Before we dive into the essential Research and Development (R&D) tools for your process manufacturing business, allow us to set the stage for you.
Many of our team members are not necessarily home improvement or DIY gurus. When it comes to this category, some of the team may even appear to be “skills-challenged.” Luckily we found our wheelhouse in software development and professional services. In working with Research and Development (R&D) labs over the years, there are a few common elements that differentiate the truly gifted from the inept.
A Sophisticated Lab Notebook
Most R&D labs have some form of Lab Notebook. They take many shapes and forms. Many are still literally notebooks – you know – pad and paper. Others have progressed to Excel. Others have a custom Access database created by a former lab intern who no longer works for the company. The star students, however, have taken their game to the next level. Their databases contain all their project work – searchable and archived for easy access. User fields can be added without programming, and all this data is available to all members of R&D without complex ‘Copy & Paste’ or band-aids and sneakernet. The time saving is just shy of miraculous!
Imagine an environment where marketing supplies an electronic requirements document. Data from that request is passed into R&D where similar project results are evaluated. An extensive list of potential formulations is then filtered to a manageable number. A sample batch ticket is generated, samples are submitted for evaluation and are all tracked and measured as a routine KPI. Utopia? That is a reality today, and more and more R&D companies have that vision at their fingertips.
Access to Historical, Current and Future Raw Materials Costs
Most companies today have integrated access to the current cost of materials within formula development. The ERP purchasing system automatically maintains the last purchase costs and tracking these costs requires little effort. Fewer clients can look backward and analyze formulation costs based on historical material costs. This is helpful to understand why profits for a formulation may be eroding in time. The real goal, however, is to incorporate anticipated material costs changes into the R&D formulation activities and to sell cost analysis.
Where do you fit in this spectrum? If you spend your day looking up current costs, then you are about ten years behind the times. When you can compare ongoing formulation costs to three months, six months and 12 months ago, you are better than average. If you can use material cost predictors to estimate future material costs and identify the current production formulations most affected by these changes – well then, you, my friend, are firing on all cylinders.
The Ability to Search Historical Formulations
Why reinvent the wheel if you have already solved the problem? It would amaze you how often companies formulate for the same requirements without even realizing they are already doing it. Once you have centralized your formulations out of Excel and into a searchable database, you next need a tool to query the database without adding programming staff. Some of the essential elements to search are the existence of specific raw materials, quality specifications, material and labor costs, suppliers of raw materials, and physical properties of materials such as allergens or hazard properties. The search engine should also weigh the formulas by whether you currently make these products and by what some of the yields you have achieved during production are. Imagine having all of this information readily available. There are tools out there that are affordable and integrated that can help deliver this vision to your organization today.
A Feedback Loop from Production to R&D
This is one of the simplest R&D tools to implement but rarely is it done consistently. Every commercialization process should include a review of all new formulations immediately after the first batches, and then again after the formulas have been running for a while. A focused, informal meeting between production, quality, and R&D on a routine basis can change the trajectory of your company.
First and foremost, discuss yields. Are there ways to improve the process? Every percentage saved in return is profit. Then, consider quality additions. Should we change the process or the formula to eliminate or reduce the need for a second pass through quality? Every time a batch has to go through quality a second time, it costs the company money. Are there alternate ingredients or physical processes that could make the processing more efficient? Getting three people in a room once per week to discuss five products is not difficult to do. The results are amazing!
Tracking of Samples Generated by R&D and Measurement of Conversion Rates
How much time and effort does your company spend from sales through marketing into R&D and shipping to process just one new formulation sample? It’s costly! How much time and what systems are in place to track the conversion of that sample into a sale? My bet is, there’s ten times the effort to make an example as there is in monitoring the conversion to purchase. How many samples turned into sales? What customers have the highest (and lowest) conversion rates? What’s your cost of creating a new formula and how long will that formula be sold? All these are valid questions to ask, and there are tools available today to answer those questions. For literally $60/month, the samples could be tracked using Microsoft Dynamics CRM. It can be stand-alone and hosted so the setup is literally minutes and it can make the world of difference to your company.
If you are interested in learning more about any of these R&D tools, connect with our team here at Vicinity Software today. Let’s see how we can implement some or all of these tools for you today.