What is global product development?
Global product development is the globalisation of tasks and activities throughout the product development process, beginning with the global distribution of production centres, and more recently the distribution of high value adding stages of product development such as concept and detail design.
Firms may adopt two different sourcing modes for global product development:
- Outsourcing - the firm hands over specific tasks and activities during product development to independent foreign providers.
- Offshoring - the firm expands product development to foreign countries while maintaining full ownership and control of the subsidiary.
Why do we need practical tools?
Opportunities to reduce development costs, access new competencies and expertise and gain local knowledge of global markets during the development of products are key motivations for global product development. However, a recent study with over 40 multinational Danish manufacturing firms (www.industriensfond.dk/global-produktudvikling-guide) found that management encounter difficulties in relation to the coordination of culturally diverse and geographically dispersed engineering teams.
Furthermore, the lack of practical tools and methods to manage such difficulties typically resulted in a learning-by-doing approach to global product development. This can be costly later down the process and a need has been identified to support Danish firms to better prepare for global product development.
The research project
Building on these findings, a five-year research project entitled ‘Practical Tools for Global Product Development’ (www.industriensfond.dk/global-produktudvikling-metoder-og-værktøjer) was conducted that aimed to gain a deeper understanding of the impact that global product development has on Danish firms, and to develop practical tools to support:
- The strategic decision making process
- The measurement of operational impacts
The results from the project, which involved collaboration with over 60 multinational Danish manufacturing firms, have been compiled in a practical guidebook for industry with the purpose to strengthen the management and operationalisation of global product development.