R&D During COVID-19 and Toll Processors’ Roles
Justin Klinger, Apr 23, 2020 12:13:03 PM
This is our third blog post directly related to challenges caused by the current pandemic.
Most recently, we covered supply chains, specifically how to effectively manage disruptions caused by the virus. Before that, we covered how toll processors can provide the services you need to continue serving the changing demands of your customers.
Now, let’s cover research and development (R&D).
A survey (conducted before the pandemic) by Chief Executive magazine found manufacturing companies’ median investment in R&D is only 1.25% of net total revenues, with only 1 in 10 manufacturers investing 8% or more of their net total revenues in R&D.1
Where did you fall before the virus? Where are you now? And how is COVID-19 affecting your ability to conduct R&D?
Did COVID-19 Put the Breaks on Innovation?
Social distancing guidelines have kept people apart; family members, schoolmates, and coworkers, including researchers in laboratories. These unique facilities, and their specialized equipment, often can’t be run remotely, so many have closed, shutting down R&D projects. Unless a project is essential (or can’t be suspended because it would be too costly or disruptive), many institutions have put it on hold
What effects has the pandemic had (or will soon have) on R&D?
- Costs to shut down R&D projects
- Costs to restart suspended projects
- Less availability of new R&D equipment
- Concern about future R&D projects due to financial instability
For the R&D projects that continue on (and aren’t focused on specific COVID-19 solutions), other challenges may surface: additional costs, drop in efficiency and/or quality, or the closure of product suppliers and service providers (more on this later).
COVID-19 has already adversely affected R&D overall and the pace of innovation that drives it. The extent of these effects may not be fully known for years.
However, those involved in R&D can overcome some challenges and create future opportunities by 1) learning lessons from recent responses to COVID-19 and 2) partnering with toll processors that can assume R&D responsibilities.
Apply Response Learnings to R&D
Consider how lessons from COVID-19 response can be applied to R&D:1. Immediate Action: Top-of-mind considerations should include challenges that immediately impact your customers, your processes, and your workforce. Attack these issues first.
2. Consider Pivoting: Identify your business-critical activities; the operations that need to happen. Do you have to pivot any processes to complete these?
R&D implications: Determine what are the biggest, most immediate challenges.
R&D implications: separate what needs to be done now, what can wait, and what needs to pivot.3. Plan Ahead: Create a comprehensive contingency plan; this situation will eventually improve, and you need to quickly and effectively return to “business as usual,” whatever that may look like.
R&D implications: plan now for the upcoming uptick in R&D needs.
4. Reimagine: Speaking of the future, you need to thrive in the new normal. Take time now to analyze any shifts you’ve had to make in manufacturing, and focus on reinventing processes to improve your production.
R&D implications: consider if your R&D will need to have a “new normal.”
Partner with Toll Processors to Continue R&D
Some companies’ vulnerabilities have been exposed by COVID-19, especially when it comes to disruptions to R&D projects. Some product suppliers and service providers have closed, either temporarily or permanently, further straining the supply chain.
How can toll processors help continue your current R&D activities? Well, some can’t.
Some toll processors are just “order takers.” They’re comfortable with their capabilities, and they may perform them quite well. Yet, they’ll shy away from any project with significant barriers.
On the other hand, Custom Processing Services welcomes a challenge. We’re problem-solvers, so your R&D needs are another opportunity for us to find solutions. Going from concept to commercialization is absolutely in our wheelhouse.
Bring us any trials that may have been delayed, or we’ll help initiate new ones to keep things moving. Not even sure how to start? We’re ready to help with that, too.
CPS can help you — now and into the future — with your R&D and toll processing needs. As the “Architects of What’s Possible,” we’ll discover what’s possible for you.
Connect with CPS with questions or concerns during these stressful, difficult days. Or simply give us a call at 610-779-7001.
1Chief Executive, What Are U.S. Manufacturers Really Spending On R&D? We Surveyed Them And Found Out, March 6, 2020