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NIST MEP 15 Sep 2005 Business Realities 1 Business Realities of Technology Transition & Product Commercialization FLC Mid Atlantic Region 15 Sep 2005 Dan Pitkin, Business & Technology Advisor NIST Manufacturing Extension Partnership dan.pitkin@nist.govdan.pitkin@nist.gov 301-975-4734 daniel.pitkin@osd.mildaniel.pitkin@osd.mil 703-607-5313 Slide 2 NIST MEP 15 Sep 2005 2 Business Realities Labs Warfighters Private Industry Slide 3 NIST MEP 15 Sep 2005 3 Business Realities Technology & IP New products for Govt Agencies (DoD, DoE, NASA) Transition & Commercialization New products for Commercial markets Slide 4 NIST MEP 15 Sep 2005 4 Business Realities Transition vs. Commercialization Technology Transition Driven by customer requirements and end user needs Driven by customer requirements and end user needs Requires product development, prototyping, test and evaluation, demonstration, manufacture scale-up Requires product development, prototyping, test and evaluation, demonstration, manufacture scale-up Must provide application utility for end user and economic value to both customer and supplier Must provide application utility for end user and economic value to both customer and supplier Proof of Transition is Agency acquisition, use and sustainment Proof of Transition is Agency acquisition, use and sustainment Product Commercialization Same Proof of Commercialization is product sales growth and business profitability Slide 5 NIST MEP 15 Sep 2005 5 Business Realities Technology Transition & Product Commercialization Technology transition happens when new technologies are converted into products worthy of acquisition and sustainment. Commercialization happens when customers buy and use new products that come from innovative technologies. The common goal is commercial viability economic value for the customers, application utility for the end users, profit and ROI for suppliers. Slide 6 NIST MEP 15 Sep 2005 6 Business Realities The Commercialization Challenge Avoiding & Overcoming Risks Market Risks misunderstanding customer requirements and end user needs Technical Risks missing technical milestones Business Risks missing the business opportunity (change in demand, technology, competitive environment) Systematic Risk Reduction Commercialization requires systematic risk reduction in all areas, Market, Technical, and Commercial Slide 7 NIST MEP 15 Sep 2005 7 Business Realities Market Risks Methods to reduce Market Risks - those that might impede customer acceptance of a new product. Analyzing and knowing the industry and marketplace; Analyzing and knowing the industry and marketplace; Selecting target customers and applications, and studying competitive offerings (price, quality, application value); Selecting target customers and applications, and studying competitive offerings (price, quality, application value); Defining the product specs performance, applications, technical data, standards, certifications, special requirements; Defining the product specs performance, applications, technical data, standards, certifications, special requirements; Establishing test and evaluation programs with target customers and end users to ensure product acceptance. Establishing test and evaluation programs with target customers and end users to ensure product acceptance. Slide 8 NIST MEP 15 Sep 2005 8 Business Realities Technical Risks Methods to reduce Technical Risks those associated with converting technology into useful finished products that add economic value to both supplier and customer: Setting specific product performance and cost/price targets, based upon customer requirements and end user needs; Setting specific product performance and cost/price targets, based upon customer requirements and end user needs; Testing and evaluating product prototypes during development to gage technical progress and make adjustments; Testing and evaluating product prototypes during development to gage technical progress and make adjustments; Contracting or partnering with an industrial designer and/or manufacturer that have relevant product design and manufacturing experience; Contracting or partnering with an industrial designer and/or manufacturer that have relevant product design and manufacturing experience; Using MEP tools and services (e.g. Quality Function Deployment, Design for Manufacturability, Lean Mfg.) to enhance product quality and cost. Using MEP tools and services (e.g. Quality Function Deployment, Design for Manufacturability, Lean Mfg.) to enhance product quality and cost. Slide 9 NIST MEP 15 Sep 2005 9 Business Realities Business Risks Methods to reduce Business Risks - Methods to reduce Business Risks - those that might block commercialization due to abrupt changes in economic and business environment. Studying and