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

How to use it

Measurement

Define one start event, one finish event and rules for pauses before collecting results. Segment projects by product type, risk and complexity, and supplement the total duration with time spent at each development stage.

Data collection method

Link the approval, staffing, design, test, release and customer-availability milestones across product-development and marketing records. Prefer workflow timestamps; where manual records are necessary, assign ownership for entering each gate date.

Formula

There is no universal boundary. Some organisations start when a concept is approved, while others start when a project is fully staffed. Possible end points include engineering transfer, first shipment and first customer purchase. Select the boundaries that match the decision being made and retain them consistently.

Time to market = date the offer becomes available to customers − agreed development start date

Express the result in days or months and analyse comparable initiatives together.

Frequency

Record the final measure when the offer becomes available. During development, review elapsed time and forecast completion against the target release date so emerging delay can be managed before launch.

Source of the data

Use the project, product-development, research, manufacturing and marketing records that connect initial approval to commercial availability.

Cost/effort in collecting the data

Collection is usually inexpensive when stage gates and dates already exist in project systems. Effort rises when teams use inconsistent definitions or milestone records must be reconciled manually.

Target setting/benchmarks

Targets are industry- and product-specific. A study of Canadian manufacturers during 2002–2004 reported an average of 13.7 months. Clothing and leather manufacturers, influenced by seasonal cycles, were 24% faster than that average, while aerospace manufacturers, facing complexity and regulatory demands, took 35% longer. These are historical reference points, not current universal targets. Internal baselines by project class and recent specialist benchmarks are more credible for management decisions.

Example

Suppose Company X approves development of software requested by major customers. The approval is the agreed start event, and customer availability is the finish event. The team sets a launch target, establishes milestones and uses gate reviews to examine slippage and assign corrective action. Transparent reporting is essential because hidden delay prevents timely intervention. If the product becomes available in seven months against a target of nine months, the project has beaten its target—but the organisation should still confirm quality, adoption and financial outcomes before declaring the faster cycle successful.

Top practical tip

Publish the KPI definition beside every report. Product development, operations, marketing and business units must use the same clock. Then analyse stage-level waiting time to remove bottlenecks rather than pressuring every activity to move faster.

Top pitfall

Never meet a time target by weakening essential discovery, testing, safety or quality work. A premature launch can create recalls, rework, customer harm and lasting reputational damage that outweigh any first-mover benefit.

Further reading

Aberdeen Group, The Mechatronics Systems Design Benchmark Report.

For information on product design and development, see www.ic.gc.ca/eic/site/dsib-dsib.nsf/eng/h_oq01750.html