Adding value in product development by creating information and reducing risk

Many firms expend a great amount of effort to increase the customer value of their product development (PD) processes. Yet, in PD, determining how and when value is added is problematic. The goal of a PD process is to produce a product "recipe" that satisfies requirements. Design work is done both to specify the recipe in increasing detail and to verify that it does in fact conform to requirements. As design work proceeds, certainty increases surrounding the ability of the evolving product design (including its production process) to be the final product recipe (i.e., technical performance risk decreases). The goal of this paper is to advance the theory and practice of evaluating progress and added customer value in PD. The paper proposes that making progress and adding customer value in PD equate with producing useful information that reduces performance risk. The paper also contributes a methodology-the risk value method-that integrates current approaches such as technical performance measure tracking charts and risk reduction profiles. The methods are demonstrated with an industrial example of an uninhabited combat aerial vehicle.