What your kids can teach you about R&D trials
“Are we there yet?”
As the words hang in the air you grip the steering wheel a little tighter and say, “another 20 minutes”.
To your child the question is still unanswered: they don’t yet have a concept of time to an end point.
Does your R&D project include the concept of an end point?
One of the fundamental eligibility requirements for your R&D project is that it has an eligible purpose: an identifiable target you are aiming for in creating new knowledge or improving your product, process, service, material or device. Whether it is as sophisticated as a product functional specification, or as general as a 15% reduction in quality control defects, this technical objective is the touchstone we keep coming back to as part of determining eligibility.
When it comes to R&D trials, the end point is even more important: government expects that the activities you are doing are capable of some degree of measurement. For instance:
• Have you improved the situation?
• Have you made it worse?
• Have you gained productivity?
• Have you eliminated technical risk?
• Have you moved closer to attaining your technical objective?
All of these questions are an important part of determining not only the eligibility of the trial, but also the duration of the trial, the claimable expenditure and the overall benefit you will obtain from the R&D tax concession.
So, as you can see, a lot can depend on the end point.
How do I establish what the end point is?
Ideally, each of your R&D trials will have a specific objective. A clear proposition you intend to prove or disprove, supported by your investigations and a logical next step in your R&D process. Sometimes, however, such a “pure” process isn’t only difficult, it’s impossible. When you’re trialling in a production context, and all the variability of the system is in play, identifying the success or failure of a trial can mean lots of data analysis and work beyond the routine.
You may need time to observe just how the changed process operates, how the improvements made are bedded in, and how product quality and rejects trend. You may need to identify and address operator-induced error. You may need to put the plant or production at risk in order to identify the result.
In each case you will come back to your purpose, and the way in which the objective of the trial contributes to or is part of the objective of the project.
Sometimes trialling is necessary to overcome or address the technical risks in the project. Technical risks, of course, are the technical uncertainties involved in the work: exactly the sorts of things your R&D trials are attempting to establish. And where ideally the trial might quantify a result you can expect from future work, sometimes you are actually trialling “Will this work or not?”
And the consequences of the trial may be a career-maker.
(Or a career breaker)
But, what if we’re successful?
Failure in trials is often terrible commercially, but can be wonderful in terms of establishing eligibility of the R&D. What better way to establish high levels of technical risk than to point to the steaming mess of R&D on the factory floor. Or the mining equipment buried underground (these situations have happened to our clients). Fortunately, though, many trials are successful or at least don’t have such terrible consequences.
But, if that’s the case, how can I establish that my trial was eligible in the first place?
This is where many people come unstuck; and it actually applies to both successful and unsuccessful trials. You need to document the purpose of the trial, establish the trial took place, and outline the results of the trial.
How do I document purpose?
The key to demonstrating the purpose of the trial is being able to explain why particular trials were needed. This means technical personnel must explain the technical uncertainties that were faced, the reasons why a trial was needed in order to resolve those uncertainties, the reasons why a solution could not be found without the need to resort to trials, the aims of a particular trial or group of trials, and whether those aims were met.
For trials undertaken to remedy production problems, the continued existence of the problem is not enough to establish a trial. It may be that the trial was clearly unsuccessful, but in the absence of any clear solution, a decision has been made to continue operating according to the new parameters for a period of time. Once the answer is known, or in other words, once the objective of the trial has been tested and a result can be declared, the operations cease to be R&D unless a new trial is undertaken, (ie unless there is an ongoing process of feedback R&D with new parameters being tested as soon once the old ones are discarded).
How do I establish that the trial took place?
Being able to show evidence of the actual conduct of the trial is naturally key to being able to make a claim for any associated expenditure. In most operations, this should include the criteria for measuring success or failure of the trial, the measurements taken, the date on which success or failure was determined, etc. Contemporaneous records might also include:
• who was in control of the conduct of the trials (if technical personnel were in control, at what point was production handed over to normal operating staff and for what reasons?);
• how frequently operating parameters were adjusted;
• what additional measurements and tests were undertaken during the trials (as compared with ‘normal’ production operations);
• what parts of the plant or process were involved in the trial;
• what online plant documentation or process control logs are available;
• what happened to any products that resulted from the activities?
To give yourself the greatest chance of establishing the eligibility of the trial, each production trial should be documented contemporaneously. Documents should identify the purpose of the trial, the criteria for measuring success/failure, and the measurements taken.
How should I record the results of the trial?
Unfortunately, in many companies, the process of writing up detailed trial memoranda to form part of the technical library after trials are undertaken has gone the way of the horse and buggy. The need is to be lean, light, and nimble technically, so that conclusions are often drawn solely from operational data and measurements and without necessarily capturing lessons learned or the areas where further research or trials may be fruitful.Although there is some limited guidance that you need to be able to show the data on which you made a decision (even if that was only operating data and an analysis in a spreadsheet) that what you conclude is robust enough for the project and the scale of the work undertaken.
How do I make this a part of my process?
For future R&D projects involving production trials, developing a production trial authorisation form may be a good idea. Such a form would identify the R&D project number, the technical uncertainties to be addressed in the trial (ie the reason why the trial is required), what attempts have been made to resolve the uncertainties without trialling, the objective of the trial, and the estimated length of the trial. Regular trial reports, which comment on key R&D concession criteria, should also be produced. This can be included as an aspect of normal weekly/monthly reporting processes.
You need to be careful, though, that you take the time to at least summarise the results of your trial: fundamentally you need to be able to answer the question, “Are we there yet?”
