The bigger picture

When working on cross-functional teams, R&D members can see their work in a whole new context

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Most decisions to either proceed with a project or kill it are financial decisions.  The purchase price and product cost, as well as the required ingredients, specifications and equipment, all affect the direction, viability and profitability of the project. The better versed he is in finance, the better the R&D member can proactively identify and resolve related issues and move a project forward. A better grasp of financials also can help R&D determine projects or project paths that aren't financially successful and advocate options or projects that are.


Specifically, R&D professionals must be able to read and build product costing models (including ingredient and material costs; supply chain costs; advertising & merchandising costs; overheads, etc.), understand the impact of capital costs on project viability, and work with the concepts and mathematics of wholesale and retail pricing, wholesale and retail margins and profit contribution.


Quality & supply chain: All products developed need to be successfully integrated into a steady-state production operation. The more an R&D team understands how plants operate , the ways they measure performance and the practical constraints they face -- the more successful the implementation will be. The also team needs to understand these issues as they apply to procurement/purchasing and distribution/logistics.


Quality systems are designed to translate consumer and customer desire into a product proposition that is cost-effective, reliable and reproducible. R&D must understand the   needs of the supply chain and be skilled in developing and operating quality systems to successfully translate product design criteria to ongoing production.


Safety, regulatory & legal: Many aspects of safety, regulatory and legal issues , including microbiology, nutrition, chemical and physical hazards and labeling -- are part and parcel of R&D's technical knowledge. These and similar issues are largely driven by the U.S. Department of Agriculture (USDA), Food and Drug Administration (FDA),  Federal Trade Commission (FTC) and similar regulatory bodies.  However, many of these issues also relate to company practices, preferences, policies and risk profiles.


R&D needs to understand aspects of safety, regulatory and legal considerations that are driven by company-specific policies and, when appropriate, influence internal policy change, driving greater or lesser risks based on their informed perspective. This will help ensure the delivery of a product that is safe, legal and profitable.


Sales and customer:  Customer needs and requirements must be met for a business proposition to be successful. Because Sales is the primary point of contact for customer organizations (wholesalers, retailers, food service organizations, etc.), it obviously possesses a great deal of knowledge about customers. For effective development of new or improved product propositions, R&D must understand the needs and requirements of customers along with the sales activities required to keep the customer satisfied.   Additionally, R&D should understand the operating /supply chain practices of various customers and how they impact product and package performance.

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