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A main challenge in new product development (NPD) is to match a new design to customer preferences. Recent reviews show large failure rates in the commercialization of new designs. In most of the cases, the reason of failure has been not a lack of technological capability of the firm, but a wrong understanding of the customer needs and demands. One strategy that has been proposed in the literature to reduce the risk of flops in NPD is postponement. The idea of a postponement strategy is to delay a design decision until there is better information on the parameters of this decision. The idea of this paper is to investigate a new approach to reduce the NPD risk by postponing some design decisions into the customer domain. Our concept of embedded open toolkits for user innovation plans for manufacturers to design products with build-in flexibility by embedding knowledge and rules about possible product differentiations into the product. This shall enable users directly to modify a product according to their individual needs, freeing the manufacturer to perfectly acquire concrete customer needs before the product is designed. The objective of this paper is to study the feasibility of such an embedded open toolkit conceptually and experimentally. Our paper contributes to the literature by discussing the contingency factors and the tactical and strategic implications of embedded open toolkits for user innovation.
Date of Conference: 2-6 Aug. 2009