GGI RapidNews R&D Product Development eZine: Volume 4, Issue 7, July 7, 2003
In This Issue
2002 METRICS SURVEY RESULTS
BOOK REVIEW - Business Expectations: Are You Using Technology to Its Fullest?
MANAGEMENT PRODUCTIVITY - R&D Investment Trends
NEW BIENNIAL SURVEY - 2002 RD&E Survey Results available now
NEW WEB CONTENT - Updated GTKs: Calendar, 3D/CAD/CAM, NC Path, CNC, Analysis S/W
FEATURED iSTORE PRODUCT - 2000 Product Development Metrics Research Summary
CONFERENCES OF INTEREST - PLM; PDMA; MRT Metrics
WEBINARS OF INTEREST - Sopheon's Winning Practices for Product Development
TELEVISION EVENTS - Alexander Haig's World Business Review
2002 METRICS SURVEY RESULTS
GGI's 2002 Product Development Metrics Survey was recently published. The 2002 Survey focused on resource and capacity management practices and metrics. Over 5 months, GGI is sharing with RapidNews readers selected results from each section of the survey. Last month focused on the third section, "Balancing Cross-functional Resources." This month we present the fourth section, "Using Systems, Tools, & Metrics to Manage Capacity." This month's selected results are summarized below.
- The most common system used to manage capacity is still the spreadsheet, as reported by 29% of respondents, with no underlying project management system. Stand-alone tools are still the most common.
- Companies are using more resource management applications (47%) than capacity management (20%). A substantial number (33%) of respondents did not know which their system did, and may not be able to differentiate between the two.
- Just over 1/3 of the respondents (36%) have a defined set of R&D metrics, while a comparable number could derive the metrics set from experience and observation of meetings, etc. Almost 1/3 (29%) cannot derive what is measured.
- The number of metrics in use in companies that can only derive the set is approximately 1/3 more than where the set is clearly stated.
- For those companies with either a "stated" or "derived" set of R&D metrics, a large majority (68%) reported that between 0 and 2 of these metrics were capacity management metrics, 22% claimed that they had between 3 and 6 capacity measures in their metrics suite, and 10% reported more than 7 capacity metrics in the set.
The original survey questionnaire can be downloaded at http://www.goldensegroupinc.com/biennial/surveys/2002MetricsSurvey.pdf. Complete survey results are available for purchase at http://www.goldensegroupinc.com/cgi/catalog.cgi?display_p355.
Next month, look for the fifth and final section, selected results on "RD&E Metrics Used in Industry."
GGI's next Product Development Metrics Survey will be conducted in 2004. Please contact me at firstname.lastname@example.org if you wish to participate. All participants receive a complimentary copy of the Executive Summary of the Survey results.
Business Expectations: Are You Using Technology to Its Fullest?, by Bryan Bergeron and Jeffrey Blander. John Wiley & Sons, Inc. April, 2002, 1st edition. 272 pages.
The most successful companies consistently turn new ideas into great new products, often enabled through developing an emerging technology. The authors of Business Expectations, both consultants and instructors at MIT and Harvard Medical School, describe a "consistent approach that produces consistent results" for the modern-day alchemy of turning ideas to products. They explore the product development process for the evolution of an idea into a marketable product, which they call the "Continuum," and some of the issues that must be managed at each stage and decision point. The book also provides case studies and examples that explore the many issues relating to product development.
The authors offer four principles of product development to improve a new product's success:
1. Customers expect more, such as mass customization.
2. Form follows function, i.e., ergonomics and ease-of-use must be major design considerations.
3. Inventors with ideas need entrepreneurs with cash to perform research and marketing.
4. Learn from your failures because you won't be able to succeed every time.
Marketplace failures are often not bad products but poorly executed ones. "Products don't succeed on technology alone." Political and public relations issues must be considered (example: genetically modified foods), in addition to the product's appeal to consumers (example: Nokia's trendy, digital wireless phones vs. Motorola's analog, less-trendy ones).
Obviously, companies must have strong R&D to create a stream of viable new products. In order to ensure R&D success, the authors suggest the following:
- Set reasonable expectations
- Identify potential sticking points before starting R&D, such as leadership, personnel, budgets, technological changes, and competition
- Take good care of your company's R&D "brain trust"
- Be aware of late-breaking trends in industry
- Focus on the goal, but be flexible about how to reach it
R&D Investment Trends
Summarized from "R&D Investment Trends: U.S. Needs More High Tech," by Gregory Tassey. Research - Technology Management, March-April 2003.
