the management of research and development activities

8/3/2019 The Management of Research and Development Activities

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The management of research and development activities

Most research and development projects are examples of a project, or one-shot,production system. Here, as opposed to the ongoing activity found in batch or continuous

systems, resources are brought together for a period of time, focused on a particular task,

such as the development of a new product, and then disbanded and reassigned. Themanagement of such projects requiresa special type of organization to administer project

resources in an effective manner and maintain clear accountability for the progress of the

project. This organization also must avoid the inherent conflict of authority betweenproject managers and managers in the marketing, production, and other departments and

coordinate members of R and D teams who are assigned to more than one project and

must divide their time among conflicting demands. The management of the wholeprocess is a key to Rand D and commercial success.

In industries where continuous innovation and R and D are critical, such as electronics,

drugs, robotics, and aerospace, the R and D department usually operates on a corporate

level comparable to production, finance, and marketing. A relatively small managementgroup usually sets priorities and budgets and supervises R and D activities. Most research

and development personnel are assigned to project activity and report to individualproject managers who have considerable autonomy and authorityover the people and

resources required to complete the project.

The basic purpose of the R and D laboratories of private industry is to provide new

products for manufacture and new or improved processes for producing them. One

difficulty facing those who plan these projects is the relationship between development

costs and predicted sales. In the early stages of development, project expenditures aretypically low. They increase to a maximum and decline slowly, disappearing as early

production difficulties are overcome and the product settles into a market niche.

Similarly, production rises slowly at first, then more rapidly, and finally reaches a

plateau. After a time, production starts to fall, sales declining gradually as the product

becomes obsolete or abruptly as it is replaced by a new one.

At any particular time, a company may have a number of products at different stages of

the cycle. Project managers must ensure that the total development effort required isneither greater nor significantly less than available human and financial resources.

Production managers must be satisfied that the eventual demands upon their capacity and

resources will be sufficient to keep them fully loaded but not overloaded.

To maintain such a balanced condition, a steady flow of new R and D proposals is

required. Each must be studied by technical, commercial, financial, and manufacturing

experts. Planning within an R and D organization, then, consists of selecting fordevelopment new products and processes that promise to employ the resources available

in the most profitable manner. R and D managers have a key part to play in proposing

projects as well as in carrying them out.


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At each stage of the research and development process, there are numerous technical,

financial, and managerial issues that haveto be resolved and coordinated with many

groups. For example, during the late 1970s and early 1980s several computer andelectronics companies in the United States and Europe established major research

programs aimed at developing bubble memory devices for large computers. As bubble

memories were proved to be technically feasible (i.e., work reliably under normaloperating conditions), attention shifted to developing processes to manufacture the

memory units at competitive costs. This part of the job proved the most difficult, and by

the mid-1980s bubble memories had captured only a minuscule share of the total marketfor memory devices.

The difficulties in developing the design and production specifications needed to produce

low-cost bubble memory units severely tested the mettle of the R and D organizations inseveral companies in the United States, Japan, and Europe. Each company had to balance

the expense of continued R and D investment against the consequences of withdrawing

from bubble memory research.Making a decision like this requires a keen sense of the

market, a knowledge of the technical issues at hand, and, most importantly, anunderstanding of the company's priorities and alternatives for R and D funds.

Project management and planning techniques

Value engineering and cost-benefit analysis

In the areas in which technology advances fastest, new products and new materials are

required in a constant flow, but there are many industries in which the rate of change isgentle. Although ships, automobiles, telephones, and television receivers have changed

over the last quarter of a century, the changes have not been spectacular. Nevertheless, a

manufacturer who used methods even 10 years old could not survive in these businesses.The task of R and D laboratories working in these areas is to keep every facet of the

production process under review and to maintain a steady stream of improvements.

Although each in itself may be trivial, the total effect is many times as large as the marginbetween success and failure in a competitive situation.

These efforts to improve existing products and processes have been formalized under the

titles of value engineering and cost-benefit analysis.

In value engineering every complete product and every component have their primary

function described by an action verb and a noun. For example, an automobile's dynamo,or generator, generates electricity. The engineer considers all other possible methods of

generation, calculates a cost for each, and compares the lowest figure with that for the

existing dynamo. If the ratio is reasonably close to unity, the dynamo can be accepted asan efficient component. If not, the engineer examines the alternatives in more detail. The

same treatment is applied in turn to each of the parts out of which the chosen component

is built, until it is clear that the best possible value is being obtained.


