What Lean Manufacturing metrics should you use to measure R&D investment impact?

1 R&D Cycle Time

One of the key metrics for lean manufacturing is cycle time, which measures how long it takes to complete a process from start to finish. For R&D, cycle time can be defined as the time from the generation of an idea to the launch of a new product or service. Reducing R&D cycle time can help you accelerate innovation, respond to customer needs, and gain a competitive edge. To measure R&D cycle time, you can track the duration of each stage of your R&D process, such as ideation, prototyping, testing, validation, and commercialization. You can also compare your R&D cycle time with your industry benchmarks and best practices.

2 R&D Productivity

Another important metric for lean manufacturing is productivity, which measures how efficiently you use your resources to produce output. For R&D, productivity can be defined as the ratio of the value of your R&D output to the cost of your R&D input. Increasing R&D productivity can help you optimize your R&D budget, reduce waste, and increase profitability. To measure R&D productivity, you can use various indicators, such as the number of patents, publications, or new products generated per R&D employee, the revenue or profit generated per R&D dollar spent, or the return on investment (ROI) of your R&D projects.

3 R&D Quality

A third essential metric for lean manufacturing is quality, which measures how well your output meets the expectations and requirements of your customers and stakeholders. For R&D, quality can be defined as the degree of novelty, usefulness, and reliability of your R&D output. Improving R&D quality can help you enhance customer satisfaction, loyalty, and retention, as well as reduce defects, errors, and rework. To measure R&D quality, you can use various measures, such as the number of customer complaints, returns, or warranty claims related to your new products or services, the percentage of R&D projects that meet or exceed their specifications and objectives, or the customer satisfaction or net promoter score (NPS) of your new products or services.

4 R&D Alignment

A fourth critical metric for lean manufacturing is alignment, which measures how well your output aligns with your strategy, vision, and values. For R&D, alignment can be defined as the extent to which your R&D output supports your business goals, customer needs, and market opportunities. Achieving R&D alignment can help you create value, differentiation, and competitive advantage, as well as avoid wasting time and resources on irrelevant or unprofitable R&D projects. To measure R&D alignment, you can use various methods, such as conducting strategic reviews, portfolio analysis, or market research, to evaluate the fit, feasibility, and attractiveness of your R&D projects.

5 R&D Learning

A fifth vital metric for lean manufacturing is learning, which measures how much you learn from your experiments, failures, and feedback. For R&D, learning can be defined as the amount of knowledge, insight, and improvement that you gain from your R&D activities. Enhancing R&D learning can help you foster a culture of innovation, creativity, and continuous improvement, as well as reduce risk, uncertainty, and waste. To measure R&D learning, you can use various tools, such as conducting post-mortems, lessons learned, or best practices sessions, to capture and share the key learnings, successes, and challenges of your R&D projects.