPD process is also strongly supported by the data. Managerial implications of this article are important because they show the links between JIT and speedy new product development, which is crucial for companies to be competitive in a global market.

 

Introduction

The just-in-time (JIT) production system has received considerable attention since its beginning in Japan in the early 1980ís. Some of the main benefits of JIT, such as inventory reduction, quality improvement, and quick delivery, are well known (Cook and Rogowski, 1996; Hobbs, 1994; Billesbach, 1991; Payne, 1993; Temponi and Pandya, 1995). However, in a competitive global market, price, quality, and quick delivery are not sufficient to stay ahead of competition once the product reaches the maturity stage of its life cycle. To stay competitive in the market, in addition to price, quality, and speed, organizations need to develop agility to innovate, design, and introduce new products to the market quickly (Eppinger, 2001; Krishnan and Ulrich, 2001). Introducing new products to the market early has several strategic and operational advantages. It often means charging premium price, building name recognition, controlling a large market share, and enjoying the bottom line profit. Better competitive position in the market also makes it difficult for competition to enter the market (Blackburn, 1991; Cooper and Kleinschmidt, 1994; Zahra and Ellor, 1993).

 During the last two decades, through their JIT systems, world class manufacturers have dominated their competitors not only in the areas of price, quality, and speed, but also in the areas of innovation, design, and quick new product development (Bebb, 1989; Dumaine, 1989; Blackburn, 1991; Clark and Fujimoto, 1991; Ulrich and Eppinger, 2000). The research issue of interest in this article is to demonstrate if there is a link between JIT manufacturing and simultaneous NPD. Since the early 1980ís, JIT has been studied extensively and, as a result, there is a set of generally accepted guidelines that organizations can follow to achieve manufacturing success. However, there has been limited research on simultaneous NPD, and there is no comparable set of guidelines for successful management of NPD process. The focus of this article is to show similarities between the two practices and that the research on JIT can be utilized to synthesize a set of parallel guidelines for NPD.

To understand the relationships between JIT and NPD, one has to carefully examine the fundamental principles of a JIT system. These fundamental principles are elimination of waste and respect for people (Hobbs, 1994; Payne, 1993; Wantuck, 1983). In a JIT system, elimination of waste is achieved by adopting practices such as total quality management, focused factory, reduced setup times, flexible resources, group technology layout, pull production system, and effective use of technology (Gargeya, and Thompson, 1994; Sohal, Ramsay, and Samson, 1993; Suzaki, 1987). Respect for people includes elements such as employee training, employee participation, team work, fair compensation, and a new attitude toward suppliers (Sohal, Ramsay, and Samson, 1993; Wantuck, 1983). Although application of the above practices seems to be appealing to a wide variety of manufacturing and service areas, unfortunately, since its beginning, an often a narrow view of JIT, mainly inventory reduction and frequent deliveries, has been accepted and practiced by a large number of manufacturing organizations (Deshpande and Golhar, 1995; Handfield, 1993; Lawrence and Hottenstein, 1995; Golhar, Stamm, and Smith, 1990; Moras and Dieck, 1992). Careful examination of JIT principles clearly indicates that the application of JIT to reduce inventory and to deliver frequently is only a small fraction of the full potential benefits of a JIT system (Blackburn, 1991; Gilbert, 1994; Towner, 1994). To take advantage of the full benefits of JIT, it is necessary to have a broader view of JIT principles (Blackburn, 1991). Looking at JIT as a process to eliminate waste and to respect people, rather than simply as an inventory reduction and frequent delivery method, reveals that its principles can be applied to other areas of business, such as new product development, supply chain management, and even to service organizations in which there is no physical inventory.

The objective of the article is to show similarities between JIT manufacturing and simultaneous new product development (NPD), and to demonstrate that the main principles of waste elimination and respect for people in JIT can also be used in NPD. The remainder of this article is organized in the following manner: First, there is a brief overview of traditional sequential NPD and a recent method of simultaneous NPD is presented. Next, the article compares similarities between JIT manufacturing and simultaneous NPD for a set of critical factors. Research hypotheses, research methodology, and results are the final sections of the article.

