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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

1762.0. "Bad Benchmark?" by BOOKS::HAMILTON (All models are false; some are useful - Dr. G. Box) Mon Feb 10 1992 11:48

From the Wall St. Journal (courtesy of Vogon News):

"                    [stuff deleted]

   Still, a large cut in research spending would be painful for Digital, which
 has long taken pride in its heavy investment in research. According to
 Inside R&D, published by Technical Insights Inc. of Englewood, N.J., Digital
 ranked fifth in 1990 in research spending by the largest U.S. corporations,
 after General Motors Corp., International Business Machines Corp., Ford Motor
 Co. and American Telephone & Telegraph Co. Moreover, as a proportion of
 revenue, Digital's $1.6 billion research budget - at 12.5% of its calendar
 1990 revenue - far exceeded that of GM, Ford, IBM or AT&T.

                   [stuff deleted] "

Here is my question: why is our R&D spending being compared to companies 
that, to put it mildly, have had their share of problems lately?  Personally,
I have a *big* problem with the choice of benchmarks for this analysis,
and am frankly surprised that the estimable WSJ didn't ask some
more questions. 

Why doesn't the analysis compare our R&D spending as a percentage
of NOR to, for example, NEC or Matsushita?   Let's see, GM
and Ford are getting *their lunches eaten* by the Japanese, 
so let's use them as the benchmark.  I *hate* these trite analyses,
and I hate it even more when a newspaper with the clout of WSJ
uses them verbatim.  I wonder if WSJ didn't use the complete analysis
or whether Technical Insights didn't *do* a good analysis?  Does anyone
    have a copy of Inside R&D?  What's your cut?

Comments?

Glenn



  
T.RTitleUserPersonal
Name
DateLines
1762.1ESMAIL::CANELLAgive me everythingMon Feb 10 1992 12:1210
    Ahem, GM leads all auto makers, including the Japanese, in number of 
    patents issued.  At least, they led all auto makers the last time 
    I read about it which was less than a year ago.  In my view, patents 
    are directly related to how much you invest in R&D and how efficiently 
    you invest in R&D.  Of course, it doesn't explain crap like the Chevette 
    and other GM clunkers.
    
    Alf
    
    
1762.2...hey, whadaIknow??STRIKE::LENNARDMon Feb 10 1992 12:185
    Isn't a large portion of our spending in R&D (at least in the past)
    a function of the Corporation being absolutely dominated by hardware
    engineers?  Maybe things just have to change now to get ready for
    the brave new world of commodity hardware...cheapie software....and
    wide-spread systems integration.
1762.3Patents not necessarily equal progressSKYLRK::LATTALife is uncertain, eat dessert firstMon Feb 10 1992 14:2218
    RE: .1
    
    The number of patents owned is a very poor indicator of product
    quality.  There are basically four reasons to seek a patent.
    
    1.  To gain a technological advantage for incorporating the invention
        into your product.
    
    2.  To sell it to another party.
    
    3.  To prevent anyone from using the invention.
    
    4.  To stroke one's ego.
    
    Based on GM's products over the past few decades, I'd say numbers 3 and
    4 must be prominent motivations.
    
    ken
1762.4Selective Investment ReductionSGOUTL::BELDIN_RPull us together, not apartMon Feb 10 1992 14:4710
    A key problem for American industry has been in the area of converting
    their technology into money-making products.  Sizable parts of our
    investments in R&D don't ever get to market.  If we can prevent the
    investment that will not go to market, we can save expense without
    reducing our income.  However, given our track record of bad guesses,
    maybe that is too big an "IF".
    
    fwiw,
    
    Dick
1762.5Who patented what?CTOAVX::BRAVERMANSounds like assonance to me...Tue Feb 11 1992 05:005
    I would say that most of the patents were generated by Charles
    Kettering, probably the second most prolific inventor of our era,
    behind Thomas Edison.
    
    hy
1762.6best *inventor*SOLVIT::BUCZYNSKITue Feb 11 1992 09:0113
    re .5
    
    Hi, HY  *8)
    
    I always thought that the most prolific inventor of all time (I see his 
    name on almost everything I pick up) was...
    
