INTERVIEW

Developing and Implementing a New Product Development Process:
the Key to Commercializing Nanotechnology
Reprinted courtesy of R&D Magazine (November 2004)

By Thomas A. Cellucci, PhD, MBA

In the burgeoning nanotechnology market, there is an immediate need for efficient and cost-effective product development. As the most publicized private nanotechnology business in the world, we are often asked how we’ve been so successful in commercializing nanotechnology. The majority of the answer lies in the fact that we have a well-documented and industry-proven New Product Development (NPD) process. This article details the step-by-step, five-stage, gated process that enabled Zyvex to produce more than ten new products in 2003.

Stage One:
Concept Feasibility and Evaluation

The goal of Stage One is to investigate new product opportunities. We start by looking at a particular application, research the scope of the product(s) that are required to meet the application, estimate the required resources, and then produce the Preliminary Product Plan. The first step of the Plan is to create a product description and a project overview to ensure that the product is aligned with Zyvex’s vision, core competencies, and the specific applications we’re targeting.

We then select the Development Project Team and Approval Team. The Development Project Team is always led by one Project Leader or “champion” from one of the functional groups. It should be noted that every potential area of the firm is involved in developing products: Development, Sales/Marketing, Finance/Operations, Manufacturing/Support, Research, and Quality Assurance.

The Project Development Team consolidates several important activity areas during the initial evaluation and throughout the NPD process. Sales/Marketing defines potential product attributes (features, benefits, reasons to buy), estimates market size in view of current market growth trends, and creates a preliminary product applications overview. They also put together a list of potential customers and competitors. The Manufacturing and Finance/Operations teams estimate the required capital, define potential manufacturing processes, and evaluate potential materials and suppliers. The Research Team investigates relevant Zyvex intellectual property and defines complimentary/predicated technologies.

There is complete team participation until the product is released to market. The Approval Team is comprised of the CEO, President, CTO, and CFO. Teams consider the feasibility of moving forward with the project, given the identified opportunity and the necessary resource requirements. The Approval Team makes a go/no-go decision in a timely manner to ensure rapid development and minimal downtime. If the proposed product meets stage one parameters, further analysis is approved and the product passes the first gate.

Stage Two:
Planning and Specifications

A product that passes the first gate moves on to Stage Two of our development process. The goal for this stage is to develop a complete set of marketing specifications (using the Preliminary Product Plan) and produce a Complete Product Plan (CPP). The CPP covers marketing opportunities, financial considerations, and the design concept. The development effort for the CPP also incorporates many additional analyses, including conceptual designs and variations, trade-offs and risk analysis, a “needs vs. wants” list, Manufacturing’s capital equipment requirements, a preliminary Bill of Materials (BOMs) estimated Cost of Goods (COGs), a development budget, necessary CAD drawings of external equipment, project variances/metrics, and a detailed schedule.

Engineering drawing of Zyvex’s Nanomanipulator System

Sales/Marketing does a SWOT-competitive analysis (strengths, weaknesses, opportunities, and threats), a scenario analysis, and a sales forecast estimate. They prepare a product vs. marketing positioning chart and market survey, identify possible beta-customers, and create a list of potential product names. Manufacturing creates the manufacturing plan and prepares schedules for manufacturing the pilot product. Research assembles the key IP disclosure submissions. Quality Assurance generates all safety/standards compliance items, calibration requirements, details shipping and packaging materials, and defines foreign export needs (including localization, if applicable). Finance creates NPV and ROI spreadsheets.

The Project Team remains fully engaged in all activities of project management. If the Complete Product Plan is approved, we conduct a final review. This review establishes key supporting materials that are needed to move forward with product development, and communicates final marketing and technical specifications of the product. As in Stage One, the Approval Team makes a timely go/no-go decision. The product has now passed the second gate.

Stage Three:
Core Development

The goal for Stage Three is to complete design and development and to collect feedback on the product beta. We use the Complete Product Plan as the foundation for creating a design that meets the target specifications. During this stage’s development effort, we conduct a beta design review, create a beta BOM, produce a detailed supplier list and a supplier benchmark, begin writing the user’s manual, develop a service strategy, confirm the risk analysis, and review engineering change orders.

