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A83 - Goldense On R&D-Product Development - Measuring Competencies in Lean and Innovative Companies

Machine Design, Penton Publishing, Cleveland, Ohio, USA
October 10, 2013

The vast majority of all R&D spending across the globe goes to projects and programs. So, project and program measures are perhaps the most important metrics for facilitating R&D performance.

If a company performs poorly on a project, this fact is immediately visible to its employees. If less-than-desired performance continues across multiple projects over time, the failures usually become visible to outsiders as well and begin to affect branding, reputation, and pricing. A company can usually recover from a single product that does not live up to expectations. When product development repeatedly falls short of expectations, the whole company feels the pain.

We have learned that manufacturing is optimized when a known process is consistently and repeatedly applied. This approach ensures everyone knows the game and the rules, as well as the corrective actions to be taken if variation increases and quality levels are challenged. The same applies in product development. As engineers and designers juggle multiple projects, finishing some and moving onto others, consistency in the language and values of execution are critical. And, from a management viewpoint, consistent measures make it simpler to aggregate results across all projects and to interpret those results.

There is inherently more variability in product development than in manufacturing, no denying that. The metrics that account for �what happened� are fairly mature and generally understood. These metrics are typically called �reactive� metrics. These are the metrics we regularly use and report to management. And, if the metrics reveal a problem, we go fix it reactively.

The "still ahead of us" opportunity for project and program measurement is to develop metrics with better proactive and predictive correction abilities. In fact, today, do we even have one measure that can be taken early in product development that has a high correlation to a promised business or project plan? What should or can be measured, early in the cycle, that will show the project or product is deviating from the plan and what to do about it? Operations, finance, sales and other department areas have such measures. Relatively speaking, predictive metrics for projects and programs remain fertile ground in R&D and product development.

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