Development of Key Performance Indicators for the Product Launch Process at IKEA Industry

University essay from Lunds universitet/Produktutveckling

Abstract: The purpose of the project was to develop key performance indicators (KPIs) to measure and easily communicate the performance of IKEA Industry’s new product development process; Product Launch Process (PLP), and their new products, NEWS. This to enable improvements of the process and the products. The projects objectives were: 1. What performances of PLP should be measured? 2. What performances of NEWS should be measured? 3. How should the measurements be carried out? 4. When during the process should the performance be measured and followed up? This project does not include improving PLP or setting goals for the developed KPIs. The base for the used method was Rummler and Braches four step method Develop Sound Measures for finding measures. Due to the lack of a process map a different way of visualizing the most significant outputs and the critical dimensions was used. The creation of this visualization was added as a step, and the method was modified as followed: 1. Identify the most significant outputs of the Product Launch Process 2. Identify the critical dimensions of performance for each of these outputs 3. Visualize the most significant outputs and critical dimension 4. Develop the measures for each critical dimension The main approach for the execution of the steps was to find what is important according to the literature and what IKEA Industry think is important and then combine the two. Methods used in the execution of the steps was based on product development methodology, literature studies, personal conversations, and questionnaires. In this project, the developed KPIs are together measuring the five most significant outputs; Resources, Time, Sustainability, Low Price, Form, and Function. This, by measuring the critical dimensions communication efficiency, precision at sales start, less material, and easy assembly. The KPIs developed by IKEA Industry is measuring Growth and the most significant outputs Time, Sustainability, and Quality. All KPIs combined are therefore measuring Growth and all most significant outputs except for Continuous Improvement. The project resulted in the following recommendations. IKEA Industry should start with implementing the recommended KPIs. After the KPIs is fully implemented, new KPIs can be developed and implemented to cover all most significant outputs in the goal map. However, to minimize the amount of KPIs used, it is recommended to only use one KPI per critical dimension, and strive for only one KPI per most significant output. To confirm that the KPIs are measuring what is meant it is recommended to evaluate them after a year.

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