Commercialization of innovation is the process of introducing a new product or production method into commerce that makes it available in the market. This term often refers to mass sales. But it also includes a transition from laboratory to commerce. Many technologies begin at the inventor’s research workshop and may not be practical for commercial use in the so-called “infant” age (as prototypes).
The “development of a research spectrum” segment requires time and money, since systems are developed with the goal of making a product or method a commercial offer. The release of a new product is the final stage of development. In this action, advertising, sales promotion and other marketing efforts develop the commercial adoption of a product or method. In addition to the model of commercialization of innovations (in which technology enters the business world), there may also be a consumer model (in which they become everyday goods, such as computers, first they were sent from the laboratory to the enterprise, and then home or in your pocket). The process of commercializing innovation is often confused with sales, marketing, or business development.
Three key aspects
Distinguishing it is very important to consider a lot of ideas, get one or two products or a business that can be sustainable in the long run. The commercialization of innovation is called a phased process, and each period has its own key goals and stages. It is imperative to engage key stakeholders early on, including clients.
Problems
The proposed model of innovation commercialization may raise the question of when to launch it. Factors such as the potential cannibalization of sales of other supplier products, any demands for further improvement or adverse market conditions may delay the launch.
Where to begin?
A potential supplier can start marketing in one place or several regions, or even in a national or international market. Existing resources (in terms of capital and operational capabilities) and the degree of management confidence can greatly influence the proposed launch mode. Smaller suppliers usually appear in attractive cities or regions, while larger companies can immediately enter the national market. Global deployment usually remains the prerogative of conglomerates because they are of the right size and use international distribution systems. Other multinational corporations may apply a “lead country” strategy. Introducing a new product in one region at a time.
Who should be guided
Marketing research and testing can determine the primary consumer group. An ideal community should consist of innovators, pioneers, experienced users, and opinion leaders. This will encourage other customers to take the product during the growing season.
How to start?
Potential suppliers must decide on an action plan for introducing the proposed product. The concept is formed by answering the questions above. The supplier must develop a viable marketing mix and structure the appropriate budget.
Definition
Commercializing innovation is a process that transforms ideas, research, or prototypes into viable products and production systems. Which retain the desired functionality, while at the same time developing them so that they can be easily manufactured at low cost and quickly launched or implemented with developed high-quality equipment. Commercializing innovation also involves developing effective production and supply chain strategies early on. This action may be a necessary step for commercial success for innovations coming from new enterprises, research, acquired technologies, patents, etc.
Common reasons
Here are common grounds that include false assumptions and counterproductive practices:
- You need to get something that works fast, regardless of technology and cost. Everything can be fixed later.
- Make it work quickly with any parts you can find now. Using any process of commercialization of innovations to which there is access.
- You need to make sure that the prototype will work now at all costs, indicating tight tolerances and using highly skilled work.
How to develop commercial design products?
An ideal way to commercialize innovations and production systems would be to create them “the first time”. For optimal manufacturability, cost, quality, time and functionality, the commercialization of research should include the following: summarize the results so that the study does not define, limit or imply product architecture, production strategy or any design aspect when everyone looks at a physical proof of principle or experiment. It is imperative to use common words, such as “mean,” “fulfill,” and so on.
As patent attorneys say, “mean” words are the most powerful. And if the invention has a claim, starting with “means”, it will be a very broad application, resulting in a powerful patent. Common words should be documented in real time in a workshop on a word processor that is projected onto the screen. If everything is done correctly, the general description will contain only vocabulary jewelry, and you can even surprise the team with brevity and unusualness. Basic postulates:
- Valuable resources and time should be spent on identifying the goods.
- The development team must identify, isolate and preserve the “jewels” - the actual foundation of innovation, and then optimize the projects around it. Likewise, make sure that product requirements express the “customer voice” in general.
- It is important to include manufacturability from the very beginning, for the rapid development of low-cost, high-quality products for lean manufacturing. If the whole enterprise needs to learn this or a cultural shift is needed, it is necessary to organize training on the same principles through seminars. For products or services that need to be created on demand or mass customized, the principles “Build to order and general customization. The ultimate innovation commercialization management and lean manufacturing strategy for low-cost on-demand manufacturing with no forecasts or inventories. ”
- Management should understand and support these principles by reading books and attending trainings, as well as classes on product development strategies for executives and managers.
- Quantification of the total cost. The more important the price, the better it is to measure it. For ambitious goals regarding costs, it is imperative to quantify all costs that affect sales. Until the company-wide measurements of total amounts are implemented, the development team needs to make cost decisions based on a general analysis or to make important decisions manually. Since a significant part of the savings will be in overhead costs, you need to make sure that the costs of new products are not burdened by average prices.
Stages of commercialization of innovation
The strategy of prototypes, mock-ups or applied research in any form should begin with the identification and preservation of the “pearl" - technology, which is the basic premise or essence of what has been proven. Without changing the form of commercialization of innovations, everything related to the core technology and supporting systems will be developed or processed to provide the best value, quality and time to market. At the same time, it will be integrated into the optimal product architecture and production strategy.
