A Risk Management Approach for Collaborative NPD Project
Summary (2 min read)
Introduction
- Keywords—new product development; project management; collaborative network; risk management; innovation.
- Higher requirements for the products lead to the need for constant innovation for company’s competitive advantage.
- External knowledge sharing appeared in collaborative network and forms an open innovation system [4] with advantage and difficulties.
- To identify the risks and propose a risk management plan, the objective of this work is to propose a reading frame for collaborative NPD project.
- Therefore, in this section, the authors define these particular notions.
A. The innovation and its effect on the project
- NPD collaborative project has four main steps: Requirements specification (including idea genesis), Product design, Product implementation, and Commercialization.
- This steps are formalized as a sequential process (stage-gate process), or a concurrent, iterative one (Vee cycle) [8].
- In the Evbuomwan et al.’s [10] classification the level of originality is obtained by routine design, to redesign and non-routine design.
- Du to the innovation, NPD project are risky.
- The types of collaborations are described in the next section.
B. Collaborative network and partners election
- 1) Definition NPD project may imply a “co-development alliance “[13] or “Technology development alliances” [14], with the purpose of improvement in technology and know-how, for example agreements for joint R&D, simultaneous engineering, licensing, joint design and/or technology commercialization.
- Those involve the sustained joint creation of property and knowledge for the partners, requiring them to bring in resource and work together on a constant basis [15].
- Schumpeter [16], contrary to the standard neo-classical theory, point out the endogenous character of technology and innovation (mainly in-house R&D).
- In unilateral alliance one partner provides founds to another partner for specified R&D development.
- Innovation level is directly proportional with novelty gain.
C. Risk management in Network
- Firms trying to be innovative develop new ways of doing business.
- The performance risk is usually shared by making alliances but the relational risk appears only if an alliance is made [27].
- Tornatzky and Fleischer [28] framework highlights the three main elements of a firm’s context influencing the process by which it adopts and implements technological innovation: Organization, Technology, and External Task Environment.
- Other kind of risks, exogenous of network, are possible.
- They are mentioned below but are not considered in this work.
D. Finding
- Depending on the innovation level of the project and on the collaboration involved in the development, different risks are possible.
- The strategies needed to manage risk and to success the project different on the type of the considered risks.
- To identify risks and propose adapted risk treatment strategies, is necessary to be able to characterize a project following the three dimensions presented in the literature review (Innovation level, collaborative network and type of risks).
- First the authors formalized the process to build the risk management plan.
- This process uses the characteristics of the project to achieve efficient plan.
A. Risk management in collaborative project design
- During the NPD project is designed, risks are studied.
- The level of innovation drives the manager to develop incrementally the new product based on existing products or a radically different one.
- The planning of the project and the associated project can have to be reviewed.
- These works do not considered the effect of the alliance selection on the planning and on the risk.
- Therefore, risk treatment strategies generally conduct to review the product design or the project planning as well as to modify the collaborative network.
B. A structuring frame
- The innovation level with the incremental or radical innovation.
- The type of risk with the relational and the performance risk.
- The cube obtained presented in figure 3 show in each cells the intersection of this decomposition.
- Each cell represent contexts where the project will be carried on and for which risk treatment strategies have to be proposed.
C. Risk management
- For each cell of the cube the literature identify different risks and possible treatment strategies.
- These sets are provided in order to drive the decision maker in the identification of the risks and in the risk treatment strategies to provide a risk management plan.
- Pharmaceutical companies establish alliances to develop new medicine.
- The problematic addressed in this paper is to help the manager building a risk management plan to make the project robust to the risks.
- This work gives a macroscopic vision of the influence of the innovation and alliance on the project risk level.
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