    
    
     Pat. Pending  8*)
    
    
    Mike
1762.7More on KetteringSKYLRK::LATTALife is uncertain, eat dessert firstTue Feb 11 1992 13:349
    RE: .5
    
    Mr. Kettering was indeed prolific and contributed greatly to GM's
    success.  Someone recently suggested that he may in fact hold a record
    as the inventor with the most inventions outlawed by the Environmental
    Protection Agency.  Most notably, leaded gasoline and CFC based air
    conditioning equipment.
    
    ken
1762.8CECV01::CANELLAgive me everythingWed Feb 12 1992 12:319
    Re .3
    
    I never said that GM produced more reliable cars than other companies
    which don't receive as many patents, I just said that they put in
    enough effort in R&D.  Now, had .0 asked why companies which invest
    lots of money on R&D still make crummy cars, your note would have some
    applicability. .
    
    Alf
1762.9Invented vs. Perfected here...PHDVAX::RICCIOBundy in 92!Wed Feb 12 1992 15:1421
    
    
    
      R & D is obviously very important, but what was the last "thing"
    the Japanese developed (invented). It wasn't the automobile, it wasn't
    the VCR, or any other home electronics "gadget". We (the U.S.) are the
    think tank for the western world (well maybe not Germany). From the 
    telegraph to the telephone, television, automobile to the high tech
    weapons seen in the gulf war, were all invented here! This,
    unfortunately has some draw backs. One of which is once it's a working
    "device", it can then be analyzed, modified and profected. This is 
    typically done through manufacturing, something the Japanese are very
    good at. (Camaras, VCRs and the other home electonics are perfect
    examples)
    
       Bottomline, it's nice to be "invented here", but it's sometimes
    better to be "perfected here".
    
    
    
                                            Phil... 
1762.10the *analysis* is the problemBOOKS::HAMILTONAll models are false; some are useful - Dr. G. BoxWed Feb 12 1992 15:2112
    
    Re: -all
    
    My problem is not with GM (or any of the other companies).  My
    problem is with the analysis that compares DEC (a 13+B worldwide
    concern) with *only* American companies.
    
    If we're competing in a global environment, then I contend that
    analyses like that noted in .0 should compare us to Japanese
    companies.  Or German companies.
    
    Glenn  
1762.11And we laugh at Russians claiming all inventionsCGOOA::DTHOMPSONDon, of Don's ACTWed Feb 12 1992 19:3018
    Just as a matter of record...
    
    Bell's first phone call occurred in Brantford Ontario, Canada,
    while the Scottish born inventor was a resident of Canada.
    
    The Italian, Marconi, sent and recieved the first radio signals in
    Canada.
    
    The electronic white-board (where you can get copies of your
    presentations or whatever) was invented in Japan.
    
    The strength the Japanese have is a different business ethic - if it's
    patented in North America, then they feel they may manufacture it in
    Japan and sell it anywhere they want (except North America) and forego
    royalty payments.  Our business ethic differs.  (Exists?)
    
    
    Donf
1762.12Yeah, we have the same regrets!COUNT0::WELSHPenetrate the installed base!Thu Feb 13 1992 03:0839
	re .9:

>      R & D is obviously very important, but what was the last "thing"
>    the Japanese developed (invented). It wasn't the automobile, it wasn't
>    the VCR, or any other home electronics "gadget". We (the U.S.) are the
>    think tank for the western world (well maybe not Germany). From the 
>    telegraph to the telephone, television, automobile to the high tech
>    weapons seen in the gulf war, were all invented here!

	Firstly, I believe Akio Morita claims that Sony invented the VCR.
	(I may have misremembered what I read, but I'd be interested to
	know if anyone else is positive of the facts). Japan has certainly
	invented many variants of basic technology - and there is an
	argument that it is products that sell and lead teachnology
	advance, not basic concepts.

	Secondly, I agree with the other reply which pointed out that
	Americans have not invented nearly as many things as they often
	think. The legend of Edison and the other great American inventors
	may obscure this fact - although the recent news about the US
	history textbooks which said that Napoleon won the battle of
	Waterloo and John Kennedy was shot during the Nixon presidency
	leads me to think that some younger Americans may not be as
	accurately informed about the past as they might wish to be.

