Match Throughput to Business Need

Any work related to the improvement of business must be grounded in the fundamental purpose of the business – Revenue and Profit. A business should have objectives for revenue and profit growth which must match the capability of the product development system necessary to deliver both the Revenue and Profit objectives. For an existing business, there will be a natural decay of sales for products in the market. There are factors which can mitigate the sales decay, such as sales incentives. expanded geography and market reach, etc. In essence, however, doing nothing to existing products will lead to sales decay. The fiscal difference between the Sales Decay curve and the Revenue / Profit curve must be filled with new products and services. Filling this gap is the responsibility of the organization’s Product Development system.

In this case, Product Development refers to the organization’s strategy for the business, the portfolio plan encompassing both the product and technology roadmaps, engineering, product design, project management, sales, marketing, and any development aspects necessary to launch and bring a product to market. Little’s law identifies the product development throughput necessary to match product development with the business needs.