System dynamics approach for change management in new product development

New product development (NPD) project is an organizational competitiveness strategic weapon. Yet, many NPDs projects fail due to the dynamic nature of critical success factors such as time, cost, quality, and scope. Scope and change management (CM) are crucial factors and have a direct bearing on the other three factors. Thus, there is a need for effective CM in NPD projects to sustain the competitiveness and focusing on scope. This study aims to examine this issue.

In this paper, the principles of cybernetics and system dynamics (SD) methodology have been used in developing causal loop diagrams, flow diagrams, and the governing equations. The SD model thus developed has been used to analyze the factors such as change in scope due to the development of new technology.

The dynamic simulation of the SD model was carried out; the results indicate that effective knowledge management (KM) constitutes the main controlling factor that has a significant control over project dynamics. Accordingly, suggestions have been made to improve on the KM aspects in the manufacturing sector, based on which the model has been developed.

The model developed in this research gives an in‐depth study of the influence of “change in scope” on competence loss, competence development, and competence absorption of the knowledge workers. The results lay special emphasis on efficient KM in the manufacturing sector. Accordingly, suggestions on KM implementation include the processes of knowledge creation, storage, distributions, validation, and application.

This paper is unique in the sense that it develops a model with in‐depth structures, which helps the strategic managers in better understanding of the dynamics of NPD when change in scope occurs.