00:00:04:13 - 00:00:22:18

Centricity

Welcome to the Best Kept Secret video cast and podcast from Centricity. If you are a B2B service professional, use our five step process to go from the grind of chasing every sale to keeping your pipeline full with prospects knocking on your door to buy from you. We give you the freedom of time and a life outside of your business.

Each episode features an executive from a B2B services company sharing their provocative perspective on an opportunity that many of their clients are missing out on. It's how we teach our clients to get executive decision makers to buy without being salesy or spammy. Here's our host, the co-founder and CEO of Centricity, jokingly.

00:00:42:23 - 00:01:10:19

Jay Kingley

I'm Jay Kingley, co-founder and CEO of Centricity. Welcome to our show, where our guests share their provocative perspective on what their target market is missing out on. I'm happy to welcome to the show. Zha Dren Chung, founder of Cadence Process Consulting Georgia, and helps clients bring innovative technologies from the laboratory bench to the manufacturing floor. Sharon is based in Malden, Massachusetts.

Welcome to the show, Zha Dren.

00:01:13:11 - 00:01:16:02

Chia-chun Chung

Hi, Jay. Thanks for having me. It's great to be here.

00:01:16:08 - 00:01:53:11

Jay Kingley

Shahjahan you and I are soulmates, and if we were both Italian, which were not, we would call each other partizans because we are both by education. At least for me, three years of practice engineers. And I started my career as a chemical engineer working for DuPont. And I had the most amazing housing assignment because DuPont was taking something that they had done in the lab, and they were going to scale it up to a full size manufacturing facility and bring this product to market.

And I was there from the very beginning in terms of the engineering side, and it was fascinating to me as a 20 year old to see how this work to the real world. And it started by taking what the brilliant scientist had done in the laboratory and creating what we called a pilot plant, which was a miniature manufacturing facility.

Maybe it was somewhere between 1/100 and even 1/1000 of the ultimate scale. But it was no longer done the way that the scientists did everything in the lab. This was now the engineers coming in and saying, Let's do a little mock up of how we think we're going to have to commercialize this. And then we went from the pilot plant, and that maybe took six months from finalizing what we'd done in the lab to getting the first incarnation of the pilot pilot plant built and operational.

Although there were many, many iterations as we were playing around with how best to scale up what they had done in the lab. And then it took I want to say like two years once the pilot plant was operational, to translate that into how we would build and run a full scale manufacturing plant. And if you looked at the finished product and then you went back and looked at what they had done in the lab, you would see virtually nothing was the same.

Everything was different with the exception that, yes, what we produced in the manufacturing plant matched with the scientist had produced in the lab. But we did it so differently and this was a tremendous insight into how the world of manufacturing works. But I think it was also surprise to a lot of the scientists who would created this because of how long it took and how different the ultimate manufacturing plant looked compared to the lab.

And this is an area that you focus on that you have tremendous expertize. So share with us what is the challenge of going from that innovation in the lab to a process by which we can actually commercialize and make money off of those great scientific breakthroughs?

00:04:29:13 - 00:05:05:03

Chia-chun Chung

To to understand this problem, let me first set the stage right. So we have part tech or deep tech company founders. They have an innovative, promising technology that's grounded in science that shows a paradigm shifting performance with the potential to really change the world. And this technology is almost always conceived in a laboratory based on this. The scientist turned founders have pitch to investors, raise funds, but their processes are not yet repeatable, scalable or commercially viable.

So there's a lot of uncertainty around how to go from this breakthrough performance in the lab to the new normal for their product. And as you said, the process of scaling up takes many years. Right. And this during this process development, you could have many unexpected problems come up. And if you take too long to solve these problems, it could really put the company's trajectory in jeopardy.

00:05:31:12 - 00:05:44:18

Jay Kingley

So why is it that this is such a challenge? I mean, why can't you just say, well, if they did it that way in the lab, I just need to make everything bigger. And then what's the issue?