	Britain has a similar claim and a similar gripe - "we have a
	great record of inventions, but who makes all the money?" In
	this connection, it's noteworthy that the inventor of TV, John
	Logie Baird of Scotland, died in poverty, while many American
	firms have made fortunes out of his technology. While there are
	many accounts of "who invented the computer", I believe that the
	work done in the 1930s by Turing, while at that stage theoretical,
	were of decisive importance, and antedated any US involvement.

	In this connection, I might comment on the US Department of
	Commerce's export licensing rules, and how they affect Digital's
	business, but I won't.

	/Tom
1762.13ASICS::LESLIEAndy LeslieThu Feb 13 1992 03:5612
          <<< Note 1762.11 by CGOOA::DTHOMPSON "Don, of Don's ACT" >>>
>    The strength the Japanese have is a different business ethic - if it's
>    patented in North America, then they feel they may manufacture it in
>    Japan and sell it anywhere they want (except North America) and forego
>    royalty payments.  Our business ethic differs.  (Exists?)
    
    
    If you are saying that Japanese companies don't pay royalties, then you
    are wrong.
    
    /andy
    
1762.14DCC::HAGARTYEssen, Trinken und Shaggen...Thu Feb 13 1992 04:014
Ahhh Gi'day...�

    And if they didn't another part of the same firm would have tariffs and
    quotas put on their products entering the US before they could sell two.
1762.15Off Topic SomewhatFLOWER::HILDEBRANTI&#039;m the NRAThu Feb 13 1992 09:323
    Edison was the real thing.....
    
    Marc H.
1762.16FIGS::BANKSVice President in charge of VMSMailThu Feb 13 1992 10:5122
.12: (?)

Yes, I almost responded to the VCR thing.  The VTR was, I believe, an American
invention.  In addition, there were a number of American produced attempts at
home VTRs.  Maybe even VCRs.  But, lots of things had to happen to make it 
viable (cheap enough) for the consumer market.  One of these things was to
reduce, by at least an order of magnitude (maybe two) the amount of tape
required to record any given program.

The inventions for this reduction are, I'm told, of Japanese origin.  The two
biggies seem to be helical scanning heads (although older VTRs used something
that's arguably close to helical scanning) and the mismatched azimuths on the
heads so that video tracks on tape can be physically adjacent without creating
too much crosstalk on playback.

I'm *PRETTY* sure that helical scan was a Japanese invention.  I'm 99 44/100%
sure that the mismatched azimuth trick was a Japanese invention.  And, I'm
pretty sure that someone over there has patents on both.

I suppose it's a matter of definitions.  Someone came up with the idea, someone
came up with the basic mechanics, and someone came up with the cost saving
ideas.  It's up to anyone to dole out credit for the sum of the parts.
1762.17FLOWER::HILDEBRANTI&#039;m the NRAThu Feb 13 1992 11:096
    Re:.16
    
    The folks in Phillips would disagree with you on the helical scan
    idea.
    
    Marc H.
1762.18Even further off the track, but worth considering...JOET::JOETQuestion authority.Thu Feb 13 1992 11:2110
    re: .15
    
>    Edison was the real thing.....
    
    Although he was an American, we can't use him as a role model or hero
    or *anything* positive as it's well known that he frequently used
    various cocaine products.
    
    -joe tomkowitz
    
1762.19of course he didENTREE::RICHARDSONJackThu Feb 13 1992 11:563
    .-1:  As well known as the fact that *everybody* used cocaine products
    in that era.  It was used as a medicine.
    
1762.20ROYALT::KOVNEREverything you know is wrong!Thu Feb 13 1992 12:5815
The key invention for videotape was the rotating head. Ampex (a US company) 
invented this. Their head rotated at 90 degrees to the tape. They produced
only commercial equipment (e.g. for TV stations) and licensed the technology
to Sony for home use, as they thought it was not possible to produce one
cheaply enough. Other Japanese companies copied them, and told Ampex that they
could either license it to them or they would produce the machines anyway.

I'm not sure at what point the heads were tilted.

To me, this shows two things: 1) American companies (well, at least one company)
are not willing to make a large investment in cost-reducing products for the
popular market, and so, will lose a large market they could have had; and 2)
Japanese companies can be ruthless.

