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Case Study: Knowledge Sourcing in Daimler-Benz
 

Case Study: Knowledge Sourcing in Daimler-Benz

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Case study on how Diamler-Benz was sourcing the knowledge as in 1997. the way they manage global R&T is ...

Case study on how Diamler-Benz was sourcing the knowledge as in 1997. the way they manage global R&T is
also described in details. especially how they are addressing the well-known issues in
international R&D activities such as cultural differences, coordination issues, communication problems
and many others difficulties.

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Case Study: Knowledge Sourcing in Daimler-Benz Case Study: Knowledge Sourcing in Daimler-Benz Presentation Transcript

  • Somchai Ruangpermpool Tresor Ngassa
  • Outlines
    • R& T Department Structure and Activity
    • Company overview
    • Management of a large R&T
    • Management of International R&T Activity
    • Features of global R&T activity
    • International R&T sites
    • Lessons learned
    • Conclusion
    Tresor Ngassa
  • Tresor Ngassa
  • Daimler-Benz History
    • Benz
    • Established in 1871 by Benz and Cie
    • Manufactured automobile and internal combustion engine in brand of Benz
    • Daimler
    • Established by Gottlieb Daimler and his partner Wilhelm Maybach in 1890
    • Manufactured automobile and internal combustion engine in brand of DMG
    Tresor Ngassa Formally merged on June 28, 1926 becoming Daimler-Benz and agreed that, all the factories would use the brand name of Mercedes-Benz on their automobile.
    • In 1998 Daimler-Benz merged with the American automobile manufacturer, Chrysler corporation and formed DaimlerChrysler
    • The company produces car and truck under the brands Chrysler, Dodge, Jeep, Mercedes-Benz, Smart and Maybach
    Daimler-Benz History (cont.) Tresor Ngassa
    • T otal revenues of € 151.6 billion s in the year 2006
    • 33 % was generated by the Mercedes Car Group 31 % by T he Chrysler Group 19 % by the Truck Group 9 % by the Financial
    • Services division an d 8 % by the Van, Bus, Other segment.
    • DaimlerChrysler employed more than 360,000 people worldwide.
    • Through most of its history, Chrysler has been the third largest of the “BIG 3” US auto makers,
    • In Jan 2007, DaimlerChrysler excluding its luxury Mercedes and Maybach lines outsold traditionally 2 nd placed Ford, though behind Toyota
    DaimlerChrysler 2006 Figures Tresor Ngassa
  • Daimler-Benz Corp.
    • In fact, there are 23 business in four divisions
      • Passenger car
      • Commercial vehicles
      • Aerospace
      • Services (railway system, microelectronics etc.)
    • Its revenue 75 percent from automobile
    Tresor Ngassa
  • R&T adjustment 1980s-1990s Tresor Ngassa Time Business Situation/Strategy R&T Adjustment 1980s – Early 1990s
    • External Growth
    • Technology Acquisition
    • Establish itself as an major
    • “ Integrated technology group”
    • Many R&D departments added along with the acquired companies
    Middle 1990s
    • Concentration on specific competencies and competitive strengths
      • Non-strategic business sold
    • Assessment of R&T Impact
      • Redundancy detected
      • Non-productive internal competition
    • All R&T units are brought under centralized control
      • Render R&T as the Strategic technological weapon for Daimler-Benz competitive future
  • Tresor Ngassa
  • R&D in Daimler-Benz Organization Chart Tresor Ngassa
  • R & D in Daimler-Benz
    • One of the highest spender on R&D worldwide (in 1997 about US$ 5.4 billion )
    • Conducting p roduct development , advanced development and fundamental research
    • But not heavily conducted in basic R&D
    • Development is exclusively carried out by business units (account for US$5.1 billion)
    • R&T is clearly separated from the organization point of view
    Tresor Ngassa
  • R&T department Overview
    • Centralized for all business units and cover research activities for a wide range of potential products.
