The best practises of product development as an interaction between scientific research, university of applied sciences and local SMEs

Esa Hietikko
Savonia University of Applied Sciences

Kai Kärkkäinen
Savonia University of Applied Sciences

Universities of Applied Sciences (UAS) operate in Finland in teaching activities as well as regional developers. Their aim is to follow the scientific research and to filter and apply its results as good practices both for teaching and for utilizing the local industry's business life. On the other hand, UAS’s can also act as intermediaries for the needs and wishes of business life both for their teaching and for the scientific research. UAS’s also have an important student and R&D personnel resource to help business life in the region, which is a win-win situation in where both of the participants can benefit.
The economic success of manufacturing companies depends on their ability to create products that meet the needs of customers with low production costs. This is central in achieving meaningful competitive edge. The most important decisions in the product development process are done at an early stage, also known as "Fuzzy Front End". It is not sensible to develop a product that does not meet customer needs.
Product development management, trends and practices have been studied a lot. There are significant and extensive quantitative and qualitative studies targeted at large companies, geographically located in the large countries like USA. However, small countries and small companies are not well represented in these researches. Effective product development is not easy. In most cases the small companies do not have knowledge nor resources needed to perform product development activities effectively.
Research methodology
The aim of this study was to identify the causes of the management in the early stages of product development process as literature research and to evaluate the results of the target group in the local SME sector of the manufacturing industry. There was also an attempt to clarify the role of local UAS in those activities.
The research is trying to find answers to the questions like:
• What is the present situation of PD management in local SMEs
• What kind of process model would be suitable for those
• What is the role and position of local UAS in the activities
Savonia UAS is carrying out an ERDF-funded project called CusTech, together with three local companies, to develop a product development process and tools suitable for the SME sector in the manufacturing industry. The improvement focuses on the upstream process, whose main steps are product development capabilities management, prioritization of identified product features, business potential evaluation, conceptualization, and product vision definition. The planned tool is focused on utilizing AHP (Analytic Hierarchy Process) and QFD (Quality Function Deployment). However, at the beginning of the literature review, the use of these tools alone did not solve the product development challenges but expanded the scope to include strategic planning, management, organization and identification of opportunities. The emphasis on the identification phase was used to ensure that the R&D process has identified the characteristics with priority and weighting that must be taken into account when defining technical specifications.
As a result of the literature review, ideas for the process and toolbox developed for the SME sector were obtained. The need to focus research on product development in the SME sector was also identified: earlier studies have focused on large companies and typically a quantitative research method. There is a clear demand for a qualitative review.
The study developed a model for the management of the Fuzzy Front End firmly based on the company's strategy. By using the process the company can easier find the product vision with its prioritized product features, which then can be used as a basis of further product development activities. The model has been tested by case study in a few local technology companies. The result of the testing is, first of all, an observation that, in particular, smaller companies do not have a controlled process of the underlying activities. There is also a lack of resources for companies, which gives the subject the belief that UASs' assistance is needed.
The early stage, the fuzzy front end, of a product development process is a key step in developing a new product. It is therefore important to pay particular attention to it. In many smaller companies, this phase will, however, be remitted with little attention. The reason for this is often the uncertainty. There is no accurate information on what customers really want, what competitors are and what their new product should look like. On the other hand, too tight process model could cause the lack of creativity which is one of the most important factors in the early stages of product development. Smaller companies lack resources and knowledge, which could be repaired with the help of local UAS.