NPD Project Evaluation in the Manufacturing Industry

University essay from Lunds universitet/Företagsekonomiska institutionen

Abstract: Title: NPD Project Evaluation in the Manufacturing Industry Seminar date: 26 May 2015 Course: FEKN90 Authors: Carl Ekbom and Alexander Wrange Supervisor: Ph.D. Christian Koch Key words: NPD projects, evaluation methods, evaluation criteria, portfolio management, manufacturing industry Purpose: The purpose of this thesis is to increase the understanding of how new project de-velopment (NPD) projects can be evaluated in terms of methods and processes. Furthermore, it aims at scrutinizing the impacts of actors and structures on the evaluation process. Moreo-ver, it aims at identifying what challenges and trade-offs companies face when choosing eval-uation methods and organising processes for NPD project evaluation. Method: Qualitative multiple-case study of three large manufacturing companies in Sweden, with embedded design and influence from action research. Theoretical perspectives: Theories in financial project evaluation, project evaluation criteria, agency theory, portfolio management Empirical foundation: Semi-structures, in-depth interviews with a total of ten managers with different functions at the three case companies. Conclusions: Financial methods are essential for NPD project evaluation, but complementary criteria that consider the complexity of NPD projects are necessary to include. Portfolio man-agement can be used as a process to combine financial methods and complementary criteria. The impact of actors limits objectivity, but they provide important knowledge and experience. The structures serve as a cross-functional framework to guarantee the involvement of actors from different functions in the evaluation process. Companies face several challenges in rela-tion to NPD project evaluation and have to choose between using a comprehensible or sophis-ticated evaluation method, a common method or different methods, and the same set of crite-ria for all projects or use different sets for different types of projects.

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