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R&D project selection: Productivity considerations
Author(s) -
Cook Wade D.,
Roll Akov
Publication year - 1988
Publication title -
randd management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.253
H-Index - 102
eISSN - 1467-9310
pISSN - 0033-6807
DOI - 10.1111/j.1467-9310.1988.tb00591.x
Subject(s) - productivity , best practice , selection (genetic algorithm) , process (computing) , outcome (game theory) , operations management , business , industrial organization , computer science , economics , microeconomics , management , economic growth , artificial intelligence , operating system
The paper consists of a theoretical discussion of the circumstances justifying the use of R&D to increase the productivity of a firm's manufacturing capability. There are three possibilities: Increase the productivity of existing capacity; re‐equip with purchased existing best‐practice technology; or use R&D to develop new technology. The choice depends on which of the four following situations exist: 1) When the productivity of existing capacity is well below its potential and is also well below that of the industry's best‐practice; in this case the right strategy is first to bring actual productivity up to potential, and then to consider the purchase of best‐practice. 2) When productivity is well up to potential but is well below best practice; the advice is then to purchase best‐practice. 3) When existing capacity is already best‐practice but productivity is well below capacity; in this case productivity of existing plant should be increased. 4) When existing capacity is bestpractice and productivity is near the maximum; then and only then is R&D to develop new technology justified. The paper concludes with a brief account of the process to be undergone between the establishment of a case for R&D using the above criteria and, if R&D is undertaken and completed, the retrospective review of its outcome.