00:05:45:00 - 00:06:09:10

Chia-chun Chung

Well, there are three main factors. So the first one is that the fact that the unit economics are very different when you go from small batches to two large quantities, right? So in a in a lab setting, the costs associated with scrapping maybe 20% of your product may be negligible. But when you're making hundreds of thousands of units, that that 20% becomes significant.

So imagine if you're hosting a dinner party cooking for four people at the cost of, say, $5 a person and maybe one of your dishes doesn't turn out well. That's no big deal. So you've wasted a few dollars, but the stakes are suddenly a lot higher when you have to feed, cook, to feed a thousand people at the same cost.

That 20% yield hit becomes very significant in terms of dollar amount. So any errors, deviation from your target now becomes a lot more in absolute terms. Second, your physical process behaviors change when you increase the volume. So often, like you said, the manufacturer and processes that deliver the final product look nothing like how it was done in the lab.

So you do not simply multiply the inputs to and expect to scale the outputs. So for example, think about baking cookies going from one batch to two batches. You may double the ingredients, but you wouldn't double the baking temperature or the baking time. Knowing how the different parameters behave is fundamental to being able to design our manufacturing process well.

And lastly, the commercial products face a higher quality standard. So once your technology transitions from an academic setting to a commercial one, it now faces competition from the marketplace. Right. And consumers expect a certain level of performance set by the existing incumbent products. So this really sets a higher bar in terms of being able to consistently deliver a level of quality compared to perhaps in an R&D setting.

00:07:53:08 - 00:08:06:14

Jay Kingley

Given the fact that you have founders that have raised a lot of money that need to appropriately set expectations. What do you do solve these sets of issues?

00:08:07:06 - 00:08:33:12

Chia-chun Chung

I have three points. First one is to set realistic expectations. So developing and optimizing the manufacturing processes is not trivial. So don't underestimate the time and effort it will require. It could take many years, and often you just don't know what you don't know until your problems are showing up in your operation. So benchmark against other innovative tech companies.

And again, don't underestimate the effort. Second is to map out your processes and really short work to shorten your critical path to accelerate the speed of learning, to get a stable, predictable manufacturing process that delivers consistently quality products. You really need to first have a deep understanding of your processes, get very good at generating knowledge in short iterative cycles, and organize your process flow so that you can test your hypotheses and make conclusions within a day, within instead of waiting for weeks.

And lastly, leverage the existing tools to understand your processes. The the general challenge of developing and refining processes to improve on quality, yield and reduce costs is actually not unique to innovative technologies. Right. There are existing concepts, tools and methods that are practiced in the manufacturing industry. So. So there's no need to reinvent the wheel.

00:09:38:06 - 00:10:05:21

Jay Kingley

So if a company follows your advice in terms of what they need to do in order to go from the lab to full scale commercialization, and I compare that rigor and discipline that you talk to to companies that are perhaps less sophisticated in this process, don't quite understand how to set expectations, are a little bit more ad hoc in their processes.

So if I compare A to B, what are the benefits that you find companies get from following your recommendations?

00:10:14:18 - 00:10:48:06

Chia-chun Chung

The benefits are multifold. The number one benefit is being able to bring to market faster and start creating real impact and getting to getting closer to profitability sooner. So by improving their processes, the companies can lower their cost of goods sold leading to higher profit margin. And all of this will help the company survive. At a previous employer, I've seen this myself firsthand by learning and applying Lean Manufacturing Concepts and Six Sigma methodology.

The company reduces labor costs by about 50% in two years. And when you add up all the improvements made in total $4 million saved, and a return on their investment exceeding 4,000% from the 17 days of team training conducted. And in addition, there's the benefit of improved product reliability coming from a stable process by strategically leveraging these tools and concepts.

Myself, I led a team to reduce manufacturing cycle time by 45% within two weeks so that the team who run the process from start to finish analyze the results and plan for the next phase run all within 12 hours. So within 18 months we made forward visions to a fiber demonstrator product and resulting in over 100 fold improvement in reliability.

00:11:45:15 - 00:12:14:05

Jay Kingley

Another, I think, benefit that I want to just throw on the table comes from the financial side of the house. So when you take in money from outside investors, they have an expectation of a compound return on their money. Let's just take what I think is probably a target that's very much on the low side. But I think it illustrate what I'm talking about, which is a 20% expected return.

