TECHNOLOGY READINESS

Too many new product innovations go into production without a full assessment of their technological readiness, resulting in wasted time, dissatisfied customers, and lost revenues. A comprehensive technology readiness process can avoid this.

Don Clausing and Maurice Holmes

Don Clausing received the BS degree in mechanical engineering from Iowa State University in 1952. After working for nine years, he again became a full-time student, receiving his MS (1962) and PhD (1966) degrees from the California Institute of Technology (Caltech). He worked in industry for 29 years before becoming a half-time faculty member at MIT, where he worked from 1986 until 2000. Since 1975, he has had a role in major improvements in new technology and product development that have enhanced the competitiveness of many commercial industries. This includes the publication of his book Total Quality Development: World-Class Concurrent Engineering (1994). He is also a co-author, with Victor Fey, of Effective Innovation: The Development of Winning Technologies (2004). dontqd@comcast.net

Maurice Holmes is the managing director of Business Process Solutions Group, a private consulting group in Pittsford, NY, that helps companies leverage their R&D investments to improve bottom-line business performance. Prior to this, he held appointments in both the Engineering School and the Sloan School of Management at the Massachusetts Institute of Technology where, as the professor of the practice of management and engineering systems, he was also the co-director of the Center for Innovation in Product Development. His industrial experience consists of 26 years at Xerox Corporation, including positions as corporate vice president and chief engineer of the corporation, as well as president of the Office Document Systems Division. He holds a BS in physics from the University of Pittsburgh and an MS in engineering from the University of Rochester. mfholmes@rochester.rr.com

OVERVIEW: Finance and technology meet at the crossroads of technology readiness. A disciplined method for assessing technology readiness assures that new products will integrate smoothly with downstream design and manufacturing processes and perform as expected in the user's environment. In the absence of a technology readiness assessment, unstable performance will disrupt later stages in the development process or, worse yet, appear once the product is in the hands of the customer. A structured technology readiness method like the one described here includes a development process that improves the stability of the technology until its performance meets predetermined criteria and an assessment component that measures the degree of technology readiness and the risk involved in proceeding to development. Such a technology readiness method can transform a technology stream into a reliable stream of profit.

KEY CONCEPTS: new technology integration, new technology commercialization, smooth introduction of new products

For many companies, new technologies are the key to growth; promising technologies feed optimistic new-product business cases that aim to convert the technology to profit. However, too often these business cases assume that the new technology is ready for commercialization when it is transferred downstream, although the business's development program includes little or no provision for assessing technology readiness. If a new technology's ability to cope with downstream variations in design and manufacturing parameters or customer use environments has not been rigorously developed, its performance as it works its way toward the market will be unpredictable. Prototypes will reveal many problems, some of which may be temporarily adjusted away, only to return; the adjustment itself may lead to new problems. Build-test-fix cycles will lead to more build-test-fix cycles, squandering time, money, and goodwill. Dissatisfied customers will eventually drift off to competitors.

The systematic implementation of a technology readiness method overcomes these problems by assuring that new technology is ready to survive the several transitions that will take it into the marketplace by eliminating or accounting for sensitivity that can cause delays in production and customer dissatisfaction. Holmes and Campbell (2004) argue, as part of their description of the corporate-level product development business process, that a structured technology readiness method should be a central part of product development; we argue that technology readiness has a close relationship with the process they depict (Figure 1). Similarly, for Clausing (1994) and Clausing and Fey (2004), technology readiness is an important component of new-product innovation. Our experience supports this work, showing that when a technology readiness method is introduced, prototype build-test-fix cycles may be reduced by as much as a factor of five.

Here, we offer a comprehensive technology readiness method designed to produce a documented state of technological stability that enables engineers to design the new technology into a product with confidence that it will perform as expected. This is a structured method of the type advocated by Wheelwright and Clark (1992) to give managers the information they need to make better judgments about their organizations’ ability to capture the value of new technology. Holmes (1993) describes a similar process used by the Xerox Corporation to assure that new technology is stable enough to be integrated into a new product.

The Technology Readiness Method

A comprehensive technology readiness method like the one we propose should consist of three elements:

1. The technology readiness development process, which is designed to develop stability in new technologies to ensure a smooth flow downstream;

2. The technology readiness assessment (TRA), which measures the stability of new technologies, ensuring that those that are too sensitive do not flow into the development stream; and

3. The technology implementation plan, which avoids the inadvertent reintroduction of sensitivity after the TRA.

Figure 1.—Technology readiness is embedded in the product development business process to ensure smooth technology implementation.

In a disciplined technology readiness method, any newly invented technology is introduced to the realistic conditions of engineering, manufacturing, and customer use early, long before it is transferred to the product commercialization team. The goal is to develop excessive sensitivity out of the new technology and improve its ability to cope with the variations it will face as it rolls downstream. We call this capability to accept realistic variations “latitude.” (Latitude may also be referred to as “robustness.”) A technology with developed latitude will operate reliably in all of the downstream conditions it is likely to encounter.