My information comes from a Boston Globe Magazine article of a few years ago.
1762.21GO, and digress no more...JOET::JOETQuestion authority.Thu Feb 13 1992 13:1514
    re: .19
    
>    .-1:  As well known as the fact that *everybody* used cocaine products
>    in that era.  It was used as a medicine.
    
    Actually, Edison did testimonial ads for 'Vin Mariani' which was a wine
    laced with cocaine.  Today, that would make him unemployable as a
    recreational polydrug abuser and a kingpin or something.  
    
    The guy would never have passed a random urine screening.  Fortunately
    for us, he was self-employed and also somehow avoided involvemment in
    turf wars and the inevitable drive-by shootings.
    
    -joe tomkowitz                                         
1762.22Digression is good for the soulSKYLRK::LATTALife is uncertain, eat dessert firstThu Feb 13 1992 13:4621
    >>    .-1:  As well known as the fact that *everybody* used cocaine products
    >>    in that era.  It was used as a medicine.
     
    Cocaine was not only a medicine in that era, but also an ingredient in
    the recipe for Coca-Cola.  Recreational drug use was not yet illegal.
    
    Edison probably did invent some of the things he claimed patent
    protection for, but it has been alledged, and is almost certainly true,
    that many of "his" inventions were actually the creations of his
    employees.  That seems perfectly reasonable in light of Digital's
    assertion that it can claim the rights to anything one of us might
    invent.  Just another instance of the Golden Rule.
    
    Anyone consumed with the notion that Japanese do not invent things
    should contact the US Patent Office.  FWIW, practically all patents are
    issued for improvements to an existing technology, not for previously
    unimagined devices.  If Japanese engineers conceived of an improvement
    to helical-scan head design they deserve as much credit as the person
    who realized helical was an improvement over fixed heads.
    
    ken
1762.23Huh???FLOWER::HILDEBRANTI&#039;m the NRAThu Feb 13 1992 14:037
    RE: .18
    
    He is my role model....where did you get the cocaine info?  I've
    read a number of books on him. Can't recall ever about the cocaine
    part.
    
    Marc H.
1762.24Rathole�NOTIME::SACKSGerald Sacks ZKO2-3/N30 DTN:381-2085Thu Feb 13 1992 14:513
The original formula for Coca Cola contained a minuscule amount of cocaine.
It was formulated with "spent coca leaves," i.e. what was left over after
the cocaine had been removed for medicinal purposes.
1762.25bottom line - its the bottom lineSGOUTL::BELDIN_RPull us together, not apartThu Feb 13 1992 15:0110
re .9  and some others

   US industry has been criticized for spending lots of money on R&D for
   products that it never brings to market or if it does, is late.
   Certainly, the company that makes the product available to the
   marketplace is the one who makes the money.  We can afford to forego the
   R&D on products we will never sell.  The patents bring in precious
   little, compared to sales of products.
   
Dick
1762.26SQM::MACDONALDThu Feb 13 1992 15:2927
    
    Re: .25
    
    TQM has come to the R+D world as well.  I just finished the
    Oct. 25th issue of Business Week which is devoted totally
    to Quality.
    
    With respect to just this issue Alcoa (R+D), for example:
    
    	uses so-called portfolio management to continually
        evaluate its list of some 200 research projects, determining
        whether to fish or cut bait.  Each project must pass the
    	test of commercial possibilities.  "It forces us to ask the
        right questions about whether we're working on the right
        things," says Bridenbagh executive VP for Science and
        Technology.
    
    Also as said by David Snediker, VP of Quality at Battelle,
    the goal of TQM as applied to labs is to recognize the difference
    between "good science and good relevant science".
    
    There are no extra pennies hanging around any more for doing
    things just because someone has an interest in it.
    
    Steve
    
    
1762.27Drugs... aaaarrrrgggghhhhhhhCGOOA::DTHOMPSONDon, of Don&#039;s ACTThu Feb 13 1992 15:5012
    re: .18
    Off topic, I know.  Probably early too, but you anti-drug types are
    quite ridiculous when suggesting things like "...or *anything*
    positive...".
    
    You arrest and convict criminals on the basis of fingerprints, but
    Conan Doyle was a druggie.  You also rely heavily on submarines to
    defend your shores.
    