Now, in the types of businesses that you're talking about, we have a timeframe that could be years from taking in that first money to start the commercialization process all the way through, getting out to the market, earning first dollar revenues, and even more importantly, first dollar of profit. So let's say with that 20%, that means if my starting values 100, I have to be worth 120 in after one year.

And yet I am still working on going to market. I'm not even out there yet. And the next year it's 144 because of the compound impact and so on and so on. So if I following your methodology in your approach, we can shorten even a little bit the time to market, the time to first revenue and first dollar profit.

The impact on that return then I'm going to have to give my investors just becomes a lot less. And that takes an enormous amount of stress out of the system. Which brings me to the next thing I want to hear your point of view on. We've talked about the benefits of the company, but what about that founder, that brilliant scientist who's come up with this innovative idea that's game changing and now they have got to watch it take potentially years before they can get this into the market, dealing with all sorts of issues that they never had to deal with when they were working in the lab.

How does following your approach impact that?

00:13:50:17 - 00:14:25:17

Chia-chun Chung

So I've gotten to know several founders over the years and part tech innovators have something in common. They all have a very strong vision. They really believe in their technology and they're deeply dedicated to making a positive impact with their innovation. Founders have a lot to worry about, right? So this uncertainty is definitely weighing on their minds. But being able to bring a high quality product to market sooner will maximize their chance of turning that technical promise into a reality and actually change the world for the better.

And that, I believe, is every innovative street be able to leave a lasting impact and becoming a leader in their field.

00:14:34:00 - 00:14:55:12

Jay Kingley

You have made, I think, a strong case for adopting your approach to this critical issue. If I am that founder, CEO, that scientist. I'm saying I love what I'm hearing. So how do I take your ideas and implement them into my organization?

00:14:55:14 - 00:15:20:12

Chia-chun Chung

So I have three main points. Number one is to apply lenience, Six Sigma concepts and tools in your process development. So these are proven approaches and frameworks that already exist. So the leader should leverage them strategically and use the right tools at the right time. Number two is to always make process related decisions based on experimental data, not just theories.

As much as we all want things to happen according to theory, is going to our prediction. They often don't. So look at the data objectively and use it to derive your next steps. Thirdly, coach your team members to the actual problem solvers. The reality is that process improvement work will never truly be finished. It's not like a 12. every day is a new opportunity for Murphy's Law to to rear its head.

Really, the best defense against that is to mentor your team and develop problem solving capabilities among everybody who's involved so they can be vigilant and really pitch in at the front line level to keep that process stable.

00:16:04:12 - 00:16:32:06

Jay Kingley

Being exposed to the business and popular media and press. There's so much emphasis on software startups. Of course, even in the software business, they have their own issues of how they scale and become commercially robust. But I think when you're dealing with manufacturing and hard tech, you have an entirely different set of issues, which is someone who's been on both sides of a divide.

I would say that that these issues that you're talking about are much more challenging, much more difficult, take much longer to work through. So you have provided as, I think, a fantastic roadmap for how to think about this issue of commercialization and scaling. But we're going to take a quick break. And when we come back, we're going to learn a bit more about Shadrack.

00:17:00:05 - 00:17:22:22

Centricity

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So email time@centricityB2B.com to schedule an 18 minute call to learn more.

00:17:58:14 - 00:18:17:19

Jay Kingley

Welcome back. We're talking to George and John, founder of Cadence Process Consulting. Let's find out a bit more about Chodron as you look at your firm in the work that you do. What are the pain points that you solve for your clients? Why do they need you to get rid of the pain?

00:18:17:23 - 00:18:50:00

Chia-chun Chung

Well, I work with hard tech startup leaders to help their companies grow and thrive. So together we assess their processes at a technical Hands-On level through a manufacturing engineer. Once we highlight the process, symptoms or failure, most identify the root causes and implement improvements to refine and optimize their process with the ultimate goal of achieving their targets of quality, delivery, cost, safety and morale.

