Operations Management
New Product Development at HPM
Company Background
• HPM Industries is a privately owned company established in 1925. Its core business is in the design, manufacture and distribution of electrical wiring accessories such as electrical power plugs, power outlets and light switches.
• The company had its origins in button production, when Ruth Simon’s parents (Ruth is the wife of the current chief executive officer, Peter Simons) started HPM in the button-moulding business.
• In 1948 they bought a tool at auction to make plug-tops and started turning out about 20 products.
• The company’s backbone of success: electrical wholesale
• It has also been successful on developing and marketing main products for the retail market sector.
• HPM has been the dominant player in the Australian domestic market for many years.
• The company has also managed to break into a number of special niches.
• It employs, at present, more than 1,100 employees working in various factory sites, warehouses and sales offices around the country, from which it supplies over 3,500 product lines.
Goals of HPM:
To effectively compete in the most challenging market that is continually evolving.
To improve its product development process in an increasingly fast-paced, globalized market.
Strategy:
Use innovation and technology to differentiate itself in the market
Concentrate on using the latest technology in both its new products and new manufacturing processes
Problem
• There has been a change in the length of the product life cycle.
o Products had a life cycle of 8-10 years during the 1970’s and 1980’s. However, the company must now contend with product life cycle of two years and less.
Causes of the problem:
(a) Impact of technology — This is not only because competitors are able to develop alternative products on a much more frequent basis, but also because competitors are able to reengineer exact duplicates of HPM’s products
Company Background
• HPM Industries is a privately owned company established in 1925. Its core business is in the design, manufacture and distribution of electrical wiring accessories such as electrical power plugs, power outlets and light switches.
• The company had its origins in button production, when Ruth Simon’s parents (Ruth is the wife of the current chief executive officer, Peter Simons) started HPM in the button-moulding business.
• In 1948 they bought a tool at auction to make plug-tops and started turning out about 20 products.
• The company’s backbone of success: electrical wholesale
• It has also been successful on developing and marketing main products for the retail market sector.
• HPM has been the dominant player in the Australian domestic market for many years.
• The company has also managed to break into a number of special niches.
• It employs, at present, more than 1,100 employees working in various factory sites, warehouses and sales offices around the country, from which it supplies over 3,500 product lines.
Goals of HPM:
To effectively compete in the most challenging market that is continually evolving.
To improve its product development process in an increasingly fast-paced, globalized market.
Strategy:
Use innovation and technology to differentiate itself in the market
Concentrate on using the latest technology in both its new products and new manufacturing processes
Problem
• There has been a change in the length of the product life cycle.
o Products had a life cycle of 8-10 years during the 1970’s and 1980’s. However, the company must now contend with product life cycle of two years and less.
Causes of the problem:
(a) Impact of technology — This is not only because competitors are able to develop alternative products on a much more frequent basis, but also because competitors are able to reengineer exact duplicates of HPM’s products