September 4, 2007
What Do Manufacturers Need to Get Their Products to Market?
While many building product manufacturers start with great ideas, becoming a commercial success takes much more. They must first understand the new product development and commercialization process, build the right relationships, and learn to navigate the nuances of the home building industry.
PATH is responding to these needs through a project launched in October 2005 with the
NAHB Research Center, "PATH Commercialization Tools."
By developing template tools and guides describing markets, regulations, and political processes in homebuilding, PATH aims to provide a source of readily accessible information to assist small manufacturers, based largely on large manufacturers' advanced skills.
As of summer 2007, three tools are being disseminated to select audiences for critical review:
New Building Products Development Resource Guide
helps building-products manufacturers and inventors create, develop, and launch new building products.
serves as a "matchmaking" system for the home building industry to establish the mutually beneficial relationships required to develop, test, finance, and ultimately commercialize innovations.
Lead-User Panel Tool
consists of an expert panel of leading home builders who can evaluate new product ideas, provide advice on improvements, and point out applications and potential markets where they will most likely find success.
PATH has provided a variety of other studies and tools for the manufacturing industry, including the PATH publication
Getting Building Technology Accepted: Developing and Deploying New Building Technologies.
Preliminary tools from the Commercialization Tools project will be available in fall 2007.
For more information:
One of the critical areas that surfaced in PATH's "Overcoming Barriers to Innovation" Roundtables was the vast difference in capacity and planning between large and small manufacturers of housing products and innovations. In general, large manufacturers have extensive analytical tools, financial resources, and industrial savvy to produce innovations that are predominately incremental in nature. Small manufacturers, on the other hand, usually produce the more radical innovations in the industry, yet they have few resources and, sometimes, no knowledge of the homebuilding industry's markets to successfully develop, deploy, and diffuse their ideas. This capacity gap not only disproportionately biases the industry towards incremental change, but also results in a diminished innovation pipeline overall. By developing template tools and guides describing markets, regulations, and political processes in homebuilding, PATH can provide a source of readily accessible information to assist small manufacturers, based largely on large manufacturers' advanced skills.
Through interviews, the Commercialization Tools project tried to determine the level of sophistication of the new product development process (NPD) used by various organizations. The project also attempted to identify the gaps likely to arise for the majority of manufacturers that have little formalization of their NPD process or need greater access to NPD resources.
More than 20 organizations with a vested interest in the commercialization of new construction technologies were interviewed. The participants are among the top-performing businesses and organizations in their fields and can be categorized as organizations that either self-administer the NPD process (e.g., manufacturers) or assist others in administering the NPD process (e.g., small business development centers or technology incubation and development organizations).
The interviews included open-ended discussions about topics such as:
- how manufacturers identify and assess opportunities based on production approaches and philosophies;
- how manufacturers launch and track products;
- how assistance organizations select clients and technologies and provide services; and
- how innovators and their assisting organizations evaluate markets and technologies.
The interviews identified 1) inadequate knowledge of NPD in general or of specific NPD tools and methods; and 2) a lack of resources for NPD and commercialization as the central failings of many manufacturers. These problems resulted in innovations with high potential failing to gain market acceptance; being "mothballed;" being launched prematurely; or being forced to undergo extensive post-launch modifications of product features, production process, or marketing. The interviews also uncovered these gaps in NPD information and performance:
- A lack of overall understanding among building materials manufacturers regarding NPD and commercialization processes, especially in the construction industry environment
- Manufacturers' inability to remain constantly apprised of both new innovations and evolving market needs, which could have offered direction to new product and service development
- The high cost of product design, production, evaluation, and launch
- A lack of financial resources and/or understanding of funding options to develop and commercialize technologies
- The failure of innovators to establish networks of mutually beneficial relationships among key stakeholders in innovation, including stakeholders involved in financing, technology development and testing, manufacturing, distribution, marketing, etc.
- The inability of many manufacturers to adequately communicate their new product's superior performance to buyers because suitable metrics are either unavailable or poorly understood by non-technical buyers
- The regulatory barriers to the successful development and introduction of innovative technologies, including a poor understanding of the regulatory structure and strategies to navigate these barriers
- Manufacturers' poor understanding of their markets due to their failure to communicate directly with the ultimate customer (the builder) and end-user (home buyer), but indirectly through the distribution channel of wholesalers and retailers
The project team identified potential solutions that could take the form of commercialization tools; other recommendations came directly from the interviewees. The project team proposed a limited number of solutions that seemed most feasible given the scope of this project. Interviewees reviewed and voted on the list of potential tools. Based on the results of that process and fiscal constraints, three tools were chosen for development:
- The New Building Products Development Resource Guide
- The Collaboration Forum
- The Lead-User Panel Tool
Content updated on 9/7/2007