stages of development - International Business Growth Radio Network

Optimizing your R&D Spending - Jeremy Gray

20/12/2020

Jeremy Gray - "Practical Solutions to Difficult Problems"

Value Stream Mapping, 5S and the Plan Do Check Act Cycle for continuous improvement techniques also have applicability to the R&D or product development process. The use of these tools will reduce waste, enable you to come up with innovative designs that your customers will value

In the world of R&D Best is the enemy of better, trying to develop the best product will delay the introduction of a better product. A quest to find the best product will extend development time,

Types of R&D

Basic research which is aimed at a fuller understanding of fundamental aspects of a concept or fact, this research does not have a particular outcome in terms of a product in mind.

Applied research is activity intended to gain knowledge with a specific goal in mind.

Product development accounts of nearly 90% of R&D activity. This can be additions to an existing product line for example the increasing options available. Or modifications of existing products or services which better meet the customers needs

Sustaining Engineering. The concept behind sustaining engineering is that you have a team focused on ways to make the product at a lower cost. This sustains the products competitiveness, hence the name.

A well rounded R&D program will include new product development, product line extension and sustaining engineering.

R&D can be considered optional but R&D provides the long term growth platform for your company

Without R&D you will lose your competitive edge and be overtaken by your competitors.

An R&D program enables you to respond to your competitors new products or services by matching or improving on them in your offering.

Patents are often thought of the ultimate outcome of R&D. Developing a patented product can give you years of protection from competition and enhanced profits

In some instances proprietary knowledge, that is knowledge that is known only to your company, is superior to a patent.

You can keep the knowledge in house and not reveal it to your competitors. Proprietary knowledge needs to be protected.

Intellectual property or IP is an invaluable asset of your business. This is particularly so if you should decide to sell your business. Buyers value IP highly and will pay for it.

Sources of R&D development include doing it yourself or in-house but building a lab is an expensive undertaking, safety equipment, ventilation, waste handling need to be considered for the safety of your employees and the environment. Hiring staff is costly

Many small businesses do not have the resources to develop their own in house capabilities and it is possible to outsource your R&D to professional firms who can develop your product from start to finish.

If you choose to go the outsourcing route there are some steps you can take to improve the efficiency of the development process.
1. Retain control of your product, and constantly be learning.
2. Implement checks and balances to reduce your risk.
3. Hire specialized engineers.
4. Don't put all your eggs in one basket.

A source of R&D is via M&A, Mergers and acquisitions. In other words you buy the company that has the technology you want.

An alternative to buying the company could be to license the technology.

Market research is a good way to identify real problems or opportunities to improve your product.

Key questions that should be asked:

Is the purpose of the concept clear and can potential users be persuaded of the product’s benefits?
Does the product meet a need?
How are existing products used?
What challenges do people face in using existing products?
Is the price reasonable?
How likely are potential users to buy the product?