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Supervisor

Dr. N. Kannan, MBA, PGDCA, M.Phil, Ph.D, LL.B. M.L.,

Professor in School of Management Studies,
Sathyabama Institute of Science and Technology,
Chennai.

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Nominee of International National Examiner
Examiner

Dr. A. A. Ananth, Dr. Atik Shaikh,

Associate Professor, Associate Professor,
Annamalai University, University of Pune,
Chidambaram - 608 002. Pune - 411 001.
Dr. D. Jublee, Mr. J. Kamalraj,
Professor, Vice-President &
Sardar Vallabhbhai Patel Operations,
International School, Diamond Engineering,
Coimbatore - 04. Chennai - 600 048.

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 In business and engineering, New Product Development
(NPD) is the complete process of bringing a new product to
market.
 NPD is expressed in the literature as the transformation of a
market opportunity into a product available for sale and it can
be tangible or intangible (like a service, experience or belief).
 A good understanding of customer needs and wants, the
competitive environment and the nature of the market
represent the top required factors for the success of a new
product.
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 Understand and observe the market, the client, the
technology and the limitations of the problem;

 Combine the information collected at the first step;

 Visualize new customers using the product;

 Prototype, evaluate and improve the concept;

 Implementation of design changes;

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 Idea Generation
 Idea Screening
 Idea Development and Testing
 Business Analysis
 Beta Testing and Market Testing
 Technical Implementation
 Commercialization
 New Product Pricing
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Almendra and Christiaans (2009) believe the designers and
product developers have to make countless decisions which
have a great impact on the quality of the design solution
and on the company’s success on the market.

They highlighted three substantive elements in decision

making in design process.

They are:
Knowledge Access and Management
Thinking and Communication Skills
Use of Strategy and Provide Solutions

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Greenwood (1969) presented two decision frameworks;
namely open and closed.
In a closed decision framework, a known set of alternatives
and one or several courses of actions are selected by a
rational selection process.
Open decision framework is more complex which is called
adaptive.
Also, decisions can be classified into two types; adaptive
decisions and routine decisions.
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The key to a successful product development process is
strong leadership of an expert Chief Engineer (CE) with total
project responsibility who is supported by experienced
function engineer.

Liker (2004) observes that the successful Chief Engineer is

sometimes referred to as a “heavy weight project manager”
who has proven engineering excellence, leadership skills to
control the programme and customer satisfaction.
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After thorough review of the existing literature on the NPD
in engineering industries, it is found that the studies are
covered on process, design, development, manufacturing
strategy and commercialization strategies
in India and abroad.
The usage of technology, models and new methods are
widely studied. Hence the researcher found a gap to study
the comprehensive issues in NPD in engineering industries
in India and with special reference to Chennai.
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The reason for selection of Chennai is, in South India,
Chennai is one among the engineering pioneer
cities with high level technology deployment
and up gradation from time to time.
In addition, Chennai city is having more than six industrial
estates specially designed and developed for the
engineering manufacturing. Hence it is appropriate to
select and study the NPD issues and strategies during post
technological Era in a contemporary environment.
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 NPD involves many dimensions of issues and factors due to
involvement of money, risk associated with the investments and
feasibility and commercial viability of the product.
 Before introduction of a new product, another advanced and
economical product may emerge as substitute. In this case, the
risk is high. This is external environment related.

 But internal factors role in new product development is equally

holds good. The role of firm’s demographics
is indispensable in nature.

 There is no comprehensive study covering the issues and

concerns pertaining to new product design and development in
fabrication engineering industry. Hence the present study is
taken up for the research.
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 The scope of the current study is limited to
selected engineering firms operating in
Chennai which include both public limited
and private limited firms.
 The operations of the sample firms are spread across all the
domains and verticals of design, development, site engineering,
servicing and consultancy services in engineering domain.
 The employees in the survey cover the range of age groups,
experience groups, working at different levels of management.
 The findings of the study may be applicable to the firms operating
elsewhere in the same environment in the country.
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 There is both practical and theoretical significance of conducting
a research study of this nature.

