Assessing product development efficiency at Volvo Powertrain Focus on systems engineering and lean principles at two global sites

Paper in proceeding, 2013

Measuring the performance of a development process is highly difficult, especially before it has led to an outcome such as a product. Furthermore, even with a diagnosis at hand showing the strengths and weaknesses of the development process, the information can seldom be used to answer the paramount question: How should the organization allocate its process improvement resources to best support its objectives? This paper presents a survey-based method for identifying which areas for process improvement are likely to have the strongest impact on company objectives, called outcomes. The survey has been completed by respondents within the organization and uses the data to present three different analyses. The first analysis shows the perceived current fulfillment within the organization of a number of principles identified as important for successful development. The second analysis is a regression analysis commonly used in marketing research to measure the impact of each principle on five outcomes: Efficiency/Effectiveness, Lead-Time, Innovation, Satisfaction and Product Quality. The two first analyses are then combined to a third analysis that provides a pie chart for each outcome with the principles possessing the highest potential for further improving that particular outcome. A case study at the automotive company, Volvo Powertrain, shows how the method was used to assess and compare process improvement potential at two development sites. The results clearly show that the analyses provide different views of what principles deserve attention for process improvement activities at the case company. The two principles deemed to be most attractive, based on their impact on outcomes, were currently neither among the highest nor the lowest performing principles. As a result of the study, Volvo Powertrain chose to start several improvement activities to work with the high-potential principles. The improvement can then be measured using annual surveys to track improvements and manage deviations from the plan.