CHAPTER TEN
Measurements for the Engineering Department
THIS CHAPTER FOCUSES ON the measurements that can be used to determine the performance of the engineering department, especially of its new-product design function. There are no financial measurements listed here at all. Instead, the formulas cover such operational issues as bill of material accuracy, reuse of parts in new product designs, and ability to reach target costs.
The measurements discussed in this chapter include:
| Bill of Materials Accuracy | Percentage of Products Reaching Market before Competition |
| Labor Routing Accuracy | Return on Innovation Investment |
| Idea Kill Rate | Intangibility Index |
| Percentage of New Products Introduced | Science Linkage Index |
| Percentage of Sales from New Products | Ratio of Actual to Target Cost |
| Percentage of New Parts Used in New Products | Warranty Claims Percentage |
| Percentage of Existing Parts Reused in New Products | Time from Design Inception to Production |
| Average Number of Distinct Products per Design Platform | Percentage of Floor Space Utilization |
BILL OF MATERIALS ACCURACY
Description: The engineering department is responsible for the release of a bill of materials for each product that it designs. The bill of materials should specify exactly what components are needed to build a product, and the quantities required for each part. This information is used by the logistics staff to ensure that the correct parts are available when the manufacturing process begins. An accuracy ...