    • Their responsibilities
      • Support all business units and Daimler –Benz in term of technological strategies through networked and knowledge based cooperation within business units
    • Had budget of US$280 billion coming from two sources.
    Tresor Ngassa
  • R&T Department The Organizational structure Tresor Ngassa
  • R&T Projects Types and Financing sources Tresor Ngassa Corporate Projects Business Units Projects
  • R&T Activities Projects types
    • Business Units Projects
    • Corporate Projects
    • Short-term projects
    • Business oriented
    • Aims
      • Transferring new and mature technology to BU
      • Support in the development of technological strategies
    • Examples
      • mature technology for Passenger car
      • commercial vehicles, microelectronics
      • railway system.
    • Long term projects
    • Strategic technology creation applicable in several business areas
    • Aims:
      • Give a competitive technological advantage
    • Examples
      • Multimedia,
      • Satellite based navigation and communication
      • Environmental production processes
    Tresor Ngassa
  • R&T management : How to make it works ?
    • What is the yardstick of R&T?
      • Successful transfer of research results to the business
    • Since R&T aim to be integral part of business units therefore
      • Scientific know how of employee is crucial and
      • This know how can be sustained via the networks
    Tresor Ngassa
  • R&T management : How to make it works ?
    • Key success factors for industrial research were identified
      • Close interaction with internal customers at divisions
      • Goal-oriented and time-managed projects based on these areas.
      • A culture for employees that cooperate over departmental boundaries is essential for success.
      • The entire value-creation process had to be support by the use and integration of IT
    Tresor Ngassa Project Management Corporate Culture Supporting Technology
    • Two core process were identified
      • Technology strategy, innovation planning, project work, transfer of results. Measure agree upon are :
        • Technology management and research know-how are now united
        • Cooperation with business units will be determined in individual organization agreement
        • The process transfers will dealt with separately.
      • Staff selection, staff development, staff transfer : Critical success factor for R&T and technology transfer are
        • Skilled
        • Motivated employees.
    R&T management : How to make it works ? Tresor Ngassa
  • First core process The main goal
    • Reinforced integration of R&T in defining the overall technology strategy of Daimler-Benz and the innovation strategy of the business units.
    • Transition of all research programs into research projects
    • Concentration of distinct capabilities in research laboratories designated as competency center that serve to consolidate internal and external knowledge
    Tresor Ngassa
  • Three Vectors model Tresor Ngassa
  • Problems and Solutions in R & T
    • Set of Problems I
      • It is more difficult to cooperate between different business area than between different sites
      • Project members are engaged in several projects or function . And different locations do increase coordination problems.
      • Spatially dispersed project management has to deal with the following problems .
        • Coordination cost
        • Information cost
        • Project management cost are higher and must be accounted for accordingly
    Tresor Ngassa
  • Problems and Solutions in R & T (cont.)
    • Solution for set I
      • Project must be identified properly at the beginning phase
      • At individual level, project managers should be educated in Human Resources Management and cultural management
      • +++ People with technical knowledge, managerial talent and good networking skill are generally hard to find
    Tresor Ngassa
  • Problems and Solutions in R& T (cont.)
    • Set of problems Problem II
      • External partners within Daimler-Benz are considered as competition.
      • The NIH syndrome occur between different location.
    • Solution II
      • The new structure with labs as competence centers. Each lab has research focus.
      • The labs form a resource pool for project team, so that matrix problem can be solved.
      • Lab are clustered with R&T directors managing the cluster.
    Tresor Ngassa
  • R&T Functional Organization Tresor Ngassa
  • R&T Department Classification of Projects Tresor Ngassa Project type Project volume Number of projects Approved by Reviewed by A projects > DM 16 millions ~30 CTO, KAMs, other R&T directors CTO, KAMs, other R&T directors B projects DM 5-16 millions ~ 100 KAM KAM C projects <DM 5 millions ~ 240 KAM Lab Director
  • International research expansion
    • International of R&D encompass more than establishing R&D site oversee, its activities included
      • Cooperation in projects with the leading universities worldwide
      • Cooperation with specialized research institutes
      • Strategic cooperation with other companies, or in international research program
      • Participation in high-tech venture-capital funds.