Although the United States remains the largest performer of R&D, the U.S. share of world R&D is shrinking through international competition. The U.S. is considered technologically advanced, but U.S high-tech industries comprise only 7-10% of Gross Domestic Product (GDP) and reinvest 8-12% of sales into R&D. All U.S. industries are losing market share to foreign competitors, who can perform comparable or more R&D and generally have the benefit of lower labor costs. Consider also the manufacturing sector, which has declined to just 15% of GDP through the shift to the information-technology and service-oriented "New Economy." Manufacturing spends on average only 3.2% of sales on R&D, but performs 62% of U.S. industrial R&D. Non-manufacturing (primarily service industries) accounts for 71% of the economy's output, but conducts only 38% of industrial R&D. These indicators imply that "the productivity of the entire U.S. economy is being driven by a fraction of a relatively small sector." Different economic studies have concluded that R&D spending in the manufacturing sector, and other industries, should triple or even quadruple to keep pace.
Levels of R&D spending are not the only problem. Data from the Industrial Research Institute (IRI) and from the National Science Foundation (NSF) indicate that R&D spending has been shifting toward incremental improvement or product-line extensions at the expense of next-generation and radically new technologies. Investment time horizons are shortening and are more focused on current technology life cycles. As existing technologies age, radical innovations become necessary to maintain profitability. Funding for applied research has not kept pace with basic research and development through the 1990s. In the 1990s, funding for basic research (the science base for new technologies) increased 67% and funding for development (market-focused innovations) increased 70%, but applied research (the transition phase between science and innovations) funding only increased by 46%. This trend could be a sign that "the U.S. economy is not preparing itself to be competitive in the next set of emerging technologies that will drive future economic growth."
Before this situation becomes a crisis, a solution must be developed that will ensure high-tech expansion in the U.S. economy and increased R&D investment by government and industry. National R&D facilities must align themselves with long-term technology predictions and corporate strategies. More data is needed to understand R&D investment trends and their economic impact, in order to formulate appropriate policies and strategic plans. R&D as a part of the economic system is complex, but it must be managed with a long-term perspective in order to remain globally competitive.
NEW BIENNIAL SURVEY
2002 RD&E Survey - Resource & Capacity Management: Complete results from our 2002 Product Development Metrics Survey are now available, including our most detailed "RESULTS" report.
The survey focused this year on the following 5 areas of resource and capacity management:
- Loading the RD&E capacity pipeline,
- Providing capacity for RD&E activities,
- Balancing cross-functional resources (staffing ratios),
- Using systems, tools, & metrics to manage capacity, and
- RD&E metrics used in industry.
The 3 versions of the survey results reports that we offer for sale to the public are
1. 2002 SURVEY HIGHLIGHTS: A text-only report (65 pages),including the full text of all the results and analysis of the survey population analyzed as a whole,
2. 2002 SURVEY SUMMARY: A report of composite results, where the survey respondents are analyzed as a whole (116 pages, including a full set of graphics), and
3. 2002 SURVEY RESULTS: The most detailed report, complete with the composite results and "special cuts," where the survey population is segmented and analyzed in the following groups: Public vs. Private, Smaller vs. Larger, Process vs. Repetitive/Discrete vs. Job Shop, Higher Technology vs. Lower Technology, and More vs. Fewer Employees (223 pages).
These reports are available in the Market Research section of GGI's iStore (http://www.goldensegroupinc.com/iStore/store.html). The original survey questionnaire as well as a description of the survey (including survey focus and demographics, tables of contents for the 3 reports, and examples of key findings) can be found at the Market Research Reading Room at http://www.goldensegroupinc.com/readmarket.shtml.
NEW WEB CONTENT
GTK-Gateways To Knowledge: Your resource for industry and product development related information and contacts offers thousands of links to providers of technologies and services for line management functions. The main entrance to GTK can be found at:
One of our top 3 MEGA Gateways is the Calendar of Industry Events MEGA Gateway, a listing of links to conferences, seminars and distance learning opportunities. We have just updated the calendar to include approximately 20 new conference listings. The Calendar of Industry Events MEGA Gateway is located at:
Another one of our top MEGA Gateways is the Technology Providers MEGA Gateway, which is a directory of hundreds of links organized by technical topic (hardware and software). The Technology Providers MEGA Gateway can be found at:
3D/CAD/CAM: This UPDATED Gateway offers links to over 60 companies that provide computer-aided design and 3D modeling software. Find it in the Technology Providers MEGA Gateway. The URL is located at:
CAM/NC Path Verification: This UPDATED Gateway provides links to 40 companies that specialize in CAM and NC path verification software. Find it in the Technology Providers MEGA Gateway. The URL is located at:
CNC: This UPDATED Gateway offers links to companies that specialize in CNC milling machines. Find it in the Technology Providers MEGA Gateway. The URL is located at:
Analysis - Mechanical: This UPDATED Gateway provides links to over 30 companies that provide mechanical analysis software. Find it in the Technology Providers MEGA Gateway. The URL is located at:
FEATURED GGI iSTORE PRODUCTS
Featured Item: GGI's iStore features one deeply discounted offering, which changes periodically. The current Featured Item is the "2000 Product Development Metrics Research Summary" (MR12).
