From Concept To Customer

Sept. 21, 1998
All functions participating in the process of innovation and commercialization must be tightly integrated to meet the demand for creative new products.

Since the beginning of time our cultures have been measured and judged by the products we make and trade, be they artistic or utilitarian. They define us and the level of our civilization: stone implements, bronze tools, the printing press, the steam engine, the telephone, the automobile, the computer, the clone. And as our sophistication has increased, so too has the process by which we convert our ideas to value for ourselves, our customers, our companies, and our society.

No longer do the functions of research, product development, manufacturing, and sales/marketing operate in isolation. In the New Manufacturing they are intertwined, forming a synergistic network. Operating in any other way a company is doomed to waste its energy, constipate its product pipeline, even outright fail in its ability to meet demands of the marketplace. Integrated and in sync, the same company has at least positioned itself for a run at success.

The R&D function can no longer simply be content to invent, but instead must create sustainable value up and down the entire value chain. To meet this challenge it must participate significantly in establishing corporate strategy. Business and technology planning must run in parallel, both responsive to customer needs. To understand those needs researchers are mingling in the marketplace as never before, as the days of the white-coated lab technician operating apart from the outside world are gone forever. "R&D needs to be much closer to the marketplace," says Peter Drucker, "where changes that occur in society and the economy are the basic stimulants for innovation."

The process of product development and commercialization, once sequential, is now concurrent and team based. From the start, manufacturing, R&D, sales/marketing, and even finance operate in parallel. Otherwise, innovative products simply take too long to come to market. To integrate the innovation process and focus resources within a company on speeding ideas to the commercial marketplace, many companies are using formalized innovation systems. An idea working its way to commercialization is examined with increasing rigor at stages based on critical criteria including manufacturing capability, regulatory compliance, product functionality and performance, marketing opportunity, and potential value.

At Du Pont & Co., Wilmington Del., for instance, a multifunctional product-authorization team sits in judgment of the project team actually performing the development/commercialization. The authorization team can make go/no-go decisions at critical milestones from concept evaluation to product release. "In the past, R&D always drove the innovation process," says Jim Trainham, Du Ponts technical director for its Dacron business. "We never had much [demand] from the rest of the business for new products. Now, every function has a specific responsibility, and product innovation moves right along because it is part of peoples assignment to make it happen."

Likewise the salesperson can no longer simply peddle products on the basis of price. He or she must add value to the transaction as a consultant and offer total solutions tied to support deep within his or her company: industry expertise, legal advice, diagnostics and repair capability, even financing. And pressure will mount with the increasing importance of information technology on the entire chain of command from idea to commercial marketplace. The Internet opens vast new vistas of opportunities for commerce, allowing unknown companies in unheard-of lands to compete with established industry giants. Where there were three competitors yesterday, today there are 10, and tomorrow there will be 15. Integration is the overwhelming choice of companies to meet this challenge and come out a winner.

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