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This article is part of Bain's 2023 Engineering and R&D Report.

At global medtech giant Stryker, the leadership teams quest for new sources of value creation is transforming the business. Once focused mainly on medical products, the company has moved over the past decade into preoperative surgical planning, digital physician advisory, robotic surgery, and wearable devices to track rehabilitation. Digital sensors harvest data at each step in the patient journey to continually improve Strykers products and ensure the best medical outcome.

Companies like Stryker are leading a vital shift in the way they wield technology and innovation in engineering and R&D (ER&D) as a source of value creation and competitive advantage. Historically, companies have viewed ER&D as a core function, but their primary focus was on making products better and cheaper. Today, an emerging group of leaders are investing in it as a strategic capability. These companies put ER&D and new technologies at the center of their businesses and wield them in bold new ways to innovate and reinvent business models. Instead of concentrating largely on improving products, they are moving into outcome-based solutions that allow customers to pay based on negotiated results, such as machine uptime.

How does this work on the ground? CTOs and ER&D teams are developing software, hardware, and services to improve customer outcomes and experiences (Figure 1). For example, instead of selling a hip implant, Strykers ambition is to ensure successful hip implant surgery and rapid recovery.

To reimagine the business around the concept of customer outcomes and experiences, leadership teams are accelerating their investments in several key areas. First, companies are embedding novel features in their products based on artificial intelligence, machine learning, cloud connectivity, and edge computing, which is a form of computing done on-site or near the source of the data, minimizing the need for remote data processing. Such features can transform unconnected products into smart devices.

A second area of investment to enhance customer experience involves designing products for continual upgrades and new services. Digital technologies allow companies to send upgrades via software or over the air. The aim is to delight customers with new experiences and produce an ongoing stream of revenue as opposed to a one-time product sale.

Companies are also creating new sources of value by improving environmental, social, and corporate governance (ESG) outcomes. Many are investing in new technologies to lower the firms carbon footprint and reduce the carbon emissions of their products. Leaders are designing goods for a circular economy by reusing materials, recycling, and remanufacturing products to extend their life. Circular design involves the use of modular components that are easy to replace or upgrade, enabling a longer life span. Remote monitoring technology can help firms better understand the value of a device in the field and its potential for refurbishment.

CTOs leading the race to find new sources of value creation are investing in all of these areas, often in combination. For example, Google Nest tapped artificial intelligence and machine learning to add innovative new features to standard thermostats. The result was a smart thermostat supported by cloud-enabled services that can learn a customers schedule and program itself to save energy. The innovation transformed the customer experience and forged a new market segment. Smart thermostats are expected to capture 18% of the thermostat market by 2028.

The risk of technology-based disruption adds urgency to the search for new sources of value creation. Companies in ER&D-heavy industries that do not invest and innovate to improve the customer experience may find themselves rapidly sidelined by nimble rivals.

The path to new sources of value creation differs by industry, but many first movers are reimagining their products as a service. Until recently, for example, automakers viewed their core business as producing vehicles. Now, many define their business as providing mobility. These leaders expect services to become a significant share of their business as they expand into new areas of mobility, including self-driving taxis, connectivity, and features that make driving easier, more pleasurable, and more productive.

Volkswagen, for example, sells electric vehicles (EVs), but also provides a charging service on multiple continents with one convenient wireless identification card. To ensure a seamless customer experience, it has teamed up with infrastructure providers to develop a simple and standard process that allows drivers to charge their cars at locations across the US, Europe, and China.

In aerospace, companies that once focused on selling planes increasingly are developing products and digital services that enhance the customer experience prior to the flight, in the air, and after landing. For example, Airbus and German authorities recently launched a research initiative on urban air mobility that will explore electric vehicle takeoff and landing for trips within cities and from one city to another.

Machinery companies are undergoing a similar shift. Instead of selling equipment with traditional service contracts, leaders are offering solutions that generate greater value for their clients. Such contracts may guarantee machine uptime, output rates, or other productivity metrics. Switzerland-based construction power tool company Hilti is expanding from hardware into construction software to improve construction productivity. It recently acquired Silicon Valley construction management software company Fieldwire, which is improving productivity on construction sites by optimizing coordination among owners, general contractors, architects, engineers, and other subcontractors.

Some companies and industries are further down the path than others in developing new sources of value based on enhanced customer experience. One early lesson: Success requires cross-functional collaboration. Leaders start by identifying the customer need. Next, the salesforce designs a proposition and pricing model. That ensures ER&D teams will create the right product.

What sounds easy in theory is extremely challenging in practice. Companies that take broader responsibility for outcomes need to deploy digital technologies that can dramatically reduce error rates and variable results. Take the case of self-driving cars or planes. To make autonomous vehicles safe, ER&D organizations must use fundamentally different technologies and develop new capabilities. Outcome-focused engineering requires big data and analytics capabilities, control over multiple value chain steps, and human-centric and personalized product design.