So I help them build a foundation to methodically solve problems and capture process knowledge.

00:18:57:00 - 00:19:23:16

Jay Kingley

I can assure our audience from my own personal experience that what G-Dragon does takes enormous expertize skill, talent and experience. And when you're in that world, of course, there is a big distribution of people that are really great at it, to people that aren't so good. So Chödrön, what makes you great at what you do?

00:19:23:21 - 00:19:49:06

Chia-chun Chung

All the things I'm advocating for, I have done myself. So I understand the technical and operational challenges related to scaling up new technologies. So I have firsthand experience of what works and what doesn't at a company level. I've spent over 12 years in start up environments and have been involved in scaling to novel technologies that came out of MIT.

The second of which I led. I have experience in different manufacturing settings and have a very clear picture of what the ideal state looks like in terms of process development, continuous improvement and manufacturing. Also, the many years of leading teams with very diverse backgrounds and in problem solving have also taught me the importance of building a human driven culture.

And that's one aspect that often gets overlooked when you focus too much on technical.

00:20:18:09 - 00:20:46:22

Jay Kingley

I encourage everybody to check this out on LinkedIn and look at her experience in her education. It is all, I think, very, very impressive and supports the fact that she is outstanding at what it is that she does. But I have a slightly different question for you, which is tell us what happened in your life that would most explain why you do what you do today.

00:20:47:03 - 00:21:19:15

Chia-chun Chung

So in my twenties, I started volunteering for a grassroots advocacy group, and obviously trying to affect policy making is very different from building and improving the production line. But over the years, I've seen that in addition to working hard, there is tremendous value in working smart. So being able to bring the right talent and expertize together, having the right information to the right people at the right time can have great impact in effecting systemic change.

And that is really what motivated me to strike out on my own and start a consulting business, because both professionally and personally, I want to be that catalyst for positive change and help companies see and solve real world problems.

00:21:36:00 - 00:21:55:07

Jay Kingley

For all our hard tech manufacturing scientist based CEOs. John, what you talked about is both important and urgent, so I'm sure they're going to be folks that want to reach out to you to continue the conversation. How should they get in contact with you.

00:21:55:12 - 00:22:12:08

Chia-chun Chung

So they can email me and Jordyn and cadence passes dot com. They can also look me up on LinkedIn I'm at CC call. My phone number is 7819576910. And also there's a contact form on my website cadence process.

00:22:12:21 - 00:22:38:17

Jay Kingley

And I will put all that in the show notes and as an insert into the video so you will get the exact proper way to spell everything out. So fantastic stuff as we talked about, this is such a critical area, but it's not an easy area that you have got to nail. You bring something that is not common to the table.

And as such, you've been a tremendous guest for us. You know, we all have competition. I have. Believe it or not, I have competition on the show area. Other people do these shows for a B2B audience. And you're a tough guest to get. And I know that if I were them, I'd be really happy. I have this big smile on my face about now saying We did it.

Yes, what an amazing show. This is going to go in the box as one of our best and they would be looking to close this and get out a.s.a.p while they get an out is good, but I don't play that game. I am always the number one advocate for our listeners and I know they tell me, Jay, do you need to ring all the value possible out of them?

So I willingly accept that challenge. I'm looking at you. I think you can do even more for our listeners. How about you offer them a little gift for listening to what you had to say today?

00:23:48:23 - 00:24:16:08

Chia-chun Chung

Well, Jake, what a tremendous opportunity to connect with your listeners. And as a thank you, happy to offer a 30 minute consultation for for the audience of the Best Kept Secrets show. So if you email me or message me on LinkedIn and mentioned the best kept secret show, we will I will have a 30 minute free consultation to learn my business and see how I can be helpful.

00:24:16:13 - 00:24:46:19

Jay Kingley

I will just say to my listeners, anyone who's in hard tech manufacturing that is going down this journey of commercialization, you must take advantage of Zuckerman's opportunity because this is really the make it or break it for the commercial side of your business. I want to thank you. You have been a fabulous guest to my audience. Let's continue to crush it until next time.