Transnational R&D projects are managed more easily if the R&D network consists of competence centers such as is the

case for Roche or Schindler, giventhat complementary competencies are provided locally. With increasing comple-mentarity of resources, competencies, and knowledge bases, as well as the divi-sion of labor and specialization of work, synergy potential in R&D projects can beexploited. Productivity measurements of production or sales centers are difficult, but for R&D sites adequate monetary figures indicating management results can be im-plemented only indirectly and with much imperfection. Schindler chose a credit-point-based solution for bringing profit center thinking into R&D: For each pro-ject which is ordered by field operations, a contract is made. After R&D deliversthe new product, the field operations assign credit points for R&D performance.At the end of the year, corporate R&D management results are measured by howmuch the sum of all credit points exceeds the previously agreed R&D budget. Thisintroduces pressure to reduce cycle-times and increase first-pass-yield. Neverthe-less, this scheme has been found inappropriate as a factor in the decision to closedown entire R&D units. Schindler Advanced development, technology scanning & monitoring and development of software,cars, drives, safeties and system concepts, and corporate R&D in Ebikon (CH), Morristown(New Jersey, USA), Shanghai (P. R. China), and Sao Paulo (Brazil) Module development and market-driven development take place at the decentralized sites:landing doors in Melun (F), sheet metal components in Mulhouse (F), electronics in Locarno(CH), hydraulic systems in Stockholm (Sweden) and Morristown (USA), gears in Zaragoza(Spain) As of 2005, approx. 500 engineers in the R&D centers throughout the world Research and advanced development focus on intelligent traffic management, state-of-the-art control systems, and alternative drive technologies, as well as new safety and ride-comfort solutions for topspeed elevators. Environmental impacts - particularly the consumption of energy and materials - are taken into account when developing new products. Schindler Lifts (the worldwide leader in escalators and second in elevators)started to establish a competence-based R&D network in 1996. Schindlers rapidexpansion was based mainly on acquisitions. Its R&D was therefore dispersedover several units in Switzerland, France, Spain, Sweden, Brazil and USA. Inorder to avoid duplication and to realize synergy, its management identified andanalyzed core competencies in R&D. These core competencies and the changefrom a functional organization (i.e. software,

mechanics, electronics) to a module-oriented organization (i.e. drive, control, hoistway, car) were the basis for a major reorganization of R&D in 1998. In the new organization, R&D activities wereconducted in three areas: corporate R&D, manufacturing R&D and field opera-tions engineering. Each R&D area had its own mission; the efficient cooperationof these areas in a highly interdependent network was a prerequisite for the lowcycle-time development of advanced product systems (Fig. I.4.12).