How are leading ER&D organizations supporting the transition to new business models? One important step is building a digital twin, or a virtual model of products out in the field. A digital twin can, for example, alert engineers to problems before they occur, chart energy use, and improve productivity. In designing a product, digital twins can be used to run simulations that help catch errors before the product trial phase, reducing time to market.

Another vital step is building a talent pipeline for the necessary engineering and IT capabilities, including data science, Internet of Things (IoT), and cybersecurity expertise. Leaders also are expanding the engineering teams scope of activity across the product life cycle. Nearly three-quarters of CTOs say shortening time to market is a top priority for engineering departments, while 70% say incorporating novel technologies into products and services is a key priority (see Figure 2).

Successful CTOs have understood that redesigning the ER&D organization is critical to focusing more effectively on customer experience and outcomes. That means expanding the engineering teams scope of activity, modernizing the operating model, processes, and workflows, and developing an effective human capital strategy and culture (see Figure 3).

One important organizational change is the need for interdisciplinary teams that provide access to strategic assets such as technology expertise to all departments. For example, a European leader in building technologies has bundled its embedded software and hardware capabilities in a cross-functional team. That team now provides different internal units throughout the organization with a modular set of software and hardware building blocks that they can use to build products.

A second major organizational difference is the shift from cyclical product development toward continuous technology development. In the long run, an Agile approach shortens time to market and reduces unit costs. Software development leaders such as Amazon and Netflix highlight the power of continuous development by using software code to upgrade their products thousands of times a day. Cross-disciplinary teams are key to continuous development as they are more likely to develop efficient solutions. Instead of having different departments create electronic control units for various functions in a car, for instance, one cross-functional team can use its combined expertise to consolidate the customer experience functions in fewer chips.

Leading ER&D organizations also embrace open engineering. They build an ecosystem of partners to fuel innovation and broaden their capabilities. Siemens and Qualcomm Technologies, for instance, joined forces to develop 5G-enabled smart building networks. The goal of the building automation partnership is to improve energy efficiency, reduce the cost of building ownership, and enhance security.

To free up engineering talent for more critical tasks, top CTOs are investing in automation, technology, and artificial intelligence. That approach also increases engineering efficiency, generating cost savings to invest in upskilling and hiring.

In the coming decade, ER&D teams will be critical sources of competitive advantage. They will improve existing products, unearth new sources of value creation, and lay the foundation for entirely new business models. Leaders know that developing new sources of value takes time. Those that start down that path today will be best positioned to compete in a new era.

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Engineering and R&D: The Path to New Sources of Value - Bain & Company

Employers across industry face a series of challenges attracting and retaining the skilled engineers they need to compete. Martina McGrath, Director of Human Resources at Bosch UK explains how Bosch is addressing these challenges.

Technology is developing at a faster pace than before, necessitating the need to ensure our associates have the skills required to allow us to remain competitive in the marketplace. At Bosch we have in place several programmes specifically designed to respond to this development. We are committed to continuously developing our associates, be that via upskilling, reskilling, reverse mentoring, so that their skills remain relevant throughout their time at Bosch. We are in an era where whole new job fields are emerging and evolving quite quickly, depending on the situation this can, at times, require us to hire new associates with the required skills for example data scientists.

Reflecting on how subject areas and roles have changed over time it is clear that digitalisation has played a key role in this evolution, it is no longer necessary to manually transfer data in paper format to a software programme, a simple upload from one programme to another is usually all that is required.

We invest heavily in research and development. For decades a large part of our business has centred around developing engine technology for cars and trucks, this has now transitioned to focusing on developing technology in vehicles by boosting the power of software whether its driver assistance safety systems, electric powertrains, in-car entertainment, or other areas and thats an exciting development for Bosch.

We work very closely with our associates to anticipate the skills gap we expect in the future. At Bosch we have trained large groups of engineers so that theyre able to turn their attention to a new area of work, essentially reskilling. And we upskill too, so if someone is competent in software skills but perhaps lacking in another field, we support their development by offering them the opportunity to expand their skillsets and broaden their knowledge. We have partnerships with some of the leading universities in the UK who support our aim in this regard, one of our most recent examples relates to an associate who undertook a Masters qualification alongside their role. This enabled our associate to learn about AI, the application of this knowledge is being used to eliminate weeds on farmland in a targeted way, thereby reducing the impact on the environment.

Creativity also plays an important part in really understanding who has the skills we need and how they can be developed within the business. We heavily use coaching, mentoring and reverse mentoring initiatives, where a junior team member teaches skills to a colleague more senior than them thats where creativity and collaboration become truly effective. We give associates not just the opportunity to learn new skills but to share their own knowledge with others and we find that a lot of our associates enjoy being teachers and showing people how something like AI works, or how it can lead to an exciting business opportunity.

