Encouraged by an increasing globalization, the car manufacturing industry expanded to growing markets such as China, which is with about a demand of 19.3 million vehicles in 2013 the biggest market in the world. Due to the different habits of customers’ worldwide and changing laws there is a high demand for innovations of alternative fuel vehicles, lightweight materials and connectivity.
In order to provide alternative mobility concepts, efficient and comprehensive technology, the European car manufacturing industry invested over 32 billion Euros into Research and Development (R&D) in 2012. This investment is around 25% of the total R&D spending in the European Union. These investments demonstrate the importance of developing new products in the car manufacturing industry to obtain a competitive position in the global market. To ensure the profitability of developing projects it is important to keep balance between creativity during the innovation process and costs. Controlling helps the management to keep this balance and to measure the performance of new development projects. Therefore, performance measurement can be used.
Table of Contents
1. Introduction
1.1 Initial Situation and Statement of the Problem
1.2 Objectives and Approach
2. Performance Measurement in Car Manufacturing Industry
2.1 Literature Review of Performance Measurement
2.2 Performance Measurement in Car Developing Projects
3. Criteria for Car Development Projects within the BSC
3.1 The Balanced Scorecard
3.2 Performance Criteria for R&D in the Car Manufacturing Industry pective
3.3 Applying the customized BSC to the Volkswagen Group strategy
4. Conclusion
4.1 Summary
4.2 Critical Appraisal and Outlook
Research Objectives and Core Themes
This paper aims to define appropriate performance measurement criteria for Research and Development (R&D) projects within the car manufacturing sector. By evaluating the specific challenges of the automotive industry, the study seeks to adapt the Balanced Scorecard (BSC) framework to align R&D activities with strategic corporate goals, using the Volkswagen Group as a primary case study.
- Analysis of R&D performance measurement challenges in the automotive industry.
- Evaluation of the Balanced Scorecard as an effective management tool.
- Development of specific criteria across financial, customer, internal process, and learning perspectives.
- Practical application of customized BSC metrics to automotive corporate strategy.
- Examination of the trade-offs between cost, time, and innovation.
Excerpt from the Book
The Internal Processes perspective
Performance measures based on the internal processes perspective help managers to see how well their business is running and whether the day-to-day activities support the key objectives. The internal processes in the field of R&D can be measured by cost and time. Due to enormous investments in the car manufacturing industry, the strategic importance of innovations and the increasing competiveness raise the need to optimize development projects.
Referring to the criterion time a sub criterion Time-to-Market can be created. A fast development process is a competitive advantage as well as it avoids contract penalties for delayed delivery. According to Gentner’s approach, the development project is split up into different phases. In the next step every phase can be split up into milestones which consist of different tasks. Every task has a fixed period of time and a deadline. By summing up the time, all finished tasks and the elapsed time since the beginning of a project can be calculated. Furthermore, the unproductive time during the development process which results of processing errors or management adjustments can be measured. The subtraction of the unproductive time from the elapsed time in the project can be used to measure the time based performance. Adding the time before the development process starts and the time before the production starts leads to the overall time (or Time-to-Market) which is needed until the car production starts.
Summary of Chapters
1. Introduction: This chapter highlights the current challenges in the automotive sector, specifically the need for efficient R&D investment, and outlines the objective of the paper to develop a performance measurement framework.
2. Performance Measurement in Car Manufacturing Industry: A literature review is provided, focusing on the specific pressures of cost and innovation, and the necessity of managing development projects using metrics like the magic triangle.
3. Criteria for Car Development Projects within the BSC: This section introduces the Balanced Scorecard, determines specific performance criteria for R&D across four perspectives, and applies them to the Volkswagen Group’s strategy.
4. Conclusion: The paper summarizes the findings, confirms the utility of the customized BSC framework for R&D, and provides a critical appraisal of the methodological approach and its limitations.
Keywords
Performance Measurement, Research and Development, R&D, Car Manufacturing, Balanced Scorecard, BSC, Automotive Industry, Target Costing, Time-to-Market, Return on Investment, RoI, Innovation, Strategy, Project Controlling, Volkswagen Group
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on establishing suitable performance measurement criteria for Research and Development (R&D) projects within the highly competitive car manufacturing industry.
What are the main thematic areas covered?
The core themes include R&D performance metrics, the application of the Balanced Scorecard (BSC), cost and time management in development, and strategic alignment with corporate goals.
What is the ultimate research objective?
The primary objective is to clarify how performance measurement is conducted in automotive R&D and to demonstrate how these measures can be systematically integrated using a customized BSC framework.
Which scientific method is utilized in this paper?
The paper utilizes a literature review to identify industry characteristics and a case study approach to apply the BSC framework to the strategic objectives of the Volkswagen Group.
What topics are discussed in the main body?
The main body covers the literature on performance measurement, the characteristics of car development, the identification of specific R&D criteria, and the practical implementation of these criteria within a company strategy.
Which keywords best characterize this work?
Key terms include Performance Measurement, R&D, Balanced Scorecard, Automotive Industry, Target Costing, and Time-to-Market.
How does the "magic triangle" relate to R&D performance?
The magic triangle describes the critical coherence between input (costs/resources), output (quality/success), and time (deadlines), which must be balanced to achieve efficient development projects.
Why is the "Milestone-Cost-Trend-Analysis" significant for R&D?
It is a multi-dimensional tool that allows management to visualize the relationship between planned costs, deadlines, and actual progress, helping to explain cost overruns or schedule delays.
How does the Volkswagen Group use employee surveys in this context?
Volkswagen uses the "Stimmungsbarometer" as a tool within the "Learning and Growth" perspective of the BSC to involve employees and monitor satisfaction, work pressure, and working processes.
- Arbeit zitieren
- Nils Nörmann (Autor:in), 2014, Performance Measurement for the Purposes of R&D in the Car Manufacturing Industry, München, GRIN Verlag, https://www.grin.com/document/301913