New Product Development Methods

The new product development process is a sequence of inter-connected activities in which information regarding customer needs is translated into final product design. In a traditional sequential approach, the design process is managed sequentially by personnel from various departments in the organization with limited contacts. A major drawback of this approach is that the output from one design stage is often passed to the next stage with little or no communication. Lack of communication and feedback among sequential stages causes the process to be too slow, requiring too many design changes, is too costly, and often is of poor quality. The final result is that the designs are often rejected because it is either outdated due to long development process, or there is incompatibility in terms of manufacturing capability (Blackburn, 1991; Ulrich and Eppinger, 2000). In short, traditional NPD process contains problems very similar to traditional manufacturing where the system is organized into separate departments with very limited communication.

To solve problems associated with traditional sequential NPD method, world class organizations are now utilizing the new method of simultaneous NPD. Unlike traditional approach to NPD, where functional units work sequentially and downstream functions are not involved until late in the process, simultaneous NPD requires early involvement of cross functional teams. It requires that designers, manufacturers, marketers, suppliers, and customers work jointly to design product and process simultaneously. In simultaneous NPD, the objective is to integrate product and process design into a common activity (Clark and Fujimoto, 1991; Donnellon, 1993; Millson, Ranj, and Wilemon, 1992; Shunk, 1992). Due to early cross-functional communication, simultaneous NPD enables an organization to be more innovative in terms of improving design quality, shortening development time, and reducing development and manufacturing costs (Blackburn, 1991; Ulrich, and Eppinger, 2000; Zirger and Hartley, 1996). Close examination of sequential and simultaneous NPD processes causes one to realize that simultaneous NPD process requires a complete change in design philosophies, similar to the changes made by moving from traditional manufacturing to JIT manufacturing. In other words, total quality management, focused factory, reduced set-ups, employee empowerment, team work, worker training, effective use of technology, and other principles of JIT can also be applied to simultaneous NPD process.

Comparison of JIT Manufacturing and Simultaneous New Product Development

Manufacturing literature during the last two decades consistently indicates that organizations that have been successful in implementing their JIT system have also been successful in implementing their simultaneous NPD program. A reasonable explanation of such a relationship is that organizations that have learned and effectively applied the principles of JIT into their manufacturing system are also applying the same principles to their NPD programs. For these organizations, successful NPD is simply the result of knowledge and technology transfer from their JIT system into their NPD process. To obtain some insight into the links between JIT manufacturing and simultaneous NPD, this section examines similarities between JIT and NPD for some critical factors. Blackburn (1991) presented a comparison of JIT and NPD for limited parameters. Comparison of traditional manufacturing and sequential NPD for a number of critical factors is presented by Meybodi (2003). Based on the above studies and other JIT and NPD literature, the factors shown in Table 1 were chosen to compare similarities between JIT manufacturing and simultaneous NPD (Spencer and Guide, 1995). A brief comparison and analysis of selected factors is shown below in Table 1.

Table 1. Comparison of JIT Manufacturing and Simultaneous New Product Development

Factor

JIT Manufacturing

Simultaneous New Product Development

Layout

GT/Cellular manufacturing

Project/Design teams

 

Process and information flow

Two way flow: material downward, information upward

Parallel activities: Two way flow of information among team members

 

Lead time

Fast delivery

Short development time

 

Set-up/Transition time

Short

Short

 

Batch size

Small

Small (batches of information)

 

Quality

Quality at the source, continuous quality improvement, low rework

Early detection of design quality problems, continuous design improvement, low redesign

Customer focus/Market responsiveness

Highly responsive

Highly responsive

 

Scheduling

Localized team control, team responsibility

Localized team control, team responsibility

 

Employee involvement and teamwork

High

High

 

Employee communication

High

High

 

Employee empowerment

High

High

 

Supplier involvement

High level of sharing information, quality partners

High level of involvement in product development

 

Decision making

Manufacturing team

Design team

 

Technology

Integrated systems, new technology after process simplification

Integrated CAD, CAE, CAM

 

Value added

High

High

 