      • Participation in sponsorship programs.
    Tresor Ngassa
  •  
  • Tresor Ngassa
  • Global R&T Management Major Issues
    • Organization of soft and informal means
    • Building of a global mind-set for R&T employees
    • Intrinsic difficulties of international R&D operations
      • Different languages and cultures
      • High costs
      • Long project execution times
      • Geographical distances
    • Interfunctional differences
    Tresor Ngassa
  • R & T Organization Special features
    • Five features support global R&T operations at Daimler-Benz
    • Technology Monitoring
    • Research Project Coaching
    • Circle Member Group
    • Exchange Group R&T
    • Research Auditing
    Tresor Ngassa
  • Technology Monitoring
    • In 1990 Daimler-Benz establish a technology observation unit to systematize its global technology monitoring
    • Mission:
      • Maintain and strengthen the technological competitiveness of the business areas
    • Tasks:
      • Conduct a business oriented analysis of relevant technological developments
      • Support corporate or business specific technology strategy development
    Tresor Ngassa
  • Technology Monitoring Six Step Process Tresor Ngassa
  • Technology Monitoring Six Step Process
    • Identify customers and their needs
    • Design of a monitoring plan
    • Information acquisition
    • Data Storage
    • Analysis of the material
    • Dissemination
      • Customers are potentially all Daimler-Benz employees
      • Scientists want detailed technical data, executives require technical overviews/business news
    Tresor Ngassa
  • Technology Monitoring Six Step Process
    • Identify customers and their needs
    • Design of a monitoring plan
    • Information acquisition
    • Data Storage
    • Analysis of the material
    • Dissemination
      • Plan which includes:
      • Technology fields to be monitored
      • Information sources
      • Available resources
    Tresor Ngassa
  • Technology Monitoring Six Step Process
    • Identify customers and their needs
    • Design of a monitoring plan
    • Information acquisition
    • Data Storage
    • Analysis of the material
    • Dissemination
      • Formal sources
      • Patents / Licenses
      • Publications
      • Press Releases
      • Business news
      • Informal sources
      • Personal networks
      • Reverse engineering
      • Electronic resources
      • Electronic databases
      • Netsurfing
      • Others sources
    Tresor Ngassa
  • Technology Monitoring Six Step Process
    • Identify customers and their needs
    • Design of a monitoring plan
    • Information acquisition
    • Data Storage
    • Analysis of the material
    • Dissemination
      • Computerized databases which play the role of knowledge database
    Tresor Ngassa
  • Technology Monitoring Six Step Process
    • Identify customers and their needs
    • Design of a monitoring plan
    • Information acquisition
    • Data Storage
    • Analysis of the material
    • Dissemination
      • Identification of substitutes and competing technologies
      • Analysis of the activity patterns of competitors, suppliers, and customers
      • Benchmarking of internal technology
    Tresor Ngassa
  • Technology Monitoring Six Step Process
    • Identify customers and their needs
    • Design of a monitoring plan
    • Information acquisition
    • Data Storage
    • Analysis of the material
    • Dissemination
      • Depends on the results of the analysis
      • Briefings for executive board
      • Evaluations/reports for senior management and expert groups
      • Presentations and Workshops are carried out
    Tresor Ngassa
  • Research Project Coaching
    • Daimler-Benz established commercial project controlling in R&T in 1991.
    • Consist of project coaches who act as service providers.
    • Have grown from 11 to 40 coaches (as in 1997)
    • Tasks:
    • Introduce project management (knowledge, instruments)
    • Establish project controlling processes
    • Focus:
    • Strategic or special R&T projects
    • Projects susceptible to (or having) particular problems
    Tresor Ngassa
  • Circle Member Group
    • CMG* is an information network of distinguished scientists.
