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PRODUCT INNOVATION ACTIVITIES IN AUSTRALIAN MANUFACTURING INDUSTRY
Abstract
Australian manufacturing industry needs to pay more attention to introducing innovative products if it is to be more competitive in the international marketplace. This paper reports some results of an investigation of new product process activities of Australian manufacturing firms. The aims of the study were to determine the sorts and forms of activities undertaken, their proficiency of execution and the sorts of improvements needed. The result have implications for more informed managerial decision-making to promote successfulproduct innovation.
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NOTES AND REFERENCES
See Department of Industry, Technology & Commerce Innovation for the 1990's: New Challenges for Technology Policy & Strategy, AGPS, November 1988.
Merle C. Crawford, New Products Management, Richard D. Irwin, Illinois, 1987.
E. Yoon and F. Lilien, ‘New industrial product performance: the effects of market characteristics and strategy’ Journal of Product Innovation Management, 2, (3), 1985, p.p.134-144.
Department of Industry, Technology and Commerce, op. cit.
op. cit., p.79.
Booz, Allen and Hamilton Incorporated, New Products Management for 1980s, Chicago, 1982.
See R. G. Cooper and E. J. Kleinschmidt, ‘An investigation into the new product process: steps, deficiencies and impact’, Journal of Product Innovation Management, 3 (2), 1986, pp.71–85.
These three research questions also guided the study of Canadian firms by Cooper and Kleinschmidt, op. cit. The present study also sought to determine the impact of new product process activities on commercial success and failure and the effect of the organisational characteristics of firms’ product development efforts on project outcomes. The Canadian study did not address the latter issue. The Australian study revealed statistically significant associations between organisational characteristics, the frequency, completeness and proficiency of the activities and commercial success/failure. Space limitations preclude more detailed discussion here. See L. Dwyer and R. Mellor, New Product Process Activities of Australian Manufacturing Firms Studies in Product Innovation Research Report 89/1, School of Business & Technology, University of Western Sydney, Macarthur, 1989. Copy available upon request.
The present paper concerns which activities are undertaken in the new product process, how proficiently they are undertaken and the improvements required for all projects whether successful or not. Interesting and statistically significant differences between successful and unsuccessful projects are discussed in detail in L. Dwyer & R. Mellor, op.cit.
Based on Australian Standard Industrial Classification two digit code. Firms were classed by the authors based on information about the nominated new product provided by each firm. To date, no analysis has been undertaken to determine whether or not there are significant inter-industry differences regarding activities undertaken and their impact on new product project outcomes. The issue must await further analysis of the survey responses.
The ‘technology push v ‘demand pull’ distinction has been displaced by new forms of analysis emphasising the process of innovation. (See Department of Industry, Technology & Commerce, op.cit., p.1). We employ the distinction here simply to categorise the source of ideas for the nominated new products. Since the projects were nominated by the respondents we cannot infer that this proportion of ‘market derived’ to ‘technology derived’ ideas represents some industry aggregate. It is interesting to note however, that even in a sample of respondents dominated by R & D managers, a large proportion of the projects originated from the marketplace.
For the majority of activities there are statistically significant associations between activities undertaken and overall project succes/failure. Some activities were undertaken significantly more often in successful than in unsuccessful projects. Successful projects also featured significantly more activities than did failures. That is, successful projects tended to feature a more complete new product process. The proficiency with which activities are undertaken is also closely associated with project success. The mean proficiency rating was higher for successful than unsuccessful projects for all activities with the strongest associations involving ‘up front’ or ‘pre-development’ activities (see L. Dwyer & R. Mellor, op. cit., pp.41–48.
As indicated, the survey sought to determine if there were links between firms’ organisational characteristics and the outcomes of new projects. To investigate this question the survey employed the McKinsey 7S framework (strategy, shared values, style, structure, staff, skills, systems) to structure responses. For details, see L. Dwyer and R. Mellor, op. cit. Some of the information provided by respondents has useful implications for management and has been incorporated in this section.
A study of new product process activities of manufacturing firms in England and Belgium reveals remarkable similarities in the problems facing new product managers and their action implications. See L. Dwyer, ‘Proficiency of new product development activities in U.K. manufacturing firms’, Management Research News, 12, 6, 1989; L. Dwyer and R. Mellor, ‘New product process activities and project outcomes” R&D Management (forthcoming).