Analysis of the effect of risk management practices on the performance of new product development programs

Josef Oehmen; Alison Olechowski; C. Robert Kenley; Mohamed Ben-Daya

doi:10.1016/j.technovation.2013.12.005

Analysis of the effect of risk management practices on the performance of new product development programs

Josef Oehmen^*
, Alison Olechowski
, C. Robert Kenley
, Mohamed Ben-Daya

^*Corresponding author for this work

King Fahd University of Petroleum & Minerals

Research output: Contribution to journal › Article › peer-review

108 Scopus citations

Abstract

Risk management is receiving much attention, as it is seen as a method to improve cost, schedule, and technical performance of new product development programs. However, there is a lack of empirical research that investigates the effective integration of specific risk management practices proposed by various standards with new product development programs and their association with various dimensions of risk management success. Based on a survey of 291 product development programs, this paper investigates the association of risk management practices with five categories of product development program performance: (A) Quality Decision Making; (B) High Program Stability; (C) Open, problem solving organization; (D) Overall new product development project success; and (E) overall product success. The results show that six categories of risk management practices are most effective: (1) Develop risk management skills and resources; (2) Tailor risk management to and integrate it with new product development; (3) Quantify impacts of risks on your main objectives; (4) Support all critical decisions with risk management results; (5) Monitor and review your risks, risk mitigation actions, and risk management process; and (6) Create transparency regarding new product development risks. The data shows that the risk management practices are directly associated with outcome measures in the first three categories (improved decision making, program stability and problem solving). There is also evidence that the risk management practices indirectly associate with the remaining two categories of outcome measures (project and product success). Additional research is needed to describe the exact mechanisms through which risk management practices influence NPD program success.

Original language	English
Pages (from-to)	441-453
Number of pages	13
Journal	Technovation
Volume	34
Issue number	8
DOIs	https://doi.org/10.1016/j.technovation.2013.12.005
State	Published - Aug 2014

Bibliographical note

Funding Information:
The authors thank the King Fahd University of Petroleum and Minerals in Dhahran, Saudi Arabia , for funding the research reported in this paper through the Center for Clean Water and Clean Energy at MIT and KFUPM through project R11-DMN-09. The authors gratefully acknowledge further funding support through the Lean Advancement Initiative at MIT and the MIT-SUTD International Design Center . We are also grateful to all survey respondents, as well as to the members of our industry focus group, benchmarking partners, professional organizations and academic partners that helped us develop, test and disseminate the survey, most notably at the Air Force Institute of Technology, Futron, INCOSE, NDIA and RiskSIG.

Keywords

New product development
Program management
Risk management

ASJC Scopus subject areas

General Engineering
Management of Technology and Innovation

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10.1016/j.technovation.2013.12.005

Cite this

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title = "Analysis of the effect of risk management practices on the performance of new product development programs",

abstract = "Risk management is receiving much attention, as it is seen as a method to improve cost, schedule, and technical performance of new product development programs. However, there is a lack of empirical research that investigates the effective integration of specific risk management practices proposed by various standards with new product development programs and their association with various dimensions of risk management success. Based on a survey of 291 product development programs, this paper investigates the association of risk management practices with five categories of product development program performance: (A) Quality Decision Making; (B) High Program Stability; (C) Open, problem solving organization; (D) Overall new product development project success; and (E) overall product success. The results show that six categories of risk management practices are most effective: (1) Develop risk management skills and resources; (2) Tailor risk management to and integrate it with new product development; (3) Quantify impacts of risks on your main objectives; (4) Support all critical decisions with risk management results; (5) Monitor and review your risks, risk mitigation actions, and risk management process; and (6) Create transparency regarding new product development risks. The data shows that the risk management practices are directly associated with outcome measures in the first three categories (improved decision making, program stability and problem solving). There is also evidence that the risk management practices indirectly associate with the remaining two categories of outcome measures (project and product success). Additional research is needed to describe the exact mechanisms through which risk management practices influence NPD program success.",

keywords = "New product development, Program management, Risk management",

author = "Josef Oehmen and Alison Olechowski and \{Robert Kenley\}, C. and Mohamed Ben-Daya",

