How Can Productivity in Product Design and Engineering Be Assessed? Guidelines to Build a Dashboard of KPIs

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 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 and engineering activities, considered a key competitive advantage source. Indeed, such units oversee major responsibilities in developing new products and improving existing ones. Therefore, monitoring product design and engineering units’ productivity is of pivotal importance, especially for firms whose business model heavily relies on new or continuously improved products. However, research on the productivity of product design and engineering units has been underdeveloped, and previous studies have called for research on the topic. Hence, this article outlines the features of product design and engineering activities, describing their similarities and differences with respect to research and development activities and to service activities. Consequently, it presents methodological insights to assess product design and engineering productivity and their illustrative implementation in Leonardo SpA, a global company in the Aerospace and Defence sector. Finally, the article outlines the theoretical and managerial implications of the study.