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Key Performance Indicators (KPIs) are only useful when measured, tracked, and analyzed. While there are certain standard KPIs that most organizations will use, such as time to market and cost of development, the rest will depend on the company’s goals and the nature of its products.
No matter what metrics a company decides to use, it is important to ensure they are measurable. Trackable metrics can help the company understand how effectively it achieves its objectives and goals.
Additional Benefits of Tracking KPIs
Aside from establishing a set goal and monitoring the company’s performance against those goals, KPIs have many other benefits for the company and the teams involved in product development in manufacturing.
Stay Aligned with Goals
KPIs help align team and organizational goals with the overall strategic objectives. They clarify what needs to be achieved and how success will be measured.
Inform Decision Making
KPIs provide data-driven insights that support decision-making at various levels of the organization. They help identify areas where action is needed, changes should be made, and where resources could be allocated for improvements.
Improve Performance
KPIs help highlight areas of underperformance or inefficiency. Continuously monitoring KPIs facilitates the ongoing optimization of processes and operations.
Maintain Accountability
KPIs create accountability by clearly defining expectations and measuring performance against those expectations. They provide a basis for evaluating individual and team contributions.
Set Benchmarks
KPIs enable organizations to track their performance against industry standards or the competition. This comparison provides valuable insights into relative strengths and weaknesses.
Manage Risks
KPIs help identify potential risks and vulnerabilities by highlighting areas of concern. Knowing these concerns helps teams take proactive management against these risks.
Customer Focus
KPIs that reflect customer satisfaction or outcomes help organizations stay focused on meeting customer needs and expectations. Customer-centric KPIs guide efforts to enhance products, services, and experiences.
Useful KPIs for Physical Product Manufacturing
When companies remember that KPIs serve as a tool for performance management, enabling organizations to measure, monitor, and improve their performance, it becomes easier to choose the right metrics to track. Here are some of the top metrics successful manufacturers track to ensure their success.
Time to Market
Time to market or TTM measures the time involved in developing and launching a new product from concept to market availability. It includes all stages of the product development process, from ideation and design to manufacturing and distribution. When companies track their Time-to-Market, they can identify areas to improve efficiencies and deliver quality products to market sooner.
Product Development Cycle Time
The product development cycle time KPI measures the average time it takes to complete one iteration of the product development process. It helps identify bottlenecks and inefficiencies within the development workflow. Knowing where these points occur helps teams create solutions to improve the cycle time for future iterations.
Cost of Product Development
The cost of product development measures the total expenses incurred during the development of a new product. It includes costs related to research, design, prototyping, testing, and any other expenses directly associated with product development.
Quality of Product Design
This KPI evaluates the quality of the product design based on factors such as functionality, usability, reliability, and adherence to specifications. It can be measured through customer feedback, testing results, or adherence to design standards.
Prototype Iterations
Knowing the number of iterations it takes to achieve the desired product specifications is a useful metric in physical product development. This KPI indicates the level of refinement and optimization a product requires and can help with future planning and resource allocation.
Manufacturability Index
The manufacturability index assesses how easily a product design can be manufactured at scale. It considers factors such as material selection, complexity, assembly requirements, and production process compatibility.
Product Cost vs. Target Cost
This KPI compares the actual production cost of the product to the target cost set during the development phase. It helps ensure that the product remains financially viable and meets cost objectives. This metric informs future decisions on where and how to align these values if needed.
Defect Rate in Prototypes
This KPI measures the percentage of defects or issues found in the prototypes during testing or validation. It reflects the quality of the design and the effectiveness of the development process. While it’s impossible to avoid all defects in the prototype and testing period, an alarmingly high number of issues can be a red flag for development teams.
Supplier Lead Time
Measuring the time it takes for suppliers to deliver components or materials needed for product development is another important KPI to track in manufacturing. Timely delivery of components is crucial for maintaining project schedules and meeting the projected milestones.
Product Launch Success Rate
The product launch success rate measures the percentage of new products that meet or exceed their sales targets within a specified timeframe after launch. It reflects the effectiveness of product development in meeting market demands and customer expectations.
These KPIs help organizations monitor and improve various aspects of their product development process, from speed and cost-effectiveness to quality and market success.
Tracking KPIs on the Product Roadmap
Tracking KPIs involves monitoring and evaluating specific metrics throughout the product development lifecycle to ensure alignment with strategic goals and objectives. By tracking KPIs on the product roadmap, organizations can effectively monitor the success of their product development efforts, make data-driven decisions, and ensure that resources are allocated efficiently to achieve strategic objectives.
With Gocious product roadmap management software, product teams, and other product stakeholders can access the data they need to track and assess the KPIs that matter. Schedule your free demo to see how your teams can benefit from using Gocious.