R&D ROI
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Mark.Rackin
One word: MOTOROLA. When led by the founder, Paul Galvin, later (after Paul's ...
Grant Martin
But you need to finish the Scottish connection between "the best laid plans ...
The best laid plans of mice and men
Ron Collett
3/12/2012 7:43 PM EDT
Last month on these pages I discussed "The elephant in the corner"–the wholly unrealistic IC development schedule nobody dares openly question. In truth, the situation is often much worse than I described. Usually it isn't just one elephant in the corner, there's a herd—a portfolio of projects. In fact, one of the most insidious problems of portfolio management is the failure to adequately verify that project plans are realistic. Because most R&D organizations lack a reliable verification capability, most portfolios end up in chaos—indeed, "the best laid (portfolio) plans of mice and men often go awry."
With that in mind, how many chip design projects is your R&D organization currently working on? If it's a handful or more, my guess is that many will miss schedule—too many projects, too few engineers. When projects are understaffed, the implicit assumption is R&D teams will compensate by achieving enormously high productivity. It doesn't happen. Instead, much of the portfolio slips schedule—often by a lot.
Oversubscription by more than 40 percent is common in the semiconductor industry. That means R&D organizations needs at least 40 percent more engineers to meet the portfolio's time-to-market objectives.
Perhaps it's an open and shut case of wanting to "have one's cake and eat it, too." There simply aren't enough engineering resources to handle all the business opportunities marketing and senior management pursue. But that inconvenient fact rarely prevents major over-commitments. Instead, most projects simply end up underfunded. "Book the business now, and we'll worry about on-time delivery later," seems to be the common refrain in the industry.
R&D organizations can offset portfolio under-resourcing in a number of ways:
(a) reduce the scope of projects—difficult to do because markets and customers demand maximum functionality & performance, and likewise, competitors are constantly upping the features/performance ante; (b) re-sequence the portfolio's execution pipeline by delaying certain projects' start dates ("resource leveling")—it's done sometimes but typically not enough to have much impact; (c) "encourage" the R&D organization to work longer hours, which increases engineering throughput—it happens quite a bit, but engineers burn out and productivity often declines; (d) the R&D organization can attempt to boost its productivity; unfortunately, productivity often must increase far more than humanly possible within the target time horizon, because chip design complexity is increasing faster than productivity typically improves.
So what's the solution? First, organizations must be far more discriminating in selecting business opportunities and projects. That puts the onus on marketing organizations, as well as senior management, to gain greater insight into the markets they serve. To this end, marketing should establish a robust process for quantifying the likelihood of achieving its forecasted revenues—assuming R&D meets its commit dates—and it should present those (realistic) probabilities to senior management. Second, productivity implied in project plans must be measured at the outset of each project, and projects assuming unrealistic performance should be flagged. Implementing this strategy leads to streamlined portfolios whose projects meet schedule and revenue targets. Moreover, both the engineering and marketing organizations become more accountable for meeting schedules and forecasts.
Ronald Collett is president & CEO of Numetrics Management Systems Inc.
With that in mind, how many chip design projects is your R&D organization currently working on? If it's a handful or more, my guess is that many will miss schedule—too many projects, too few engineers. When projects are understaffed, the implicit assumption is R&D teams will compensate by achieving enormously high productivity. It doesn't happen. Instead, much of the portfolio slips schedule—often by a lot.
Oversubscription by more than 40 percent is common in the semiconductor industry. That means R&D organizations needs at least 40 percent more engineers to meet the portfolio's time-to-market objectives.
Perhaps it's an open and shut case of wanting to "have one's cake and eat it, too." There simply aren't enough engineering resources to handle all the business opportunities marketing and senior management pursue. But that inconvenient fact rarely prevents major over-commitments. Instead, most projects simply end up underfunded. "Book the business now, and we'll worry about on-time delivery later," seems to be the common refrain in the industry.
R&D organizations can offset portfolio under-resourcing in a number of ways:
(a) reduce the scope of projects—difficult to do because markets and customers demand maximum functionality & performance, and likewise, competitors are constantly upping the features/performance ante; (b) re-sequence the portfolio's execution pipeline by delaying certain projects' start dates ("resource leveling")—it's done sometimes but typically not enough to have much impact; (c) "encourage" the R&D organization to work longer hours, which increases engineering throughput—it happens quite a bit, but engineers burn out and productivity often declines; (d) the R&D organization can attempt to boost its productivity; unfortunately, productivity often must increase far more than humanly possible within the target time horizon, because chip design complexity is increasing faster than productivity typically improves.
So what's the solution? First, organizations must be far more discriminating in selecting business opportunities and projects. That puts the onus on marketing organizations, as well as senior management, to gain greater insight into the markets they serve. To this end, marketing should establish a robust process for quantifying the likelihood of achieving its forecasted revenues—assuming R&D meets its commit dates—and it should present those (realistic) probabilities to senior management. Second, productivity implied in project plans must be measured at the outset of each project, and projects assuming unrealistic performance should be flagged. Implementing this strategy leads to streamlined portfolios whose projects meet schedule and revenue targets. Moreover, both the engineering and marketing organizations become more accountable for meeting schedules and forecasts.
