Lean Product Development - Performance Measurement System

Abstract: Lean product development (LPD) has been introduced as a concept which is able to improve Product development processes and firm’s competitive advantages. The concept has been argued that has potential to reduce time to market of new product with higher quality and manufacturability. Performance Measurement system is a key factor in evaluating processes and effect of new concepts or changes on process efficiency. Managing and measuring performance in product development has been seen as a mean to ensure survival of business by increasing quality, reducing time and cost. Scholars argue identifying right metrics and measuring performance of Product development processes play a key role in success of Lean Product development. The aim of this project is to evaluate how firms measure performance of lean Product development. The foundation of the study will be on the definition of lean product development as a coherent whole and systematic way rather than focusing on a special technique or tool. The theoretical framework shows two approach of process oriented and outcome oriented in definition of lean product development exist. The firms consider the processes oriented approach while these processes are unique for each firm. Design of processes is dependent to current situation of company. In case of performance measurement theoretical framework argue that a performance measurement system should have five elements of Objective, Dimension, Indicator, Structure and processes. The main dimension of performance in product development processes are efficiency and effectiveness while firm measure efficiency they fail to measure effectiveness. On the other hand setting standard and goal play an important role in success of performance measurement system and performance improvement. But some firms are failing in setting clear vision and goal for their processes.