Managing unplanned design iterations in new product development: An approach using risk management, resilience, and organizational learning

Most new-product development (NPD) engineering projects encounter uncertainties from rapidly shifting market demands and developing technologies resulting in requirements change and the organization’s ability to implement state-of-the-art processes reliably. This complexity triggers unplanned design iterations in the engineering design phase of the NPD process. These unplanned design iterations can be assumed to be the occurrence of a specific class of NPD project risks. Unplanned design iterations ultimately cause failures in reaching cost, schedule, quality, and customer satisfaction targets.
Today’s organizations utilize traditional risk management practices to mitigate risks in NPD projects. However, even with mitigation actions in place, projects still struggle to manage NPD project risks. This thesis explores the utilization of risk management, resilience, and organizational learning in managing unplanned design iterations risk in the design and development of new products.
To achieve this aim, we employed a deductive research approach. We used different research methods in the deductive research approach, including literature review, case study, cross-sectional interviews, and survey.
First, we used a literature review to identify learning methods and conceptualize the “cost-of-learning” from failures and mistakes in the engineering design phase. In the literature review, we classified the learning methods into formal and informal learning methods. The formal learning methods involve prototyping, outsourcing, learning by doing, consulting past product reviews, and learning by training and lectures. On the other hand, informal learning method identified was learning from incidents in the design phase.
Second, we conducted an interview-based case study to evaluate the hypothesis that resilience-based “monitor-and-react” and risk management-based “predict-and-plan” approaches complement each other in managing NPD project risks. The results confirmed that resilience-based and risk management-based approaches complement each other as a strategy in managing known and unknown risks in NPD projects. Furthermore, subsequent analysis of the interviews conducted in two different companies also confirmed findings from the case company. Thus, for better avoiding and mitigating the impact of known and unknown NPD projects risks, the analysis of the empirical data suggested the overlap of risk management-based “predict- and-plan” and resilience-based “monitor-and-react” approaches.