    
    Don
    
1762.28Not Sir Arthur?AKOFAT::SHERKIgnorance is a basic human rightThu Feb 13 1992 16:184
    Ah yes.  Those famous british submarines... or is this Conan the
    barbarian... :-)
    
    Ken
1762.29No wonder Grandma was upset when they change Coke recipes :-0SUFRNG::REESE_Kjust an old sweet song....Thu Feb 13 1992 19:248
    Conan Doyle, as in Sherlock Holmes :-)
    
    BTW, cocaine by-products were in Coca-Cola until some time in the
    late 1960's or early 1970's (from someone who lives in Atlanta -
    home of Coca-Cola) :-)
    
    Karen
    
1762.30what was the topic?SALSA::MOELLERACE ? Nice try, Pinocchio..Thu Feb 13 1992 19:4311
    Edison was overrated.  The Alternating Current system, dynamos,
    generators, distribution substations, down to house wiring, was
    developed by Nikolai Tesla.  Edison didn't understand AC and did his
    best to bury this superior technology.  Tesla sold his AC technology to
    Westinghouse (now GE) for $100,000, which he quickly blew in further, 
    intriguing experiments, attempting to draw power directly from the 
    'ether'..
    
    He died penniless in 1947.
    
    karl
1762.31Way of topicFLOWER::HILDEBRANTI&#039;m the NRAFri Feb 14 1992 08:569
    Re: .30
    
    Half truths Karl...
    
    If anything, Edison was underrated. 
    
    Now, how long before the mods jump in?
    
    Marc H.
1762.32NOTIME::SACKSGerald Sacks ZKO2-3/N30 DTN:381-2085Fri Feb 14 1992 11:0011
re .29:
    
>    BTW, cocaine by-products were in Coca-Cola until some time in the
>    late 1960's or early 1970's (from someone who lives in Atlanta -
>    home of Coca-Cola) :-)

By the same token, marijuana by-products have been used in ropes for
centuries.  The real question is whether there's been any measurable
amount of cocaine in Coca Cola since it was reformulated at the
beginning of the century when whites feared that cocaine-crazed
blacks would wreak havoc after drinking a Coke.
1762.33No money... no coke...CGOOA::DTHOMPSONDon, of Don&#039;s ACTFri Feb 14 1992 11:5611
    Re: .30
    
    From what I understand about death, EVERYONE dies penniless.
    
    
    Re: Coke in Coke...
    
    Cocaine was removed from the Coka Cola formula (and replaced by
    caffeine) long before the '60's - more like late 1920's.  (Of course,
    it might have taken 50 years to come to the attention of ... ;^).)
    
1762.34No one ever invented anything all aloneRAGMOP::T_PARMENTERYear of the Golden MonkeyFri Feb 14 1992 12:3327
Who invented what is a much vexed question.  By some standard or other, 
everything important was probably invented by someone you never heard of
and credited to someone you have heard of   You've probably never heard of
Santos-Dumont, inventer of the airplane, Emil Berliner, inventor of the
phonograph, or George Selden, inventor of the automobile.  I hope I don't
rathole this topic into what these people "really" did or did not do.  The
point is, they made credible moves toward the inventions cited before the
success of the credited inventors and yet received no money or credit for
having done so.

Once you have invented something, you must figure out how it works, how to 
manufacture it and how to get it into the stream of commerce.  Ofentimes 
the famous inventor is the one who did all three of these things.  In the
case of the Wright Brothers, for instance, their invention of the airplane
is disputed, but their invention of the wind-tunnel is not.  This means they
not only were very early fliers, but they knew why their plane worked.  And, 
once they had it working, they started a company, sold planes to the army, etc.
The "backyard bike mechanics" bit is just a myth, they were real engineers
and entrepreneurs.  All Santos-Dumont did (and it is not nothing) was to build
an apparatus and launch it while sitting on it as it moved through the air 
for a few seconds before crashing.

