When companies are successful, this often becomes a special challenge for the R&D sector. The reason for this is that, for cost reasons, the growth of resources may not be proportional to the growth of turnover, or it can be because of bottlenecks in personnel markets. The R&D ratio is forced to decrease. This can only be achieved by increasing efficiency and leveraging existing cost potential. Fortunately, there are many levers to this end.
Directions of optimization
There are three approaches to improving the R&D rate:
- Eliminate work entirely.
- Optimise processes in themselves.
- Perform work with a better cost-performance ratio.
Nothing is more efficient than completely eliminating unnecessary work. The most important lever for reducing the R&D ratio is intelligent platform management and a well-thought-out modular concept. System platforms and modular concepts offer the possibility of reuse or sharing between different products. Admittedly, there is usually an additional initial outlay that exceeds the costs of a project-specific development. But the savings from multiple reuse clearly compensate for this initial outlay. Both in the software sector and in the development of mechatronic products, high savings and significantly shorter development times are possible.
The actual increase in efficiency is achieved by optimising all processes, the associated project management and the structural organisation that is coordinated with it.
Process design and project management are primarily about having clear requirements right from the start, doing all the work right the first time, avoiding unnecessary loops, not creating a technical deficit, eliminating waste in the processes and using state-of-the-art development technologies such as artificial intelligence, simulation and rapid prototyping. Processes and project management must, therefore, be optimised with regard to interdisciplinary cooperation (Simultaneous Engineering) in clearly described acceptance criteria for work results and rapid decision-making.
Supporting this, responsibilities are distributed in a lean matrix organisation in such a way that all necessary competencies remain available, the duplication of work in different areas is prevented and there is a healthy conflict between customer- and synergy orientation.
You can find out more about this under “Shaping the organisation”.
Optimise the cost-performance ratio
Another lever for improving the R&D ratio is a global organisation. In this organisation, various roles are distributed among the existing (or yet to be established) development locations. One of these roles is that of internal development service provider, which can provide development services for projects in best-cost countries at a better cost-performance ratio than other locations. If external partners are added to this group, a review of one’s own development breadth and depth can lead to additional cost savings. System and component suppliers also take over their development. External development service providers deliver individual work packages. For more on this, see “Global development network”.
There are many approaches to increasing efficiency and reducing the R&D ratio. But only an integrated approach consisting of strategic, process-related and organisational solution modules will lead to long-term success. Our experienced consultants will support you in finding and implementing the best way for you.
The benefit to you
- You consider all relevant approaches and then choose the best way to reach your goal.
- You create a good balance between customer orientation and standardisation.
- You do not optimise individual levers but the interaction of strategy, processes and organisation.