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The “Valley of Death” between concepts and viable products

The official page of the Breakthrough Energy Coalition (led by the most famous high-tech leaders) is quoted as saying

“Experience indicates that even the most promising ideas face daunting commercialization challenges and a nearly impassable Valley of Death between promising concept and viable product. Neither government funding nor conventional private investment can bridge this gap.”

Well, commercialization principles can bridge that gap. Read on:

Commercialization Article  

                                        Figures and Sections refer to the authors DFM book

Definition

Commercialization is the process that converts ideas, research, or prototypes into viable products and production systems that retain the desired functionality, while designing the product to be readily manufacturable at low cost and launched or implemented quickly with high quality designed in.

Commercialization also involves formulating effective manufacturing and supply chain strategies early, devising implementation strategies, and implementing those strategies. Commercialization may be a necessary step for commercial success for innovations coming from startup ventures, research efforts, acquired technology, patents, and so forth.

 Common Causes of Commercialization Challenges

Here are common causes that include their false assumptions and counterproductive practices:

“Get something working fast, regardless of manufacturability and cost. They can all be fixed later.”

“Get it working quickly with whatever parts you can find now, and built with whatever process you have access now. They can easily be changed later.”

“Make sure the prototype will work now, at any cost, by specifying tight tolerances and using highly skilled labor.”

3.10.2 How to Best Develop Commercialized Products by Design

The ideal way to commercialize products and production systems would be to design them "right the first time" for the optimal manufacturability, cost, quality, time, and functionality. The previous section shows how to do manufacturable research . If that is not done, then the proof-of-principle or prototype will have to be redesigned for commercialization.]

 Identify and preserve the “crown jewels”

The crown jewels are the essence of the innovation or what customers are buying the product for. The first step in the commercialization process is to identify the crown jewels to preserve them.
The science would be the same, but the hardware, software, materials, controls, and production systems would be commercialized to be more manufacturable. Similarly, the physics would be the same; the chemistry would be the same; the biology would be the same; the thermodynamics would be the same; and the basis technology would be the same. One way to think of this is that whatever is being affected by the product or service “doesn’t know the difference.” Here are several examples: the light rays don’t know the difference; the flow of electronics don't know the difference; the fluid flow doesn’t know the difference; the cells don't know the difference; the sample being tested doesn’t know the difference; the sound doesn’t know the difference; or fill in your own blank: the ____________ doesn’t know the difference.
After identifying and preserving the crown jewels, the rest can be re-designed for manufacturability, using all the techniques of this book, without risking any changes to the functionality or quality.

View Generically.

View research results or experimental investigations generically so that research does not specify, limit, or imply product architecture or production strategy or any pivotal aspect of the design, when everyone is looking at a physical proof-of-principle or experiment that “works.” Be sure to use generic words do not suggest or limit the solution. Similarly, make sure that the product requirements express the “voice of the customer” generically.
A valuable important exercise for a commercialization Workshop would be to create a generic description of the innovation. The team would identify the "crown jewels" and express them in the most generic terms, such as “means to do ___________” As Patent Attorneys will tell you, the words “means to. . . . .” are the most powerful words in patent law and if an invention has a Claim starting with “means to,” that would a very broad claim, thus resulting in a very broad and powerful patent. In a workshop setting, the generic words should be documented in real time on a word processor that is projected onto a screen. If done right, the generic description will contain only the crown jewels, and may even surprise the team with its brevity and conciseness. This will focus valuable resources and time should be focused on the crown jewels and improving the rest.

 Identify what can be redesigned for supportive hardware

The following recommendations are what can be redesigned for whatever that supports the crown jewels, but not the crown jewels themselves. These are in order of the easiest first with the highest return with lest effort and risk. These are the “low hanging fruit.” The first category is for Electronics, followed by Hardware.

Commercialization fo r Electronics

• Replace custom power supplies with proven off-the-shelf power supplies, even if it changes unusual voltages on things that will be redesigned anyway (See Section 3.1.15).

• Replace manual wiring. See Section 3.1.13, which prioritizes electrical connection from the “best” to the “worst”

• Replace custom PC boards for routine functions. If early architecture decisions ensure that routine electronic functions can be performed by off-the-shelf circuit boards, then those functions can be performed well at low-cost with the best availability, leaving you to focus on the crown jewels. If not, then custom circuitry may need to be designed, which can take a lot of resources and may complicate other aspects of the design.