 The fabrication division is depending on the customer specific

products design and development. Hence every product is different
and every product required a new model and new requirements in
terms of resources and talents.
 In this scenario, a comprehensive study on the issues, concerns,
motives, strategies adopted and factors influencing the NPD in
fabrication engineering industries could be value addition to the
existing literature and identifying the success factors of new
products in fabrication industry could be of practical use to the
industry. With this philosophy in mind, the current project is
undertaken.
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 To examine the motives for NPD in fabrication industry.
 To find out the different kinds of strategies adopted in new
product development by the fabrication engineering firms.
 To analyze the factors influencing new product development in
fabrication industries.
 To notify the success factors of
new products in fabrication industry.
 To find out the role of employee demographics and the firm
characteristics in the NPD in fabrication industries.
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 On the basis of the objectives of the study, the following
hypothesis were framed and administered on the sample
data.
 There is no significant difference between the various kinds of
firms with regard to motives for new product development in
fabrication industry.
 There is no significant difference between the various kinds of
firms with regard to strategy adopted in new product
development in fabrication industry.
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 There is no significant difference between the various kinds of
firms with regard to factors influencing new product
development in fabrication industry.
 There is no significant difference between the perceptions of
various kinds of firms with regard to success factors of new
product in fabrication industry.
 There is no significant difference between the various groups of
employees (classified on the basis of demographics) with regard
to various dimensions of new product development aspects in
fabrication industry.
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 For the purpose of study, data required is collected from
both primary and secondary sources.

 The primary data is collected from a structured questionnaire

prepared and tested through pilot study.

 The secondary data is collected from magazines, newspapers,

books, journals, research based thesis and review reports.

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The questionnaire is framed with eight parts.
 Part-I deals with the profile of the sample respondents and the firm
relating to new product development.
 Part-II deals with the level of
agreement on the motives for NPD.
 Part-III deals with the level of agreement on the various types of
strategies adopted in NPD by the fabrication firms.
 Part-IV deals with the factors influencing NPD in fabrication
engineering industries.
 Part-V deals with the level of agreement on barriers in new product
development by the fabrication firms.
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 Part-VI deals with the level of agreement on the success factors of
new product development by the fabrication firms.
 Part-VII deals with the level of approval to the following
suggestions to improve the NPD by the fabrication firms.
 Part-VIII deals with an open ended question asking, any other
suggestions from the respondent to improve the new product
development by the fabrication firms.
 The questionnaire comprised two different kinds of questions in the
form of multiple choices and Likert’s five-point scale type in order
to sustain the interest of the respondents and avert monotony.
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 The pilot study was conducted by distributing 125
questionnaires to respondents from the engineering
companies in the sample area.
 Cronbach Alpha Test was used to determine the degree of
consistency among the multiple measurements of each factor.
 It measures the inter-item reliability of a scale generated from
a number of items.

 The reliability for the same was calculated by using Corn Bach’s
Alpha Score and found at 0.896 (89.6%) as reliable.

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 The current study is descriptive in nature.
 Fabrication engineering firms from
Chennai are selected by using the
Industrial Association Dictionary from
Guindy Industrial Estate Firms Association.
 From the list of fabrication industries having more than 20 years
of experience in the industry is selected for the study.
 There are 49 firms having more than 20 years of experience in
fabrication industry.
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 While approaching for studying, 16 companies rejected the
entry permission, sharing of data and distribution of structured
questionnaires to the employees.
 From the list of remaining 33 firms, all the companies are
given due and equal weightage and distributed 20
questionnaires to each company on quota sampling basis.
 481 filled in questionnaires were collected back and scrutinized
to remove the unfilled and partially filled questionnaires.
 442 questionnaires are filled in all respects and found usable
for further analysis.
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 The sample size is determined by using scientific method, by using
pilot study standard deviation of the sample of 125 respondents by
allowing the standard error at 5% level.
By using formula,
Sample Size (N) = (ZS/E)^2

