Managing new product design and development: an Anglo-German study.

This article reports the results of a study of innovation and product development at 245 manufacturing sites in the UK and Germany. It examines the relationship between design and performance end the competitiveness of the UK and Germany in design end manufacturing. Overall, few sites reached "world-class" standards - 9% in Germany and 3% in the UK, although many sites were not far below these standards.

Competitiveness of manufacturing companies does not come just from managing the manufacturing process well. It also comes from successful exploitation of new technology, from a deep understanding of customer requirements and the ability to bring the right products and services to market faster than competitors. This is not simply a matter of creativity, but the ability to develop products that are easy to build, easy to ship, easy to use and a pleasure to own. This process of innovation (the continuous generation of new product concepts and ideas) plus product development (processes which systematically turn concepts into products and deliver them to market) is often called design.

This article on the "design" process is based on the results from the latest phase of a long programme of study of the competitiveness of manufacturing organisations in Europe. The programme - the Made in Europe study - has been led by the LBS Centre for Operations Management and IBM, with collaborators in Europe. The UK data is now being collected in conjunction with the Confederation of British Industry Probe benchmarking programme. The first part of this field study focused on the competitiveness of manufacturing in four European countries (Britain, Germany, the Netherlands and Finland) measuring both operational practice - total quality, lean production etc - and operational performance - productivity, profitability etc (Voss et al 1995).

This second study focuses on the competitiveness of design processes in British and German companies. We wanted to test the age-old rhetoric that the UK breeds great skills of invention - which itself suggests the importance British manufacturers attach to design. By developing a model of world class practice and performance, this study aimed to better define and measure the importance of design for manufacturing industry. Interviews were conducted at 245 manufacturing operations in the two countries, examining how well companies were managing their design and development processes against world class standards.

The Study

The Made in Europe design study is based on a conceptual model that links design practice to operating and business performance (figure 1). "Practice" refers to the established processes that a company has implemented to manage its manufacturing business. "Performance" refers to the measurable outcome of these practices at both the operational and business levels. The central hypothesis tested by this study is that adopting best practice will lead to attainment of high performance.

[Figure 1 ILLUSTRATION OMITTED]

Methodology

The data collection process was through a multi-level, cross-functional team at each participant site. Using a structured questionnaire, they assessed the level of practice and performance against a set of descriptions of good and poor practice.

For the study reported in this article, 27 new questions on innovation and product development were added to the original 46 core questions on manufacturing. Each question resulted in a ranking of site practice or performance on a 1 to 5 scale, with 5 representing world class performance, 3 representing average performance, and 1 representing poor performance.

Each site was then visited by an expert practitioner, who conducted an on-site review of the assessment team's responses. In addition, the reviewer provided feedback that positioned the site against its industry sector and against the entire sample. These results provide a powerful datum for regularly measuring the site's rate of progress towards world class. (There are many definitions of world performance. For the purposes of this study, a company defined as world class has to emulate and surpass the very best international companies in every area of its business.) Some sites have used the study's measurements as supporting evidence in their European and British Quality Award assessments.

122 UK sites and 123 in Germany were visited during 1994 and 1995. These represented a broad range of site sizes, industry sectors, parent company origins and ownership structures. 41% of the sites had over 500 employees, and another 34% had 200-500. Industry sectors ranged from "aeronautical and automotive" (15% of the total) to food (3%), with "mechanical" as the largest single group (19%). Nearly three-quarters of the sites were domestically owned, and nearly half were subsidiaries of other companies. Each site assessment becomes part of the Made in Europe database, which now includes more than 800 reports.

The questions that we sought to answer included:

* How far have manufacturing sites progressed in implementing world class design practice and performance?

* How many sites in the UK and Germany have reached world class levels in design practice and performance?

* What are the similarities and differences between the UK and Germany in design?

* Do better design practices lead to better design performance?

* What are the variables linking design and business performance?

* Is there a preferred sequence for improving specific design practices?

* Where are the critical opportunities for improvement?

* What is the link between design and a nation's competitiveness?

The breadth and depth of the sample made …