• Replace custom controllers and other supportive sub- systems with proven, low-cost off-the-shelf versions, even if they have more capacity or functionality then need. They may also have higher ratings and better quality, but all of this may still result in lower total cost than all the costs of designing your own “just enough” custom sub-systems. Some of this logic is explained in Figure 5.6.

• Base product architecture on card-cages which expands the range of off-the-shelf printed circuit boards available, most of which come in standard card-cage formats, like VME.. Further, these are very easy to assemble, just by plugging into the card cages and they result in more reliable connections through one connection, usually gold plated. Lower, connecting printed circuit with wires make current go through up to four times more connections.
• Optimize supply, cost, and reliability of materials, light sources, lasers, sound sources, and internally generated motions, chemicals, vibrations, electrical signals, and so forth.

• Reduce cost, space, and weight of electronics by specifying higher levels of silicon integration, eliminating manual wiring,, modularization (see below), combining circuit boards, and, if not possible, replacing all circuit board connectors with layers between boards (See Section 3.1.14) This may be too much a change for the crown jewels, but if much of the supporting hardware is being redesigned anyway, it might be worth considering.

Commercialization for Hardware

• Replace custom hardware with Off-the-Shelf parts, such as: electrical enclosures (and all the hardware that goes inside), standard cables, guards, shields, stairs, railing, platforms, and the fast turnaround build-to-order of custom-dimension parts, for instance from Masumi, which can ship custom parts from their 3,000 catalogs in 6 days. See more about Off-the-Shelf Parts in Section 5.18)

• Replace material handing devices that feed or package the product. Be cautious about investing time and money in automation or robotics just for cost reduction without significant gains in quality, reliability, and consistent functioning. Keep in mind that design guidelines for automation are more strict than for manufacturability in general.

Your product may need all of this hardware to be complete, but don’t use up valuable resources designing them.
• Replace Manual Fabrication using high-skilled labor with concurrently engineered manufacturing equipment and tooling that will greatly speed production and significantly lower many categories of cost.

• For any redesigned supporting hardware, replace hard-to-get parts that have long to delivery with“pulled” parts and materials that arrive spontaneously (Section 4.2.1) that will have one tenth the material overhead, as shown in Section 3.8.10 and 3.8.11. When choosing parts, emphasize quality, availability, and the lowest cost-of-quality, which means not to sacrifice any of these for a cheap purchase price, as emphasized in Section 6.1 and Figure 1.2.

• Replace slow batch production that goes to inventory with Flow Manufacturing (Sections 4.1.1) that is shipped on-demand to customers (Section 4.2). If the design of the crown jewels does not have to be changed, this could greatly lower cost, eliminate inventory, and enable on-demand delivery.

• Replace welded frames and hard-to-build structures as discussed in Section 9.6) that can save a lot of money, raise quality, and speed delivery for this product, future derivatives, and provide backward-compatible replacements that can become “drop in” replacements for existing products for near-term savings that can actually help finance this product being developed or commercialized.

        As pointed out in the previous major section, if regulated products do not following manufacturable research recommendations of Section 3.9, it will be even harder for them do avoid additional rounds of qualification, certification, or clinical trials if they have to undergo
additional commercialization stage. Imagine if the crown jewels get favorable publicity and generate intense interest in early release, only to have to go through another round to replace unavailable parts or replace custom parts with lower-cost, higher quality, and more available off-the-shelf parts as recommended above.

 Selective low-risk redesigns of above items for the crown jewels themselves

This would be for changes that don’t affect the function, quality or reliability. The general premise of commercialization is to preserve the crown jewels, but if any of these redesign steps can be done without risk, some of the steps that have might have been missed in the manufacturable research section (Section 3.9) and could be carefully considered.

Section 3.6.4 quoted from step 3 from the “Nine Keys to Creativity”as recommending reviewing assumptions because: “When revisiting, you often find that assumptions are more striking than ideas.” So the point here is to reexamine assumptions that made in the original formulation of the crown jewels themselves, especially any that might affect commercialization, manufacturability, or scalability.