note = "Funding Information: The authors thank the King Fahd University of Petroleum and Minerals in Dhahran, Saudi Arabia , for funding the research reported in this paper through the Center for Clean Water and Clean Energy at MIT and KFUPM through project R11-DMN-09. The authors gratefully acknowledge further funding support through the Lean Advancement Initiative at MIT and the MIT-SUTD International Design Center . We are also grateful to all survey respondents, as well as to the members of our industry focus group, benchmarking partners, professional organizations and academic partners that helped us develop, test and disseminate the survey, most notably at the Air Force Institute of Technology, Futron, INCOSE, NDIA and RiskSIG.",

year = "2014",

month = aug,

doi = "10.1016/j.technovation.2013.12.005",

language = "English",

volume = "34",

pages = "441--453",

journal = "Technovation",

issn = "0166-4972",

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AU - Olechowski, Alison

AU - Robert Kenley, C.

AU - Ben-Daya, Mohamed

N1 - Funding Information: The authors thank the King Fahd University of Petroleum and Minerals in Dhahran, Saudi Arabia , for funding the research reported in this paper through the Center for Clean Water and Clean Energy at MIT and KFUPM through project R11-DMN-09. The authors gratefully acknowledge further funding support through the Lean Advancement Initiative at MIT and the MIT-SUTD International Design Center . We are also grateful to all survey respondents, as well as to the members of our industry focus group, benchmarking partners, professional organizations and academic partners that helped us develop, test and disseminate the survey, most notably at the Air Force Institute of Technology, Futron, INCOSE, NDIA and RiskSIG.

PY - 2014/8

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N2 - Risk management is receiving much attention, as it is seen as a method to improve cost, schedule, and technical performance of new product development programs. However, there is a lack of empirical research that investigates the effective integration of specific risk management practices proposed by various standards with new product development programs and their association with various dimensions of risk management success. Based on a survey of 291 product development programs, this paper investigates the association of risk management practices with five categories of product development program performance: (A) Quality Decision Making; (B) High Program Stability; (C) Open, problem solving organization; (D) Overall new product development project success; and (E) overall product success. The results show that six categories of risk management practices are most effective: (1) Develop risk management skills and resources; (2) Tailor risk management to and integrate it with new product development; (3) Quantify impacts of risks on your main objectives; (4) Support all critical decisions with risk management results; (5) Monitor and review your risks, risk mitigation actions, and risk management process; and (6) Create transparency regarding new product development risks. The data shows that the risk management practices are directly associated with outcome measures in the first three categories (improved decision making, program stability and problem solving). There is also evidence that the risk management practices indirectly associate with the remaining two categories of outcome measures (project and product success). Additional research is needed to describe the exact mechanisms through which risk management practices influence NPD program success.

AB - Risk management is receiving much attention, as it is seen as a method to improve cost, schedule, and technical performance of new product development programs. However, there is a lack of empirical research that investigates the effective integration of specific risk management practices proposed by various standards with new product development programs and their association with various dimensions of risk management success. Based on a survey of 291 product development programs, this paper investigates the association of risk management practices with five categories of product development program performance: (A) Quality Decision Making; (B) High Program Stability; (C) Open, problem solving organization; (D) Overall new product development project success; and (E) overall product success. The results show that six categories of risk management practices are most effective: (1) Develop risk management skills and resources; (2) Tailor risk management to and integrate it with new product development; (3) Quantify impacts of risks on your main objectives; (4) Support all critical decisions with risk management results; (5) Monitor and review your risks, risk mitigation actions, and risk management process; and (6) Create transparency regarding new product development risks. The data shows that the risk management practices are directly associated with outcome measures in the first three categories (improved decision making, program stability and problem solving). There is also evidence that the risk management practices indirectly associate with the remaining two categories of outcome measures (project and product success). Additional research is needed to describe the exact mechanisms through which risk management practices influence NPD program success.

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SN - 0166-4972

VL - 34

SP - 441

EP - 453

JO - Technovation

JF - Technovation

IS - 8

ER -

Analysis of the effect of risk management practices on the performance of new product development programs

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

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