Layout

The layout in JIT manufacturing is often in the form of product focus and manufacturing cells. This type of layout is necessary because small lot size production requires that the layout to be compact and efficient to ensure smooth flow of materials. A pull production system requires close communication between work stations. Unlike traditional manufacturing, the flow in a JIT system is in two directions; material is pulled forward, but information flows backward to provide feedback on material requirements. In simultaneous NPD, the overlapping of a large number of activities requires a complete change in layout that facilitates communication and encourages team work. Instead of organizing by sequential functions, simultaneous NPD emphasizes cross-functional integration and the formation of a design team. The design team works together in one location, creating a type of project layout. A project layout creates an environment for frequent, two-way communication between team members, which encourages concurrent development of a product and its associated processes.

Lot Size

In contrast to traditional manufacturing, JIT manufacturing requires production of small lot-sizes with lot-sizes of one as the ultimate goal. Production of small lot sizes is made possible by drastically reducing set-up times. It is well documented that production of small lot-sizes in JIT manufacturing is closely associated with improved quality, reduced inventory, faster delivery, and better market responsiveness. Similar to JIT, simultaneous NPD also utilizes small lot-sizes. The only difference is that, in JIT manufacturing, small lot sizes of goods are processed. However, simultaneous NPD requires continuous flow of small lot sizes of information among team members (Blackburn, 1991; White, 1993). With continuous flow of small lot-sizes of information, downstream team members can begin working on different phases of the design while final design is evolving. Continuous flow of information among team members reduces uncertainty and encourages early detection of problems, which enables organizations to avoid costly and time-consuming changes.

Employee and Supplier Involvement

In a JIT system, management encourages employee involvement and team work. The responsibility for job scheduling and quality are often passed to the teams at the shop floor. Due to production of small lot size, delegation of authority to the teams at the shop floor is essential for smooth production flow. Similar to JIT, in simultaneous NPD, the responsibility for scheduling of the activities is often pushed down to product development team at the lowest level. Passing responsibility down to NPD team is essential to achieve a high level of activity coordination and information sharing among team members. In JIT and simultaneous NPD, suppliers also work closely with the organization to improve quality, shorten delivery time, and offer ideas toward new product design.

Quality

Under JIT manufacturing and simultaneous NPD, organizations are often proactive, and quality means getting it right the first time. In JIT, since lot sizes are small, quality at source and continuous improvement are the main foundations. Shop floor workers are empowered to become their own inspectors responsible for the quality of their output. In simultaneous NPD, because of the team work and two-way flow of information among team members, quality problems are detected earlier and solved before they have a cumulative impact on the rest of the project.

Technology

In a JIT manufacturing system, technology comes after simplification and understanding of the entire system, and technology is not viewed as a shortcut to process improvement. Rather, technology has been utilized after process analysis and simplification has been performed. The role of technology in simultaneous NPD is enormous. Successful organizations use technology for their NPD similarly to the way they use technology in their JIT systems. The key to the success of technology in simultaneous NPD is building an effective design team with open cross-functional communication lines. Simultaneous NPD requires that the design team with diverse expertise makes a large number of interrelated decisions regarding the form, fit, function, cost, quality, and other aspects of the design (Karagozoglu and Brown, 1993). This requires supply and processing of relevant information from multiple sources in a coordinated manner. In simultaneous NPD, the design team utilizes appropriate technologies and tools at various stages of NPD process. Effective use of technologies and tools can dramatically shorten NPD time, reduce the number of prototypes, cut costs, and improve quality of the design (Karagozoglu and Brown, 1993)

Research Hypotheses

The comparison and analysis of selected factors shown in Table1 shows a high degree of similarities between JIT manufacturing and simultaneous NPD. With remarkable similarities between these two, one would expect to see that successful deployment of JIT principles would have strong impact on simultaneous NPD process. In the first set of sixteen hypotheses (H1-H16), similarities between JIT and NPD for a set of critical factors will be tested. The overall impact of JIT principles on NPD process is the purpose of the second set of statements (G1-G2).

Factor Hypotheses

(H1-H16): There is a high degree of similarities between JIT and simultaneous NPD factors.