Sales/Marketing generates a sales and distribution plan, a detailed promotion plan, and creates a beta website and customer interface. Manufacturing creates a preliminary Manufacturing Plan and works with Marketing/Sales to finalize product packaging. Quality Assurance defines regulatory requirements, prepares a preliminary quality plan and a procedure for first prototype testing (including developing a test plan and conducting tests), and designs the inspection tooling.

The Project Team champion is tasked with enlisting sub-teams or contracting resources from other functional groups to support the fulfillment of tasks. If the Approval Team makes a “go” decision, we hold a pilot release review to measure progress against the plan, identify bottlenecks and agility-hits, and initiate pilot manufacturing. The product has now passed the third gate.

Stage Four:
Manufacturing

The goal in Stage Four is to secure a high-confidence product handoff to Manufacturing. The main input to this stage is the Manufacturing Plan (from Stage Three). The development effort includes a detailed BOM, final design reviews, functional product prototypes along with documented product test results, final product CAD drawings, a preliminary user’s manual, testing the beta website , and confirming the development budget.

At this stage, Sales/Marketing updates the marketing plan, the sales and distribution plan, and all sales materials. They also collect beta feedback for website enhancement, confirm sales forecasts, update the project specifications, and prepare submissions for foreign language documentation and a press release. Manufacturing develops assembly and manufacturing procedures, designs and fabricates manufacturing tooling, compiles a list of long-lead-time items and audits key suppliers, and designates internal part-numbers. Quality Assurance updates the Test/QA plan and creates the Quality Plan. They also develop testing procedures, create test and fixture designs, perform reliability testing on the prototype, and design and test the shipping container.

The Project Team continues to have full team participation until the product is released to market. If the product passes this fourth gate, the Approval Team makes its “go” enabling decision and there is a build-to-print documentation release review. This review serves to build confidence for the project in Manufacturing and Support by establishing key processes and relationships.

Stage Five:
Pilot and Sales Release

The goal of the fifth and final stage is to demonstrate product manufacturing according to Quality Assurance standards while remaining within cost/ schedule targets. The main input to this stage is our previously prepared build-to-print manufacturing documents and our manufacturing, sales, quality, and marketing plans. The final output of this stage is a robust manufacturing process and a finished commercial product offering. The Development effort concludes with a customer-adopted defect-free product, implemented engineering change orders (ECOs) and a final user’s manual. Applications engineering and technical engineering support are implemented.

Sales/Marketing provides sales training, creates a promotional plan and coordinates literature advertising and public relations. They also create the “launch” press release and update corporate presentations, corporate profiles, and the website to include the new product offering. Manufacturing establishes the final manufacturing/assembly routines and procedures, the final manufacturing tooling, and the manufacturing document release and acceptance, then undertakes an analysis for future product cost reduction. Quality Assurance does the final QA and test tooling, prepares the final QA/test procedures, and compiles the manufacturing yield data. Finance conducts the materials and parts procurement setup and analyzes the first-product-build cost data.

Zyvex’s Nanomanipulator System

After the approval team makes its last go/no-go/enabling decision and the product passes through the final gate, we do a sales release review. This is a review of final producability performance, cost, and availability of product. We also review sales, promotional materials, and the schedule to build our confidence to take on volume orders.

Using the NPD process has enabled Zyvex to become a new-product powerhouse. This process will work for any advanced technology company that can muster the discipline to apply it.

About the Authors
Dr. Thomas A. Cellucci is President and COO of Zyvex. He joined the company in 2002. He has written over 97 articles on nanotechnology, environmental disturbance control, laser physics, photonics, MEMS test and measurement, and high-tech sales and marketing.
Cellucci graduated from the University of Pennsylvania, with a Ph.D. in Physical Chemistry. He received his Bachelor of Science degree in Chemistry from Fordham University (Bronx, NY) and his MBA in Strategic Management and Marketing from Rutgers University (Camden, NJ). He is on the Board of Directors of the Laser Institute of America and Edmund Industrial Optics, and is a special advisor to the board of MANCEF, a member of the United States Senatorial Trust, and an editorial board member for “Nanotechnology Law and Business.” He is frequently invited to speak at business schools and conferences.

Acknowledgements
The authors would like to thank Tanya Monga for implementing the New Product Development Process database system at Zyvex. In addition, we’d like to thank the (too-many-to-mention) people and corporations who have shared their insight and experience (e.g., Coherent, Coventor, Electronic Data Systems, Honeywell, Intel, Micron, Motorola, Newport Corporation, Raytheon, Shell, and Texas Instruments).

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