    • 23 members (1996)from a broad range of disciplines and different parts of the world. Each member has a mentor within Daimler-Ben
    • They are expected to:
    • Demonstrate in-depth appreciation for international state-of-the-art developments
    • Bring along excellent contacts to others institutes worldwide
    • Activities:
    Tresor Ngassa
  • Circle Member Group Tresor Ngassa
  • Exchange Group R&T Tresor Ngassa
  • Exchange Group R&T Benefits and Financing
    • Benefits:
    • Development and production profit from personal know-how and expertise of researchers
    • Central research recruit former “customers” who know particular needs of business units
    • Engender greater customer orientation among research personnel
    • Financing:
    Tresor Ngassa
  • Research Audits
    • A network of research auditors (60+) who evaluate project or research fields
    • The research auditing system applies T otal Q uality M anagement principles to research
    • Objectives:
    • Get direct feedback concerning quality and competitiveness of Daimler-Benz research activities
    • Give to executives a feeling of where they stand in the international scientific community and what the demand is for innovation
    • Justify the costly in-house research
    Tresor Ngassa
  • Research Audit The process
    • Four or five research audits are carried out each year
    • The audit is performed by a group of ten experts:
      • 5 business managers from Daimler-Benz manufacturing division – “The customers”
      • 5 outside scientists – The independent experts
    • Criteria of evaluation
      • Technology attractiveness
      • Expertise of researchers
      • Market potential
      • Management strategy
    Tresor Ngassa
  • Tresor Ngassa
  • Tresor Ngassa International R&T Sites Location
    • Two Strategic Reasons in the choice of a location:
    • Proximity to Market
    • Collocation with principal markets and customers
      • Facilitate the learning and understanding of the needs of downstream functions and customers requirements
    • Presence in Hot-spots
    • Few places where critical knowledge and know-how is created
      • Stay up to date with the latest technology developments
  • Activity of International Research Site
    • Depending on the purpose, international sites carry on 3 different activities:
    • Representing
    • Monitoring / Listening
    • Research
    Tresor Ngassa
  • International Research Sites Representing & Monitoring Original Research Hot Spot Market Proximity Tresor Ngassa
  • Natural Evolution of International R&D Sites Tresor Ngassa
  • Listening Posts
    • Small teams : 3 to 10 people
    • Missions
    • Technology Monitoring:
    • Observation of key technology areas and identification of new trends
    • Establishing Research Cooperation
    • Establishing and maintaining expert networks
    • Technology and market intelligence service
    • Location
    • Tokyo
    • Boston
    • Moscow
    Tresor Ngassa
  • Tokyo Listening Post (1990)
    • Reasons of the Location:
    • Monitoring of the Japanese automobile market
      • Japan is a strategic market for Daimler-Benz
    • Get pre-market, first-hand data
      • Improve Daimler-Benz competitiveness
    Tresor Ngassa
  • Tokyo Listening Post General Information
    • 10 employees (in the beginning):
      • 3 German and 7 Japanese people
      • Each member is specialized in a technology field
      • Each member build his specific network
    • Activities and Financing
      • Basic Monitoring financed by the central R&T dept
      • Additional projects are paid by the client
    Tresor Ngassa
  • Tokyo Listening Post Basic Monitoring Keeping Track of daily life in Japan Outcome : A Newsletter Tresor Ngassa Sources Entities monitored Newspapers Automobile manufacturers Press conferences Automobile suppliers Annual reports Industry associations Research reports Research institutions Conferences Governmental agencies
  • Tokyo listening Post The Newsletter The process of the newsletter Tresor Ngassa
  • Tokyo Listening Post Additional Projects
    • Identify a research institution/researcher to work on the problem of the client
    • Making contact and/or facilitating a visit of the client
    Tresor Ngassa
    • Very long and complex process to establish contact with Japanese institution
      • A full week of preparation for each day spent in a Japanese institution by a Daimler researcher
