Thesis (S.M.)--Massachusetts Institute of Technology, System Design & Management Program, 2000. / Includes bibliographical references (leaves 78-80). / This thesis aims at developing a practical method to adjust product development metrics, which will enable effective management of the product development (PD) process. A set of good metrics is crucial to the success of a product, as metrics direct the development process by driving the actions and decisions of the PD team members which in turn define the product. Emphasizing or "weighting" certain metrics more than others can make the difference between success and failure. Through empirical exploration of metrics we seek to determine the weights, and the impact of different metrics on product success. Unlike its use in the engineering literature, the management use of the term "metric" includes both quantitative and qualitative measures which the PD team members can influence through their efforts. The theory used to determine the correct weight of a metric has its roots in the principles of Agency Theory and has been developed by "engineering" the theory to obtain two key parameters which define the weight of a metric. These two parameters are "leverage" and "risk discount factor" (RDF). Leverage is the amount by which a metric can impact the profitability of a product and RDF takes into account the inherent risk averse nature of the PD team members that influence their decisions. In order to evaluate the PD metrics and their weights within a firm, data was collected for a set of metrics across 17 programs at Ford Motor Company. The values for each metric were assigned based on information obtained through program documentation and interviews with multiple team members across various functions within the organization. Different success measures were collected and the impact and leverage of each metric was determined through empirical exploration of the various relationships. The key findings to date include: * Cronbach's Alpha for metrics regrouped using factor analysis average 0.7 demonstrating internal reliability. * Customer satisfaction correlates significantly with the rigor of the PD process, and internal coordination and communication between the core team and the other members of the value chain. * Time to market shows consistent correlation with profit and profit residuals. " The calculated weights suggest higher emphasis on capturing manufacturing need and using robust design practices, technology, and differentiation will increase profitability. " The measured RDF does not change the relative weightings of the metrics as obtained through the leverage calculation. / by Arpita Majumder. / S.M.
| Identifer | oai:union.ndltd.org:MIT/oai:dspace.mit.edu:1721.1/29210 |
| Date | January 2000 |
| Creators | Majumder, Arpita (Arpita P.), 1970- |
| Contributors | John R. Hauser., System Design and Management Program., System Design and Management Program. |
| Publisher | Massachusetts Institute of Technology |
| Source Sets | M.I.T. Theses and Dissertation |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | 104 leaves, 9282954 bytes, 9282712 bytes, application/pdf, application/pdf, application/pdf |
| Rights | M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission., http://dspace.mit.edu/handle/1721.1/7582 |
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