Search results

The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).

This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.

The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.

This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.

This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing, life cycle costing, component commonality, and modular design.

The structured literature search covered papers about 15 different cost management methods published in 40 journals in the period 1990–2013.

The search yielded a sample of 113 different papers. Many contained information about more than one method, and this yielded 149 references to specific methods. The number of references varied strongly per cost management method and per journal. Target costing has received by far the most attention in the publications in our sample; modular design, component commonality, and life cycle costing were ranked second and joint third. Most references were published in Management Science; Management Accounting Research; and Accounting, Organizations and Society. The results were strongly influenced by Management Science and Decision Science, because cost management methods with an engineering background were published above average in these two journals (design for manufacturing, component commonality, modular design, and product platforms) while other topics were published below average in these two journals.

The scope of this review is accounting research. Future work could review the research on cost management methods in new product development published outside accounting.

The paper centers on methods for cost management, which complements reviews that focused on theoretical constructs of management accounting information and its use.

The increase of foreign investment in industrial activities has accelerated the restructuring of production and new ways of managing the workforce in Brazil, especially in the car industry. Based on the investigation of new auto plants in Rio de Janeiro state in the 1990s, this text intends to bring more arguments to a general discussion about the relationship between the global and the local, emphasizing the point of view of localities that receive foreign direct investments, and suggesting that transnational companies benefit from the conditions offered to attract investments, but also stimulate the creation of new political and economical structures that may produce new forms of participation from local and regional political actors.

This paper deals with the organizing of interactive product development. Developing products in interaction between firms may provide benefits in terms of specialization, increased innovation, and possibilities to perform development activities in parallel. However, the differentiation of product development among a number of firms also implies that various dependencies need to be dealt with across firm boundaries. How dependencies may be dealt with across firms is related to how product development is organized. The purpose of the paper is to explore dependencies and how interactive product development may be organized with regard to these dependencies.

The analytical framework is based on the industrial network approach, and deals with the development of products in terms of adaptation and combination of heterogeneous resources. There are dependencies between resources, that is, they are embedded, implying that no resource can be developed in isolation. The characteristics of and dependencies related to four main categories of resources (products, production facilities, business units and business relationships) provide a basis for analyzing the organizing of interactive product development.

Three in-depth case studies are used to explore the organizing of interactive product development with regard to dependencies. The first two cases are based on the development of the electrical system and the seats for Volvo’s large car platform (P2), performed in interaction with Delphi and Lear respectively. The third case is based on the interaction between Scania and Dayco/DFC Tech for the development of various pipes and hoses for a new truck model.

The analysis is focused on what different dependencies the firms considered and dealt with, and how product development was organized with regard to these dependencies. It is concluded that there is a complex and dynamic pattern of dependencies that reaches far beyond the developed product as well as beyond individual business units. To deal with these dependencies, development may be organized in teams where several business units are represented. This enables interaction between different business units’ resource collections, which is important for resource adaptation as well as for innovation. The delimiting and relating functions of the team boundary are elaborated upon and it is argued that also teams may be regarded as actors. It is also concluded that a modular product structure may entail a modular organization with regard to the teams, though, interaction between business units and teams is needed. A strong connection between the technical structure and the organizational structure is identified and it is concluded that policies regarding the technical structure (e.g. concerning “carry-over”) cannot be separated from the management of the organizational structure (e.g. the supplier structure). The organizing of product development is in itself a complex and dynamic task that needs to be subject to interaction between business units.

In this paper we appraise the ways in which use of closed-system proprietary product architectures versus open-system modular product architectures is likely to influence the dynamics and trajectory of new product market formation. We compare the evolutions of new markets in China for gas-powered two-wheeled vehicles (G2WVs) based (initially) on closed-system proprietary architectures and for electric-powered two-wheeled vehicles (E2WVs) based on open-system modular architectures. We draw on this comparison to suggest ways in which the use of the two different kinds of architectures as the basis for new kinds of products may result in very different patterns and speeds of new market formation. We then suggest some key implications of the different dynamics of market formation associated with open-system modular architectures for both the competence-based strategic management (CBSM) of firms and for technology and economic development policies of governments.

Specifically, we suggest how the use of open-system modular product architectures as the basis for new products is likely to result in dynamics of new market formation that call for new approaches to the strategic management of innovation and product creation. We also suggest technology and economic development policies favoring use of open-system modular architectures may stimulate new market formation and related economic development by providing platforms for accelerating technology development and dissemination, facilitating the formation of an industrial base of assemblers and component suppliers, assisting new firms in building customer relationships, enabling more geographically diffused economic development within countries, and facilitating development of export markets. We also suggest directions for further research into the potential for open-system modular product architectures to enable bottom-of-the-pyramid innovation processes, frugal engineering in developing economies, and development of low-cost product variations more generally.

