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Time to market
In commerce, time to market (TTM) is the length of time it takes from a product being conceived until its being available for sale. TTM is important in industries where products are outmoded quickly. A common assumption is that TTM matters most for first-of-a-kind products, but actually the leader often has the luxury of time, while the clock is clearly running for the followers.
Measuring TTM
There are no standards for measuring TTM, and measured values can vary greatly. First, there is great variation in how different organizations define the start of the period. In some industries, automotive, for example, the development period starts when the product concept is approved. Others realize that little will happen until the project is staffed, which can take a long time after approval if developers are tied up on existing projects. Therefore, they consider the start point when the project is fully staffed. The initial part of a project -– before approval or full staffing -- has been called the fuzzy front end, and it can consume a great deal of time. Even though the fuzzy front end is difficult to measure, it must be included in TTM measurements for effective TTM management.
Next, definitions of the end of the TTM period vary. Some people, who look at product development as engineering, say the project is finished when engineering transfers it to manufacturing. Others define the conclusion as when they ship the first copy of the new product or when a customer buys it. High-volume industries will often define the end point in terms of reaching a certain production volume, such as a million units per month.
Finally, TTM measurements vary greatly depending on complexity –- complexity of the product itself, the technologies it incorporates, its manufacturing processes, or the organizational complexity of the project (for example, outsourced components). New-to-the-world products are much slower than derivatives of existing products. Some companies have been successful in putting their products into categories of newness, but establishing levels of complexity remains elusive.
Although TTM can vary widely, all that matters is a firm’s TTM capability relative to its direct competitors. Other industries may be much faster. They do not pose a direct threat, although one may be able to learn from them and adapt their techniques.
TTM and Quality
A tacit assumption of many is that TTM is improved (shortened) by skipping steps of the development process, thus compromising quality. Especially for those who use highly structured development processes, such as Stage-Gate or Six Sigma, product development is often viewed as a sequence of steps to be followed. Skipping a step, due to time pressure, for example, not only undercuts quality but can lengthen development if they must complete or repeat the step later. Following this view, TTM is usually improved by following all of the prescribed steps.
Others operate more aggressively, recognizing that not all steps need to be completed for every project. Furthermore, they actively apply tools and techniques that will shorten steps, cut decision-making time, and automate activities. Many such tools and techniques are available (see References below).
Types of TTM
Organizations pursue TTM improvement for a variety of reasons. Some variations of TTM are
- Pure speed, that is, bring the product to market as quickly as possible. This is valuable in fast-moving industries, but it is not always the best objective.
- More predictable schedules. Rather than reaching the market as soon as possible, delivering on schedule, for example to have the new product available for a trade show, can be more valuable. In addition to processes such as Stage-Gate or Six Sigma, project risk management (see References below) is an effective tool here.
- Minimizing resources, especially labor. Many managers figure that the shorter the project the less it will cost, so they attempt to use TTM as a means of cutting expenses. Unfortunately, a primary means of reducing TTM is to staff the project more heavily, so a faster project may actually be more expensive.
- Flexibility to make changes. Product innovation is intimately tied to change, and often the need for change appears midstream in a project. Consequently, the ability to make changes during development without being too disruptive can be valuable. For example, one’s goal could be to satisfy customers, which could be achieved by adjusting product requirements during development in response to customer feedback. Then TTM could be measured from the last change in requirements until the product is delivered.
These types of TTM illustrate that an organization’s TTM goals should be aligned with its business strategy rather than pursuing speed blindly.
History
The first recorded conference on Time-to-Market was organised by Bart Hall of AiC and held on 25 and 26 October 1995 at the St James Hotel in London. It was chaired by Mike Woodman of Logica and Allen Porter of AIIT.
See also
References
- Kenneth B. Kahn, Editor,The PDMA Handbook of New Product Development, Second Edition, John Wiley & Sons, 2004. Chapter 12 (pp. 173-187), "Accelerated Product Development: Techniques and Traps."
- Smith, Preston G. and Merritt, Guy M. Proactive Risk Management, Productivity Press, 2002.
- Smith, Preston G. and Reinertsen, Donald G. Developing Products in Half the Time, 2nd Edition, John Wiley and Sons, New York, 1998.
