Measure and Evaluate New Product Development Tools

The following describe a few simple examples of some of the key measures that can be used in new product development:

• Team - Cross-functional (integrated) involvemente.g. % of managers or employees involved in cross-functional / integrated teams or, number of cross-functional design teams working within an organisation. The measure could also be used to assess specifically the number of cross-functional, voluntary, or delegated teams.

• Supplier partnership in product design e.g. % or no. of supplier partnerships in product design. This measure assesses the strength of the relationship with suppliers in product design. To use this measure a definition of what constitutes a partnership is needed.

• Customer partnership in product design e.g. % of products designed by customer partnerships or, number of customer partnerships in product design. This measure assesses the strength of the relationship with customers in product design. To use this measure a definition of what constitutes a partnership needs to be agreed.

• Sales or Market Penetration of New Product or Service e.g. turnover generated from new products or services in a given period, or % of sales turnover that is generated from new products or services in a given time period, or % of orders that are generated from new products or services in a given time period or, sales turnover generated from new products or services as a percentage of total market sales value (Market Share). This measure assesses the success of the new product or service in terms of market response (customer orders).

• New Product time to market slip rate e.g. the average measure of how late a project is to market as a percentage of its total time scheduled. This forms a measure of the effectiveness of the product/service development process.

• New product / service quality - Fitness for purpose e.g. % of new products or services that are 100% 'Fit for Purpose' or, % of new products delivered to the customer that are defect free or, % deviations of technical parameters from design specifications or, % deviations of marketability parameters from launch programme. New Product or Service Quality measures the extent to which the new product or service launched is fit for its intended purpose.

• New product or service cost of quality e.g. Total cost of quality conformance (COC) in a given period or, total cost of non-conformance to quality requirements (CONC) in a given period. The measure of New Product / Service Cost of Quality provides an indication of how well products and processes are designed in order to produce high quality products, and does so in the common unit of cost to allow comparability of data.

• Innovation - New product profitability e.g. the amount of profit gained by new product in a given period as a % of the cost to produce them in that period. This is a measure that provides an input to the assessment of the effectiveness/performance of the product/service development process and or the organisation's innovation strategies.

• Innovation - New product sales e.g. % of total sales derived from new products or, % of revenue origination from new products. This forms a measure which provides an input to the assessment of the effectiveness/performance of the product/service development process and or the organisation's innovation strategies.

• Target cost e.g. Target cost = market price - desired profit. This measure provides an input into a methodology used to design acceptably priced new products.

• Target cost performance e.g. % of Target cost analyses that prove accurate at a certain point after product launch. This measure provides an input into the measurement of New Product Design process effectiveness.

• Failed Projects e.g. No. of or % projects abandoned at the various Stage Gate decision points. Knowledge of this can indicate how early project/product selection improves over time, and ultimately even how much resource is needed to per successful project/product – in terms of, for instance, other failed project costs and time.