Product development is vital to the success of many companies. New products, line extensions and reformulations are part of everyday life in the food industry. Over the years, various forms of automation have assisted in product development operations.
The Food CIO Forum (Providence, R.I.) conducted a study of automation use and success in food industry product development processes. The survey results are the analysis of information from 135 U.S. food industry companies. The objectives of the study included answering the following questions:
Taking Care of BusinessRespondents were queried on which methods they use to address their product development requirements. There were eight options, in addition to “Other”:
These tools are used in various ways across the product development process. Defining product development as a six-step process in addition to overall project management, we find the tools are used as described in the chart “Product Development Process and Tools.”
Ranking ToolsTo determine the effectiveness of each tool, those conducting the study asked the group to rank how well specific tools met expectations. The ability of the tool to meet expectations is judged relative to the tools used within the product development process. For example, a tool used in formula development may be very good at formula development but has no value in project management.
In general, all tools are considered relatively adequate. However, follow-up interviews indicated individual tools were adequate within their own specific scope.
Of special interest is Process PLM, which is used in all phases of product development plus project management. It is used by 23% of respondent companies, and 88% of these companies stated that it met, exceeded or greatly exceeded their expectation. Process PLM showed the highest rate of satisfaction among the tools evaluated.
Process PLM is a different concept from alternative tools. The other tools represent spot solutions whose objectives are specific to part of the product development process. Process PLM varies from supplier to supplier but represents a more comprehensive, more integrated approach. In addition, most Process PLM tools are relatively new. The underlying technology used in these tools provides an improvement on the ability to integrate other systems with Process PLM.
In the “other” category, the survey found a wide range of tools. Not surprisingly, “Microsoft Excel” was ranked the most widely used tool, with 88%. “Other PC applications” (i.e., MS Project, Outlook, etc.) were ranked at 62%, followed by “custom-developed software” at 38% and “paper lab notebooks” at 35%. Some 23% of respondents use “Lotus Notes,” while 8% use “e-lab notebooks.”
Interviews indicate that Excel serves two purposes in the product development process: filling gaps and integration. Where functional gaps exist in the product development process, companies have moved the product development data to Excel spreadsheets for further processing. For example, one respondent said his company uses Excel to convert the formula from R&D units of measure and quantities to production units of measure and quantities. Another respondent stated Excel is used to manipulate ingredients to meet marketing claim requirements (i.e., low-fat).
Where multiple tools are in use, Excel's role is frequently integration. The product data is loaded to Excel, reformatted and then loaded into an alternate tool. For example, the formula may be moved from the product development process to the production system (ERP).
The frequent use of Excel in product development deserves further study. The analysis brought to light a number of pluses and minuses with Excel as a product development tool. On the plus side, Excel is a highly flexible tool which can provide many functions--thus, it is very good at filling functional, data management and integration gaps. Excel is widely used, with most product development professionals knowledgeable about it.
On the minus side, Excel presents complex development challenges requiring expertise that often is not available. Excel can be changed easily and, therefore, does not promise a consistent process or the ability to audit past processes, a potential Sarbanes-Oxley issue. (The Sarbanes-Oxley Act of 2002 is a major piece of legislation that affects disclosure, accuracy and the accounting practices of publicly traded companies.) Each spreadsheet is disconnected from the entire process, adding latency into the process and further delaying the timeliness of market objectives. With the possibility of varying data rules, re-keying, etc., Excel potentially allows errors to be introduced into the product development process.
Is Integration Important?For a number of years, integration has been a very important discussion point in the world of business systems. Respondents were asked if they considered their product development tools to be integrated. Only 38% of respondents said their product development systems are integrated. Some 63% of respondents opined that their product development systems are not integrated. Follow-up interviews revealed these companies are either using Excel as an integration tool or re-keying data to move from step to step within their product development process. The interviews proved that the lack of integration extended the critical path of product development, as well as added errors that required additional time to resolve, or had other negative impacts on product success.
Of those companies without integrated systems, none thought their product development processes were very adequate, and only 47% believed these systems were adequate or moderately adequate. Of those companies with integrated systems, 15% felt that the system was very adequate, with 77% stating the systems were adequate or moderately adequate.
Is integration important? The answer is clearly “yes,” integration is a major contributor to the overall satisfaction with product development systems and processes.
Observing these results, it is interesting to wonder how these differences impact competitiveness. In other words, is “just okay” adequate to compete in today's market? With rapidly changing consumer preferences, an ever-increasing rate of new product introductions and the demands of channel masters (Wal-Mart, McDonalds or Sysco, for example), a market-leading company must be able to react quickly to these demands. Having “just okay” product development processes and tools are indicative of a company that, over time, will lose market share. Those companies with “best in class” product development will be able to meet market demands more quickly and gain share.
Investment PlansLooking to the future, we asked respondents how important it is that their companies invest in product development tools. Nearly half of the respondents felt it was very important that investments be made in product development tools. A total of 87% felt it was important, somewhat important or very important.
When asked when those investments should be made, 36% said within one year, with an additional 40% stating that the investment should take place within two years. Follow-up interviews indicated the investments should be made due to competitive pressures. Respondents indicate they fear their companies cannot compete effectively without improvements in product development.
Respondents also were asked when they expect investments will take place (rather than when the investment should take place.) Their responses indicate one can expect to see significant investment in product development systems within the next two years. Since competitive issues drive the investments, companies choosing to wait beyond the two-year period may find their ability to compete is negatively impacted.
