Research & development: Organizational design

In light of its significant influence on other parts of the company, R&D assumes a pivotal role in cost-cutting and streamlining activities. Manufacturers face the need to optimize both their development work and their R&D organizations. We have identified the main ways to adopt best practices.

Flat budgets are only one of the many challenges facing development departments. At the same time, globalization is demanding a local presence close to customers in a global market – a trend that is itself driving international alliances and corporate mergers with a view to integrating R&D sites. The sheer variety of products is also increasing constantly. New products are launched ever faster and at ever shorter intervals, even on different markets.

With all of these challenges, manufacturers need to optimize both their development work and their R&D organizations. Adopting best practices has become a must. As part of a recent study, Roland Berger Strategy Consultants conducted 60 interviews with OEMs and suppliers to identify the main ways in which companies are responding to these challenges.

The Roland Berger R&D framework has three levels:

1. R&D strategy links R&D initiatives to the requirements of corporate strategy and gives clear guidance on expectations and performance improvement targets
2. R&D performance covers all aspects of value creation, including sustainable cost-cutting strategies, best-in-class service levels and innovation
3. R&D enablers guarantee the sustainability of performance improvements

To translate this theory into practice, Roland Berger Strategy Consultants combines a series of customizable tools such as benchmarking, organization and process development, a product development system, modular strategies, standardization and value analysis.

Organizational development and product development system

An international automotive OEM asked us to develop a global engineering strategy. They wanted to connect three main locations and establish a platform for significant savings based on joint development and common product features. We decided to implement a global lead engineering organization that was tailored to the client's needs. This structure was later supplemented by a global product development system and now forms the backbone of the OEM's global development activities.

Module strategies and organizational development

For another automotive OEM, we formulated a strategy for a modular organization. The objective was to identify the main organization and process enablers, define a methodology for developing module strategies and then support development of key module strategies. In close collaboration with our client, we drew up the organization and key processes and developed the module strategy process. We then validated this process in a number of pilot projects. Having finalized the process, we then supported the development of more than 100 module strategies. In the first six of these strategies alone, we identified potential annual savings of EUR 94 million on production materials and EUR 5.6 million on warranty expenses, in addition to one-time savings of EUR 96 million for tools and equipment.