Full citation

Koufteros, X. & Marcoulides, G. A. (2006). Product development practices and performance: A structural equation modeling-based multi-group analysis. International Journal of Production Economics, 103(1), 286-307.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Advanced

Annotation: The purpose of this paper was to describe strategies involved with conducting tests of model invariance by illustrating a model designed to investigate relationships between certain product development practices and performance measures of product innovation and quality. The model looks for invariance between two different levels of cellular manufacturing.

Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees), University

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Researchers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

Primary Findings


  • When operating at a high level of cellular manufacturing, establish strong capabilities in introducing new products to ensure quality.
    Survey of 214 manufacturers. The effects of product innovation on quality were found to be dependent on the level of cellular manufacturing, x2 = 7.21, p<.05
  • Employ heavy-weight/senior product development managers and the use of information technology to obtain positive effects on concurrent engineering. High levels of concurrent engineering will result in higher levels of product innovation and quality.
    Survey of 214 manufacturing firms. Senior managers were significantly associated with concurrent engineering, t=6.87, p<.01. As was the use of information technology, t=4.00, p<.01. Concurrent engineering was significantly related to Product Innovation, t=3.91, p<.01 and Quality, t 4.57, p<.01.
  • When operating at a low level of cellular manufacturing, use concurrent engineering to obtain quality.
    Survey of 214 manufacturing firms. The relationship between concurrent engineering and quality was different for high cellular versus low cellular manufacturing firms, x2 = 4.18, p<.05

Tip: Use information technology to maintain an electronic connection to customers and external partners in order to make design decisions faster.
Survey of 214 manufacturing firms
Occurrence of finding within the model: Tip 4.1, Tip 4.7, Step 4.1, Step 4.11

Secondary Findings

Tip: Use computer based tools to help shorten design time, reduce costs and improve quality. (Karagozoglu and Brown [1993])
Occurrence of finding within the model: Step 5.4, Step 5.1, Step 7.6, Step 7.5, Step 6.4, Step 6.2