"Making R&D Lean"

Donald Reinertsen and Leland Schaeffer

Research-Technology Management

July/August 2005, pp. 51-56

While there are some similarities between manufacturing and R&D, the authors note four main differences to be taken into account when creating lean R&D:

• All variability is bad in manufacturing, and reducing variability improves the process. R&D cannot eliminate all variability in its function without reducing all value-added.
• Manufacturing adds value to physical objects, that can only be in one place at a time. R&D adds value to information, which can be in multiple places at the same time.
• R&D must constantly adapt to emerging information, while manufacturing has more fixed requirements.
• Taking risks is crucial in R&D, so mistakes are more easily tolerated.

Given these differences, the authors consider ten lean principles and propose adaptations for R&D:

• Reduce batch sizes—In R&D, smaller batch size means that information is released more frequently;
• Make the process tolerate all necessary variability—R&D tries to capture the value of "good" variability, while minimizing the cost;
• Focus on maintaining flow instead of perfect planning—R&D must respond flexibly to emerging information.
• Pull, don't push—"Daily assignments of goals and resources are made in response to the current status of work."
• Create fast, powerful, feedback loops—"Researchers feel more in control, are more willing to take risks, and are more inclined to use initiative when unproductive paths can be quickly truncated."
• Requirements are seldom required—"In R&D we must be willing and able to modify our goals in the presence of compelling new information."
• Invest in flexibility—"Preparation involves broadening skill sets before they are needed."
• Achieve adequate failure rates—"Lean R&D manages risk by accepting higher 'efficient' failure rates and limiting the downside consequences of these failures."
• Understand the economics of waste—"...the relative economic importance of wasted cycle time, compared to wasted expenses, can be over 200 times greater in R&D than manufacturing."
• Control the right parameter—Understand the critical path and control the parameters that may interfere with the path.

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