Survey Shows Manufacturers Weak On Quantifying R&D

While many companies cite new product development efforts as a strategy to increase competitiveness, a recent study indicates that most manufacturers have only a rudimentary idea of how to quantify the effects of those efforts. So say results of the 1998 Product Development Metrics Research study recently released by Cambridge, Mass.-based management consulting firm Goldense Group Inc. (GGI). Working with The Management Roundtable of Lexington, Mass., GCI surveyed 190 companies worldwide that produce medical, electronics, automotive, and industrial products. Among its findings, the survey showed that less than 40% of respondents measure new product development in relation to its contribution to the bottom line. Metrics that tie projects to profitability, such as "time to profit" or "break-even time" were not used by most companies. "This suggests that product development and its metrics are presently decoupled from business strategy," says GGI President Bradford L. Goldense. In other findings, all respondents used some type of metrics to track their research and development efforts, but results show a minimal use of common measurement systems, a lack of sophistication in the measurement tools used to capture results, and a misplaced responsibility for product development within the corporate hierarchy.