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1 Department of Management Engineering, Technical University of Denmark 2 Production and Service Management, Department of Management Engineering, Technical University of Denmark 3 Engineering Systems Group, Production and Service Management, Department of Management Engineering, Technical University of Denmark 4 Massachusetts Institute of Technology 5 King Fahd University of Petroleum and Minerals 6 Massachusetts Institute of Technology 7 King Fahd University of Petroleum and Minerals
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. © 2014 Elsevier Ltd. All rights reserved.
Technovation, 2014, Vol 34, Issue 8
Risk management; New product development; Program management
Main Research Area: