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Study and Implementation of Project Management Principles in New Product

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GRD Journals- Global Research and Development Journal for Engineering | Volume 6 | Issue 6 | May 2021

ISSN- 2455-5703

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43

Study and Implementation of Project

Management Principles in New Product

Development in the Automobile Manufacturing

Industry

Akshay Bhogil D. K. Shinde

Student Associate Professor

Department of Production Engineering Department of Production Engineering

Veermata Jijabai Technological Institute (VJTI), Mumbai

400019

Veermata Jijabai Technological Institute (VJTI), Mumbai

400019

Abstract

Current market environment is more competitive to introduce new product in the market, one should always analyze levels of

competitions, rapidly changing market environment, technical advancement, duration of the product life cycles. Purpose of the

papers is to study and implementation of the project management principles in the new product development as, it is an important

event for any organization. As new product give opportunity to stay ahead in the market many firms adopt typical practices for the

development that leads to the loss of company and affects the health of the market success. Presently, successful firms start

incorporating the project management practices in project which increases the success rate. Project management believes in

deliberate planning which lead to the reduction in the lead time. This study investigates the typical practices adopted by the firms

for new product development due to the existing problems in the past practices and thus, the project management practices

effectively address the issue for new product development to complete product development in optimum time for truck

manufacturing in the automobile industry.

Keywords- New Product Development, Project Management, Product Life Cycle, Innovative Strategy

I. INTRODUCTION

For any organization successful innovation is key driver for revenue growth, competitive margin and sustain in the market. But

this innovative strategy needs to reach the market very quickly, efficiently and stand ahead from competitors in especially

important. In new product development, to bring the product in the market with effectiveness requires coordination and integration

among multiples cross functional areas which include not limited to product design, procurement, planning, manufacturing, sales,

and marketing. In addition, an organization need to leverage core capability over other companies. To bring innovative product in

market faster, smarter, and cheaper a collaborative approach needs to use which take advantage of two organizations. Every

organization need to integrate and coordinate itself internally and externally with the suppliers and customers to create end to end

supply chain processes and capabilities which impose differences on product and customer requirement.

Today’s market environment is more competitive to introduce new product in the market with increasing levels of

competitions, rapidly changing market environment, technical advancement, and duration of the product life cycles. Whatever the

practices and typical method used earlier need to change. Meantime, to bring the product in the market a modern project

management practices are remarkably effective. There are very few firms which uses principle of project management. All such

firms are successful.

By referring to the above scenario, this study focused on use of the project management practices in New Product

Development (NPD). Fig. 1 below illustrates the reasons why firms develop new products and its role in the organizations.

Study and Implementation of Project Management Principles in New Product Development in the Automobile Manufacturing Industry (GRDJE/ Volume 6 / Issue 6 / 008)

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Fig. 1: New Product Development cycle [19]

II. LITERATURE REVIEW

A. Typical Process used for New Product Development for any Product

The New Product Development process is often referred to as the Stage-Gate innovation process, developed by Dr. Robert G.

Cooper as a result of comprehensive research on reasons why products succeed and why they fail [1]. A detailed NPD models have

been developed over the years, the best known of which is the Booz, Allen, and Hamilton (1982) model, shown in Fig.2 also,

known as the BAH model, which underlies most other NPD systems that have been put forward. This widely recognized model

appears to encompass all the basic stages of models found in the literature of general process of development [3].

Fig. 2: Stage of New Product Development [3]

The major firms experimenting with Agile–Stage-Gate hybrids. The early outcomes of these efforts are quite positive;

some firms report significant improvements in both times to market and development productivity, as well as faster responses to

changing market conditions and customer needs and higher project team morale. However, many challenges are identified in

implementing Agile–Stage-Gate hybrids, such as addressing management skepticism, finding the needed resources to field

dedicated teams, and dealing with fluid product definitions and development plans for implementing a hybrid product development

system [4].

B. The Traditional Automotive Product Development Process (PDP)

The automotive product development process as Truck program is long, expensive, complex, and risky. A typical Truck program

usually takes three to five years to complete, with costs ranging from several hundred million to several billion dollars. It can

involve several hundred, or even thousands, of people from many functional organizations and facilities spread across the country

and throughout the world. As an additional and sometimes hard-to-believe twist, very few of the people who begin this type of

Study and Implementation of Project Management Principles in New Product Development in the Automobile Manufacturing Industry (GRDJE/ Volume 6 / Issue 6 / 008)

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45

project will be around at the end because individual career paths move along quicker than Truck programs. This has obvious

implications for continuity of vision, goals, and philosophy [5].

The complexity of a Truck program is also a function of the thousands of choices and decisions awaiting the design,

engineering and manufacturing experts in order to balance cost, time-to-market, government regulations and consumer acceptance.

The challenge is to complete the process and produce a product that will attract buyers and create profits. All this gives an indication

of the tremendous risks that are inherent in every Truck program. Part suppliers and manufacturing engineering will use the

completed product designs to design and build productive capacity. Productive capacity is a combination of methods and machines

called Tools. In the automotive business, the term “tool” can apply to items with sizes ranging from a hammer to a house. Tool

construction has the highest cost of any portion of the PDP. The production plants modify their facilities to accommodate future

model tooling, usually while maintaining production of the current model [5],[6].

C. Improve automotive product development processes using Project management

Now a day’s many business organizations start applying modern principles of project management. Many businesses have the

products like bridge, building and automobile products etc. but they look these products as project. As per literature, only few

organizations that adopting the modern principles of the project management to develop the product. Some manufacturers realize

that the product development process (PDP) is an important contributor to profitability, just like the production process.

Three ways between profitability and the successful execution of their PDP [6],[7]. This discussion gives brief idea how

to improve automotive product development processes by using project management techniques and principles which provide

superior quality and profitable products, shorten lead time and reduce engineering changes. The main key strategy in this technique

is to make a good plan and avoid mistakes during execution. For the simple project it is quite easy to handle and mange but due

complicate nature of the product as automobile it is challenging to run the project smoothly [7].

The Checklist for Sustainable Product Development (CSPD), which is a qualitative decision support tool for use during

the early phases of automotive product development. The CSPD supports designers and engineers, encouraging them to improve

the sustainability performance of technologies by providing them with a structured and iterative process that allows them to identify

and define tasks and address violations of key sustainability principles. The results of the case study of automotive technologies

and a full vehicle concept demonstrated the practical applicability of the CSPD. The focus of sustainable product development is

directed toward identifying opportunities, recognizing mutual benefits and facilitating the exchange of knowledge between

different departments, and this is achieved by applying the back casting approach making technical engineers into the main actors.

The companies can integrate the CSPD into their internal processes and combine it with existing tools in order to conduct

sustainability assessments such as Life Cycle Assessment. A procedure was described for adapting the CSPD accordingly to allow

the application of the CSPD in different industries and products. The developed tool helps designers and engineers assess and

improve the sustainability performance of a technology and that it stimulated processes of collaboration and information exchange

within and between organizations [8].

Improving sustainability performance in early phases of product design: A checklist for sustainable product development

tested in the automotive industry. An agile framework based on Generative Design significantly reduced the impact of constraints

of physicality and avoided some challenges. The successful technology integration requires the agile framework to be tailored to

both technology and development context. So that both sides do not interlock, and the benefits may not be realized on overall

product development level become an applicability of standard agile methods is limited [9],[10].

III. METHOD AND ANALYSIS

Many factors such as cost estimates, material procurement, and underground problems are concentrating on proper project

management that is planning, scheduling, monitoring, and executing the projects. These factors can be treated well while working

that can reduce the delay and cost overrun of any [11],[12]. The project schedule should reflect all the work associated with

delivering the project on time. Without a full and complete schedule, the project manager will be unable to communicate the

complete effort, in terms of cost and resources, necessary to deliver the project [13]. The manager’s perspective behind selecting

any software depends upon the exposure it has received from his experience in different organizations. With the best selection of

a project management tool the firm can deliver more projects successfully and gain larger projects [14].

By implementing lean manufacturing principles, the unnecessary time for performing the fabrication operation were

reduce by 120 hours, which leads to cycle time reduction of the above fabrication process and productivity increased by 7.6%.

This reduction in the cycle time has significant impact on company’s productivity. The value stream map developed gave a good

idea of the process and the changes was done. The improved productivity by using of new technique in current environment is

valid and feasible [15]. Manufacturing Execution System (MES) is briefly defined as a category of industrial software for the

manufacturing environment and shop floor. MES is a newest member of the industrial software family. Market reports show that

it has been adopted in a number of discrete, batch and continuous process manufacturing industries, especially aerospace,

automotive. MES is a technological advancement which provides a competitive edge to manufacturing organization by promising

43.48% reduction in low efficiency downtime and 18.07% reduction in injection molding machine breakdown [16].

After practically study and analysis with the old standard practices with one automobile company, following data extracted

from the truck manufacturing plant of four-wheeler TATA motors Ltd. Pune. The cost task is shown in the Fig.3 and the cot over

Study and Implementation of Project Management Principles in New Product Development in the Automobile Manufacturing Industry (GRDJE/ Volume 6 / Issue 6 / 008)

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46

run is shown in Fig 4 are obtained from the data collected from the truck manufacturing plant for the one-year activities data

analysis.

Fig. 3: Cost Task Overview

Fig. 4: Cost Overruns

On the analysis of the cost task and the cost overrun for the truck manufacturing plant for light weight transport vehicle

of Tata Motor, it indicates that cost of variance is negative indicates project is over budgeted and the estimate at completion is high

and variance at completion is negative. That significantly indicate that NPD of the truck manufacturing is over budgeted.

A. Earned Value Analysis to check the health of the Project

The project’s earned value based on the status date. If actual cost is higher than earned value, then the project is over budget. If

planned value is higher than earned value, then the project is behind schedule. The earn value (EV), Cost Performance Index (CPI),

and Schedule Performance Index (SPI) are calculated for the truck manufacturing of Tata Motors Plant for given period of 12

month is discussed as below and the Earned Value Analysis to check the health of the project for truck is showed in Table 1.

Earned Value calculations require the following:

1) Planned Value (PV) = The budgeted amount through the current reporting period

2) Actual Cost (AC) = Actual costs to date.

3) Earned Value (EV) = Total project budget multiplied by the % complete of the project.

The Table I show the eared value analysis of the Diesel engine assembly project for Tata Motors.

Study and Implementation of Project Management Principles in New Product Development in the Automobile Manufacturing Industry (GRDJE/ Volume 6 / Issue 6 / 008)

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Table 1: Earned Value Analysis to check the health of the project for truck manufacturing

Project Completion 12 months

Baseline Actual Cost (BAC) 536800 536800 536800 536800 536800 536800 536800

Actual Cost (AC) per month 90000 135000 200000 245000 360000 450000 536800

Observation at month 2 3 4 5 8 10 12

Planned Completion (%) 15% 30% 40% 45% 70% 75% 100%

Actual Completion (%) 15% 30% 32% 40% 45% 40% 60%

Planned Value (PV) 80520 161040 214720 241560 375760 402600 536800

Earned Value (EV) 80520 161040 171776 214720 241560 214720 322080

Cost Performance Index (CPI) 0.8946 1.192 0.8 0.8 0.671 0.4771 0.6

Schedule Performance Index (SPI) 1 1 0.8 0.888889 0.64243 0.53333 0.6

The sample calculation for the Earned Value Analysis to check the health of the project is show below. The detailed analysis of

the earned value add the CPI & SP for sot performance and schedule performance are shown in the Fig. 5 and Fig. 6.