The absence of the reasoning stage in the analysis of long-term investment decision creates a serious gap in this classic topic in management accounting literature. The purpose of this paper is to fill this gap. The traditional analysis focuses on the evaluation stage using capital budgeting tools to rank alternative investment proposals. It tacitly assumes that the decision is to be made, thereby bypassing the reasoning stage. However, the reasoning stage may reveal that there is no sufficient justification (reasoning) to consider searching for and evaluating alternative proposals for this decision. Focusing on the reasoning component, the paper combines Fritz's (1989, 1990) “creative tension” and Janis and Mann's (1977) “challenges” as the driving forces for the problem-finding step. To demonstrate the significance of filling the reasoning gap in the long-term investment decision, the paper selects the modular manufacturing system and the complex investment decision required for its adoption. Using hypothetical data, the paper employs the Dempster-Shafer Theory of Evidence and Omer, et al's (1995) algorithm to compute the belief and plausibility values of the three reasoned actions: (1) maintain the status quo, (2) adopt Level 2 (assembly) modularity or (3) adopt Level 2 (design) modularity.

The contributions of the paper include (1) highlighting a critical gap currently existing in one of the classical decisions in the management accounting literature; (2) developing a framework for filling this gap and (3) applying this framework to the intricate nature of the modular manufacturing system and its complex investment decision.

This study proposes targeted modernization of the Department of Defense (DoD's) Joint Forces Ammunition Logistics information system by implementing the optimized innovative information technology open architecture design and integrating Radio Frequency Identification Device data technologies and real-time optimization and control mechanisms as the critical technology components of the solution. The innovative information technology, which pursues the focused logistics, will be deployed in 36 months at the estimated cost of $568 million in constant dollars. We estimate that the Systems, Applications, Products (SAP)-based enterprise integration solution that the Army currently pursues will cost another $1.5 billion through the year 2014; however, it is unlikely to deliver the intended technical capabilities.

Ten years ago, Resende was a peaceful town near a well-known mountain resort in the State of Rio de Janeiro and housing the famous military academy through which many of the military elite of Brazil have passed. Near the border of the State of São Paulo and beside the main road linking the cities of Rio and São Paulo, Resende seemed doomed to a slow existence with no bright future ahead. This paper draws upon on-going research into the social impacts of new developments that took place in Resende, after the inauguration of two big vehicle assemblers – Volkswagen’s bus and truck plant in 1996 and the Peugeot/Citroen car assembly plant in 2001. In the case of VW, the plant was also presented as a major development in vehicle assembly. The unique feature of the plant’s production system rests on the relationship between the assembler (VW) and its component suppliers. At Resende, these were involved in a joint enterprise to establish a “modular consortium” of production. In this system, the component suppliers finance a part of the factory and organise the assembly of their components on site. As such, few of the production workers are employed by VW whose main role in the process is to co-ordinate production and market the vehicle.

The traditional product-costing continuum is too limited to account for the new mass customization approach currently used by many corporations in many industries. Mass customization has changed the nature of many transactions, activities and, indeed, the very essence of many manufacturing companies, who have become more of assemblers than manufacturers. These new developments necessitate establishing new way of accounting for proper planning and control. After tracing the development of the mass customization approach from modular manufacturing into common platforms applied in one firm, and then shared by a group of firms, the paper explains the benefits of these approaches to both manufacturers and their suppliers. The central theme of this paper is to develop a product costing system for mass customization. It begins with the traditional product-process matrix in operations management literature and adds to it two elements: firm size and the modular manufacturing method. The rationale for this addition is that modular manufacturing is the best mass customization method; firm size and mass customization are inherently related as indicated by the typical evolutionary pattern of production processes. At this point, the operations management taxonomy is renamed the modular-process matrix; this matrix displays three groups of major activities: manufacturing, supplemental manufacturing, and assembling activities. These three activity groups provide the basis for developing a new set of accounts and a ledger system to account for specific customer orders developed by mass-customization processes.

In this paper we extend established concepts of product and process architectures to propose a concept of organization architecture that defines the essential features of the system design of an organization needed to achieve an effective strategic alignment of an organization with its competitive and/or cooperative environment. Adopting a work process view of organization, we draw on concepts of product and process architectures to elaborate fundamental elements in the design of an organization architecture. We suggest that organization architectures may be designed to support four basic types of change in organization resources, capabilities, and coordination, which we characterize as convergence, reconfiguration, absorptive integration, and architectural transformation. We also suggest the kinds of strategic flexibilities that an organization must have to create and implement each type of organization architecture. We identify four basic types of strategic environments and consider the kinds of changes in resources, capabilities, and coordination that need to be designed into an organization's architecture to maintain effective strategic alignment with its type of environment. We then propose a typology that identifies four basic ways in which organizational architectures may be effectively aligned with strategic environments. Extending the reasoning underlying the proposed alignments of organization architectures with strategic environments, we propose a strategic principle of architectural isomorphism, which holds that maintaining effective strategic alignment of an organization with its environment requires achieving isomorphism across a firm's product, process, and organization architectures. We conclude by considering some implications of the analyses undertaken here for competence theory, general and mid-range strategy theory, and organization theory.