General Statements

G1: The main principles of waste elimination and respect for people in JIT can also be applied to simultaneous NPD.

G2:   Organizations that are successful in their JIT system are also successful in their NPD process.

Research Methodology

The target population for this study consisted of manufacturing firms in Midwestern United States. A sample of 500 manufacturing firms with more than 50 employees were chosen from the 2002 manufacturers directory of the states of Illinois, Indiana, Ohio, Michigan, and Wisconsin. The sample covers organizations in variety of industries including fabricated metal, communication, electronics, automotive, tools, chemicals, rubber, and paper products. A survey instrument that covers various aspects of JIT manufacturing and simultaneous NPD was developed. A panel of three practitioners who had implemented JIT and simultaneous NPD and two JIT researchers was used to validate the survey. In addition to 13 general organizational and managerial profile items, the survey contained 32 items (16 paired) regarding similarities between JIT and NPD factors and two statements regarding the general impact of JIT principles on NPD process. For the first set of sixteen hypotheses, the instrument contained a series of statements regarding JIT and simultaneous NPD. These questionnaire items are shown below in Table 2.

Table 2. Comparison of JIT Manufacturing and Simultaneous New Product Development (SNPD) Factors

(1=strongly disagree, 5=strongly agree)

1.a.  Under JIT, group technology (GT) or cellular manufacturing layout allows smooth flow of materials downward and information flow backward.

  1.b. Under SNPD, project layout formed by the design team allows frequent and two way flow of information among team members.

2.a. In JIT, smooth flow of materials downward and information flow backward has a great impact on reducing manufacturing lead-time.

2.b. In SNPD, frequent and two-way flow of information has a great impact on reducing new product development time.

3.a. Successful JIT system requires short set-up time.

3.b. Successful SNPD requires fast transition  (i.e. short set-up time) from one part of the design to another.

4.a. Successful JIT system requires production of small lot-size.

4.b. In SNPD, continuous and two-way flow of information among team members is equivalent to early release of small batches of information.

5.a. In JIT, due to production of small lot-size, quality at source and continuous quality improvement are essential to the success of the system.

 

5.b. In SNPD, due to simultaneous development of product and process, early detection of design quality problems and continuous improvement of the design are essential to the success of NPD process.

6.a. In JIT, production of small lot-size is associated with improving quality.

6.b. In SNPD, continuous and two-way communication among team members encourages early detection of the design problems, which is associated with improving design quality.

7.a. In JIT, production of small lot-size is associated with reducing inventory.

7.b. In SNPD, continuous and two-way communication among team members associated with reducing unnecessary amount of information among team members.

8.a. In JIT, production of small lot-size is associated with reducing manufacturing cost.

8.b. In SNPD, continuous and two-way communication among team members encourages early detection of the design problems, avoids costly design changes, which is associated with reducing development cost.

9.a. In JIT, production of small lot-size is associated with faster delivery.

9.b. In SNPD, continuous and two-way communication among team members encourages early detection of the design problems, avoids time consuming design changes, which is associated with reducing development time.

10.a. Organizations with successful JIT system are more responsive to the market demand.

10.b. Organizations with successful SNPD program are more responsive to the market demand

11.a. In JIT, management encourages employee involvement and teamwork.

11.b. In SNPD, management encourages employee involvement and teamwork.

12.a. In JIT, detailed shop floor responsibilities such as job and employee scheduling and quality decisions are often passed to the manufacturing team members.

12.b. In SNPD, detailed design and development activities such as employee scheduling and quality decisions are often passed to the design and development team members.

13.a.  In JIT, due to production of small lot-size, delegation of authority to the manufacturing team members is essential for smooth production flow.

13.b. In SNPD, passing responsibility down to the design and development team is essential to achieve a high level of activity coordination and information sharing among team members.

14.a.  In JIT, suppliers work closely with manufacturing teams.

14.b. In SNPD, suppliers work closely with the design and development teams.

15.a. In JIT, close relationship between suppliers and manufacturing teams is essential in improving quality, reducing manufacturing cost, and shortening delivery time.

15.b. In SNPD, close relationship between suppliers and design and development teams is essential in improving design quality, reducing design and development cost, and shortening design and development time.

