Opt-out options in new product co-development partnerships

We study three contractual arrangements—co-development, licensing, and co-development with opt-out options—for the joint development of new products between a small and financially constrained innovator firm and a large technology company, as in the case of a biotech innovator and a major pharma company. We formulate our arguments in the context of a two-stage model, characterized by technical risk and stochastically changing cost and revenue projections. The model captures the main disadvantages of traditional co-development and licensing arrangements: in co-development the small firm runs a risk of running out of capital as future costs rise, while licensing for milestone and royalty (M&R) payments, which eliminates the latter risk, introduces inefficiency, as profitable projects might be abandoned. Counter to intuition we show that the biotech's payoff in a licensing contract is not monotonically increasing in the M&R terms. We also show that an option clause in a co-development contract that gives the small firm the right but not the obligation to opt out of co-development and into a pre-agreed licensing arrangement avoids the problems associated with fully committed co-development or licensing: the probability that the small firm will run out of capital is greatly reduced or completely eliminated and profitable projects are never abandoned.

Product intelligence: Theory and practice

Are there any benefits in allowing orders and products to be able to manage their own progress through a supply chain? The notion of associating (and even embedding) information management and reasoning capabilities with a physical product has been discussed for over ten years now. This talk will review the notions of product intelligence and examine the rationales for these models and the practicality of their implementation. Both theoretical and practical issues associated with product intelligence will be examined referencing a number of trial deployments in manufacturing, logistics and aerospace equipment servicing. © 2012 IFAC.

Requirements-based development of an improved engineering change management method

Engineering changes (ECs) are essential in complex product development, and their management is a crucial discipline for engineering industries. Numerous methods have been developed to support EC management (ECM), of which the change prediction method (CPM) is one of the most established. This article contributes a requirements-based benchmarking approach to assess and improve existing methods. The CPM is selected to be improved. First, based on a comprehensive literature survey and insights from industrial case studies, a set of 25 requirements for change management methods are developed. Second, these requirements are used as benchmarking criteria to assess the CPM in comparison to seven other promising methods. Third, the best-in-class solutions for each requirement are investigated to draw improvement suggestions for the CPM. Finally, an enhanced ECM method which implements these improvements is presented. © 2013 © 2013 The Author(s). Published by Taylor & Francis.

Exploring an effective model of new product development in medical devices: A knowledge cluster approach

This study proposes a new product development (NPD) model that aims to improve the effectiveness of innovative NPD in the medical devices. By adopting open innovation theory and applying an in-depth investigation methodology, this paper proposes a knowledge cluster that improves the integration of interdisciplinary human resources and enhances the acquirement of innovative technologies. A knowledge cluster approach helps gather, organise, synthesise, and accumulate knowledge in order to become the impetus for innovation. Although enterprises are no longer the principals of research and development, they should still be capable of integrating professional physicians, external groups, and individuals through the knowledge cluster platform. However, in order to support an effective NPD model, enterprises should provide adequate incentives and trust to external individuals or groups willing to contribute their expertise and knowledge to this knowledge cluster platform. Copyright © 2013 Inderscience Enterprises Ltd.

Stakeholder engagement in early stage product-service system development for healthcare informatics

This paper presents the findings from four case studies on stakeholder engagement in new health information and communication technology (ICT) product-service system (PSS) development. The degree of connectivity between the new health ICT PSS and its intended operating environment has emerged to be an important contextual factor that may impact the decision of stakeholder engagement in the early stage development process. Along with the proposition of a four-level framework to guide stakeholder identification for new PSS development, three stakeholder engagement propositions that are based on the degree of connectivity are developed. Analysis has shown that there can be two types of connectivity: data and process. Moreover, each connectivity type can be characterized by how much the new PSS is connected with its environment: independent if there is no linkage, linked if it interfaces with, or incorporated if it is embedded into. Furthermore, depending upon whether and to what extent the PSS has data and process connectivity with its intended operating environment, the stakeholder engagement needs in early stage development vary. The propositions presented in this paper provide important directions for future work exploring PSS characterization and stakeholder engagement decision in early stage new PSS development in the healthcare industry. © 2013 PICMET.

Lean product development in practice: Insights from 4 companies

This paper aims to elucidate practitioners' understanding and implementation of Lean in Product Development (LPD). We report on a workshop held in the UK during 2012. Managers and engineers from four organizations discussed their understanding of LPD and their ideas and practice regarding management and assessment of value and waste. The study resulted in a set of insights into current practice and lean thinking from the industry perspective. Building on this, the paper introduces a balanced value and waste model that can be used by practitioners as a checklist to identify issues that need to be considered when applying LPD. The main results indicate that organizations tend to focus on waste elimination rather than value enhancement in LPD. Moreover, the lean metrics that were discussed by the workshop participants do not link the strategic level with the operational one, and poorly reflect the value and waste generated in the process. Future directions for research are explored, and include the importance of a balanced approach considering both value and waste when applying LPD, and the need to link lean metrics with value and waste levels.

Technology management tools: Generalization, integration and configuration

Managers in technology-intensive businesses need to make decisions in complex and dynamic environments. Many tools, frameworks and processes have been developed to support managers in these situations, leading to a proliferation of such approaches, with little consistency in terminology or theoretical foundation, and a lack of understanding of how such tools can be linked together to tackle management challenges in an integrated way. As a step towards addressing these issues, this paper proposes the concept of an integrated 'toolkit', incorporating generalized forms of three core technology management tools that support strategic planning (roadmapping, portfolio analysis and linked analysis grids). © 2006 World Scientific Publishing Company.

FBS Linkage ontology and technique to support engineering change management

© 2014, Springer-Verlag London. Engineering changes are essential for any product development, and their management has become a crucial discipline. Research in engineering change management has brought about some methods and tools to support dealing with changes. This work extends the change prediction method through incorporation of a function–behaviour–structure (FBS) scheme. These additional levels of detail provide the rationales for change propagation and allow a more proactive management of changes. First, we develop the ontology of this method based on a comprehensive comparison of three seminal functional reasoning schemes. Then, we demonstrate the FBS Linkage technique by applying it to a diesel engine. Finally, we evaluate the method.