Sample Calculation:

– BAC = 5,36,800 INR

– AC = 90,00 INR

1) The Planned Value (PV) and Earned Value (EV) can then be computed as follows:

1) Planned Value (PV) = Planned Completion (%) * BAC = 15% * 90,000 = 80520 INR

2) Earned Value (EV) = Actual Completion (%) * BAC = 15% * 90,000 = 80520 INR

2) Compute the Earned Value Variances:

1) Cost Performance Index (CPI) = EV / AC = 80520 / 90,000 = 0.89

This means for every 1 INR spent, the project is producing only 90% in work.

2) Schedule Performance Index (SPI) = EV / PV = 80520 / 80520 = 1

Fig. 5: Earned Value analysis

Fig. 6: CPI and SPI analysis

Study and Implementation of Project Management Principles in New Product Development in the Automobile Manufacturing Industry (GRDJE/ Volume 6 / Issue 6 / 008)

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Fig. 6 indicates that CPI is less than one, this means the project is over budget. For every Rupee spent we are getting 60% worth

of performance. SPI is less than one, the project is behind of schedule. However, this has come at a cost of going over budget. The

project will be delivered lagging behind of schedule and over budget. Therefore, corrective action should be taken. This means for

estimated 2 months of work, the project team is completing entire work. Since CPI is less than 1, it means that the project is over

budget and SPI index is one means project is on schedule. Thus, the analysis of CPI and SPI concluded that there is need to check

the cause of over budgeting the NPD of truck manufacturing.

B. Cause and Effect Diagram

After performing the cause-and-effect analysis the diagram shown in Fig. 7 that identify the major cause on product development

delay. The major causes are found after the analysis CPI and SPI and, the main parameters are Engineering change, Scope change

and communication gaps among the team.

Fig. 7: Cause-and-effect diagram

C. Ideal Time Required for Development of Product

To make any new generation truck, require 3 to 5 years on project life span. To get full advantage and benefit of new product in

the market it is especially important to launch that product in mean time. Faster the rate of introduction/ launch of new product in

the market, greater will be the profit and success organization will achieve. This study focuses on the major causes which leads to

more development time and hence reduce the time for product development. Thus, the principles of modern project management

play important role in developing the NPD. Hence it needs to develop sample’s 320 parts and PPM analysis that takes 14 weeks.

The lead time required for the development for 320 parts after the Purchase order (PO) to release is shown in the Fig. 8.

.

Fig. 8: Mapping of Lead Time Required for the Development of different part

Fig. 8 clearly indicates that critical time needed the development after PO release is 24 weeks. By adding PPM analysis span the

total critical time planned as calculated below.

Total Critical Time = PPM Analysis span + Development Lead Time + Allowance = 14 weeks + 24 weeks + 10 weeks

Thus, Total Critical Time = 50 weeks (Almost 1 year)

However, in real practice it is not possible, due to typical practices time require for the development is two years.

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IV. A MODERN AUTOMOTIVE PRODUCT DEVELOPMENT PROCESS (A GOOD PLAN)

Most automotive PDPs use traditional methods to establish program benchmarks. This consists of placing standard, historical, or

experiential time periods between key points in the program such as concept approval, start of prototype, and start of pilot. The

problem with this method is that duration values are imposed between arbitrarily selected benchmarks. This means that the quality

of the entire schedule of benchmarks rests solely on the ability of the scheduler rather than on a measure of the real work activities

that lie ahead. [11]. That may have worked well for a five (or more) year program using known technology, experienced engineers,

and lots of money, but the world has changed. This kind of program timing is very un-competitive. World-class automotive PDPs

will require program timing that is considerably quicker than five years and, most importantly, a better way to develop and manage

their plans. It is easy to recognize advances in product and process technology, but one must also recognize the need to apply new

management methodology. That methodology is modern project management is shown in Fig. 9.