tracking changing economic and business conditions in target industries (i.e. regulations, technological obsolescence, business recession, national security incidents, new legislation, business mergers, disruptions, failures, etc); Forming a strategic partnership with the target customer so that both parties share the risks and rewards of commercialization; Licensing the technology to a commercialization partner. Slide 10 NIST MEP 15 Sep 2005 10 Business Realities Technology Transfer Partnership Intermediaries Slide 11 NIST MEP 15 Sep 2005 11 Business Realities ***Accelerating the Transition of New Technology to the US Warfighter*** Partnership between TechLink and Montana MEP MilTechs purpose is to improve the efficiency and cost- effectiveness of transitioning innovative technologies and new products to DoD operations A pilot program, beginning in Montana and expanding to other states Slide 12 NIST MEP 15 Sep 2005 12 Business Realities Partnership Intermediary facilitating transfer and transition of DoD technologies for use by the first responder community. Slide 13 NIST MEP 15 Sep 2005 13 Business Realities A partnership between TechLink and the Montana Manufacturing Extension Center [NIST MEP] This partnership is adding significant value to DoD technology transition Key Objectives: Accelerating the transition of new and innovative technology to the U.S. warfighter Lowering the cost and cycle time of technology transition and acquisition Enabling DoD to more fully benefit from its R&D funding to US small businesses Slide 14 NIST MEP 15 Sep 2005 14 Business Realities Carrier Flight Deck Cleaner Cleaning a Navy carrier deck requires environmentally unfriendly detergents, many sailor hours, and extra storage space for supplies. TechLink assists an Alaska engineering firm with SBIR I and II grants. SBIR topics address a Navy carrier deck cleaning vehicle. Slide 15 NIST MEP 15 Sep 2005 15 Business Realities Carrier Flight Deck Cleaner MilTech assisted the company with a critical design review, plant operations planning, supplier development and design for manufacturing. The vehicle will improve deck cleanliness, reduce sailor hour requirements, and reduce environmental damage. Slide 16 NIST MEP 15 Sep 2005 16 Business Realities Collaborative Product Development A U.S. travel gear manufacturer wanted to differentiate itself from imported knock-off products. TechLink initiated a relationship between Red Oxx and the Natick Soldier Center s Textile Testing Lab resulting in a Test Service Agreement. Slide 17 NIST MEP 15 Sep 2005 17 Business Realities Soldier Load Carrying System SOCOM needed rugged, comfortable and lightweight load carrying systems. A DoD lab issued a competitive BAA for design options. The lab chose a small, agile company with a history of commercial success to design and build the product. MilTech is assisting the company with testing, supply chain development and quality systems. Slide 18 NIST MEP 15 Sep 2005 18 Business Realities Naticks tests provided Red Oxx with performance comparison data to provide to their customers. Slide 19 NIST MEP 15 Sep 2005 19 Business Realities Red Oxx presented the test results to various media, resulting in the Outside Magazine Gear of the Year Award for travel duffels. Red Oxx presented the test results to various media, resulting in the Outside Magazine Gear of the Year Award for travel duffels. Viable business case, marketing driven product development, Lab Commercial business collaboration, cooperative test and evaluation, WIN-WIN outcome. Slide 20 NIST MEP 15 Sep 2005 20 Business Realities Common Purpose To accelerate the transfer and transition of appropriate technologies to the private and public sector industrial base in order to establish a national rapid response defense manufacturing supply chain. DoC and DoD Collaboration DoC and DoD Collaboration [Memorandum of Understanding June 2004] Slide 21 NIST MEP 15 Sep 2005 Business Realities 21 NIST MEP Business & Manufacturing Services - Point of Contact - Dan Pitkin, Business & Technology Advisor NIST Manufacturing Extension Partnership dan.pitkin@nist.govdan.pitkin@nist.gov 301-975-4734 daniel.pitkin@osd.mildaniel.pitkin@osd.mil 703-607-5313 Slide 22 NIST MEP 15 Sep 2005 22 Business Realities MEP Mission Provide information, decision support and implementation assistance to smaller manufacturing firms in adopting new, more advanced manufacturing technologies, techniques and best business practices. Slide 23 NIST MEP 15 Sep 2005 23 Business Realities Small manufacturers are BIG business 350,000 Small Manufacturers (< 500 employees): make up almost 99% of all U.S. manufacturers; produce 55% of the value-added goods; provide almost 65% of all manufacturing employment; are active suppliers to industry supply chains; impart flexibility and efficiency to larger firms.