1.5.1 Research & Development (R&D)

R&D is responsible for inventing new products and re-engineering old ones. R&D determines each product’s physical characteristics:

• Size (The product’s dimensions; there is a trend towards miniaturization.)
• Performance (The product’s speed and sensitivity; there is a trend towards improvement.)
• MTBF (Mean Time Before Failure; the product’s expected life span, measured in hours.)

R&D decisions affect the perceived age of your products. Revising a product’s size and/or performance makes the market view it as a newer product. R&D decisions affect the material cost of your products. Decreasing size, increasing performance and increasing MTBF increase the cost of material.

The length of time required to revise a product varies. Slight revisions can complete in three or four months; more comprehensive projects, two or three years. The longer the project, the greater the expense: a six-month project costs $500,000; a 12-month project costs $1,000,000.

R&D invents products by assigning a name, performance, size and MTBF. Inventing a product always takes more than a year. Your new product cannot be built without an assembly line, and new assembly lines take one full year to install. If you invent a product, you must coordinate with Production to time the delivery of your design with the delivery of your assembly line.

The number of simultaneous projects affects the time required for each project to complete. As you add projects, dates can slip. Be sure to check the revision dates of all your projects.