An Investigation of Productivity in Product Design & Engineering

Productivity is among the most popular and useful measures to control a firm’s performance. It is usually defined as a ratio between a firm’s final outputs or outcomes and its inputs. Such a definition for productivity does not allow an accurate assessment of those organizational units operating in the early stages of the new product development process, whose outputs are distant from a firm’s final ones. This article focuses on the organizational units operating on product design & engineering activities, which are considered a key source of competitive advantage. Indeed, such units oversee major responsibilities on the development of new products and the improvement of existing ones. Therefore, monitoring the productivity of product design & engineering units is of pivotal importance, especially for firms whose business model heavily relies on new or continuously improved products. Yet, the study of the productivity of product design & engineering units has been underdeveloped. Taking the lead from previous studies calling for research on the topic, this article addresses the study of productivity in product design & engineering. To this aim, we outline the features of product design & engineering activities, describing their similarities and differences with respect to research and development activities and with respect to service activities. Consequently, we offer methodological insights to assess product design & engineering productivity and we present their illustrative implementation in Leonardo SpA, a multinational company. Finally, the implications of the study and future research directions are outlined.