Business Policy & Strategy: Chapter Ten

1. Business Policy & Strategy: Chapter Ten • Murdick, Moor, Babson & Tomlinson, Sixth Edition, 2000

2. What are Research and Development? • Fundamental or basic research – the search for new knowledge regardless of possible applications. • Applied Research – the search for new knowledge needed to solve a current practical problem. • Development - the application of new knowledge. End result is a set of performance specifications.

3. What is Engineering? • Design Engineering – Starts with performance specifications and ends with design specifications, which describe the product in detail so that it may be manufactured. • Manufacturing Engineering – provides the specification of equipment and processes to be used in production.

4. More Definitions • Industrial Engineering – a broad term for the technical and economic problem solving required for manufacturing. • Production Equipment Engineering – design of unique or specialized equipment used to produce a particular part.

5. Role of Engineering and Research • To contribute to the profitability of the business. • To supply technical advice. • To design products that can be produced economically to meet market needs. • Technological forecasting

6. Role ofEngineering and Research

7. Unified Sense of Direction • Engineering and Research must work within the organization—not as a shop where technical people carry out projects of their own. • It must work with marketing to make new products fulfill needs. • It must work with manufacturing to achieve the optimum quality/cost mix.

8. Putting the Design Process in Action • A customer tells the firm about a general need, a particular problem, or a particular requirement. • The marketing or the R & D department identifies a problem that calls for the design of a new or improved product. • R & D makes a technical advance that has a practical application. Market research and economic analysis indicate that a new product using the technical advance has a good commercial possibility.

9. The Design Process • An idea for a product is developed by setting the characteristics the product should possess. • These characteristics are called performance specifications.

10. Performance of basic and subsidiary functions Accuracy of performance Speed of performance Reliability Ease of operation Cost Producibility Maintainability Replaceability by successive models Optimum materials and process for size of manufacturing run Performance Specifications

11. Environmental adaptability Safety and fail-safe features Social aspects (pollution, radiation, sound blasts, etc.) Legality Weight Size and shape Styling and packaging Compatibility with other systems or auxiliary equipment Ease of transporting and installing More Specifications

12. Figure 10.1 (p.192) • Specifications • Development of alternative designs • Experimenting • Prototype • Testing • Final Production Design • Production

13. E & R Problems • Failure to set objectives • Attempt to develop products not appropriate • E & R inefficient (budget based) • “Not our fault” (Firestone passing blame to consumers/Ford) • Cannot be produced • Feasibility/market research separate from Engineering (research done before start building)

14. Major Systems for Analysis • 1. Commitment of the company to creativity and innovation (Design of control, assignment of clerical and non-technical tasks and the facilities and test equipment available)

15. Major Systems for Analysis • Four Basic Organizational Structures • Functional • Systems & Components • Line Project • Matrix or Staff Project

16. Planning and Control System • Time, cost, and performance are basic features that must be synchronized and controlled. • Special progress charts are developed to monitor cumulative and monthly performance and costs for each task and the project as a whole.

17. The Design Process • Engineering adds value by adding creative thought and analysis to produce a new form of ideas or new uses for existing products • Concurrent Engineering reduces the cycle time (the amount of time from the idea stage to rolling off the production line). Involving multiple departments simultaneously on the front end of design can reduce time 40% or more

18. Relationships of E & R and Other Components • Relationship between E & R and marketing is determined by the technical content of the product • Close informal working relationships do much to reduce design costs and expedite manufacture of prototypes and production units.

19. Checklist For Analysis • Demand • Plant & Layout • Equipment • Procurement • Human Resource Management • E&R –Planning & Scheduling • Assigning & Dispatching Work

20. Plant and Layout • What type of offices are provided for engineers and scientists? • What is the environment of the offices like? • Is there a laboratory? • Is there a good technical library? • Is the location convenient? • Are there lecture and conferences rooms?

21. Equipment • Is the equipment, i.e. computers, adequate? • Are individual desks equipped appropriately? • Is the test equipment modern? • Are there good reproduction facilities available?

22. Procurement • Are engineering budgets reasonable? • What kind of control do engineers have over approval and control of purchases? • Are policies of procurement clear? • Are these policies easy to implement?

23. Human Resource Management • Are the compensation packages sufficient? • Is the turnover rate reasonable? • Is there a management development system in place? • Are management styles adequate?

24. Engineering and Research • Are projects and assignments clearly defined? • Are there evaluation plans in place? • Do assignments reflect management’s objectives? • What is the reporting structure?

25. Project Management • Is there a breakdown structure for each project? • Are jobs clearly identified? • Is the order system adequate? • Are there enough expense accounts? • Is quality defined and measured? • Is there a cost reporting system?