Do not substitute cheap parts for “cost reduction,” during commercialization
especially on the crown jewels,

What Happens Without Commercialization

Without Commercialization, there is usually the temptation to simply take research that “works” and then “draw it up and get it into production.” And that might appear to be "early progress" and may temporarily please managers and investors, or satisfy arbitrary deadlines that may be counter-productive. However, this will bring about several vulnerabilities, some potentially severe in the following areas:

• The Real Time to Market. One of the biggest vulnerability of not commercializing research may be that the product or process will not be ready to produce in production quantities in production environments and this will result in delays, during which many resources will be wasted fighting fires and implementing change orders, which Toyota says, “always compromise both product and process integrity”

 •  The real time-to-market would be delayed, or the chances of product success may be compromised, if commercialization is not attempted until all testing is done or clinical trials are completed. Then, the company has the dilemma of choosing between two unpleasant alternatives: (a) try to go into production without adequate commercialization or (b) delay the product launch to do the commercialization, and then have to re-introduce the product and maybe re-qualify the product/process or even repeat clinical trials.

• Cost. As shown in Figure 1.1 60% of a product’s cost is determined by the concept/architecture, but the opportunity to achieve the lowest possible cost is missed when the product architecture is based on the research prototype, or worse, the breadboard. Further, after the parts are designed around that, cost is not easily reduced, as shown in Section 6.1, but trying by change-order wastes valuable resources, doesn’t really reduce cost, and, again, compromises product and process integrity.
        A big opportunity missed by research scientists is Off-the-Shelf parts. Usually, scientists design only to “optimize” functionality and then make the parts fit into “the” architecture, which precludes standard Off-the-Shelf parts and usually requires very unusual parts, sometimes with cost and availability problems (which in turn delays the real time-to-market). By contrast, commercialization should start early with thorough searches and selections of off-the-shelf parts and sub-systems and then the product would be literally designed around the off-the-shelf parts. This is enough of a paradox for engineer, but quite a foreign concept to research scientists. However, off-the-shelf part strategy is a key element of commercialization to encourage focus efforts on the crown jewels.

• Quality. Research that is not commercialized may very likely have quality and reliability problems because the research that “works” is often done by highly skilled technicians, scientists, and engineers who know how to make anything work (despite manufacturability shortcomings) with sample sizes probably not statistically significant. However, the design must be robust enough to be consistently repeated in production environments and perform well in all anticipated user environments.
 

HOW TO COMMERCIALIZE PROTOTYPES & RESEARCH

    The strategy to commercialize prototypes, breadboards, or applied research in any form should start with identified and preserving the “crown jewels” -- the technology that is the basic premise of the innovation or the essence of what has been proven. Without changing the proven functionality, everything surrounding the core technology and supporting systems would be designed or redesigned for the best manufacturability, cost, quality, and time-to-market while being integrated into an optimal product architecture and production strategy.
     The science would be the same, but the hardware, software, materials, controls, and production systems would be commercialized to be more manufacturable. Similarly, the physics would be the same; the chemistry would be the same; the biology would be the same; the thermodynamics would be the same; the basis technology would be the same. One way to think of this is that whatever is being affected by the product or service “doesn’t know the difference.” Here are several examples: the light rays don’t know the difference; the flow of electronics don't know the difference; the fluid doesn’t know the difference; the cells don't know the difference; the sample doesn’t know the difference; the sound doesn’t know the difference; or fill in your own blank: the ____________ doesn’t know the difference.

Elon Musk, CEO of Tesla Motors and Space-X, said: "(Physics is) a good framework for thinking . . . Boil things down to their fundamental truths and reason up from there."  - from the Tony Rohn book: "Elon Musk; 100 Success  Lessons"

   This analysis will quickly reveal what is not the crown jewels, including cabinetry and power supplies, which can be bought off-the-shelf quickly at lower cost and higher quality, provided this is considered before arbitrary decisions preclude there use.  For instance, if an electronics module is designed to be 20" wide, it will not fit into a standard 19" rack system. 
    If early architecture decisions ensure that  routine electronic functions can be performed by off-the-shelf circuit boards, then they can be done well at low-cost with the best availability, leaving you to focus on the crown jewels.   If not, then custom circuitry may need to be designed, which can take a lot of resources and may complicate other parts of the design.      For instance. if custom circuit designs arbitrarily select whatever voltages everybody  wants, then a custom power supply may be needed, instead of picking a proven power supply and designing around the voltages that are readily available off-the-shelf.  This approach will free the design team to focus on the crown-jewels instead of wasting precious time and resources on boilerplate.

