Title: A strategic product portfolio management methodology considering R&D resource constraints for engineering-to-order industries

Authors: Charles V. Trappey, Amy J.C. Trappey, Tzu-An Chiang, Jen-Yau Kuo

Addresses: Department of Management Science, National Chiao Tung University, Hsinchu 300, Taiwan, ROC. ' Department of Industrial Engineering and Engineering Management, National Tsing Hua University, Hsinchu 300, Taiwan, ROC. ' Department of Industrial Engineering and Management, Mingchi University of Technology, Taipei 243, Taiwan, ROC. ' RFID Technology Center, Industrial Technology Research Institute, Hsinchu 310, Taiwan, ROC

Abstract: New product development projects usually incur high cost and high risk for corporations. For engineering-to-order industries, where each order requires a certain degree of new product design and customisation, R&D resources must be properly utilised for the highest possible profits. Thus, Engineering-To-Order firms often search for optimal product portfolios that effectively allocate limited enterprise resources to projects with the greatest potential for success. This paper develops a Product Portfolio Management (PPM) methodology that systematically analyses product portfolio strategies at the beginning of the product life cycle. Multiattribute decision analysis estimates the performance values used to construct plausible product portfolios during the early Engineering-To-Order design stage. An activity group concept evaluates resource requirements and the potential risks of product portfolios. The revenue of a product portfolio considers the levels of substitution among products. Finally, an industrial computer manufacturer, that is, a typical Engineering-To-Order company, adopts the methodology for its PPM to demonstrate the practical application of the research.

Keywords: product portfolio management; PPM; product life cycle management; R&D resources; multiattribute decision analysis; research and development; resource constraints; engineering-to-order; ETO; new product development; NPD; product design; product portfolios; performance values; product substitution; computer manufacturing.

DOI: 10.1504/IJTM.2009.024919

International Journal of Technology Management, 2009 Vol.48 No.2, pp.258 - 276

Published online: 04 May 2009 *

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