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Issue One Contents:
1-1
MVP
Award Winners Deliver R&D Value-Add
[read article]
1-2
Key R&D Effectiveness Metrics
1-3
What is R&D Value? -
Senior Management's View
[read article]
Issue 2
Issue 3
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1-2
Key R&D Effectiveness
Metrics
 According
to one MVP Award winner,
John Cordes, Director of New Product Development, at
National Semiconductor, “there are many challenges with trying to
measure R&D effectiveness. One of the worst is the time lag between R&D
process changes and when and how well these changes can be correlated
with results. Another challenge is that the financial results are
dependent on many other factors (such as general market conditions,
competitor activity, amount of outsourcing, changes in strategy, etc.).
As with most systems, it takes more than one metric to see if you are
improving. Some R&D metrics used by National Semiconductor include:
-
New product
margin $ (3-year and 5-year) / R&D
-
Percentage of
sales from products released within the last three years
-
New product
margin percentage
-
New product
success rate (percentage of projects which reach at least 75% of
revenue target within the first year)
All of these metrics
are very dependent on the product definition process as well as R&D
effectiveness. Other more proactive/predictive metrics for getting an
indicator if R&D effectiveness is changing:
-
Percentage of projects which finish on
schedule
-
Percentage of project which are
correct the first time (no re-design)
-
Average number of attempts to get the
product right before launch.
Additional measures
of R&D effectiveness, used by other companies, include those that track
engineering activities (design re-use, product re-use), product cost,
number of products that reach commercialization, and net present value
of the R&D investment. |