     The format and size of the product or production system should not be based on an arbitrary size, output, capacity, that corresponds to some arbitrary value or round number. Rather the format and size of the product should be optimized to correspond to the best cost/performance ratio for the system, which may be determined by the lowest cost/performance ratio for key purchased parts and subassemblies, as shown in the section titled “Optimizing Architecture/System Design” in the book, “Design for Manufacturability.” This optimization may result in multiple units being used together for certain markets, but this may still be the lowest cost per function while possibly opening up new markets at the low end of the market.

HOW NOT TO DO COMMERCIALIZATION

A common cause of commercialization challenges is the following 7 fallacies of commercialization,
which are all based on the author's observations or quotes in the press.

Once people like something that "works", they throw it over the wall to production,
in the naive hopes that the following fallacies will solve all the enivitable problems that will arise:
 

Fallacy #1: Prototypes can be easily "cost reduced" later.  For reasons cited in the article “How Not to Lower Cost,” cost is very hard to remove after a product is designed because 80% of cumulative lifetime cost is committed by design and so much is cast in concrete that systematic cost reduction will be difficult.  In addition, the changes will cost money, which may not be paid back within the life of the product.  And the changes will also cost time, especially if requalificaitons are required, which may delay the time-to-market, sometimes seriously.  Further, the changes may induce more problems, thus needing yet more changes, thus expending more hours, calendar time, and money to do the subsequent changes, which, in turn, could possibly compromise functionality, quality, and reliability.  See the article: Seven  Reasons Why "Cost Reduction" after Design Doesn't Work.
       And the worst consequence of cost reduction is that committing valuable resources to try retroactive DFM or cost reduction after design takes them away from other more-effective efforts developing low-cost products by design and improving manufacturing and quality.

Fallacy # 2: Launch the prototype or experiment into production . Typically, as soon as a prototype or experiment "works," there is pressure to “draw it up and get it into production.”  Unrefined products that are not designed for manufacturability will inevitably have problems with production launches, quality assurance, consistent functionality, and actual production will cost more than targets.  Another variation of the same problem is when management or investors insist on “proven technology” and then   won’t allow any changes in the “proven” prototype, which then goes into production without commercialization.

Fallacy # 3: Commercialization can be bypassed by  Risk Management.  Some may think an un-commercialized design can be “de-risked” by “proving success” which may just be “proving” varying aspects of functionality. However good that makes people feel, such a product may still not be manufacturable enough to ramp up quickly to stable production.

Fallacy #4: All that "young technologies" need is maturity.  Some people say what they are working on is "still a young technology, so the costs are still high," which implies that costs will naturally come down as it "matures," for instance, with the following very common fallacies..

Fallacy #5: Mass Production alone will lower the cost. The venture may think it can depend on “Mass Production” to provide “economies of scale.” In fact, many people believe the industrial myth that the only way to get cost down is to get volume up, which may be applicable to very high-volume commodity products that have little variation or few changes in markets or designs.  However, it requires a large capital investment to build such capability. If this capability is greater than firm orders, then the venture is gambling that the economies-of-scale will lower the cost low enough to generate enough demand to fill such a large factory.  However, if the product has not been commercialized, then this bet-the-company factory will be trying to mass produce prototypes or unrefined products/services and have to deal with many problems, like those cited above.  And, since it is so hard to make an inherently expensive product or service cheap, the actual cost reduction will result in a very small return for the amount of money expended to set up a mass production factory.   Worse, the venture could be in trouble if the anticipated cost savings don't materialize.  Finally, mass production factories are so inflexible that it will be hard to convert them to make a more manufacturable product later or any other products for that matter.  For this and many other reasons, mass production is an obsolete paradigm for fast moving industries for reasons cited in the mass production article/ . Mass Production is being superseded by the low-cost on-demand production in any quantity by Build-to-Order (for standard products) and Mass Customization (for custom products).
    Ironically, a product designed with Half-Cost principles will not depend on economies-of-scale to get the cost down, thus minimizing the investment and the risk.  Then ventures can focus resources to commercializing products by design rather than all the effort it takes to set up a mass production factory.
    Thus, if the product was not commercialized, the venture will be vulnerable to competitors who did commercialize their products, especially if a lot of money and effort was invested to manufacture an un-commercialized product
    