Ronald Collett is president & CEO of Numetrics Management Systems Inc.
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WW Thinker
3/13/2012 2:03 AM EDT
Too many companies today are still engineering-driven despite of their emphasis on the need to understand the market well.
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no.name_#4
3/14/2012 5:45 PM EDT
Hum, "Too many companies today are still engineering-driven despite of their emphasis"; I can agree that leadership is a vital ingredient in a companies success.
I could use some of that yesterday style leadership!
I have seen and worked for companies that are "Engineering Lead" (think Intel, Google) and those that are now "MBA Lead" (think Axcelis, TI, HP).
It seems inevitable, when a company helm is handed to a MBA, the business was inevitably parceled out and shriveled back from it glorious past.
In an industry that grows by staying on the leading edge only with technical vision, a vision for products that win market share and revenue growth; it's my impression, MBA's universally lack technical vision and direction. They are good followers, with lots of business discipline; but crappy leaders that can't lead with a physical product innovation!
Not to say that Eng Lead companies are always successful, they aren't. They are just more often the leading edge, remarkable success stories that people talk about, then an MBA lead company ever was.
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Mark.Rackin
3/19/2012 3:35 PM EDT
One word: MOTOROLA. When led by the founder, Paul Galvin, later (after Paul's tragic death in the mid 1950s) his son Bob Galvin, the chairs were primarily businessmen. However, they "knew what they didn't know" and thus relied on a very strong core of engineers to actually run the company. Dan Noble was what would today be the CTO, and the presidency was held by a series of engineers who turned out to be superb leaders too. The sorry decline and fall of this formerly great company started when the 3rd generation (Chris Galvin, who as an MBA was CERTAIN that he knew everything) took over.
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Frank Eory
3/13/2012 2:05 PM EDT
You hit the nail on the head with "organizations must be far more discriminating in selecting business opportunities and projects."
The simple truth is there are far more chips that COULD be designed than the number that WILL be designed, and verified and manufactured, qualified, etc. Deciding what to invest in and what not to invest in is the most important phase of a new product development. And sometimes projects need to be killed to free up resources for a different project that has a better chance of making money.
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Robotics Developer
3/13/2012 5:21 PM EDT
I can say from almost 2 decades of experience another schedule killer is scope creep! More often than not, the schedule was too aggressive and the team under resourced (people/machines) but most importantly, marketing/sales insisted on adding a new feature or "just tweaking" the specifications with no regard for the impact to the development. I have seen changes ripple into the pipeline depth, chip size, layout, power, memory needs, pinout and the list goes on. The end effect on far too many designs was the short circuiting of the testing/verification step and an attempt to "speed things up" schedule wise by committing to a layout before all the verification runs were done (or even started). Normally, there were bugs found and redesign/layout needed which set the project back further than if they had finished verification. Upper management is a primary cause of this error and should be held responsible. Most often, the designers were left holding the bag!
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DickH
3/13/2012 5:41 PM EDT
to Ron Collett
the best-laid plans of mice and men gan aft agley in the original Scots. 'oft go awry' is a decent translation, fine, but keep the mouse / man word order, will you?
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Neo1
3/13/2012 11:06 PM EDT
This is akin to "Who will bell the cat"
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RCollett
3/14/2012 1:09 PM EDT
Wikipedia explanation of "Who will bell the cat":
"The Fable concerns a group of mice who debate plans to nullify the threat of a marauding cat. One of them proposes placing a bell around its neck, so that they are warned of its approach. The plan is applauded by the others, until one mouse asks who will volunteer to place the bell on the cat. All of them make excuses. The story is used to teach the wisdom of evaluating a plan not only on how desirable the outcome would be, but also on how it can be executed. It provides a moral lesson about the fundamental difference between ideas and their feasibility, and how this affects the value of a given plan."
Neo1, thanks for the comment -- great comparison!
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Grant Martin
3/15/2012 6:20 PM EDT
But you need to finish the Scottish connection between "the best laid plans o'mice and men gang aft agley" and "Bell the Cat".
A wee bit more in Wikipedia finds : "Archibald Douglas, 5th Earl of Angus (1449 – October 1513), was a late medieval Scottish magnate. He became known as "Bell the Cat". " and later "In 1481, Angus became Warden of the east march, but the next year he joined the league against James III and his favourite Robert Cochrane at Lauder. Here he earned his nickname by offering to "bell the cat" – specifically, to deal with Cochrane – beginning the attack upon him by pulling his gold chain off his neck, and then ordering the hanging of Cochrane and others of the king's favourites. (The phrase "to bell the cat" comes from one of Aesop's fables, "The Mice in Council", and refers to a dangerous task undertaken for the benefit of all.)"
Now the circle of cross references is complete!
This is especially relevant for all references to Scotland at the point in time where the Encyclopedia Brittanica has ceased publishing its printed edition. To quote the Usurper again:
"The Britannica is the oldest English-language encyclopædia still being produced. It was first published between 1768 and 1771 in Edinburgh, UK"
or for those in the know, Edinburgh SCOTLAND.
Is it really true that all stories end up with a Scottish connection?
Grant Martin
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