With todays pace of change, its more important than ever to get people interested in technology from an early age. We have a STEM ambassador programme to help inspire our younger generations to consider STEM subjects and to see how technology and robotics work. Weve partnered with the Institute of Engineering and Technology on FIRST Lego League, which is for children aged from four to 16, its very hands-on, they get to build things that can take on various tasks and challenges, and for the older age groups theyre building robots.

And sometimes we look at acquiring a company that might have skills or knowledge that will work alongside our existing capabilities. An example is Five, the Oxford-based start-up that has an advanced simulator platform in which to test autonomous driving technology. Merging skills and talents from newly acquired companies into our existing organisation, supports our aim to foster continuous learning. Its a fascinating process and its cross-border too, a lot of our Head Office team in Germany has been working with Five, sharing knowledge and building the foundation to future proof our organisation.

Technology is important because it can actually be used to accelerate the training process. For example, you can have people from all over the world on one Teams or Zoom call learning about a new technology. Training in an in-person environment can still, at times, be more effective but for information sharing, having the virtual option can also be highly beneficial.

Another example is installing new technology, for example we have chatbots on our HR intranet site. We still need to train people to work the chatbots and to ensure theyre accurate and are delivering a service thats quick and easy, not slow and frustrating.

Culture also has a role to play when youre developing the skills of an associate. Weve set up focus groups that bring associates together from a cross section of our divisions to encourage knowledge sharing and best practice in key areas. The aim is not just to share knowledge but also to adapt our culture and develop our focus on our strategically important areas leadership, diversity, equity and inclusion, digitalisation, agility, and sustainability.

In the coming years, we expect that training will continue to be a more important part of associates working life than it has been in the past. Weve developed an AI training programme so that everyone at Bosch has a fundamental understanding of what AI is and what it can do. Thousands of our associates around the world have embarked on this training. As new fields unfold this element of training will become essential so that our people become knowledgeable and competent, in many new areas. It requires time and commitment, but the benefit is you have a workforce with the ability to discuss and feel confident across a wide range of new technologies.

Martina McGrath is the Director of Human Resources at Bosch UK

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Q&A Interview: How Bosch UK is rising to the engineering skills ... - The Engineer

Darryl K. Ahner will join Wright State as dean of the College of Engineering and Computer Science.

Darryl K. Ahner, Ph.D., dean for research at the Air Force Institute of Technology at Wright-Patterson Air Force Base, has been appointed dean of the Wright State University College of Engineering and Computer Science, effective July 3.

Michael L. Raymer, Ph.D., professor and chair of the Department of Computer Science and Engineering, has served as the colleges interim dean during the 20222023 academic year.

Dr. Ahners combination of leadership, scholarship and service experiences makes him uniquely qualified to lead the College of Engineering and Computer Science, said Wright State Provost Amy Thompson. He aims to create an environment where faculty, students and staff can thrive. As dean, he will foster a community that values inclusiveness, integrity, ingenuity, accountability, competence and honesty.

Ahner said he is excited about the opportunity to work with students, faculty and staff and local community members to advance the College of Engineering and Computer Science (CECS).

There is a strong demand for engineers and computer scientists across the region and nationally, Ahner said I look forward to leading the College of Engineering and Computer Science in providing transformative opportunities for our students, both in and out of the classroom, as they develop into competent, confident problem-solvers to meet this need. President Susan Edwards and Provost Amy Thompson have built a strong foundation of recruitment, retention and relationships toward ensuring student success, and I plan to continue this work with the staff and faculty of CECS in enabling our students to excel in their lives and chosen careers.

As dean for research at the Air Force Institute of Technology (AFIT) Graduate School of Engineering and Management, Ahner leads the Office of Research and Sponsored Programs and manages a $36 million research program. He provides advice and assistance to the chancellor, administrators and faculty on research, technology transfer, strategic communications, outreach and partnership activities.

In addition to serving as dean, Ahner is a professor of stochastic operations research.

Since he joined AFIT in 2010, he has also served as the director of the Office of the Secretary of Defense Scientific Test and Analysis Techniques in the Test and Evaluation Center of Excellence, director of the Center for Operational Analysis and professor in the Department of Operational Sciences.

In 2021, he received the Medal for Exceptional Civilian Service the Secretary of Defenses highest civilian award for workforce development and consulting activities.

Before joining AFIT, Ahner served on the faculty and as director of the Army Research Laboratory Mathematical Center of Excellence at the U.S. Military Academy at West Point and as director of research of the U.S. Army Research Center at the Naval Postgraduate School.

Ahners research emphasizes the optimization of test and evaluation, autonomous systems, big data analytics, reliability, stochastic models, simulation and military operations research applications. He has written 35 peer-reviewed articles, 28 proceedings and several book chapters.