The Technology Readiness Development Process

The technology readiness development process consists of criteria to measure a technology's level of readiness and specific steps to achieve those criteria. The primary emphasis is on basic function. For example, the basic function of a printer is to make prints; the printer must make a print that is close to the original analog or digital master. This is easily accomplished when conditions are ideal. However, embryonic technologies inevitably suffer from very narrow operating windows that result in serious performance degradations when subjected to the real conditions of design, manufacturing, and customer use. A cut-sheet paper feeder in a printer must separate on demand one sheet of paper from a stack and deliver it to the print engine. If the operating window is very narrow, the feeder will work well only when the paper is high grade, the temperature is 70F, the relative humidity is 40%, and the components are new. The feeder cannot operate as expected if these conditions vary. The operating window must be expanded before the technology can be declared ready for commercialization.

It is the primary job of the technology readiness development process to improve the latitude of the new technology to the point that its performance remains acceptably close to the customers’ ideal function even when the conditions of manufacture and use are far from ideal. This latitude is developed through stress testing, adjustments to enlarge the operating window (Clausing 2004), and robust design (Taguchi 1993), aided by failure mode and effects analysis (FMEA) and other closely related methods. These methods are often collected under an umbrella such as Total Quality Development, Total Quality Management, or Design for Six Sigma.

The technology readiness development process is designed to ensure that new technologies meet one overriding criterion: sufficient performance latitude to ensure that customer value is maintained as requirements are translated into design and manufacturing parameters. This single, concise criterion can be expanded into six operational criteria:

1. All significant failure modes have been identified.

2. The critical technology parameters (CTP) that control those failure modes have been defined.

3. CTP set points and ranges have been selected to avoid all failure modes with sufficient latitude and documented in a CTP specification.

4. A conceptual design has been produced that demonstrates that the CTP specification can be captured in a production design with engineering practices within the capability of the downstream organization.

5. A manufacturability assessment has been completed that demonstrates that critical elements of the technology can be manufactured with known and normal manufacturing processes.

6. An integrated technology model has been created that demonstrates that the CTP specification delivers consistently satisfactory performance and avoids all failure modes under customer-use conditions.

Technologists must also provide data and other supporting information to enable managers to confirm achievement of the technology readiness criteria and assure that downstream organizations understand and can maintain the fidelity of the CTP specification. Achieving these criteria usually entails a seven-step process:

1. Ideal Function. Customer needs are translated into an ideal function that defines the unique value of the technology. All excessive deviations from the ideal function are failure modes.

2. Failure Modes. All significant technology failure modes are identified, including the input, environmental, and time-related conditions that cause each failure mode. The operational description of how these conditions cause failure is developed. Failure modes that are missed in this activity will show up in design and manufacturing or at the customer site, where the cost of addressing the failure increases by orders of magnitude.

3. Critical Technology Parameters (CTPs). Next, the critical parameters that cause failures are identified. There are two types of critical parameters: control parameters, which designers can control, and noise parameters, over which designers have little or no control. Control parameters include dimensions, electrical characteristics, and other design and engineering factors. The values of control parameters are adjusted during the technology readiness development process to give the new technology latitude to perform as designed in the presence of noise parameters. Noise parameters are variations in manufacturing and in the use environment. Noise parameters are used during technology readiness development to demonstrate that failure modes are well understood and can be minimized in the use environment by manipulating control parameters.

4. Latitude. In this critical step, the latitude of the new technology is developed; in other words, the operating window is enlarged so that performance remains close to the ideal function even when the system is exposed to the common variations of production and the marketplace (i.e., noise). The set of critical-parameter nominal values and their allowable range of variation to achieve acceptable performance limits must be specified. This prescription becomes a CTP specification that flows through the production design to the factory and ultimately to the customer.

Latitude is developed by intentionally stressing the technology with the application of large magnitudes of the noises that cause failure and by changing the values of the CTPs in systematic trials to find the set of values that yields the widest operating window. Three types of criteria may be used to guide a judgment that there has been sufficient work on widening latitude:

 1. After rapid initial improvement in latitude, progress has now leveled off; the point of diminishing returns has been reached.

 2. A good process has produced rapid improvement and the reasonable amount of time allotted in the schedule, typically a few months, has been exhausted.

 3. Latitude compares well with benchmark tests.

It is best to use some combination of these criteria to ensure appropriate latitude.

