Solving Problems Efficiently in R&D Projects: An Empirical Study of the Application of Six Sigma Tools in an Industrial Research Center

Abstract

Given the high uncertainty in R&D work, a key concern of R&D managers is to understand how to fail faster by managing time and cost efficiently among their R&D projects. This study investigates how using a variety of Six Sigma tools can differentially affect R&D project time and cost performance. Our data are collected from 35 R&D projects in an industrial R&D center, and a total of 30 different Six Sigma tools were found to be used in varying frequencies. We analyze this problem in two phases. First, by analyzing the frequencies of tool use in the 35 projects through factor analysis, we find the application of Six Sigma tools can be guided by two distinct patterns of tool use: design-oriented tools (DT) and non-design-oriented tools (non-DT). DT include quality function deployment and failure modes and effects analysis (FMEA) for defining and understanding of the focal problems, while non-DT include Pareto chart and design of experiment for generating and testing solutions for the defined problems. Second, based on the two categories of tool use, we further analyze the effects of the two patterns of tool use on project duration and project cost. Results show that using a variety of DT is associated with faster project completion and non-DT lower project cost. In addition, the use of Six Sigma tools (both DT and non-DT) is associated with shorter durations and higher costs for complex projects but lower costs and longer durations for less complex projects. That is, different modes of trade-ff between time and cost performance can occur when project complexity is considered as a moderating factor. Overall, our findings demonstrate new insights into how using a variety of problem-solving tools affects R&D project cost and duration simultaneously.