Edison was primarily an engineer and entrepreneur, but he does get undisputed
credit for a couple of things, one is discovering the principle of electronic
amplification (that is, the basic principle of electronics; I'm out of my 
depth here, paraphrasing what's on the wall of the Edison conference room in
ZK3.) and he also invented the idea of the industrial research laborotory.
1762.35FROST::WALZGary WalzMon Feb 17 1992 16:1125
>>   US industry has been criticized for spending lots of money on R&D for
>>   products that it never brings to market or if it does, is late.
>>   Certainly, the company that makes the product available to the
>>   marketplace is the one who makes the money.  We can afford to forego the
>>   R&D on products we will never sell.  The patents bring in precious
>>   little, compared to sales of products.


     Ah, this is where we need to realize that there really is a difference
     between "R" and "D" in R&D.

     In reality, a very low percentage of "pure" research ever gets used
     directly in commercial products.  For those that do, the time lag between
     the research and the product are typically extremely lengthy.  The prime
     intent of real research is not and can not be for commercialization.
     Most of the 12.5% of our budget we spend on R&D is really "D".  

     As far as saying that the company that makes the product available to
     the marketplace is the one who makes the money: I'm not sure that's
     even typically the case.  Certainly there's an advantage to be first to
     market, but many first to market products are quickly overtaken by 
     companies that excel in rapid development and cost reduction.

     -gary
1762.36The Phone Company Knows HowCGOOA::DTHOMPSONDon, of Don&#039;s ACTTue Feb 18 1992 16:3323
    Re: .35
    
    Bell Labs is (was?) a place wherein R and D were joined together though
    done by different people.  Their model was a pure researcher was given
    a budget and time and set loose.  The things they came up with they
    would appropriately hand over to patent people who would attempt to get
    as much of the concept as possible covered.  Then things went into a
    pool of development people (application engineers) who would pick
    things they though enjoyable and find a commercial use.
    
    In 1963, one of the research people after two years had built a machine
    in a cash box which had a switch where the lock had been.  If you
    turned it on, after a few seconds, an arm would come out of the box and
    turn the switch off, then zip back inside the box and the lid would
    shut.
    
    You can still buy the little banks where you put money in a slot and a
    hand comes out and grabs it.  And Bell still gets royalties everytime
    you buy one...
    
    
    Don
    
1762.37one more timeBOOKS::HAMILTONAll models are false; some are useful - Dr. G. BoxWed Feb 19 1992 09:2930
    
    Ok, I'll try one more time :-) 
    
    In the base note, I placed an excerpt from an article in
    the WSJ.  The article suggested that DEC spent 12.5% of
    1990 Revenue on R&D.  This apparently upsets the investment 
    community because it is more, as a percent, than other big
    companies in the US.  For all I know, it may rightfully upset
    people.  Perhaps we are very inefficient in terms of turning
    R&D investment into product revenue.  Perhaps not.  I have yet
    to see data that support either side of that argument.  I suspect that
    if we have that information, it is rather closely held.
    
    Now, *lacking that data*, what does the R&D percentage mean?  It
    would seem to me that DEC should be compared to world-class
    companies in similar industries.  (For that reason, it is
    probably reasonable to compare us to IBM.)   What I'd like
    to know is how we compare to *global* competitors.  Does
    Matsushita spend 4% of NOR on R&D, or 14%?  What about NEC?
    
    My complaint, in the base note, is the (IMHO) incomplete analysis
    in WSJ.  Lots of people in this country make managerial decisions
    based upon what they read in WSJ.  If the analysis is incomplete,
    are the decisions made likely to be good ones?
    
    Do you agree or disagree that the analysis is incomplete?  Is this
    worth any more discussion?
    
    Glenn
    
1762.38NOTIME::SACKSGerald Sacks ZKO2-3/N30 DTN:381-2085Wed Feb 19 1992 09:404
If I'm not mistaken, practically all of software engineering falls into the
R&D category, whether it's development of new products or maintenance of
old products.  I've got a mug that says "Digital is a software company."
Apparently Wall Street disagrees.
1762.39Maybe the wrong metricRIPPLE::FARLEE_KEInsufficient Virtual...um...er...Wed Apr 01 1992 16:2529
So, if Software Engineering is actually reported as R&D,
and if we are really a software company as we claim when talking
to the right audience, we could make Wall St. happier by
just moving the SW Engineering costs from "R&D" to "Production costs".

Now, maybe a more interesting analysis is "what does a company
spend their R&D budget on?"
I listened to an economist on NPR last night make a good case that
the mix of product vs process R&D is significant.  Maybe less so to a 
company like Digital, but significant nonetheless.

