Evaluating Performance of a Product Design: Risk Identification for Likelihood and Impact Analyses

The design phase of the New Product Development (NPD) process is a critical one; it defines the total lifecycle performance expectations of the product. Numerous operational risks affect the performance of a chosen product design vis-a-vis organizational goals, and objectives. Identification of the potential risks is a prerequisite to analyzing the likelihood and impact of risks and evaluating the influence on product performance. A comprehensive taxonomy that can facilitate identifying risks that can influence the economic, environmental, and societal performance of a product design over its total lifecycle is not available. This paper presents a comprehensive taxonomy developed to address this need. To enable the selection of an appropriate set of risks for a risk analysis, the risks are classified into organization, industry, and external risk categories. The product lifecycle stages affected by the risks are indicated; the potential domains of risk impact in terms of the triple bottom line (TBL) are also presented. The paper further illustrates how the taxonomy can be leveraged to assess the risk likelihood using a Bayesian Belief Network-based approach; the approach to evaluating the impact of risks on the total lifecycle performance of the product design using a method that leverages Lifecycle Impact Assessment is also presented. Managerial implications of these analyses on product design decision making are discussed.