The impact of lean management on new product development performance

Document Type : Research Paper

Authors

1 Senior Lecturer in B2B Marketing, Manchester Metropolitan University

2 Institute for Management and Planning Studies

Abstract

Introduction: In today’s competitive environment, the development of new products becomes increasingly vital for firms to gain a competitive advantage. Due to a number of factors such as technological advances, increasing risk in global trades and, most importantly, rapidly changing customer needs and preferences, new product development (NPD) is considered as a complex process in the literature. Firms continually endeavor to find effective ways to cope with the complexity of the NPD process and improve its performance. Lean management practices with the aim of reducing wastes and improving product quality is suggested to be used to enhance the development performance of new products. Following the literature, this research examines the relationships between lean management practices and new products development performance. The literature shows that lean management factors alone are not able to have direct positive effects on the innovative performance of firms. To fill the gap, this study considers continuous improvement as the mediating role of this relationship so that companies can take the advantage of lean management. This study aims to show that lean management is composed of two dimensions inside and outside the organization by examining examples of manufacturing companies in Iran. It also addresses the influence of the components of lean management on NPD performance; continuous improvement can be an important interface in this regard. A review of previous research suggests that, despite the great bulk of research on new product development and lean management separately, the impact of lean management as a set of different dimensions on NPD performance has not been investigated. In other words, many studies in the field consider only one pure dimension (Samson & Terziovski, 1999; Tsai & Hsu, 2014; Felekoglu & Moultrie, 2014), while the methods and different techniques of lean management complement one another and their simultaneous implementation can have a positive effect on NPD. Instead of targeting a certain level of purity, the philosophy of lean manufacturing focuses on the continuous improvement of processes (Longoni et al., 2013). According to this concept, continuous improvement is one of the key outcomes of lean components. For this reason, this study seeks to measure the impact of lean management on NPD performance with the mediating role of continuous improvement.
Methodology: The data were collected in a survey of 301 Iranian manufacturing firms to test the hypotheses by structural equation modeling. Personal hardcopy questionnaires were distributed among those companies that had more than three years of product development activities as well as more than 20 employees. As a result, 800 manufacturing companies were recognized to participate in the survey. It is worth noting that the questionnaires were completed by executives (such as CEOs, production managers, marketing managers, sales managers, and sales research and development authorities) or their deputies. Finally, 301 acceptable and valid questionnaires were collected. There was a response rate of 37.6%. Prior to testing the hypotheses using structural equation modeling through Lisrel the 8.8 software, the questionnaire items taken from valid English research works were translated once from English to Persian and again from Persian to English, and their original copy was compared  to ensure the correct translation and transfer of the content (Tsai & Hsu, 2014; Yang et al., 2011). In order to confirm the validity of the content and the form, the questionnaires were distributed among seven experienced faculty members in the fields of innovation and business to express their expert opinions on them.
Results and Discussion: The findings show that lean management (including total quality management, cross-functional teams, customer participation) has a positive impact on the new product development performance, financially and non-financially, through continuous improvement. Moreover, regarding the dimensions of lean management, while cross-functional team and customer involvement are found to have positive impacts on NPD performance, the relationships between supplier and employee involvement and NPD performance did not attain significant levels.
Conclusion: According to the research results, beyond external factors, there are factors such as total quality management and the formation of cross functional teams that are able to integrate scattered knowledge in an organization and extend it to improve the organization’s innovation. In fact, cross-functional teams and total quality management enable people from diverse areas within the organization or even between organizations to exchange information, develop new ideas, and solve complex problems. By contrast, in terms of the external factors, managers in a business environment like Iran should focus on customer participation, not suppliers. The results show that companies cannot expect positive results in Iran by strengthening inter-organizational partnership (such as partnership with suppliers). The weakness of supply chains and the lack of sufficient information are some of the factors that hinder the acquisition of knowledge in this way. According to the results, with the participation of customers, companies come closer to the demands of customers, and this can be very critical to the sales and satisfaction of new products.

Keywords

References

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Journal of Business Administration Researches
Volume 13, Issue 26
February 2022
Pages 207-237

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