The argument went something like:

Typical Japanese/European companies spend 2/3 of R&D on production process
research, and 1/3 of R&D on new product development.

Typical American companies spend 2/3 of R&D on new product development, and
1/3 of R&D on production process research.

The assertion is that it is not the company who comes up with the new ideas 
who ultimately makes out the best, it is the company who is the best at
producing the products.  Case-in-point would be any of TV/VCR/CD technologies.
TV and VCR technologies were developed and first marketed by US companies.
CD was first developed by a Dutch company (Phillips).  Japanese companies
currently "own" all three markets because they can produce better and cheaper
than we can.

Discussion?
Kevin
1762.40r&d STAR::ABBASIi^(-i) = SQRT(exp(PI))Wed Apr 01 1992 16:3913
    i agree with Kevin too, automating production process, whatever that
    process is, is very important, one of resons why GM bought EDS in
    '84 is that roger smith saw at the time that automation was a key
    to compete with japan and to speed procution and reduce cost, they
    started a bit late , but better late than never, and hopefully they'll
    catch up. i read that japan manufacturers can talk design to final
    assemply cycle in something like 60% of time it takes our automakers.
    
    how they do it? more automations in procduction and manufacturing,
    right?
    
    byu,
    /nasser
1762.41ERLANG::HERBISONB.J.Wed Apr 01 1992 17:1716
        Re: .39
        
>Typical Japanese/European companies spend 2/3 of R&D on production process
>research, and 1/3 of R&D on new product development.
>
>Typical American companies spend 2/3 of R&D on new product development, and
>1/3 of R&D on production process research.
        
        But we don't want to be compared against `typical' companies, we
        want to compare our computer hardware work against companies or
        divisions that make computer hardware, and our software against
        software companies.  The `production process' for software is
        making copies of CD ROMs--and that isn't where we should spend
        2/3 of our software R&D budget.
        
        					B.J.
1762.42Good production planning - NOT automation.TPS::BUTCHARTTNSG/Software PerformanceWed Apr 01 1992 17:4424
    re .40
    
>    how they do it? more automations in procduction and manufacturing,
>    right?
    
    Not exactly.  According to at least one story I read, they first fix
    the manufacturing process.  Once they have a well designed, well
    implemented process, then automation can be applied.  If you attempt to
    automate first, you don't get much benefit (as GM has found after
    spending billions on automation without improving their position an
    iota).
    
    At the same time that GM was spending billions to little effect, Toyota
    took over management of GM's Fremont, California plant as part of their
    NUMMI (New United Motor Mfg. Initiative?) joint manufacturing project. 
    Without adding a bit of automation, Toyota turned it from the least
    productive plant in GM to the most productive plant.  Purely a function
    of good production planning and management.  (Plus maybe a bit of fear,
    since the Toyota deal was pretty clearly the last change to keep the
    plant open.)  According to the story, it was pretty humiliating for GM,
    since it was beating out their highest tech, whiz-bang plants in
    both productivity/worker AND quality.
    
    /Dave
1762.43A critical process to look atRIPPLE::PETTIGREW_MIWed Apr 01 1992 19:338
    The essential process that needs to be improved in a software business
    is the original collection of market requirements.  Just what is the
    product supposed to do, and for whom?  A product success or failure
    depends mostly on how well the initial requirements definition process
    works, and how quickly the process can react to changing requirements.
    
    Development and distribution processes are simple by comparison.
    
1762.44s/w requirements analysis IS R&DSGOUTL::BELDIN_RPull us together, not apartThu Apr 02 1992 08:268
   Re:                  <<< Note 1762.43 by RIPPLE::PETTIGREW_MI >>>

You're right, and that is the software equivalent of R&D.
Without a professional set of requirements, software engineers
are no more likely to develop a "killer application" than a
basement inventor/tinkerer is to design a successful device.

Dick
1762.45REGENT::POWERSThu Apr 02 1992 09:4926
>                 <<< Note 1762.41 by ERLANG::HERBISON "B.J." >>>

>        The `production process' for software is
>        making copies of CD ROMs--and that isn't where we should spend
>        2/3 of our software R&D budget.

