The evolution of time-based competition follows a continually evolving global manufacturing environment, where the order winners quickly become order qualifiers (Hutchinson 2007). The manufacturing industries, which are based on innovation and NPD, have struggled to keep up with the global competition in the new millennium, as the basis of competition has shifted from cost to quality, to variety, and now to speed; where time to market has been becoming more important than the amount of invested money and accounting (Hayes et al. 2005; Hutchinson 2007).
Most innovative companies in this new era of globalization are more concerned with time reduction as their first/major priority, than cost reduction (Ansoff 1965; Porter 2008; Rich and Hines 1997; Demartini and Mella 2011). Hutchinson (2007) and based on an adaptation from Blackburn (1991), as illustrated in Fig. 2, concerning the long-term trends in manufacturing. Graphs for the 1950s, 60s, 70s, 80s, 90s, 2000s and beyond on the x-axis are made, and plotting lines indicate roughly how industry norms have changed from decade to decade. Changes in the periods present a revealing picture of the evolution towards time-based competition that is almost universal across all industries.
Our aim here is to understand the NPD projects and to reflect and learn how the same behavior can be relevant to construction projects. By going through the literature about NPD projects, we tried to interpret the information in a conceptual, qualitative way to develop the time-cost trade-offs curve, as illustrated in Fig. 3. We can see that NPD projects went through two paths crossing three major states (“0”, “1” and “2”). State “0” depicts many companies that are cost-reduction oriented; this is because the markets are closed and less newcomers enter the local market. One example that illustrates this: Less Japanese cars were sold in Europe a few decades ago than what is the case nowadays. When globalization appeared, the survivors were the companies that changed direction from cost-reduction orientation to time-reduction orientation. The value of time (time-to-market) increased, and this increment led companies to crush their NPD projects to be first in the market, thus ensuring their survival (Moving gradually from state “0.1”, “0.2”, etc., as the competition increases, till state “1”). Based on some case studies, Schmelzer (1992) explains that when comparing an increase in the total project costs of 50 % (crashing the project, state “0.1” and up) versus trying to fit the optimum path duration (state “0”); the latter will be more harmful.
Being maximum effective will ensure the company’s competitive advantage in the market. On the other hand, companies want maximum profits from their NPD projects, and they increase efficiency to its maximum while they have the maximum effectiveness. Figure 4 is based on Schmelzer (1992) after combining it with Fig. 3. The leading companies are those ended in the state “2”, where they are (1) highly effective by being the first into the market with high sales and prices and (2) as secondary objective, being increasingly efficient by improving their NPD projects’ delivery management and methods by continuous improvement.