16.a. In JIT, new technologies such as robots are often integrated into the entire manufacturing system after process analysis and simplification has been performed.

16.b. In SNPD, new technologies such as IT and CAD are often integrated into the entire design and development process after process analysis and simplification has been performed.

For each questionnaire item, the respondents were asked to rate each statement according to relevance to their JIT and NPD practices. A five point Likert type scale was used, with 1 representing strongly disagree and 5 representing strongly agree. Out of 91 completed surveys received, 84 survey were usable, resulting in a response rate of 17 percent, a reasonable return with respect to the technical requirement of the survey.

Analysis of survey data indicates that majority of respondents had various high level managerial positions from organization with less than 500 employees. Presidents and vice presidents accounted for 29 percent, and plant managers accounted for 30 percent of the sample. About 35 percent of the sample had other managerial positions, such as operations/production managers, quality managers, and the remaining 6 percent were production line supervisors. In terms of total manufacturing experience, about 28 percent of the respondents had between 10 to 20 years of experience, and 60 percent had more than 20 years of experience. About 72 percent of the sample had more than 10 years of JIT experience, and close to 65 percent of the sample had more than 10 years of NPD experience.

Research Results

As mentioned earlier, the objective of the first set of hypotheses was to examine similarities between JIT and NPD for a set of sixteen factors. For each factor, the null hypothesis was that the mean response for JIT is equal to the mean response for NPD. The differences between the mean responses for JIT and NPD were compared using the t-test. Table 3 shows below the results where respondents agreed between similarities of JIT and NPD as well as where they disagreed.

 

Table 3. Comparison of JIT Manufacturing and Simultaneous New Product Development (NPD) Factors

(1=strongly disagree, 5=strongly agree)

 

 JIT

 NPD

Test

 

 

