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How well did the new Sumitomo Electric project ranking method predict performance?
Author(s) -
Osawa Yoshitaka
Publication year - 2003
Publication title -
randd management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.253
H-Index - 102
eISSN - 1467-9310
pISSN - 0033-6807
DOI - 10.1111/1467-9310.00302
Subject(s) - ranking (information retrieval) , productivity , profit (economics) , test (biology) , operations management , computer science , operations research , business , engineering , economics , artificial intelligence , economic growth , paleontology , biology , microeconomics
The development and implementation of a new R&D project scoring method (NS‐method) within Sumitomo Electric Industries was introduced in a previous report. This paper evaluates the NS‐method's effectiveness by comparing the information generated by application to 146 projects in 1997 with the project achievements in 2000. The test results revealed that the NS‐method's evaluation scores were correlated to the performance indicators such as the gross profit and R&D productivity. It also showed that, when projects are classified into three groups (i.e., Top, Middle, Bottom) according to the forecast data generated by the NS‐method, the projects in the Top category had higher actual productivity ratios and success rates than those in the Bottom category.