Effective analysis and planning of R&D states: A simulation approach

Clearly, with the excessive number of R&D project failures and the large amounts spent on these projects, effective planning and control tools are needed. The evolution of powerful simulation tools has accelerated the pace of R&D. A simulation based decision support system is developed to help management better understand the analysis and planning of R&D stages. The system is used to assist management in dealing with the effects of uncertainty. In particular, when management is lacking the experience for new projects, the system is used to analyze the effect on the whole project resulting from delays in individual activities. The system is applied to R&D activities in a major petroleum company. Results of the simulation included statistical data on individual stages of the R&D project duration and cost as well as overall project time and cost. These results were employed to provide decision makers with an evaluation of current configurations, prepare overall time and cost estimates as inputs to other decisions and to plan and schedule manpower, equipment and capital. Sensitivity analysis was employed to determine key stages in the R&D process where changes in their estimates of duration and probabilities might reduce network time and cost. A team of research personnel ascertained that the validity of the model is satisfactory.