R&D management involves overseeing the investment of money and effort in research and development projects. It includes determining which projects to pursue, cost accounting, project management, and product lifecycle management. It is essential for companies in manufacturing, science, and product development to devote resources to R&D as part of a long-term management strategy.
R&D management is the process and techniques used to control the amount of money and effort invested in research and development (R&D) projects. The main concepts used in this process include oversight committees, cost accounting, project management and product lifecycle management. R&D management is most commonly found in manufacturing, science, and product development. Companies in these industries must devote resources to research and development as part of a long-term management strategy.
The first aspect of R&D management is determining which projects to pursue. For example, a pharmaceutical company may assess the market for wrinkle-fighting skin creams and decide that there is enough consumer interest in the product to make it profitable. The R&D management team will then look at the options and ask scientists to explore possible solutions.
The product development team provides the product manager with an outline of the project, complete with the estimated costs and time needed to develop the product. The product manager will discuss the proposal with the monitoring committee. After review and acceptance, work can begin. While there are multiple stages to this process, it ensures senior management support for all initiatives, as well as a solid understanding of cost and time for each project.
Cost accounting is an important aspect of any R&D management system. Within a cost accounting program, each new project or initiative is assigned to a cost center. All equipment, supplies and material costs related to the project are charged to this account. In addition, employees track the time spent on the project so that wage and social security costs are also charged to the cost center. The purpose of this type of accounting is to have a clear record of the amount of money spent on a particular project at any one time.
As part of an R&D management system, project management processes are used to create a timeline, plan resources, and set milestones. A clearly defined project is much more likely to be completed successfully than one with confusing requirements and no deadlines. Using a project management plan produces higher quality output in a shorter time frame.
R&D management is the first stage of a product lifecycle management system. Under this program, total product costs and revenues are tracked from start to finish. This framework is very laborious to maintain, but provides a wealth of information for analyzing the success or failure of any long-term initiative.
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