5. Conceptual Design. Effectively designing the technology into a product requires design engineers to specify a set of critical design parameters (CDPs) that will achieve the CTP specification identified during latitude development. This design parameter set must be consistent with the other design constraints; as a conceptual design, it should obey architectural constraints, but need not yet demonstrate detailed production intent in form and fit. Rather, it must show that it can control the CTPs and thus provide the latitude embedded in them. A single CTP can require the definition of several controlling design parameters. As it is improbable that all CDPs can be finalized before the detailed production design is completed, a final set is not required at the TRA in the next step. However, the design concept presented at the assessment step should have enough detail to show that the CTP specification can be captured by a normal and reasonable set of critical design parameters. A more detailed discussion of CDPs is given by Clausing (1994).

6. Manufacturing Assessment. When a design is released to manufacturing, most of its specifications will clearly fall within the scope of the normal manufacturing art. However, for new technologies, there will usually be some critical features that require special attention. In some cases, a CDP will not easily fit within the traditional manufacturing art. It is important to identify these features and develop the design and manufacturing art sufficiently that there will not be a problem when the design reaches manufacturing. In the extreme case, where a new manufacturing technology is needed to produce the new product, the manufacturing technology must be developed in parallel with the product technology.

7. Integrated Technology Model. Upon completion of the design and manufacturing assessments, an integrated technology model is built to show that a system that includes the critical functions can deliver the CTP specification and all known failure modes can be avoided. A model called an integrated technology rig is designed and built with adjustable CTPs for this purpose. Whether the model is physical or virtual is less important than that it demonstrates that acceptable performance is maintained when the model is subjected to the input, critical parameter, and environmental stresses expected in the customer environment.

The Technology Readiness Assessment

The technology readiness development process is followed by a technology readiness assessment (TRA). The most important part of the TRA is that it be explicitly included in product development. All too often, new innovation is hurriedly, almost casually transferred to a product commercialization program. The inventor raves about the merits of his new baby. The receiving program manager says, usually somewhat desperately, that he could certainly use such a capability. And then the delays begin, because the technology is not ready for commercialization. The premature transfer of unstable technology will leave it outside the process capability of the product commercialization team. No amount of management attention can compensate for this lack of process capability and preparation. Simply including the TRA and recognizing it within the organizational culture as an important and required event will overcome many of the traditional problems that occur in transferring an innovation from technology development to commercialization.

Figure 2.—The TRA process assures that new technology can be smoothly integrated into products and manufacturing processes.

Figure 3.—The TRA matrix applies quantitative metrics to assure that the new technology is ready to move downstream. As more steps in the technology readiness method are completed, risk and uncertainty decrease. In this example, the bold vertical line indicates that the development team has not completed integrated rig testing; the dotted line indicates steps that must be completed before the technology can move to commercialization.

The TRA process (Figure 2) has two objectives:

• Convince decision makers that the technology has met all of the readiness criteria, and
• Verify that the development team has completed a plan that assures that the CTP specification can be utilized effectively during product design and manufacturing.

The technology development team first uses the TRA matrix (Figure 3) to score the current status of the technology.^[1] The level of risk incurred in moving a technology to commercialization can be determined by comparing the assessment matrix for the technology to that of previous technologies assessed by the same procedure.

The degree of rigor required for technology readiness can depend upon the situation. A company may make a strategic decision to accept the increased uncertainty associated with an unready technology if, for instance, the technology is radically new and promises a large competitive advantage. The bold vertical line in Figure 3 indicates that the development team for this example had not successfully completed the integrated rig testing required by the matrix. As a result, critical technology set point and latitude work had not been verified, increasing the risk for this technology moving into production. In this context, it was concluded that the technology could not proceed to commercialization in its current condition; however, the program could transition when the work in the cells surrounded by dotted lines in the matrix was completed. The other areas in the matrix, although incomplete, did not, in this case, represent an unacceptable degree of risk.

In some cases, managers may ask for an external peer review by people knowledgeable of the relevant markets and the science governing the technology. Gaps between the two assessments, by the technology development team and by external peers, are reviewed and discussed, with data driving the discussion. Based on the outcome of this discussion, the management team with approval authority (the Decision Team) may approve the technology transfer, or it may fund additional activity to address the gaps between the two assessments.

Figure 4.—A critical parameter management (CPM) plan assures that the CTP specification retains fidelity as the technology flows through the downstream development and manufacturing processes.

Technology Implementation

After the work of developing latitude and assessing readiness is completed, there is a natural tendency to celebrate and relax. However, as CTPs are translated into CDPs and then into critical manufacturing specifications, some of the benefits identified during the TRA are likely to be lost. A formal critical parameter management (CPM) process is necessary to avoid such loss. The CPM process assures fidelity to the CTP specification as the technology moves downstream.