Fig. 9: Generic WBS (Automotive) [12]

A central concept in project management is the separation of planning from doing. Reducing the doing lead time of a

truck program must therefore start with deliberate planning to establish a plan for the reduction. The first step to planning a PDP

is for the project manager to define the program goals. It will provide a clear idea of how the key program elements will combine

to fulfill the program goals and how to manage the program. The next steps are to appoint the planning team and to develop a

scope statement. The planning team will work together to develop a scope statement for the truck program. This statement will be

the basis for constructing a work breakdown structure (WBS) and critical path method (CPM) project network diagram

[12[,[13],[14.[15]16]. This description should be clear and shall be complete possible, however it is not complete and final since

these concepts must evolve during planning. Thus, a coarse-to-fine approach works well at this point. Next step is, create network

diagram to depict all the activity and milestone timing for the entire truck manufacturing program from concept to production. In

order to create a model, the planning team must first define the level of detail for activities. This is a primary use of the WBS to

help visualize the level of detail.

Each functional representative will create own portion of the CPM activity network using the level of detail recorded in

the WBS as a guide. Each group must pay special attention to the interactions to its sub-project activities will have with activities

from other functional areas. A total program network will combine a summary of all the detailed functional sub-projects into one

network. Using this network and activity duration estimates, the total program length and the placement of individual benchmarks

are calculated.

Sometimes there are changes, corrections of mistakes or oversights made by the team, and other times they involve

fundamental modifications to business practices and assumptions till any further change will require a modification to the scope

statement. In these instances, before changing any of these activities and constraints found on the critical path, there must be

changes in the scope statement. This iterative process should continue until the plan satisfies the program timing goals and all

functional participants are comfortable with the plan.

A. Eliminating Avoidable Engineering Changes (Mistakes)

An engineering change is the formal process of changing the size, shape, specification, or function of a part after its final release.

As per the mapped status of current scenario of working project, following is the result obtained and is shown in the Table 2 and

the contribution of the major activities in the project are shown in Fig. 9. Table 2: Working project changes

Engineering Change Count of Part No.

AP 206

BOMC 1

ECN 115

EPA 3

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Fig. 9: Distribution of ongoing changes

From an impact-on-the-product point of view, there are two general types of engineering changes, those that represent

opportunity for product improvement and those that make corrections. As meaningless engineering changes caused by careless

mistakes and lack of communication. This research conducted for one automotive manufacturer indicated that a substantial

majority of engineering changes fall into the correction category. Most of the engineering changes in the correction category are

avoidable. Engineering changes are key ingredients leading to longer lead times, higher costs, and lower quality. Research indicates

that engineering changes account for as much as 50 percent of the cost of dies and that die costs accounts for half the capital

investment for a new model. The actual mistakes, corrections, and improvement of the new NPD is shown in the Fig. 10.

Fig. 10: Reasons for Engineering Changes

There are two clear sources of unnecessary engineering changes, those caused by missing interface requirements and

others caused by faulty business practices. All parts interface with other parts and, to allow for this, the design for each part must

include provisions for each interface. These provisions take the form of interface requirements drawn into each individual part

design to account for each interface. These requirements are holes, slots, groves, surface flats, angles and other similar items that

will facilitate the interface between part A and part B. The example of an Avoidable Engineering Change is shown in the Fig.11.

[17],[18]

Fig. 11: Example Engineering Change [17]

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The above case study illustrates a missing interface and its impact throughout the organization. Suppose an electrical

engineer discovered that a particular sheet metal part needed a hole to allow electrical wiring to pass through and the hole was

missing from the released design. In other words, the final release version of the part is in use by downstream users, and the design

now requires a change to correct an error. The release engineer will resolve this conflict by processing an engineering change

document on the particular part and modify the drawing to add the hole to the design. To a tooling engineer or part supplier are

expending time and resources on tooling for the released part, this engineering change represents the introduction of a new conflict

are shown in the Fig. 12. The tooling engineer must evaluate the impact of the engineering change on the already completed work

and determine if any rework will be necessary to accommodate the change. Multiple changes for the same part (as is often the

case) will further complicate this analysis and rework[18].