This 96-page report presents the detailed results of GGI's 2000 Product Development Metrics Survey, which focused on metrics systems in use in industry as well as portfolio management. The report is organized in 5 sections, each of which contains factual observations, management analysis and a full set of graphics. This report, which analyzes the survey population of 122 respondents as a whole, will provide you with detailed information on
1. R&D linkages to corporate strategy,
2. Portfolio management metrics,
3. Product selection metrics,
4. Product success metrics, and
5. Actual metrics in use in industry.
This research is still valid, given the fact that the economy has not been in a state of high growth for the past few years. We have found consistency between the 2000 and 2002 surveys in areas where we could compare.
The price for the report has been dropped from $1920.00 to $1152.00, a deep discount of 40%. For more information or to purchase this valuable report, go to
CONFERENCES OF INTEREST
PLM 2003: Worldwide Business Research will hold its product life cycle management event, PLM 2003, on September 16-17 in Scottsdale, AZ. The conference is geared toward executives in all functional areas of product life cycle management and will emphasize minimizing product cost and maximizing life cycle value. Companies giving presentations include Deere & Company, Lam Research, Boeing, Lockheed Martin, Sun Microsystems, Agilent Technologies, Hewlett-Packard, and Dell. The conference also includes one day of pre-conference sessions on Monday, September 15, focusing on benchmarking and performance measures to identify key performance indicators.
Brad Goldense will be speaking on the subject of "Benchmarking Resource and Capacity Management Practices in R&D and Product Development" and is moderating two days of the 3-day conference.
For more information, go to WBR's web site: http://www.wbresearch.com/PLM/index.html
PDMA International Conference: PDMA's Annual International Conference will be held October 4-8, 2003 at the Boston Marriot Copley. The conference theme is The Business of Product Development: People, Process and Technology Across the Life Cycle. The conference will focus on successful product development and product life cycle management, with an emphasis on how-to's and new techniques to apply immediately to your competitive advantage. Three conference tracks are featured: People, Process and Technology.
Brad Goldense is part of the conference planning team, is the track chair for the Process Track, and will give an Executive Presentation on the subject of Industry Best Practices for Product Life Cycle Management. Other Executive Presenters include Dr. Robert Cooper and Peter Senge.
More information is available at PDMA's web site: http://www.pdma.org/2003/.
MRT 8th Annual Metrics Conference: Management Roundtable will hold its 8th annual conference, "Product Development and R&D Metrics: Quantifying Innovation, Portfolio Value, and Resource Capacity," on November 3-6, 2003 in Chicago, IL. The conference brings together leading metrics experts and advanced industry practitioners to explore the latest approaches and methods for using performance measurement systems to manage new product development activities. The conference features keynote addresses, case studies, expert clinics, pre/post-conference workshops, and Q&A and networking sessions.
Brad Goldense will be facilitating two expert clinic sessions on Tuesday, November 4 on "Proactive and Predictive Measurements." Brad will also conduct a post-conference workshop, "Product Development Metrics Portfolios," on Thursday, November 6.
More information is available at MRT's web site: http://www.managementroundtable.com/event_center/MET03/MET03.html
WEBINARS OF INTEREST
Winning Practices for Product Development: This free, online seminar series is co-sponsored by Sopheon and SCPD. These one-hour, online events feature experts and leading practitioners who will share process knowledge and practical advice about ways to improve your product development performance and results.
Sopheon and SCPD are currently in the process of planning the fall Webinar series. Your input on potential topics is requested at the link listed below. Past Webinars have been archived and are available online by following this link: http://www.sopheon.com/events_onlineseminars.asp
Alexander Haig's World Business Review: Brad Goldense has made several appearances on Alexander Haig's World Business Review in the past year. Streaming video is available for all shows, which aired on August 4, September 29 and December 15, 2002 and on May 20, 2003. See below for details.
May 20, 2003 Broadcast of September 29th In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr5
December 15, 2002 In-Studio with Alexander Haig (7.5 minutes) on CNBC paid programming: Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr3
September 29, 2002 In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment (as well as the entire 30-minute show) is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr2
August 4, 2002 On-Location at GGI (3.5 minutes): This On-Location field report is available in streaming video on GGI's website. To see the program, go to: http://www.goldensegroupinc.com/ggiontv.shtml#wbr1
The web page includes links to download a streaming video player, if you do not currently have one installed on your computer.
For more information on any of Brad's appearances on television, go to:
GGI RapidNews is an e-mail publication from Goldense Group, Inc (GGI). Its subject matter includes survey findings, company news, book reviews, key industry conferences and R&D information of interest to clients and associates. Please send communications to rn(at)goldensegroupinc.com. Thank you.