An exploratory empirical study of the role of manufacturing in product formulation

Abstract

In recent years, a considerable amount of attention has been paid to improve new product introduction projects (Hayes and Pisano, 1994). Many companies are attempting to remodel their design-manufacturing interface to ensure their product designs are easier to manufacture thereby reducing development cycle time and cost. However, the window of opportunity for manufacturing function to maximize its impact is at the front end of the new product project, namely product formulation,, because up to 80% of a product manufacturing cost depends on the decisions made at formulation (Gerwin, 1993; Smith and Reinertsen, 1991). This study explores the following research question: if the manufacturing function is represented in the product formulation of the new product introduction (NPI) project, what effective role can manufacturing play?

To answer this question, an exploratory empirical study was conducted to better understand such a role of manufacturing. Field data and findings were gathered from onsite interviews with five companies, one of which was the primary site where five NPI projects were studied in depth. This study found that the primary site and one of the four secondary sites had practiced manufacturing participation in product formulation since the late 1980s, and another secondary site since early 1990s. These sites expressed their opinions that such a practice added value in reducing development cycle time, and improving the quality of decisions made. A t the studied two sites, the role of manufacturing was found to be especially vital where concurrent development of a product design and a solution delivery process was an objective of the product formulation.

In terms of this role of manufacturing this study found that an effective role is to assume an information provider role and become a contributor to product formulation, in the areas of opportunity identification and future problem avoidance. To facilitate information exchange between formulation teams and manufacturing, other than promoting reciprocal information flow (i.e. information pulling and pushing), manufacturing at formulation may offer foresight in advanced manufacturing process management through front end product planning (e.g. advanced information and insights that could drive manufacturing strategy, thereby rapid execution of manufacturing process planning).