The only way to eliminate engineering changes caused by missing interfaces is to ensure that the part designs include

them before final release. Even though this sounds easy, the tricky part is knowing what interfaces to consider and when to consider

them. Fortunately, development teams can help eliminate these problems by, once again, using MPM techniques. The use of WBS

to create product engineering development schedules that meet the needs of all downstream users such as prototype, suppliers,

manufacturing engineering, plants, and others, allow ample time for the negotiation and inclusion of all interface requirements into

all designs before final release, and utilize a top-down and coarse-to-fine approach to development of the vehicle. There are four

main steps to accomplish this goal:

1) Develop and maintain a WBS of the entire product development process, with more detail in the concept and product design

portions. Because of its top-down format, the WBS will aid in identifying system-level interfaces first as shown in Fig 13 and

14, then detail part-level interfaces. [12],[13],[14],[15],16], [18]. By creating the detailed WBS we can easily tract the missing

interfaces at the earlier stages.

Fig. 12: Example for tracking missing interface

Fig. 13: Traditional WBS

Fig. 14: Detailed WBS Model

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1) Identify the interface requirements that were missing from past designs by examining the historical record of engineering

change information for both parts and tools.

2) Develop and maintain a database of interface information, including owners, customers, design requirements, and schedule

requirement dates.

3) Use CPM models to help control the sub-projects that produce the interface items.

It is sometimes a faulty business practice that causes engineering changes. The following scenario illustrates how this can happen.

[17],[18].

B. Faulty Business Practices Lead to Engineering Changes

At any given time, there are many functional groups working on a truck program. Each of these groups is responsible for its own

departmental budget. During times of economic distress, executive management will ask each department to reduce its budget by

delaying unnecessary spending. Those departments responsible for relatively short-lead-time parts usually respond by suspending

development work on them, Departments with long-lead-time parts cannot stop development without potential compromise of the

car program's timing goals, so they resolve the budget dilemma elsewhere. The problem occurs when development effort on the

short-lead part resumes and the part interfaces with a long-lead part. If, at this point the interface requirements are discovered to

be missing from the completed long-lead part design. It is too late to accommodate them gracefully or inexpensively. Suppose part

A is a long-lead-time part, part B is a short-lead-time part, budgetary restrictions have temporarily suspended development effort

on part B, and the design of part A is complete and released. When the design for part B resumes and reveals there is a design

requirement missing from part A to accommodate the interface with part B, it will take at least one engineering change to correct

the problem. Hence, the short-term solution to current cash problems (delaying development) contributes to more expensive long-

term problems within the PDP (unnecessary engineering changes).

V. CONCLUSION

To sustain in the competitive market of automobile new products need to introduce with faster rate. But with the traditional

practices and methods, it is difficult to achieve the objective. Typical development time for new truck is 5 years, in which idea

generation and concept development take more time which is unavoidable. But when concept is ready design and development

take 2 years this development time can be reduced. Well planned and executed PDP will provide higher quality products sooner

at less cost. Ideal time required for design and development is 50 weeks i.e., almost one year. But it is possible to reduce delay of

one. The manufacturer needs to improve the execution of their product development processes by using principles of project

management. By creating detailed WBS we can easily track the missing interface among the aggregates, avoid the engineering

changes and improve the communication visibility prior to loss time and money. By incorporating network diagrams and CPM at

every functionary element, project managers can easily involve in each function while planning activity that leads to reduction in

conflicts and get the confidence on planning that reduce the doing time.

ACKNOWLEDGMENT

We thank thanks to Production Engineering Department of VJTI, Mumbai for financial support for this project work and giving

an opportunity to conduct the project in industrial environment. Also, we thank to Mr. Nitin Deole, Program Manager of Tata

Motors Ltd. Pune for giving this opportunity to work in the company and providing me the necessary support.

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