Using Modelling and Simulation for Improving the New Product / Service Introduction Process: A System Dynamics Approach

To achieve long-term success, a company must increase its willingness to change and improve continuously its competitiveness in all its functions. This is more so because the quality perceptions of users continue to change [1]. To achieve this, an organisation needs to start from the basics; it has to improve the process that produces the product or the service and for the case of new products or services it has to improve the New Product / Service Introduction Process.

Process improvement refers to taking advantage of opportunities to move a process from a current state to another state of higher performance. Measures of process improvement include product quality, process flexibility, work-in progress inventory, lead times, material handling, and throughput [1].

The aim of this paper is to report on the use of a specific business process modelling and simulation technique, namely System Dynamics, in order to model and then simulate the generic structure of the New Product Development (NPD) process in organisations so that it would be possible to improve it. System Dynamics is a simulation technique that is especially suited to modelling and analysing the behavioural aspects of a system, i.e. the way that the system elements interact with and influence each other to generate overall system behaviour. In terms of the NPD process, such an analysis can reveal positive or negative feedback loops in the process, thereby allowing managers to understand the likely impact of ‘local’ changes on overall process cost, time, and perceived quality.