Time to market

Time to market is the elapsed period between committing to develop a product or service and making it available to customers. The measure reveals how effectively an organisation turns an approved concept into a market-ready offer.

When to use it

• Answer the performance question: “How quickly are we getting products/services to market?”
• Monitor the operational-process and supply-chain perspective.
• Locate delay across product definition, design, development, testing, production and launch.
• Compare development cycles only after standardising their boundaries and complexity.

Origins

Time to market became strategically prominent during the nineteen eighties as product life cycles shortened and organisations explored concurrent engineering and time-based competition. Research by Kim Clark, Steven Wheelwright and others linked development speed to cross-functional product-development design. No single person invented the KPI. Its usefulness depends on explicit start and finish gates and on balancing launch speed with quality, safety and market learning.

What it is

Perspective: Operational processes and supply chain perspective.

Key performance question: How quickly are we getting products/services to market?

A shorter cycle can indicate stronger coordination between design, engineering, operations, suppliers and marketing. It may also reflect fewer avoidable iterations, handoff delays and late amendments. Speed matters when customers have abundant choice, competitors operate globally and product life cycles are brief.

A 2006 North American Aberdeen Group study identified time to market as the leading product design and development KPI among manufacturers, ahead of measures such as new-product success and revenue from new products. That finding is historical, but it illustrates why development speed became a central operational measure.

Earlier availability may create first-mover advantages, extend the period in which an innovation earns attractive margins and establish customer relationships before competitors respond. Those benefits are possible rather than automatic: a fast launch that misses customer needs or creates quality failures destroys rather than creates value.

Top PD&D KPIs

Source: Aberdeen Group