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The New Practice of Global Product Development

July 1, 2006 | Steven D. Eppinger, Anil R. Chitkara | Strategy
Many manufacturers already have established product development activities in different countries around the world. As a rule, the current approach includes colocation of cross-functional teams to foster close collaboration among engineering, marketing, manufacturing and supply-chain functions. The results to date -- better product designs, faster time to market and lower-cost production -- have been satisfactory. However, growth and innovation can now be much more effective if manufacturers tie their decentralized development organizations into a cohesive, unified global product development operation.

In this article, the authors introduce new empirical frameworks to guide managers toward such practices. Citing exemplars such as Hewlett-Packard, Eastman Kodak, Hyundai Motors, Haier, Alcatel and Cummins, the authors explain why GPD has come of age and demonstrate a three-stage approach that puts product development in the context of a company's relationships with outside partners.

The article draws from extensive interviews with engineering managers at more than 100 companies in 15 countries in North America, Europe and Asia. Additional data are from a recently completed study on GPD that PTC has conducted with BusinessWeek Research Services, interviewing and surveying more than 1,100 engineering managers worldwide.
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