A first-generation college student, Ahner graduated from the U.S. Military Academy at West Point with a bachelors degree in mechanical engineering (aerospace). He then served 22 years in the U.S. Army in leadership and technically demanding positions, retiring from the Army in 2012.

Ahner earned a Ph.D. in systems engineering from Boston University, a masters degree in operations research and statistics and a masters degree in applied mathematics from the Rensselaer Polytechnic Institute, and a graduate certificate in computer engineering from the Air Force Institute of Technology.

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AFIT administrator Darryl Ahner named dean of the College of ... - Wright State University

A Russian army BAT-2.

As Russias winter offensive peters out in the ruins of Bakhmut and Vuhledar, in eastern Ukraines Donbas region, Ukraine is preparing to seize the initiativeand launch a counteroffensive.

Keep a lookout for Ukraines ex-Russian BAT-2 armored engineering vehicles. Its possible the hulking AEVs are about to become very useful.

The Russians knew this time would come. Starting last fall, they began digging in eastern and southern Ukraine. Laying mines, stringing up razor wire, digging anti-tank trenches and building bunkers.

These fortifications stretch for hundreds of miles along the Ukraine front. Holding them will be the Russians main task. Breaching them will be the Ukrainians main task.

A breach is one of the most complex and dangerous missions in land warfare. Engineers must clear a lane through minefields, fill or bridge trenches then excavate earthen berms. And they have to do it quickly, while under fire.

To give the sappers a fighting chance, armies deploy armored engineering vehicles theyve optimized for breaching.

The best breaching vehicles can clear mines, fill trenches and excavate berms, all while deflecting small arms fire and artillery shrapnel. Examples include Germanys Dachs, the American Assault Breacher and Russias BAT-2.

It should come as no surprise that, as Ukraines allies supply equipment for the coming counteroffensive, breaching vehicles have been a top priority. The United States, Germany, the United Kingdom, Norway and Sweden together have pledged to Ukraine dozens of specialized AEVs.

Ironically, the Russians have helped out, too. When Russia widened its war on Ukraine back in February 2022, a host of AEVs led the way. As the Russian advance faltered and regiments retreated to the current front line, they left behind nearly 200 of these specialist vehicles. Many of them now work for Ukraine.

Among the engineering vehicles Russian forces abandoned in Ukraine last year are no fewer than three BAT-2s.

The 40-ton BAT-2 adds a dozer blade, a soil-ripping spike, a two-ton crane and a crew compartment for eight people onto the lower hull and suspension of a T-64 tank.

The BAT-2 uses its huge, hull-mounted blade to clear a path through minefields, fill trenches and smash through berms and other obstacles.

Its not for no reason that, when hundreds of thousands of Belarusians took to the streets in Minsk and other cities to protest their authoritarian government back in 2020, the Russian army deployed at least one BAT-2 in Minsk. Its job: to punch through the protestors barricades.

Russias BAT-2s met their match in Ukraine. The vehicles are powerful and versatile. But theyre also slow and lightly armored. A BAT-2 like any armored engineering vehicle requires close protection from infantry and tanks. If the infantry and tanks retreat, they risk leaving behind their attached AEVs.

Whether the Ukrainian army makes better use of its BAT-2s than the Russian army did comes down to leadership and discipline. A breach is a classic combined-arms operation. That is, it requires infantry, tankers and engineers to work together.

The Russian army in Ukraine has neglected combined armsand paid for it with heavy losses. The Ukrainian armys own battlefield practices are more sound, thanks in large part to intensive training alongside NATO forces. But the coming breaching ops might be the real test of the Ukrainians combined-arms prowess.

If theres a flaw in Ukrainian preparations for the coming counteroffensive, its a lack of material depth. Kyivs ammunition stocks are dangerously low. And it has too few of its best vehicles.

Its unclear whether the Ukrainian army inherited any working BAT-2s from the Soviet army when the Soviet Union collapsed in 1991. The three BAT-2s that the Ukrainians captured from the Russians might be the only BAT-2s in Kyivs inventory.

In Russian army doctrine, engineers attached to a battalion tactical group form a movement support detachment that trails behind the first line of tanks. Each detachment has four BAT-2s. Three BAT-2s are too few to equip even a single battalion to the Russian standard.

Breaching vehicles work fastest when they work together. An understrength BAT-2 detachment would work slower than a full-strength detachment would. And it would lose capability quickly with every vehicle that gets damaged or destroyed.

This fragility could be one of the main limiting factors in Ukraines coming counteroffensive. Its possible the Ukrainian army has just enough BAT-2s and similar vehicles for one attempt at simultaneously breaching Russian fortifications in the east and south.

Originally posted here:

Ukraine Has Captured Three of Russia's Giant Engineering Vehicles ... - Forbes