NEW PRODUCT DEVELOPMENT: LEARNING BY DOING

In today’s market careful planning and a good product strategy are essential to help you succeeding in the market. Companies everywhere are competing more than ever to develop new and unique products or services and gain a higher position in the market. Companies develop a high number of new products every year Most of these products fail to secure competitive advantages and end up being just another high cost for the company.(G.Cooper 2001)

The USA is losing the ability to compete in high-tech fields in part because it has abandoned learning-by-doing. Basic research and applied research involving broadbased collaboration by government, academia, and business are essential for solving societal problems and in providing a base for technology-based businesses. Basic research involves understating the fundamental principles and dynamics of physics, chemistry, biology, and cybernetics to name a few. Applied research involves translating the principles and dynamics of basic research into commercial applications. The U.S. government up to about 1990 distributed about the same amount of funds to both basic and applied research projects. In recent years, the gap between basic research funding and applied research funding has been widening. The U.S. government has provided less money for applied research. 5 Outsourcing has also reduced the level of applied research. New product development is essentially applied research. New product development is facilitated when an organization has core competencies in research and development (R&D), product design, and manufacturing. Everyone is beginning to realize that there is a synergistic interplay between R&D, product design, marketing, and manufacturing. New product development is put at risk when these activities are outsourced, offshored, or both. Entire industries are affected as the knowledge is not readily available for solving problems and realizing new opportunities essentially because it is embedded elsewhere.

Learning-by-doing means that the organization makes and builds things, conducts experiments, and builds prototypes. This includes the manufacturing process. The loss of absorptive capacity insight can often be traced to outsourcing. Outsourcing typically occurs when products and service margins are under severe market pressure, and organizations are forced to increase productivity by turning to locations where labor costs are substantially lower. This can have serious consequences. If the organization loses its absorptive capacity, then the organization may not be able to understand and recognize when an emerging technology is important. In essence, the organization does not have the ability to acquire know-how, expertise and skills because it has lost the ability to learn-by-doing and learn-about emerging ideas and technologies. Grove's solution to recapturing creative and innovative mojo is to reduce costs by also increasing the scale of operations. The essence of his idea is that if an organization can produce more, it will also be able to take advantage of learning effects and to cover the fixed costs of production. Intel is committed to product differentiation, scale and cost reduction, in-house manufacturing, and in-house design. Long-term sustainability is inextricably linked to the synergistic interplay of design, manufacturing, and market awareness.

There is a revolution taking place in all businesses. Additive and desktop manufacturing, open-source software, and the do-it-yourself movement are fueling this revolution. Products and components can be conceptualized, designed, and built using 3D printers. These printers use a process that is similar to building up layers of plastic and composite materials to build products and parts and to prototype ideas. A do-it-yourselfer can assemble such a printer for under $1,000. A commercial printer can be obtained in the $10–$20K range. The products produced from these printers can be used to produce commercial products and for prototyping. Large-scale 3D printers are being developed to produce products and components the size of aircraft wings. There is also a revolution taking place in the development of services. Cloud computing, applications development tools, and open-source software are having a profound impact on the delivery of software-related services and applications. Software start-ups and prototypes can be constructed without investing in large-scale hardware infrastructure. The software itself can be cobbled together with a variety of development tools and open-source software. Competition can come from any size of company from anywhere in the world. All that is needed is an idea, hard work, and experimentation.