    • Lifetime lasting contact
    • A deep understanding of the Japanese culture is indispensable , especially for reading “between lines”
    Tokyo Listening Post Cultural/Country specificities Tresor Ngassa
  • Boston Listening Post
    • Set up in 1992
    • Reason: Presence of excellent research institutions/universities (especially MIT)
    • After the opening of Palo Alto in 1995, the Boston group was spun off into a consulting company
    Tresor Ngassa
  • Moscow Listening Post
    • Founded in 1992 with six employees
      • One German and five Russians
    • Try to establish contacts with research institutions and companies
    • Fields of interests: Material sciences, Information science and Mathematics
    Tresor Ngassa
  • Moscow Listening Post The results
    • Having an influential figure of the Russian science community appeared to be decisive
    • A lot of activities didn’t result in a direct benefit
    • However the discovery of a titanium alloy with good welding characteristics was a major achievement
    Tresor Ngassa
  • Moscow Listening Post Cultural/Country specificities
    • Erratic reception of western visitors by research institutions
    • Short relationship duration once the contact is established
    • Difficult integration of a research center with the local scientific community
    Tresor Ngassa
  • Establishing Listening Posts Lessons Learned
    • The pre-requisite characteristic for working in a technology liaison office are:
    • Colorful and hyperactive personalities
    • Not shy and not afraid of high-ranking counterparts
    • Generalist in terms of scientific/technical background
    • Broad engineering background
    • Rather in his fifties than thirties
    Tresor Ngassa
  • Listening Posts Reviewing the efforts
    • Task description is often vague
    • Can be partly based on the outcomes
      • Number of reports
      • Timeliness
      • Accuracy
    • Expenses/impact is very hard to estimate
      • One big hit can finance the program for 10+ years
    • Cost of the offices should be put into perspective to the overall R&D investments .
    Tresor Ngassa
  • Research Centers
    • There are two types of research centers:
    • Research center for local development support
    • Follow a market-driven internationalization
      • The Shanghai Institute of Metallurgy (China)
      • The Portland Vehicle Systems center (USA)
    • Research center for technology sourcing
    • Pure research in hot-spots
      • The Daimler-Benz R&T center in Palo Alto (USA)
      • The Daimler-Benz Research Center India
    Tresor Ngassa
  • Research for local development support
    • The Shanghai Institute of Metallurgy
    • It’s a Joint venture founded 1995 to support Temic
    • Fields : “electronic packaging” (microelectronics)
    • Frequent exchange between Chinese and German scientists.
    • Portland Vehicle Systems
    • Established in 1996 to support Freightliner
    • Fields: Vehicle System Technology
    Tresor Ngassa
  • Research for technology sourcing Daimler-Benz R&T center in Palo Alto
    • Set up 1995, originally technology listening post
    • in the Silicon Valley, a crucial hot spot
    • Fields : Transportation, communications and related technologies
    • Objectives:
      • Help Daimler-Benz in accelerating acquisition of cutting-edge technology
      • Help intellectual exchange flourish between US research universities/institutions and Daimler-Benz
    Tresor Ngassa
  • Research for technology sourcing Daimler-Benz R&T center in Palo Alto
    • Activities
    • Original research conducted jointly by scientists, US researchers, host scientists and engineers from Daimler-Benz
    • Foster relevant research at universities and independent research institutions
    • Encouraging promising proposals and ideas
    • Publishing a newsletter
      • Not the retrieval of the information that is vital but the selection
    Tresor Ngassa
  • Research for technology sourcing Daimler-Benz R&T center India
    • Founded in 1997 in Bangalore, a new hot spot
    • Fields: Information technology and communication research (software sector)
    • Objectives
      • Be a bridgehead for the Indian scientific community, research institutions and software industry
      • Benefit from the cost advantages of India to serve the needs of Daimler-Benz in Asian
    Tresor Ngassa
  • Daimler-Benz R&T center India How It Works?
