Managing Costs in Innovation and Product Development – A Review of Industry Practice
- Typ:Bachelor's thesis
Purpose: The primary objective of this paper is to provide a structured overview of research published outside management accounting literature on methods for cost management in new product development. In particular, this paper aims for capturing research within innovation and research and development (R&D), marketing, general management as well as operations management literature.
Methodology/approach: This paper applied a systematic literature search and selection approach, which covered papers about 15 different cost management methods published in 23 selected journals in the period January 1990-November 2014.
Findings for the innovation and research and development (R&D) and the marketing literature: 101 different papers were retrieved, which overall provided 139 references to particular cost management methods. Journals with an innovation and R&D background, such as the Journal of Product Innovation Management or IEEE Transactions on Engineering Management, provided significantly more papers and references to the final sample than marketing journals. Modular design, stage-gate reviews and product platforms found considerable attention in the literature, whereas other methods were scarcely covered. Most frequently, the papers pursued an empirical research approach, with survey data being the preferred type of data.
Findings for the general management and the operations management literature: 107 different papers were retrieved, which overall provided 136 references to patticular cost management methods. Journals with an operations management background, such as the International Journal of Production Economics or Journal of Operations Management, provided significantly more papers and references to the final sample than general management journals. Modular design, component commonality and quality function deployment found considerable attention in the literature, whereas other methods like technology roadmaps or function cost analysis were scarcely covered.
Research limitations/implications: The paper focuses on literature from a limited sample of different journals. Future research in this area seems promising, so extending the literature base could lead to valuable results. Furthermore, the scope could be extended by looking at several other cost management methods. Applying systematized, semi-automated mining approaches could furthermore prove worthwhile. The relations between the different cost management methods could be further assessed through empirical research.
Originality/value: The paper focuses on 15 different cost management methods and follows after Wouters and Morales (2014), who reviewed research on these methods within management accounting literature.
Keywords: Cost management; new product development (NPD); innovation; research and development (R&D); marketing; operations management.