Modeling performance in complex product development – A product development organizational performance model

The area of performance has challenged scholars from different functional backgrounds resulting in rich and deep streams of functionally specialized research, with little cross-fertilization. As a result, it is difficult for researchers to build on previous work. Further, succeeding with new products is vital in today’s hanging business environment. Product evelopment (PD) is therefore considered an important process, making performance in PD of even greater importance. The contribution of this research is the Product Development Organizational Performance Model (PDOPM), making it possible for managers to reason about performance in PD. The model consists of three generic levels of activities: product strategy, project management and product activities. Each level of activity uses resources to transform input to output under the direction of goals and constraints. This view of an activity is based on the familiar IDEF0 concept. The goal of the product strategy activity is related to the business strategy and the output of the activity is the goal for the project management activity. Project management translates the goal into outputs that become goals for the product activities. This way of modeling the PD process with three generic levels of activities makes it possible to analyze performance from the three perspectives. Effectiveness, efficiency and uncertainty are defined for the three generic levels of activities. Effectiveness can be expressed as how the output relates to the goal of the activities whereas efficiency can be defined as the difference between output and input divided by the used resources. The uncertainty can be viewed as the difference between the goal and the input. A first verification of the PDOPM has been performed by a root cause analysis of three problem areas selected from a previously conducted case study. Furthermore, the PDOPM can be used as a way of discussing the effect these three levels of activities have on PD as a whole (i.e., from a holistic view, aligning product strategy, project management, and product activities).