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New Product Development: Measuring and Managing Non-Value Added Activities

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Pages/Slides: 71

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ID: 4987

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"New Product Development: Measuring and Managing Non-Value Addded Activities"

STUDY OVERVIEW

In today’s digitized, accelerated, and interconnected world, organizations are constantly looking for ways to manage and reduce the amount of resources and costs associated with Non-Value Added Activities in their product development processes. This study was designed to better understand how leading organizations measure and manage Non-Value Added Activities to control costs and meet customer needs. Executives and managers involved in product development can use this study to understand what approaches are in use to reduce and manage Non-Value Added Activities and which approaches work best.

KEY TOPICS

Current and Planned Cost Structures for Value and Non-Value Added Activities
Non-Value Added Activity Measurement
Non-Value Added Activity Management
Linking Improvements to Business Measures
Strategies for Improving Quality

KEY METRICS
All of the following metrics were collected and reported for the Total Benchmark Class and Software Segment

Effectiveness of Non-Value Added Activities Management
Current and Planned Cost Breakdown of Value Added Activities
Current and Planned Cost Breakdown of Non-Value Added Activities
Percent of Companies Measuring Non-Value Added Activities
Effectiveness of Measuring Non-Value Added Activities
Percent of Companies Managing Non-Value Added Activities
Effectiveness of Managing Non-Value Added Activities
Percent of Companies Attempting to Establish Links to Business Improvements

All of the following metrics were collected and reported for Total Benchmark Class, Top Performers, Software and Nonsoftware segments

Measurement Approaches in Use for Non-Value Added Activities
Effectiveness of Measurement Approaches for Non-Value Added Activities
Management Approaches in Use for Non-Value Added Activities
Effectiveness of Management Approaches for Non-Value Added Activities
Percent of Companies Able to Establish Links to Specific Business Improvements

SAMPLE KEY FINDINGS

Only 60 percent of participants rated their approach/management of Non-Value Activities as Somewhat Effective or higher. Sixty-five percent of the Software Segment rated their approach/management of Non-Value Activities as Somewhat Effective or higher.

Study participants shared that while they need to focus “up front” in the design and development process to reduce Non-Value Added Activities, economic considerations and corporate goals often drive the product development resource allocations and timelines, resulting in more resources being expended on “back-end” Non-Value Added Activities (fixing, rework, retesting, etc).

Organizations that have achieved successes had been working on improvement initiatives for at least two years (many for much longer periods of time), producing small incremental improvements over time.

METHODOLOGY

This research was conducted on behalf of one of Best Practices, LLC's Research and Advisory Services (RAS) clients and was based on survey results from 44 participants from 32 companies, as well as in-depth interviews with several participants. The participants represent a cross-industry look at Measuring and Managing Non-Value Added Activities.

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Industries Profiled:
Health Care; Pharmaceutical; Diagnostic; Manufacturing; Professional Services; Computer Software; Telecommunications; Consulting; Computer Hardware; Automobile; Chemical; Science; Consumer Products; Academic; High Tech; Insurance

Companies Profiled:
Abbott; Baltimore Aircoil Company; Amadeus IT Group; Computer Associates; Avaya; Cap Gemini; Carrier Corp.; Davol; Computer Sciences Corporation; Fiserv; Constellation Technology; Gulfstream; Dassault Systemes; Key Plastics; DuPont; Kinetic; Fujitsu Computer Systems; M+W Zander; General Electric; Thermo Fisher; Marvin Windows and Doors; Wolterskluwer; MeadWestvaco Corp.; Misys Healthcare Systems; Motorola; NCR; Oracle; Proctor & Gamble; Sun Microsystems; Wellpoint; Xerox

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New Product Development: Measuring and Managing Non-Value Added Activities

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