RESEARCH DEVELOPMENT Mustafa METE 2010503049 Industrial Engineering Department

RESEARCH & DEVELOPMENT Mustafa METE 2010503049 Industrial Engineering Department 1

Contents n n n Definition of R&D Overview Pharmaceuticals Business R&D alliance R&D Reorientation 2

What is R&D? n Research and development is often scientific or towards developing particular technologies and is frequently carried out as corporate or governmental activity. 3

The phrase research and development (also R and D or, more often, R&D), according to the Organization for Economic Co-operation and Development, refers to: n n Creative work undertaken on a systematic basis in order to increase the stock of knowledge Including knowledge of man Culture and society The use of this stock of knowledge to devise new applications. 4

Overview n n New product design and development is more often than not a crucial factor in the survival of a company. In an industry that is changing fast, firms must continually revise their design and range of products. 5

n n A system driven by marketing is one that puts the customer needs first, and only produces goods that are known to sell. Market research is carried out, which establishes what is needed. 6

R&D investment generally reflects n n n A government’s or organization’s willingness to forgo current operations , Profit to improve future performance or returns , Its abilities to conduct research and development. 7

In the context of commerce, ”R&D” normally refers to n n Future-oriented , Longer-term activities in science or technology , Using similar techniques to scientific research without predetermined outcomes , With broad forecasts of commercial yield. 8

Statistics on organizations devoted to “R&D” may express the state of an industry, the degree of competition or the lure of progress. n n n Some common measures include: Budgets , Numbers of patents or on rates of peerreviewed publications. 9

The top eight spenders in terms of percentage of GDP were n n n n Israel (4. 53 %) Sweden (3. 73 %) Finland (3. 45 %) Japan (3. 39 %) South Korea (3. 23 %) Switzerland (2. 9 %) Iceland (2. 78 %) United States (2. 62 %) 10

In the U. S. , a typical ratio of research and development for an industrial company is about 3. 5% of revenues. n n A high technology company such as a computer manufacturer might spend 7%. Although Allergan (a biotech company) tops the spending table 43. 4% investment anything over 15% is remarkable and usually gains a reputation for being a high technology company. 11

Generally such firms prosper only in markets whose customers have extreme needs, such as : n n n Medicine Scientific instruments Safety-critical mechanisms (aircraft) or high technology military armaments. 12

On a technical level, high tech organizations explore ways to re-purpose and repackage advanced technologies as a way of amortizing the high overhead. They often reuse , n advanced manufacturing processes , n expensive safety certifications , n specialized embedded software , n computer-aided design software , n electronic designs , n mechanical subsystems. 13

Pharmaceuticals n n Research often refers to basic experimental research; development refers to the exploitation of discoveries. In the United States, universities are the main provider of research level products. 14

n n Development is concerned with proof of concept , safety testing and determining ideal levels and delivery mechanisms. Development often occurs in phases that are defined by drug safety regulators in the country of interest. 15

BUSINESS n R&D is nowadays of great importance in business as the level of competition, production processes and methods are rapidly increasing. 16

n It is of special importance in the field of marketing where companies keep an eagle eye on competitors and customers in order to keep pace with modern trends and analyze the needs, demands and desires of their customers. 17

R&D Alliance n An R&D alliance is a, mutually beneficial formal relationship formed between two or more parties to pursue a set of agreed upon goals while remaining independent organisations , where acquiring new knowledge is a goal by itself. 18

n Thanks to funding from government organizations , like the European Union’s Seventh Framework Programme (FP 7) and modern advances in technology , R&D alliances have now become more efficient. 19

R&D Reorientation n n Industrial sector is transforming from vertical integration to horizontal structure. The restructuring trends of manufacturing predict the future of R&D to be focused, financially independent, universally expanded and distributed. 20

n n n Collaborative networks in a decentralized environment are producing better results because of flexibility and cost reduction. R&D is spreading across the globe for faster development and unique innovations. Building block structure is getting popular in R&D because it is more manageable and focused. 21

n n n Formation of horizontal collaborative network is challenging because it incorporates the issues of adaptability , security , cultural differences , varying standards , trust , ownership. 22

n n n Firms can make better investment decisions if they can predict their development cost. This will directly add to the bottom line of the business. In a race to improve the productivity , lower the cost and save time, firms should not forget to retain the expertise of their core competencies. 23

n n n Companies are decentralizing their R&D units across the globe to extract the time and diversity benefits. R&D is an area where ‘ The World is Flat ‘ theory applies perfectly. Never ending attempts should be made to optimize the development with minimal resources. 24

THANKS FOR LISTENING 25