No, duplicating CD/ROMs is part of the distribution process.
Depending on your process model, the "production" phase of software 
is either the traditional design&implementation phase, or (no joke)
the running of the software at the customer's site.

Most software development isn't R&D, and shouldn't be counted as such,
though the process improvement aspects of software development (or any design
effort) should be paid for out of R&D or advanced development money.
Anyway, R&D is a misleading misnomer, since "research" and "development"
are two very different efforts.

Why does production take place at the customer's site?
Because software is machine executable specification.
The automation of the customer's task takes place at execution time.
Software is the tool that does this.
NOT distinguishing between the tool (software) and the customer's
application of it helps describe the purpose of our work in the larger
scheme of things.

- tom powers]
1762.46There's a missing process in our processesTOOK::SCHUCHARDLights on, but nobody homeThu Apr 02 1992 11:5524
    
    	The missing ingredient in all our processes are the feedback
    mechanisms to continually moniter, review and adjust process as
    needed.  It becomes culturally difficult when you measure and
    reward individuals as we do, and not teams.  It takes a shared sense
    of success/failure to get all your team members willing and even 
    eager to measure they're collective efforts and seek to improve them.
    
    	I'm watching this same issue play out in public school reform
    in Ma. Currently, public schools are process bound, but there is no
    real feedback and a complete aversion to measure anyone or anything.
    Tenure reform has become a rally cry, but it raises the spectre of
    mass firings(unlikely) and other hysteria on both teachers and parents
    parts,
    
    	What needs to be done, is to provide enough flexibilty as far
    as people movement is concerned (such as letting seniority travel to
    different districts with teatchers) so that measurement occurs based
    on goals and the success of process teams.  Sometimes, all that's
    required is changing personality mixes, or skill mixes.  Terminations
    should be a last resort vehicle, caused either by very poor performance
    or obselesence.  
    
    	bob
1762.47Hot stuffTLE::AMARTINAlan H. MartinSat Jul 11 1992 14:4023
Re .34:

>Edison was primarily an engineer and entrepreneur, but he does get undisputed
>credit for a couple of things, one is discovering the principle of electronic
>amplification (that is, the basic principle of electronics; I'm out of my 
>depth here, paraphrasing what's on the wall of the Edison conference room in
>ZK3.) ...

As far as I know, Edison discovered the physical effect of thermionic emission
(electrons traveling in a vacuum from a hot filament to a cold plate) in the
process of trying to prevent the gradual darkening of the insides of light
bulbs.  I don't know that he applied information.

However, the '84 World Almanac credits the Britisher Fleming with inventing the
diode tube (electrons wouldn't travel in a vacuum from a cold plate to a hot
filament) in 1905, and the American [Lee] De Forest with inventing the triode
tube (you can vary the plate current in a tube by varying the voltage between
the filament and a "grid" placed in the path between the filament and plate). 
The triode was the first electronic amplifier.

And you'll be glad to know that, quite topically, I seem to recall reading that
De Forest's claim has been contested in the past.
				/AHM
1762.48FRAIS::EDDF12::ROBERTSLife is but a tale . . .Thu Jul 16 1992 05:4213
    You might like to know that 'Britisher' is not a term in common use in
    British English; although it does seem to be common currency in
    American English.  If one MUST use a collective term (instead of saying
    Englishman, Scot, or whatever) 'Briton' is what we natives would say.
    
    Whenever I read the word 'Britisher', I feel probably much as you do
    when you read the word 'Yank' or 'Ami' -- 'Britisher' makes me think 
    of the Hollywood stereotype of a bowler-hatted, "upper"class Englishman.
    
    
    FWIW,
    
    A (not-so-ancient) Briton.
1762.49IMTDEV::BRUNOFather GregoryThu Jul 16 1992 09:5214
RE:    <<< Note 1762.48 by FRAIS::EDDF12::ROBERTS "Life is but a tale . . ." >>>

    >You might like to know that 'Britisher' is not a term in common use in
    >British English; although it does seem to be common currency in
    >American English.

         Don't make that assumption.  I have lived in several regions of the
     USA in my time, but I don't think I've heard that term more than a 
     couple of times, and I considered it to be concocted by the speaker in
     each case.

                                      Greg