The participants show a high degree of correlation between when a company should invest in product development tools and when they will invest. The correlation shows an alignment between what product development and corporate management see as key business objectives.
Since most of the respondents were directly involved in product development, the interviewers questioned the validity of these answers. Wishful thinking could account for the high correlation between when companies should invest versus when they will invest. To investigate this possibility, selected respondents were interviewed.
Respondents who said investment would take place in the one- or two-year time frame were asked what evidence they had to validate their statements. Those who responded that investment would take place within one year most often stated that the monies already had been budgeted, or that management had flagged the spending as an important objective for the following year. Those who responded with a two-year horizon said management had indicated the importance of product development investments, as well as the current initialization of projects leading up to investment (for example, an ingredient and formula standardization project).
Those respondents who stated investment would take place in three or more years indicated their companies viewed product development as not being important to the future of the company, or the product development process as a “stepchild.” One respondent expected the entire product development process to be outsourced within the next 18 months.
In summary, those companies who see product development as an important part of their overall success see investment in the next one to two years as a requirement to maintain their competitive position. Those who view product development as less important to their overall success do not see investments in the near-term horizon.
Summary and RecommendationsWhile all tools meet or exceed expectations within their defined role, integration is seen as the key determinant of success. If tools are integrated, companies should experience time-to-market reduction and quality improvements.
Therefore, companies with existing tools should invest in integrating these tools and place integration high on the requirements list for any additional investments. Companies with few tools or limited integration should consider replacing the existing tools with a Process PLM solution--as opposed to adding tools and investing in integration among existing tools.
With 70% of companies planning to invest in product development tools within the next 24 months, it is expected that new product introduction will be an area of increasing competition among food companies.
Showcase: Analytical & Sensory Services/Product Dev. SoftwareGenesis' R&D SQL Product Development and Labeling Software features: a database of more than 26,000 foods and ingredients, including raw foods and processing items such as gums, bases, preps and colors; analysis for 133 nutrients and nutrient factors; unlimited database expansibility; quick, accurate nutrition analysis; moisture and fat adjustment options; a user-friendly platform; a variety of label formats; colorful, printable reports; and one-click generation of a label complete with ingredient statement and allergen information. ESHA Research, Scott Hadsall, 503-585-6242, ext. 100, firstname.lastname@example.org
Beyond the ideation and concept development stages, quantitative research avoids costly missteps and keeps projects on the right track. Product Dynamics, a division of RQA Inc., collaborates with your marketing, R&D and quality assurance teams to address both strategic and tactical product issues through sensory and consumer research. Experienced in a wide range of product categories and research methodologies, we offer customized test design, superior execution, rapid turnaround and statistically sound analysis to provide insightful reports and actionable next-step recommendations. Product Dynamics, Cindy Wolter, 708-364-7060, ext. 103, email@example.com
Merlin Development Inc. is a full-service food product development and research company providing support from concept to commercialization. Merlin's in-depth experience across the majority of food systems brings innovative solutions to your product development needs. Our approach is targeted, providing results and value in a timely manner. Depending on your needs, we provide complete independent service, assist with a portion of a project or complement your development team. All projects are completely confidential. Merlin Development Inc., Paul Thompson, 763-475-0224, firstname.lastname@example.org
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Over the last 30 years, Tragon has established itself on a global scale as leader in the design and fielding of food and beverage research. A marketing research and consulting firm, Tragon provides integrated guidance, working jointly with R&D, QC/QA and marketing, taking a unique, integrated approach that reveals the "ideal" product profile. Tragon helps leading companies from around the world stimulate innovation, avoid trial and error and leapfrog competition. Tragon Corporation, Rabia Bhimla, 650-365-1833, ext. 129, email@example.com
HunterLab's EasyMatch QC software provides the flexibility to collect, display and analyze color data from its spectrophotometer. Easy to use, it can be configured to show only the information you want. Color data and spectral data are displayed numerically in spreadsheet form or graphically as color, spectral or trend plots. The simplified EZ View screen only shows data for the standard and the last sample measured and, if desired, pass/fail. The program uses job files to easily store and recall data. Jobs can be created for individual customers or products, and each job can include individual or multiple standards. Data can easily be e-mailed or exported to management software, and a secure version with definable access privileges also is available. HunterLabs, 703-471-6870, firstname.lastname@example.org, www.hunterlab.com
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This company is a leading worldwide creator of sophisticated software for sensory science and consumer research. Its Compusense® five software is used in over 40 countries and 25 languages. This software features the FCM™ methodology for panelist training. Compusense provides descriptive analysis, sensory research and sensory panels, a system to provide seamless management of information throughout the sensory testing cycle. Visit the website www.Compusense.com to learn more about the company's sensory data collection software and contract testing for sensory, consumer and market research. Compusense, Karen Phipps, firstname.lastname@example.org
As food allergens become more of a hot topic, Silliker Labs, in partnership with the Food Allergy Research and Resource Program at the University of Nebraska-Lincoln (FARRP) presents a training video, “Controlling Food Allergens in the Plant,” to help food companies enhance their in-plant allergen training sessions. The video visually communicates allergen-specific GMPs, such as checking raw material receipt to cleaning and sanitation practices. It is accompanied by a CD that contains the instructor guide, employee workbook, 15-question quiz and attendance sheet. The program is available in English, Spanish and French. Visit www.silliker.com for ordering information. Silliker Inc., Jessica Sawyer-Lueck, 708-957-7878; FARRP, Susan Hefle, 402-472-4430