    • 50 scientists headed by an Indian scientist
    • Integration of Indian scientists in Daimler-Benz research projects
      • Including sponsoring of PhD dissertations and Master theses
    • Contract out entire projects to Indian Institutes and others research companies
    • Reverse engineering
      • Aims at shortening development cycles
    Tresor Ngassa
    • Theory and Practice
    Tresor Ngassa
  • International R&T Five Ideal Structures Tresor Ngassa Configuration Organizational Structure Behavior structure Ethnocentric centralized R&D Centralized R&D National inward orientation Geocentric centralized R&D Centralized R&D International external orientation Polycentric decentralized R&D Highly dispersed R&D, Weak center Competition among independent R&D units R&D hub model Dispersed R&D, Strong center Supportive role of foreign R&D units Integrated R&D network Highly dispersed R&D, Several competence center Synergetic integration of international R&D units
  • International R&T Five Ideal Structures Tresor Ngassa Daimler-Benz configuration
  • competition cooperation high low Dispersion of internal competencies and knowledge bases Polycentric decentralized R&D Integrated R&D Network Ethnocentric Centralized R&D Geocentric Centralized R&D International R&T Structures Classification Tresor Ngassa
    • Strengths
    • High efficient due to coordination of R&D
    • Avoidance of redundant R&D
    • Exploitation of all available strength
    • Realization of synergies
    • Weaknesses
    • High costs of coordination and time
    • Danger of oppression of creativity and flexibility through central directives
    • Behavior Orientation
    • Decentralized R&D tightly controlled by center R&D center
    • R&D center has technology lead
    • Global coordination of R&D direction and budget
    R&D hub model Tresor Ngassa
  • What we have learned Organizational Structure
    • R&T reorganized due to the new strategy to position itself as major integrated technology group.
    • Each unit has a scope and activity focus , which reduce intersection and redundancy and increase mutual interdependence .
    • However hierarchical and functional distances restrict creativity and hinder efficient communication
    Tresor Ngassa
  • What we have learned Project process and Management
    • Established cross boundaries project platform and IT to support increasing demands on flexibility and dynamics in corporate innovation
    • Research project coaching needed
    • The responsibilities and competencies of project manager and the team members must be clearly defined at the outset
    • The good practices of project management must become the standards in R&D activities. Standardization
    Tresor Ngassa
  • What we have learned Knowledge acquisition and sharing
    • Maintaining networks and sustainably support informal linkages to tap knowledge
    • Keep abreast with world leading technology and customer needs
    • Culture specifics awareness should be emphasized
    • Mechanisms
      • Technology monitoring
      • Circle Member Group
      • Exchange Group R&T
    Tresor Ngassa
  • What we have learned Reviewing and Auditing
    • Reviewing is a must-have. The main benefit is:
      • Projects and researches are on par with the worldwide state of the art
    • Research Audit address several issues
      • Make sure that quality is embedded in project and technology management.
      • Evaluate the research activity and the relevance of the research programs
      • Justify the heavy R&T investments
    Tresor Ngassa
  • Tresor Ngassa
  • Conclusion
    • The reorganization and reorientation of R&D towards business units and downstream customer is not completed and remains a continuous challenge .
    • Some work of R&T should always be removed from direct market contact in order to guarantee radical innovation and completely new business opportunities .
    Tresor Ngassa
  • Conclusion Merge with Chrysler
    • Nowadays, after merging with Chrysler, Chrysler corporate research department merged with the Mercedes Care Group’s product development department to Form the new Board of Management Department “Group Research and Development Mercedes Car Group”
    • More closely integrated their research , predevelopment and development activities and effectively focused on development of final product .
    • New department continue to function as a research competence center for the entire group.
    • But is assuming more responsibility for predevelopment activities of all automotive divisions.
    • Still expand international R&D sites .
    Tresor Ngassa
  • Lessons Learned Applicable for other countries?
    • France
      • Overall organization
      • Special Features
      • People mindsets
      • Country specifics
    • Cameroon
      • Overall organization
      • Special Features
      • People mindsets
      • Country specifics
    • Thailand
      • Overall organization
      • Special Features
      • People mindsets
      • Country specifics
    Tresor Ngassa
    • Thank you
    Tresor Ngassa