where Z = Standard value corresponding

to a confidence level of 95% = 1.96

S = Sample SD from the pilot study of 125 samples = 0.535

E = Acceptable error = 5% = 0.05
N = (1.96 x 0.535 / 0.05)^2
N = 439.82 ≈ 440 and actual is 442
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 Frequency Analysis
 Chi-square Analysis
 t-test
 Analysis of Variance (ANOVA)
 F-test
 Friedman Test
 Factor Analysis – Principal Component Method
 Multiple Linear Regressions
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 The present study is conducted in the
Chennai city and by using convenient
sampling technique.
 The sample size is limited to 442 due to time and physical
constraints in meeting and obtaining the responses.
 The perceptions represented may be purely personal opinion of
the respondents and not representing the firm they belongs to
or the firm they worked with in the previous years.
 The level of understanding of the concept and its importance is
not quantified and hence the results may vary accordingly.
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Descriptive Statistics of motives for new product development in
fabrication engineering firms
 The factors are classified into two groups namely
◦ Primary factors
◦ Secondary factors
 The primary factors are identified with the higher level of
agreement score of above 75% and represented with the mean
score value of above 3.8 and mean score of below 3.8 are classified
as secondary factors.
 From the table, primary motives indicate the role of market and
customer expectations in the new product design and development
in the fabrication industry.
 Hence at secondary influencing factors are related to ability to take
up and willingness to accept the risk is important aspects of new
product design and development in fabrication engineering industry.
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Descriptive Statistics of strategy adopted in new product
design and development in engineering firms
 The strategies are classified into two types namely
◦ Generic strategies
◦ Specific strategies
 Generic strategies are those applied universal pattern by all
the firms in industry.
 The specific strategies are those applied with strategic view to
have a specific goal with time frame.
 The specific strategies are noted with mean score of above
3.8 and generic strategies are notified with mean score of
below 3.8.
 From the table, specific strategies adopted indicates that
overall strategy formulation is depending on market factors
rather than the firm related factors.
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 Generic strategies adopted in new product development are
identified based on organizational philosophy oriented strategies. 37
Descriptive Statistics of factors influencing new product
development process in fabrication engineering industries

 The factors are classified into two groups namely

◦ Primary factors
◦ Secondary factors

 The variables scores mean value of above 3.8 are titled as

primary factors and the variables scored mean value of below
3.8 are titled as secondary factors.

 The results of the primary and secondary factors are identified

and classified on the basis of mean value of the respondents
perception and the same are presented as shown in the table.
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Descriptive Statistics of success factors of new products in
fabrication engineering industry
 The factors are classified into two groups namely
◦ Primary factors
◦ Secondary factors
 The primary factors are identified with the mean value of
above 3.8 and the secondary factors are identified with the
mean value of below 3.8.
 From the table, primary success factors indicate the important
human aspects of work like work culture, recognition,
transparency, motivation, team building and confidence at
work.
 Hence, it is quoted that, without human capital and time frame
work schedules, there is no fabrication firms and without
effective deliverables, there is no sustainable engineering
firms.
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 Null Hypothesis: Perceptions of employees from the companies
having and not having NPD department with prototype testing
technology with regard to motives for NPD and strategy adopted
in NPD in fabrication engineering industries along with t-test
results.

 P value is recorded at 0.003 and 0.005 indicates less than 0.01 and
rejected the null hypothesis.
 There is no significant difference between the perceptions of the
employees from the companies having and not having NPD
department with prototype testing technology with regard to
motives for NPD and strategy adopted in NPD in fabrication
engineering industries.
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 Null Hypothesis: Perceptions of employees from the companies
having and not having NPD department with prototype testing
technology with regard to factors influencing NPD, barriers in
NPD and success factors of new products in fabrication
engineering industries along with t-test results.

 Since P value is less than 0.01, hence the null hypothesis.

 There is no significant difference between the perceptions of
employees from the companies having and not having NPD
department with prototype testing technology with regard to
factors influencing NPD, barriers in NPD and success factors of
new products in fabrication engineering industries is rejected at
1% level of significance.
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Findings of Descriptive Statistics

 Motives for new product development in fabrication

engineering firms
 If mean score value > 3.8 Primary Factors

 Indicates the role of market and customer

expectations in the new product design and
development in the fabrication engineering industries.

 If mean score value < 3.8 Secondary Factors

 Related to ability to take up and willingness to accept

the risk is important aspects of new product design
and development in fabrication engineering industries.
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 Strategy adopted in new product design and development in
fabrication engineering firms

 If mean score value > 3.8 Specific Strategies

 Applied with strategic view to have a specific goal with

time frame.
 Overall strategy formulation is depending on market
factors rather than the firm related factors.