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Project management and planning techniques

PERT and CPM

Project managers frequently face the task of controlling projects that contain unknown

and unpredictable factors. When the projects are not complex, bar charts can be used toplan and control project activities. These charts divide the project into discrete activities

or tasks and analyze each task individually to indicate weekly manpower requirements.

As the work goes forward, progress is charted and estimates are made on the effects ofany delays or difficulties encountered during the completion of the project.

In the mid-1950s more sophisticated methods of project planning and control were

developed. Two systems based on a network portrayal of the activities that make up theproject emerged at about the same time. PERT (Program Evaluation and Review

Technique) was first used in the development of submarines capable of firing Polaris

missiles. CPM (the Critical Path Method) was used to manage the annual maintenance

work in an oil and chemical refinery. Many variations and extensions of the two originaltechniques are now in use, and they have proved particularly valuable for projects

requiring the coordinated work of hundreds of separate contractors. The use of projectplanning and control techniques based on PERT or CPM are now common in all types of

civil engineering and construction work, as well as for large developmental projects such

as the manufacture of aircraft, missiles, space vehicles, and large mainframe computer

systems.

A simple example of a network, or arrow diagram, used in developing an electroniccomponent for a complex system, is shown in thefigure. Each circle on the diagram

represents a task or well-defined activity that is part of the project. The number in each

circle represents the expected time required to complete the task.

Task A requires two weeks to complete and might, for example, represent the

development of general specifications for an electronic unit in question. Tasks B and Emight represent two related parts of the design of the unit's power supply, C and F the

design of the main functional circuits, and D and G the designof the control circuitry.

Arrows indicate the precedence of relationships and depict which tasks must be

completed before subsequent tasks can begin. In this example, tasks B, C, and D cannotbe started until A has been completed (that is, no one can design specific component

items before the general specifications are agreed upon).

Task H requires two weeks to complete but cannot be started until the designs of the

power supply and the functional and control circuits have been completed. This task

might represent the design of the unit's case or cover, and the case cannot be made finaluntilall of the component designs are completed.

The arrow diagram is an invaluable planning aid for determining how long a project will

take to complete. Adding all of the task times together in the example indicates that there


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are 24 weeks of work to be completed. Note, however, that several tasks can be done

simultaneously. For example, once task A has been completed, B, C, and D can be started

and worked on concurrently. Thus, the earliest completion date can be determined bylooking at all possible paths through the network and choosing the longest one, or the

one with tasks requiring the most total time. In this example the longest, or critical,

path is ACFH, requiring a total time of 11 weeks.

The arrow diagram yields additional information to the project planner. The earliest

possible time that task H can be started is nine weeks after the start of the project (that is,after tasks A, C, and F have been completed). When task A is completed at the end of

week 2, tasks B and E do not have to be started immediately in order to complete the

project in the minimum possible time; B and E each have three weeks of slack. The

diagram shows that if activity B is started three weeks later than its earliest possible starttime (at week 5), it would be completed at the end of week 5; E would then start at the

beginning of week 6 and be completed in time for H to begin at its earliest time, the

beginning of week 10.

The notion of slack in a project network is a powerful concept that allows planners to

schedule scarce resources efficiently and manage people and equipment so that criticalactivities are kept on schedule and slack activities are delayed without placing the project

in jeopardy.

This simple example is based on CPM logic; it uses single-point task time estimates andassumes that the completion time for the project is the simple sum of the task times along

the critical path. PERT logic assumes probabilistic estimates for each task time, with

pessimistic, realistic, and optimistic estimates for the completion times of each task.

In actual projects the relationships among the required tasks are often complex, and the

arrow diagram for the project might cover the entire wall of an office. Even though it is atime-consuming job to work out arrow diagrams, precedence relationships, task time

estimates, and so on for large projects, CPM or PERT is an invaluable aid to planning and

control. The proliferation of computer programs that handle critical path and slack timecalculations and the development of computer systems capable of handling cost

estimates, budget control, resource allocation, and time scheduling promise to make CPM

and PERT even more valuable than in the past.

the management of research and development activities

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