In this book the role of R&D in the Industry is specifically defined as follows:
The invention and development of products, processes, systems and services which will provide the company with a commercial opportunity.
More broadly its role can be described as providing options, to colleagues in Marketing, for the potential growth of the business. In other words, R&D provides the opportunity whilst Marketing is charged with making the decision on whether to pursue this opportunity, and then with its commercial exploitation.
With pure or fundamental research the provision of commercial opportunities is, by its very nature, a long way into the future. However, in industry this is the final objective, no matter how far into the future, it is not science for the sake of science. This type of long-term work is uncommon in most chemical companies and at best only represents a very small fraction of total R&D budgets, even in the largest companies. It is often contracted out or carried out in collaboration with research institutes and universities, these bodies finding that it provides them with a useful source of funding and indeed a new role in the economic welfare of a country. The time frames and measures of success are quite different from product oriented research and when carried out in industry requires special management skills. This will be dealt with in Section C on innovation and creativity.
Table I3 Mergers of Pharmaceutical Companies
Pharmacia, Upjohn , Monsanto, 1995, 1999, 2000,
Warner Lambert, Pfizer, 2003
Wellcome, SmithKline Beecham, Glaxo 1995, 2000
Astra AB, Zeneca 1998-9
Hoechst, Roussel, Marion Merrel Dow, 1994, 1995, 1999 Rhone-Poulenc
Sandoz , Ciba Geigy 1996
Squibb, Breistol-Myers 1989
Speciality Chemicals 1999
Textile Colours 2001
Speciality Chemicals 1997
Speciality Chemicals 1997
Textile Colours 2001
Catalysts 2002 Polyurethane and Titanium Dioxide 1997
\ Brunner Mond
Figure I1. Change of Ownership of ICI Business 1993-2002
The heartland of innovation research, the R of R&D, in the Industry is the search for new products. These products will help to differentiate the company's product range from that of the competition, thus giving it a competitive edge in the market place. In order for this type of work to be done effectively by R&D it is very important to set clear targets. An R&D Manager must have an understanding of the particular market where the company operates, and especially recognise its driving forces. The R&D Manager also needs to work closely with colleagues in Marketing during the process of selecting and evaluating R&D targets. These important steps in the development pathway, or Innovation Chain as it is often called, will be described in Section D, which deals with Project Management.
In development, the D of R&D, there is a very strong overlap with the R&D people and those working in both manufacturing and marketing. They are all part of the operational function of the company and in these circumstances the R&D Manager will be required to be commercially astute. In addition to fitting into this matrix the R&D Manager has to be competent in working within very short time frames and in meeting deadlines. The ability to respond to circumstances, which may change rapidly, is also a necessary skill. The Project Management skills described in Section D are essential assets in helping the R&D Manager carry out this task in an effective manner.
Another area ofR&D is that looking at new ways of applying or using existing chemical products; this is sometimes called applications research. It is often carried out alongside a technical service role to customers. It therefore has a very strong interface with customers in the world outside the company. In fact in many small companies, especially those operating in the speciality or performance chemicals area, this type of R&D is the only sort that is carried out. This is because its time frames are short and entry costs low, since it does not carry those associated with new product introduction, such as product registration. The R&D Manager in this environ ment is very much a part of the commercial arm of the company.
Good quality R&D work requires an excellent back up from what are called the support functions. These include analytical, information services and technology, intellectual property and regulatory affairs. The management of these functions, especially the laboratory based analytical service, requires many of the skills associated with core R&D and will therefore not be treated separately in any detail, except to point out their relationship and role within the organisation. Traditionally, the support functions were an integral part of a large company's R&D function but nowadays they are most likely to be outsourced under contract to external organisations specialising in a particular service, especially if these activities are not seen to offer a competitive advantage to the company. The organisation of outsourcing is not a simple matter and can often take up a significant amount of management time, especially if the contract is not negotiated in an effective manner. This will be covered in Section B.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.