MMC conducted a survey about managing product development in Estonian food industry this summer. The goal of the survey was to investigate the methods used by Estonian food processing companies for managing product development. The results of the survey were presented in Radisson SAS Hotel on August 26th, 2004.

32 companies took part in the survey with annual sales totalling 7 billion Estonian kroons in 2003 – representing 2/3 of the total sales of Estonian food industry. 9 respondents had sales of over 300 million, 8 companies from 100-299 million, i.e., the survey concentrated on larger companies where the process of managing product development is presumably more systematic.

According to the study, the management of product development in Estonian food industry looks very professional, at the beginning. 90% answered that product development is customer-driven in their company, 87% have set specific goals for product development and 81% have a product development plan for 2004 in place.

At the same time, 26% of the companies have not specified the product development process, 32% have no product development strategy and 55% of the companies do not measure the efficiency of the product development as a process. Only 13% of the respondents answered that the salary in product development is tied to the product development goals.

What do these results tell? The leading food processing companies in Estonia understand the benefits of goal-oriented and planned product development process. But at the same time companies have not understood the need for a product development strategy. But, is it possible to measure the results of product development as a process if the strategy is not set? Are the goals correct? Different strategy (or no strategy) means that different things should be measured and different goals used. Is product development really strategically important if there is no product development strategy?

The results also show that companies have not understood the benefits from a process oriented management. Describing a process is the first step in starting to manage a process, but the effectiveness of the process has to be measured also. If 55% of the respondents do not measure the efficiency of the product development then how can you improve the process?