Although a detailed discussion of critical parameter management is beyond the scope of this paper, a snapshot of a typical CPM plan is provided (Figure 4). The technology implementation plan reviewed during the TRA provides the basis for the management plan. From each step in the plan, a requirements document moves the critical data across a functional boundary to the next step. Looking backward, audits verify that the requirements have been met. The first audit uses data from the conceptual design and manufacturing assessment to verify that the CTP specifications can be met. The second audit, done during product and process design, verifies that the detailed production design produces variations small enough to keep the CTPs within acceptable ranges. The final audit verifies that the manufacturing processes will keep the CDPs within the ranges that were verified as acceptable by the second audit. Faithful execution of the CPM plan will ensure that the CTPs that delivered stellar performance in the lab will flow through to deliver that same performance to the customer.

Figure 5.—Inadequate technology readiness leads to financial losses due to excessive development costs (D), ramp-up costs incurred even when the production schedule slips (R), and revenues lost because the market window closes before the product can be brought to market (MWC).

Financial Impact

The impact of an unready, unstable new technology on a new-product business case is unmistakable (Figure 5). Erratic performance caused by technology with insufficient latitude to withstand downstream variations causes three types of financial losses. In the case illustrated here, a six-month slip required to fix technology issues not only increased development spending, but also caused an increase in prelaunch build-up costs. At this stage in the product development cycle, it is very difficult to stop or reverse these costs while technology issues are resolved; attempting to do so may only increase the cost and cause the market to lose confidence in the product. The delay also contributed to a lost revenue opportunity associated with market window closures. In this case, the net effect of reduced revenue and increased cost was to drive an initially exciting business case far below a reasonable corporate investment threshold. Furthermore, since the cost of the strategic front end is more than 100 times smaller than the downstream cost of development and field operations, keeping the technology in the front end until a successful TRA is achieved will in itself dramatically improve the product business case. Clearly, technology readiness is not only a critical component of the strategic management of technology; it is essential to the successful business performance of any enterprise.

Technology readiness is especially essential for innovative enterprises, although it is still a key source of competitive advantage for mature enterprises. It is also valuable in the acquisition of new technologies from outside the organization. TRA criteria can be applied to any potential acquisition to assure that the potential problems inherent in new technologies will not disrupt the transfer of technology into the product development process. A joint TRA can greatly facilitate successful transfer.

Conclusion

When a new technology has the latitude that enables it to operate in realistic conditions of design, manufacturing, and use, then the remainder of its journey to the marketplace will be smooth and its full profit potential will be realized. On the other hand, when technology readiness is not a part of the calculation, it can be very difficult to satisfy the product business case.

Effectively managing technology readiness as a major component of a company's business process will make an important contribution to the organization's business performance. Understanding and quantifying the ideal function of a new technology and its value to the business, developing a CTP specification that provides latitude against all failure modes, and ensuring that the CTP specification can be captured in a manufacturable conceptual design preparatory to a TRA process will ensure maximum benefit from any new technology. Complementing that process with a CPM plan that effectively supports CTP tracking and management in downstream product development will help maintain the fidelity of the initial technology readiness program.

In short, technology readiness assures that the potential problems embedded in all new technologies are defused and that any remaining problems are solvable within the capability of the traditional downstream development art. The journey from technology readiness to profit will then be smooth sailing.

¹ The TRA matrix might bring to mind NASA's Technology Readiness Levels (see C. P. Graettinger, S. Garcia, J. Siviy, R. J. Schenk, and P. J. Van Syckle [2002], Using the Technology Readiness Levels Scale to support technology management in the DoD's ATD/STO environments, SPECIAL REPORT CMU/SEI-2002-SR-027; and J. Mankins [1995], Technology readiness levels, A white paper (NASA, Office of Space Access and Technology), available at http://www.hq.nasa.gov/office/codeq/trl/trl.pdf [accessed January 26, 2010].) However, there are important differences. NASA's nine–level TRL consists entirely of yes/no assessments. For example, Level 1 asks whether “Basic principles [have been] observed and reported.” The obvious correct answer is “yes.” In our experience, this type of assessment is too subjective to be effective in commercial enterprises. The technology readiness process presented here was developed to overcome the shortcomings of the yes/no evaluation and its reliance on subjective opinions. Instead, it focuses on quantitative measurement of failure modes, critical parameters, and latitude, none of which are directly addressed in the NASA TRL.

References

Clausing, D. P. 1994. Total Quality Development. New York: ASME Press.

Clausing, D. P. 2004. Operating window–An engineering measure for robustness. Technometrics 46(1): 25–29.

Clausing, D. P., and Fey, V. 2004. Effective Innovation. New York: ASME Press.

Holmes, M. F. 1993. Competing on delivery. Manufacturing Breakthrough 2(1): 29–34.

Holmes, M. F., and Campbell, R. B., Jr. 2004. Product development process: Three vectors of improvement. Research-Technology Management 47(4): 47–55.

Taguchi, G. 1993. On Robust Technology Development. New York: ASME Press.

Wheelwright, S. C., and Clark, K. B. 1992. Revolutionizing Product Development. New York: The Free Press.

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