The Hewlett-Packard Return Map
The Return Map is intended to be used by all of the functional
managers on the new product introduction business team. It is
basically a two dimensional graph displaying time and money on
the x and y axes respectively.
Time is drawn as a linear scale while money is more effectively
drawn on a logarithmic scale, because for successful products
the difference between sales and investment costs will be greater
than 100:1.
It is important to remember that money amount are shown rising
cumulatively.
The time axis is divided into three parts:
- Investigation,
- Development, and
- Manufacturing and Sales.
Investigation
The purpose of Investigation is to determine the desired product
features, the product's cost and price, the feasibility of the
proposed technologies, and the plan for product development and
introduction. At this point all numbers are estimates. Investigation
is usually the responsibility of a small team and requires a
relatively modest investment. At the end of Investigation, the
company commits to develop a product with specific features using
agreed-upon technologies.
Development
The development phase is usually the primary domain of R&D;
in consultation with manufacturing; its purpose is to determine
how to produce the product at the desired price.
Manufacturing Release
The formal end of the development phase is Manufacturing Release
(MR) - that is, when the company commits to manufacture and sell
the product. When the product is ready to be manufactured and
shipped to customers, sales become a reality and manufacturing,
marketing, sales costs and profits are finally more than estimates.
New Metrics
The map tracks - in money and months - R&D; and manufacturing
investment, sales, and profit. At the same time, it provides
the context for new metrics:
- Break-Even-Time,
- Time-to-Market,
- Break-Even-After-Release, and
- the Return Factor.
Reference
- House. C. H. and Price.R. L., "The Return Map: Tracking
Product Teams, Harvard Business Review , January-February 1991,
pp 92-101.
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