Involving+potential+customers+in+the+R&D+process.


 * Module 4**

A very nice reading on this topic. http://www.calt.insead.fr/papers/customers-innovators.pdf
 * Involving potential customers in the R&D process**.

Two main points are:

//1.When involving the customers in R&D process makes sense (from the paper)//

1. Your market segments are shrinking, and customers are increasingly asking for customized products. As you try to respond to those demands, your costs increase, and it is difficult to pass those costs on to customers. 2. You and your customers need many iterations before you find a solution. Some customers complain that you have gotten the product wrong or that you are responding too slowly. You are tempted to restrict the degree to which your products can be customized, and your smaller customers must make do with standard products or find a better solution elsewhere. As a result, customer loyalty starts to erode. 3. You or your competitors use high-quality computer-based simulation and rapid-prototyping tools internally to develop new products. You also have computer-adjustable production processes that can manufacture custom products. (These technologies could form the foundation of a tool kit that customers could use to develop their own designs.)

//2.How to turn the customer into the innovators (from the paper)//

1. Develop a user-friendly tool kit for customers. • The tool kit must enable customers to run repeated trial-and-error experiments and tests rapidly and efficiently. • The technology should let customers work in a familiar design language, making it cheaper for customers to adopt your tool kit. • The tool kit should include a library of standard design modules so customers can create complex custom designs rapidly. • The technology should be adapted to your production processes so that customer designs can be sent directly to your manufacturing operations without extensive tailoring. 2. Increase the flexibility of your production processes. Your manufacturing operations should be retooled for fast, lowcost production of specialized designs developed by customers. 3. Carefully select the first customers to use the tool kit. The best prospects are customers that have a strong need for developing custom products quickly and frequently, have skilled engineers on staff, and have little experience with traditional customization services. These customers will likely stick with you when you are working out the system’s bugs. 4. Evolve your tool kit continually and rapidly to satisfy your leading-edge customers. Customers at the forefront of technology will always push for improvements in your tool kit. Investments in such advancements will likely pay off, because many of your customers will need tomorrow what leading-edge customers desire today. 5. Adapt your business practices accordingly. • Outsourcing product development to customers will require you to revamp your business models to profit from the shift. The change might, for instance, make it economically feasible for you to work with smaller, low-volume customers. • Tool kits will fundamentally change your relationship with customers. Intense person-to-person contact during product development will, for example, be replaced by computer-to-computer interactions. Prepare for these changes by implementing incentives to reduce resistance from your employees.

Further in this context, Apple business model might be also interesting for consideration. It is based on two pillars: customer orientation and reverse engineering. The following link offers nice overview of the main principles of Apple business model. http://blogs.hbr.org/cs/2011/08/the_hidden_in_plain_sight_lega.html

A nice example of involving your customers' in your R&D program; or viewed from customers' perspective investing in your own supply chain (see the links bellow) http://www.eetimes.com/electronics-news/4389932/ASML-in-talks-with-Samsung-TSMC-on-equity http://www.semiwiki.com/forum/content/1458-intel-opens-new-front-asml.html