 If mean score value < 3.8 Generic Strategies

 Applied universal pattern by all the firms in industry.

 Based on organizational philosophy oriented strategies.
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 Factors influencing new product development process in
fabrication engineering industries

 If mean score value > 3.8 Primary Factors

 Cross-functional teams, resources and management

support play major role in design and development of
new products in the fabrication industry.

 If mean score value < 3.8 Secondary Factors

 Indicates the role of organizational variables in the new

product development.
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 Success factors of new products in fabrication engineering
industry

 If mean score value > 3.8 Primary Factors

 Indicates the important human aspects of work like

work culture, recognition, transparency, motivation,
team building and confidence at work.

 If mean score value < 3.8 Secondary Factors

 Quoted that without human capital and time frame

work schedules, there is no fabrication firms and
without effective deliverables, there is no sustainable
engineering firms.
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Findings of Inferential Statistics
 Since p value is recorded at 0.003 and 0.005, indicates less than
0.01 and rejected the null hypothesis. There is no significant
difference between perceptions of the employees from the
companies having and not having NPD department with
prototype testing technology with regard to motives for NPD and
strategy adopted in NPD in fabrication engineering industries.
 Based on the mean value, it is found that the companies having
NPD department with proto testing facilities are highly endorsed
the motives and strategies adopted in NPD in fabrication
engineering industries when compared to others.
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 This is due to the regular involvement in the NPD and practicing
proto testing for future development.
 The companies need to have a separate department in order to
bring out the more number of innovative designs and products to
compete with the competitors in the market.
 Since p value is less than 0.01, the null hypothesis, there is no
significant difference between the perceptions of employees
from the companies having and not having NPD department with
prototype testing technology with regard to factors influencing
NPD, barriers in NPD and success factors of new products in
fabrication engineering industries is rejected at 1% level of
significance.
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 Based on the mean value, it is noted that companies having
NPD department with prototype testing facilities are highly
endorsed for the factors influencing NPD, barriers in NPD and
success factors of new products in fabrication engineering
industries.
 It may be due to direct experience with the proto models and
testing the various designs before finalizing the new product
for commercialization.
 Other companies too can have such facilities for improving the
performance in new product development.

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 The performance of the firm is necessary to serve and gain the trust
and confidence of the stake holders.
 It is the duty of the employees and management together to act and
be proactive in accordance with the market demands and retain the
good client base along with sustainable development of revenues,
client base and market share.
 To get the same contribution
from the employees,
organization and NPD practices
and having the business continuity can help in their own way.
 Hence all the three needs to be focused simultaneously.
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Suggestions to improve the performance of employees
 Effective man power planning and selection
 Appropriate and regular training and development
 Employee motivation and involvement
 Talent retention management
 Career development and
social security needs of the
employees

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Suggestions to improve the performance of the firm
 Organization culture and work environment
 Physical and intellectual learning environment
 HR policies and practices
 Facilities for growth and
development
 Business consistency and
risk management practices

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 It is noted that contribution of employees, organization environment
and new product development are indispensable for the sustainable
growth and development of the business in long run.
 Hence a systematic planning and adoption of development schemes
and plans from time to time can help in growing much faster, better
and sustainable.
 Hence NPD is a tool to
capture the market risks
affecting business
continuity and sustainability
in fabrication engineering
industries.
 HR planning and employee motivation and team building, work
culture can act as a catalyst for the individual growth and the
organization development.
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 Hence new product development can be successful only when the
employee involvement with the sense
of belongingness towards
the organization.

 It is the duty of the management to grow such culture among the

employees through transparent human resources policy with
employee protection guarantee can definitely help to improve the
performance of the direction of new product development in
fabrication engineering industries.
 Let’s hope for the same for the benefit of the firm and society at large.
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 The present study has been focused on assessing the various issues
and dimensions of NPD in the fabrication engineering industry.
 The basic facts identified in this research
and presented as factors can be tested in
some other geographical region in the country
and validate the research further and
differentiate the factors of NPD.
 The comparison between two models, two strategies adoption as case
study, cross cultural issues in new product development could be of
additional value to the existing literature.
 Micro level studies can help in customization and effective
implementation for the benefit of the society at large.
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