Activity‐based management and the product development process

Abstract

Most studies on activity‐based management (ABM) focus on applications in manufacturing environments. Instead, little attention has been given to the potentialities of ABM for support units, although these are widely considered to be one of the most relevant sources of inefficiencies, especially in large firms. The purpose of the paper is to illustrate how the ABM methodology can be applied to R&D activities, with particular regard to the product development process. As a matter of fact, when implementing an ABM system for R&D operations, some relevant theoretical problems arise, essentially due to the high percentage of non‐routine, hardly standardisable activities. However, if adequately adapted to the characteristics of this function, ABM can be of great help in a number of issues, such as: improvement of the efficiency of the activities that constitute the process; evaluation of the economic benefits that can be gained through a redesign of processes; improvement of the effectiveness of links between product development activities; evaluation of product life‐cycle costs and budgeting and control of product development activities.

Citation

Maccarrone, P. (1998), "Activity‐based management and the product development process", European Journal of Innovation Management, Vol. 1 No. 3, pp. 148-156. https://doi.org/10.1108/14601069810230234