Factor

Mean

 SD*

 Mean

 SD*

T-Test

P-Value

 Correlation

1. Layout

3.84

0.85

3.62

1.08

1.47

0.140

0.74

2. Flow

3.99

1.03

4.06

0.96

-0.47

0.640

0.83

3. Set-up

4.34

0.70

3.84

0.96

3.04

0.003

0.47

4. Lot-size

3.80

0.88

3.55

1.03

1.65

0.100

0.65

5. Quality at sour.

4.16

0.77

4.28

0.74

-1.05

0.300

0.69

6. Quality Impr.

3.39

0.90

3.89

0.85

-3.67

0.000

0.32

7. Inventory

4.15

0.80

3.96

0.85

1.48

0.150

0.62

8. Manufat. cost

3.53

0.80

3.94

0.67

-3.55

0.001

0.45

9. Delivery

4.18

0.75

4.31

0.72

-1.09

0.280

0.75

10. Demand

4.17

0.73

4.24

0.70

-0.70

0.480

0.79

11. Team work

3.95

0.81

3.83

0.90

0.92

0.360

0.76

12. Team respon.

3.61

0.78

3.76

0.78

-1.17

0.240

0.82

13. Team autho.

3.84

0.72

3.96

0.77

-1.03

0.310

0.80

14. Suppliers

3.70

0.79

3.82

0.83

-0.93

0.350

0.77

15. Suppliers Ess.

4.12

0.72

4.02

0.70

0.87

0.390

0.73

16. Technology

3.41

0.96

3.68

0.94

-1.81

0.072

0.69

* SD = Standard deviation

As shown in Table 3, overall, the respondents strongly agreed with the statements regarding JIT and NPD factors. This is evident because, for more than 70 percent of the factors, the mean JIT and NPD ratings were above 3.80. Also, the statistical t-tests clearly indicate that the respondents agreed with the similarities between JIT and NPD for a majority of factors. Out of sixteen hypotheses, only three (H3, H6, and H8) were significant, meaning the respondents strongly agreed that there is a high degree of similarities between JIT and NPD for thirteen factors, and disagreed with three. For H3, the mean ratings for JIT and NPD were respectively 4.34 and 3.84. This means, although the respondents understood that short set-up and fast transition time are the main requirements of successful JIT and NPD, the relationships between short set-up and JIT was much stronger. This result is reasonable because an average manufacturing manager has longer experience with JIT than NPD, and they clearly understood that successful JIT requires small lot-size and small lot-size requires short set-up time. However, since their experience with NPD was shorter, and because NPD is primarily an information processing system, the links between small batches of information and fast transition time is not clear. H6 hypothesizes the relationships between small lot-sizes and quality improvement for both JIT and NPD. For this test, the mean ratings for JIT and NPD were respectively 3.39 and 3.89. This means for an average manager it was easier to recognize the relationships between quality improvement and simultaneous NPD, than quality improvement and JIT. This is an interesting result and consistent with JIT literature because, although total quality management and quality improvement are fundamental requirements of successful JIT, an average manufacturing manager has difficulty understanding these relationships. The relationships between small lot-sizes and reduced manufacturing cost in JIT, as well as the relationships between small batches of information and reduced development costs in NPD, are examined in H8. The mean ratings for JIT and NPD were, respectively, 3.53 and 3.94. Perhaps due to cross functional communication and early detection of design problems for an average manger, it was easier to understand this relationship in NPD than in JIT. The lower ratings for JIT is also consistent with the literature, because reduced manufacturing cost in JIT is due to elimination of wastes, a fundamental principle of JIT, and an average manager had difficulty seeing this relationship. The correlation coefficients shown in Table 3 also strongly support the above analysis. With the exception of three hypotheses (H3, H6, H8), other coefficients were greater than 0.60, indicating a high degree of linear association between JIT and NPD factors.

 Two general statements regarding the overall impact of JIT principles on NPD process, along with a statistical summary of the results is shown below in Table 4.

Table 4. General Impact of JIT on NPD

(1=strongly disagree, 5=strongly agree)

Statement

Mean

SD*

17. The main principles of waste elimination and respect for people in JIT can also be applied to simultaneous NPD.

4.38

0.60

18. Organizations that are successful in their JIT system are also successful in their NPD process.

4.45

0.74

* SD = Standard deviation

As shown in Table 4, the mean ratings for the general impact of JIT principles on NPD were respectively 4.38 and 4.45, indicating strong agreement with the statements that the main principles of waste elimination and respect for people in JIT can also be used in NPD. The managers also strongly agreed with the statement that organizations that are successful in their JIT system are also successful in their NPD process.

Conclusion

Innovation and quick new product design and development is crucial for companies to be competitive in a global market. Manufacturing literature since the early 1980ís indicates organizations that have been successful in implementing their JIT system have also been successful in their NPD process. The primary objective of this article was to demonstrate the links between success in JIT and NPD. A series of hypotheses regarding the relationships between JIT and NPD was developed. The hypotheses were tested using data obtained from those who responded to a survey sent to 500 manufacturing organizations in Midwest.

Comparison and analysis of a number of critical factors showed remarkable similarities between JIT manufacturing and simultaneous NPD. A set of sixteen hypotheses was used to test similarities between JIT and NPD factors. Statistical results clearly indicate that the respondents strongly agreed with the hypotheses regarding similarities between JIT and NPD for a majority of factors. Specifically, out of sixteen hypotheses, the respondents agreed that there is a high degree of similarities between JIT and NPD for thirteen factors and denied that this is true of three of them. The correlation coefficients between JIT and NPD factors also supported the same results. The two general statements regarding the overall impact of JIT principles on simultaneous NPD process are also strongly supported by the survey data.

For organizations trapped in the never ending cycle of design, review, inspect, and redesign of sequential NPD, the managerial implication of this research is that successful implementation of JIT principles goes much beyond inventory reduction and frequent deliveries. Since JIT focuses on eliminating waste, improving quality, reducing costs, shortening delivery time, and improving teamwork, it is natural to apply the same principles to other areas of business such as NPD.


The author would like to thank Indiana University Kokomo for providing grant-in-aid of faculty research to support this work.


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Zirger, B. J. and Hartley, . L. (1996). "The Effect of Acceleration Techniques on Product Development Time," IEEE Transactions on Engineering Management, 43(2), 143-152.


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