Research & Development (R&D) department is entrusted in exploring new products & services to be introduced in the market by an organisation. The department also carries modification to existing product & services for existing customer-base or new ones.
Why R&D important?
- Every product has life cycle with high-low demand leading to a time with NIL / negligible demand;
- Unless prepared with new products in hand → chances of losing the relevance in market
- Blackberry, Nokia lost substantial market share when others were switching to Android based phones. Similarly, point and shoot cameras lost substantial market before smart phones;
- Why Apple products are craze? → new Apple products come with more user-friendly features;
- Organisations are constantly working on new products and new technologies throughout the world;
- Today’s dominating market position is no guarantee to tomorrow’s market share;
- Regular investment in R&D is the only answer
Functions of R&D department
Functions of the department are similar to a scientist working on inventing a new product / new solution. There are hundreds of failures and small success leading to eureka moments when some ray of hope becomes visible. Till that time, there appears to be endless dark tunnel. The functions of the departments are:
- Keeping updated with the present developments around (scientific findings; researches in progress; projects under development by other organisations; etc.);
- Collection bank of ideas from all stakeholders;
- Scope definition
- Deciding the area of R&D –
- improvement of existing product;
- developing new product for the
- present business segment of the organisation;
- new business segment.
- Deciding the area of R&D –
- Conducting Market surveys through in-house team or outside agency;
- Identifying available products of other competing organisations;
- Understanding present issues faced by consumers;
- Collecting views / suggestions / complaints of stakeholders about organisation’s products;
- Evaluating all alternatives on the basis of ‘zero cost budgeting’ or ‘cost to customer’;
- Whether the alternatives meet environmental concerns?
- Development & Launch
- Developing the product to answer alternatives;
- Testing the proto-type;
- Re-do the entire process till prototype doesn’t match customer expectations (cost, feature, etc.);
- Sending the proto-type to production department and assisting them till the production gets stabilised;
- Attract, generate and screen opportunities (Discovery & Definition)
- 1-page idea proposal;
- Macro Trends;
- Consumer insights.
- Verify and define opportunity (Design)
- Strategic fit assessment;
- Market potential;
- Situation analysis.
- Project approval (Development)
- Finalise manufacturing / supply chain plan;
- Finalise product & packaging engineering;
- Consumer validation of final product.
- Project implementation (Deployment)
- Order and receive capital item;
- Manufacturing / systems implementation;
- Pilot production runs and approvals.
- Production and launch (Delivery)
- Production ramp-up;
- Quality and capacity audit;
- Launch / execute commercialisation plan.
- Post-launch audit
Deliverables (i.e. expectations from the Department)
- Organisation always ready with new products or better products with improved features;
- Fast development of product meeting cost criterion;
- Socially responsible with new products;
- Fast deployment of new product at production floor.
Important developments in the R&D function
- Computers, software, internet have changed the R&D paradigm;
- Collaboration with experts throughout the world → team members may not be knowing each-other personally → interactions through internet & mobile only → these people incorporate local issues in new products;
- 3D designing through CAD / CAM softwares;
- Reverse engineering accelerating the development process;
- 3D printers are going to change the development of products → huge 3D printers capable of building houses in a time never heard before;
- Efficient product development (R&D activities carried on the softwares → once finalised on computer → development of physical product).
Conflicts (Inter-departmental) / Challenges with R&D function
- Resource eating activities unless R&D activities managed efficiently & effectively to be carried out in a time-bound manner;
- Frustrating experience → Organisation not ready with new products while competitors launching new products regularly;
Some of the Process Implementation for better R&D function
- New Ideas collected; Feasibility of the same (Monthly);
- Other Organisations
- Products under development by competitors; likely launch date (Monthly);
- New products launched by competitors (Immediately);
- The organisation
- Products under development; project start date; resources spent on each head (salary, professional fees, material, travelling, etc.); budget of each head, variance (Monthly);
- Expenses incurred and not expected to yield any results and are to be dumped (Monthly).