Here's how you can choose vendors for Product R&D projects as a project manager.

If you’re in search of an experienced vendor, particularly in the realm of Research & Development, the conventional approach is to consult the Yellow Pages. However, these established suppliers often find themselves in the “innovator’s dilemma” (as outlined in Christensen’s book: when you scale, you stick with what brings in revenue). If you’re on the hunt for fresh ideas, it’s worthwhile to think outside the box and seek out new companies with fresh minds and innovative concepts. Therefore, it’s beneficial to conduct online research, as well as attend medium-sized trade fairs. The newcomers in the industry might not have the resources to invest in a booth at larger events like CES, but they can often be found at these smaller venues.

R&D teams typically select vendors to augment their needs for a niche expertise, an evolving field of study, technology or innovation. Recently we are hearing enterprises augmenting their Product R&D expertise with vendors who have skills in Data, AI and cloud. Look for areas where you can expedite your product development with a BUY vs. BUILD inhouse

There is no shortcut to hit a bulzeye when it comes to R&D product development but innovation will raise the bar of existing best practice adopted within operations and hence will lead to continuous improvement

Innovation is a team effort - the days when gearboxes or delivery trucks were delivered as black box solutions are a thing of the past. Interaction at various levels, both internally and externally with peers, customers, suppliers, and competitors, is the new mantra. When it comes to an international project, it's crucial that the leadership team embodies the culture of open innovation and establishes platforms for free exchange, as well as official meetings for decision-making. Often, a team-building event at the beginning is a good starting point, as individual goals can be shared and aligned towards a common solution path.

The requirements for this type of project tend to evolve over time. And the lack of agility and flexibility of organizations to adapt to this type of circumstances, very common in R&D projects, causes many of them to fail. An efficient management of these requirements and a clear communication of any changes in them will be critical to manage key aspects of these projects such as resource management, capacity planning or project budgets.

Scale is what attracts investors. However, each phase of a project has its own champion: the show car, the first prototype with an A-sample, requires different competencies and capacities, as does the ramp-up to volume production with B- and C-samples. Only very large organizations offer all stages, even Original Equipment Manufacturers (OEMs) today focus on the volume/market business and rely on the Electrical Engineering (EE) and Mechanical Engineering (ME) builds from small, agile teams in the early phases. These must have input from serial production and volume aftersales experience, e.g. as a requirement, minimum as a shared experience from an industry champion.

I feel, a vendor with a strong response and action in change management decides it's categorical capability to be chosen as a strategic or tactical partner in product development. It can also decide whether they are fit for leadership scale or excellence scale product development. So, change management and response always play a crucial role before selecting a vendor on product development.