The PDMA Handbook of New Product Development

29.1. Importance of an Effective, Efficient Product Development Metrics Program

Over the past decade, companies have made significant progress in improving their product development practices. Yet many companies are still struggling to measure the results of their R&D spending and question whether they really know what their product development capabilities are, which areas to measure, and how to get the most from those metrics. In addition, most companies have improved their product development processes, and competition from "fast followers" has increased. The focus on Six Sigma improvement is also driving many companies to bring better management to research and development. These factors intensify the need for an effective and efficient metrics program.

A metrics program enables fact-based analysis to identify gaps in new product development capabilities, define how much improvement is needed, and prioritize improvement activities. Metrics help identify waste and drive improvements. Monitoring performance levels allows management to set clear improvement goals and understand the organization's performance relative to other divisions and to the competition. A metrics program delivers a range of valuable benefits by helping companies to:

NOTE

Metrics help identify waste and drive improvements.

• Assess overall development performance: Gauge product development capabilities and identify performance gaps.

• Prioritize improvement investments: Improvement activities can be prioritized ...