Fallacy # 6: Throw Automation at it.  Automation is often viewed as a magic elixir that can bring down the cost of anything. However, just like Mass Production, automation is expensive and, if not done right, may be too inflexible to be useful for next-generation products or other product variations. The most inflexible automation is fixed or hard automation and tooling that only works for a particular product or part.  Unfortunately, attempting automation will cost a lot of money now and may result in little, if any, gain, unless there is a large demand for the chosen product...
    Ironically, if products are designed very well for manufacturability, they may not even need any automation for assembly.  Similarly, part fabrication could be easily "automated" by inexpensive flexible automation that is available inn thousands of  factories or job shops. The most common example is programmable CNC machine tools, which can automatically fabricate a wide range of parts at low cost, while being flexible enough to quickly change over to build many different parts or improved variations.

Fallacy # 7: Robotics will lower the cost of anything. Although robots are great for creating buzz and look very impressive in action, they are an expensive way to try to lower cost, except for high-volume tasks where the work is dangerous, ultra clean, or has very many difficult steps.  Although the robots themselves are flexible and can be reprogrammed for other jobs, the robot itself is only half the cost of its whole system.  The rest is the installation, programming, tooling, and end-effectors (grippers), which are usually not very applicable to different parts or the next job. 
    Good design for manufacturability can eliminate most of their need, for instance, making assembly so easy that robotics can’t even be justified, thus saving much effort and cost. 

COMMERCIALIZATION MAY REQUIRE INNOVATION

Commercialization that can scale it rapidly will require innovation.  But, in the opinion of the author of the leading book and web site on Design for Manufacturability, most companies are surprising inadequate at innovation.  F prbes  says that "95% of patents are never licensed or commercialized"  and Silicon Silicon Valley venture capitalists  liken commercialization to "crossing the valley of death."
 

 Here is the web article that tells why: Why Companies Can't Innovate, and. and how to unleash innovation. which contains18 common counter-productive practices that prevent companies from innovating, each  with web links to solutions. 

Before any urgent needs require meaningful innovation, everyone doing research needs to apply all the principles of Manufacturable Research which are available now to all research groups  at http://www.design4manufacturability.com/research.htm  who can apply all these principles immediately.

And research should never be thrown over the wall "to industry" who just "launches it" into their factories  without concurrently engineering products and scalable process, as described in the white paper: http://www.design4manufacturability.com/concurrent-engineering.htm

Dr. David M. Anderson (who authored this site) can show new ventures and existing companies how to commercialize research and prototypes into viable products that will be manufacturable enough for rapid ramps that can quickly reach even best-case-scenario demand volumes. He can help in the following ways:

• Seminars and webinars to train companies how to concurrently engineer products for manufacturability. This could be applied at the beginning of a venture or to the commercialization of an existing prototype or research.  These classes and workshops would give startup ventures an advantage over established companies because their venture could start out using these principles and wouldn't be inhibited by inertia, counterproductive policies, or resistance to changing entrenched ways of developing products.

• Workshops to focus on the commercialization of a specific product to brainstorm on how to best commercialize the product and insure these methodologies are applied.

• Consulting with product development teams to help them with on-going consulting advice to apply the most effective product development principles and make the best decisions throughout their projects.

• Design studies. Dr. Anderson applies all the principles he teaches and writes about, coupled with his Doctorate in Mechanical Engineering, thesis research on bio-mechanics mechanisms, four patents, and 35 years of design and manufacturing experience, to offer leading-edge development work ranging from concept studies to innovative product architecture development studies. The deliverables from this work will allow client companies to easily complete the inherently manufacturable design work.

Dr. Anderson’s bio-sketch is presented on the "Credentials" page. He can be reached at anderson@build-to-order-consulting.com or
1-805-924-0100.
 

The author of this site, Dr. David M. Anderson, has extensive experience designing robotics and implementing automation, including seven years at his own company, Anderson Automation, Inc. . . ..

. . . . but then he shifted to Design for Manufacturability (DFM) because that can reduce cost more.   
 

Copyright © 2018 by Dr. David M. Anderson

Dr. David M. Anderson, P.E., fASME, CMC
www.HalfCostProducts.com
phone: 1-805-924-0100
fax: 1-805-924-0200
e-mail: anderson@build-to-order-consulting.com

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