Science would be the same, but equipment, software, materials, systems for managing the process of commercialization of innovations would be commercialized to become more productive.
One way to realize this is that the product or service "does not know the difference." Here are some examples of the commercialization of innovation: the rays of light are always the same. The flow of electronics, fluid, cells, sounds - all of these concepts do not know the difference.
Such an analysis quickly shows that it is not a jewel, including cutlery and power supplies, which can be quickly purchased with lower costs and higher quality. For example, if an electronic module is 20 inches wide, it does not fit in a standard 19-inch rack.
If early architectural solutions ensure that conventional electronic functions can be performed with off-the-shelf circuit boards, they are well-made at low cost and better affordability, leaving the customer to focus on quality. If not, you may need to develop custom schemes, which requires a lot of resources and complicates other parts of the project.
For example, if custom circuits arbitrarily choose the voltage that everyone needs, then a non-standard power source may be required instead of choosing a tested one and calculating the voltages that are already available. This approach will allow the design team to focus on the model itself, rather than wasting valuable time and resources on the template.
The format and size of the product or production system should not be based on arbitrary output, capacities that correspond to a certain value. Instead, optimize the format of the product so that it matches the best price / performance ratio for the system. This will allow you to buy cheaper key parts and assemblies.
Innovation Commercialization Efficiency
Without this action, it is usually tempting to simply take a study that “works” and then “prepare” it and put it into production. And this may seem like “early progress” and may temporarily please managers and investors or satisfy arbitrary terms that can be counterproductive. However, this will lead to several weaknesses. Which one? Let's consider further.
Real time in the market
One of the most serious weaknesses of nonprofit research may be that the product or process of commercialization of innovations will not be ready for production in sufficient quantities under the necessary conditions. And this will lead to delays during which many resources will be wasted on fighting fires and fulfilling change orders. This is a warning to scientists and managers who are only interested in functionality, which in itself can be compromised due to poor technology.
Real time to market will be delayed. Or the chances of success of a product may be compromised if the innovation promotion fund is not commercialized until all trials have been completed. Then the company has a dilemma of choosing between two unpleasant alternatives: try to start production without adequate commercialization or delay the launch of the product. And then you have to re-enter the product and, possibly, once again qualify the process or even update clinical trials.
Cost
As already mentioned above, the price of a product is determined by the concept or architecture. But the opportunity to achieve the lowest possible cost is missed when the product system is based on a research prototype or, even worse, a layout. In addition, once the parts are designed in this way, the costs are not so easy to reduce, but trying to use a change order is wasting valuable resources, without actually reducing them, and, again, jeopardizing the integrity of the product and the process.
Researchers miss opportunities - spare parts. Usually, scientists develop innovations only in order to “optimize” the functionality, and then bring the details in accordance with the “architecture”, which eliminates standard spare parts and usually requires very unusual products, sometimes with cost and availability problems (which, in turn, delays the real-time market). In contrast, the center for the commercialization of innovation should begin with a thorough search and selection of finished products and subsystems. And then the product will literally be developed around these parts. This is paradoxical enough for research scientists. Nevertheless, an off-the-shelf part processing strategy is a key element of commercialization in order to focus on “jewelry.”
Quality
Non-financial studies may have problems commercializing innovation with reliability. Because studies that work well are often carried out by highly qualified technicians, scientists and engineers who know how to get things to work (despite the flaws) with sample sizes, probably not statistically.
Common causes are the following commercialization errors, which are based on observations or quotes in the press.
Prototypes can be easily "reduced" in the future
As noted above, cost is very difficult to change after the product is designed. Because 80% of the total cost of the entire life cycle is accounted for by development and creation. And so much has been done that systematic cost reduction will be difficult. In addition, changes will cost money that cannot be returned during the life of the product. And change will also be worth the time, especially if pre-orders are required that can delay market entry, sometimes seriously. In addition, changes can cause more problems, so you need to upgrade even better, thus spending extra hours, calendar time and money on subsequent products. Which, in turn, can jeopardize functionality, quality and reliability. And the worst consequence of cost reduction is that allocating valuable resources to try out retroactive DFM after design distracts from other more effective efforts to develop low-cost products by designing, improving quality, and manufacturing.
Run experimental product
As a rule, as soon as the prototype begins to work, it becomes necessary to assemble it and put it into production. Unrefined products that are not designed for manufacturability will inevitably have problems with launching at the beginning, quality assurance, consistent functionality. And therefore, actual production will cost more than goals. Another option for the same problem is when management or investors insist on “proven technology” and then do not allow any changes to the prototype with errors. Which then goes into production without commercialization.
Next error
Commercialization of innovations in Russia can be circumvented by risk management. Someone might think that nonprofit design can really be discounted by achieving success, which can simply prove various aspects of functionality. No matter how well this product was received by the audience, it may not be technological enough to quickly achieve stable production.
All young businesses need is maturity
Some people say they are working on "still young technology, so the costs are still high." Here, it implies that costs will naturally decrease as they “mature”. This error comes almost always with the following very common postulate. Consider it in the next paragraph.
Mass production alone will lower costs
The head of the company might think that the final income will depend on very large orders. . , . , . , . . , , , , . , , - , , .
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