Abstract
Although the importance of risk management and failure management has been emphasized in many organizations for sustainable development, most of the related studies have dealt with manufacturing or service processes, rather than R&D processes. Since R&D projects have high uncertainty in schedule and the quality of output, more attention should be paid to manage the risks of R&D activities. Thus, this paper proposes a systemic approach to performing R&D failure and risk management in the R&D process. To these ends, failure mode and effect analysis (FMEA) is employed, and is modified to meet the specific features of R&D activities with a stage-gate model that can identify the failure modes in each stage of the R&D process model. In addition, a process to prioritize the risks of R&D failure is suggested to support a decision-making process in R&D management, by applying the decision-making trial and evaluation laboratory (DEMATEL). The proposed approach is applied to a case of R&D process of a software development company, in order to illustrate its validity. This paper can help R&D managers to identify and cope with the risks in the R&D process by employing a systematic method.
Highlights
The contemporary intensified competitive environment renders innovation capability a key success factor for companies to enhance profitability and growth
In this paper, the original stage-gate model is utilized to investigate the risk factors in R&D risk management because new product development projects are a main task in the R&D project management of firms
The two main techniques of the Failure Mode and Effect Analysis (FMEA) and decision-making trial and evaluation laboratory (DEMATEL) are applied to analyse the influence of risk factors that are derived from the stage-gate model
Summary
The contemporary intensified competitive environment renders innovation capability a key success factor for companies to enhance profitability and growth. Since most of the studies recognize markets and businesses as major determinants of the outcomes of new product development projects, technology-oriented risks can be underestimated in evaluating the risk factors. Even though such risks are extremely important in the R&D process, most researchers focus on the cost and time perspectives, rather than on technological factors. This paper employs quantitative methods, such as Failure Mode and Effect Analysis (FMEA) and Decision Making Trial and Evaluation (DEMATEL), to prioritize the risk factors identified, by considering the stage-gate model.
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