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Working Paper 05–01

III. The Innovation Process for Battery Technologies

Understanding the production decision requires first under-standing the innovation process. The introduction of a new battery technology is a complex, expensive, and time-consuming process. As with all technology developments, it starts with an idea that has potential for a significant business opportunity. This might be an improvement on a present product, such as a new material, or a more efficient manufacturing process. It could be an entirely new product or material, which is less expensive or higher in performance than existing products. It could also be a new process with potential to lower product costs and increase sales.

Figure 1 depicts the five stages in the product innovation process: 1) concept generation and validation, 2) research, 3) applied research, 4) development, and 5) advanced development or pilot plant operations. This process holds for any technology development effort, not just for batteries. This figure provides a brief description of each category and the type of activity that occurs during that phase. Figure 1 also includes an estimate of the timing, staffing requirements, materials usage, and the relative cost of each stage. For exam-ple, the cost of the Advanced Development stage in approximately 50 times the cost of the Concept Validation stage.

It is difficult to assign an absolute time span for each segment. Some concepts are abandoned when they fail to yield their initial promise, while some can be accelerated when experimental results confirm such promise. One constant is that each new concept has its own unique time to fruition. Concepts that show promise and yield early confirmation may be accelerated in order to reduce time to market. The chart reflects that, for the battery industry historically, the maxi-mum time from conception to advanced development and actual product introduction totals 19 years. This corresponds closely to the actual time line for introduction of the alkaline cell, which is today's standard for performance of primary cells. The alkaline cell discovery occurred after the end of World War II, in the late 1940s. It was based on substituting manganese dioxide for mercury oxide in the Ruben cell. An initial product introduction by Rayovac failed in the mid 1950s. Eveready and Duracell introduced the product as we know it today between 1968 and 1970.

Figure 1. Schematic of the Overall Battery R&D Process from Conception to Production Concept Generation Production

The chart also suggests that the process can be completed in as quickly as 10 years, as happened with the Li-ion technology. Work started in Japan in the early 1980s at Asahi Chemical Company, with the substitution of a carbon intercalation anode (based on the results of Basu, Besenhard, and Yazami) for the lithium metal anode coupled with lithium cobalt oxide for vanadium oxide (based on the Goodenough results for lithium intercalation into transition metal oxides). Sony announced the product in 1991 and made commercial cells available in late 1992. Thus, the Japanese companies moved extremely rapidly through the development and commercialization processes for Li-ion cells, as they have for many electronics innovations in the past decade. The U.S. companies anticipated the longer time frame. However, the new technology was quickly adopted for cellular telephones and notebook computers because of its smaller volume and significantly lighter weight than Ni-Cd and Ni-MH.

New product introduction in the battery business is a risky activity. Line extensions and new sizes in a product line generally take one to two years. The processes are slow and quite expensive. An estimate of the total cost of developing a new battery technology, from concept to production, is about $100 million. This includes a small pilot operation, but does not include the cost of the production facility.

The ability to fabricate prototype cells that closely approximate those that will be used during product introduction is essential throughout the R&D process. It takes considerable time and testing to determine the nature of the interaction between the various components of the cell. The stability of a given design might not be fully understood until years after its introduction.

Essential to commercial success is early input from the marketing group to determine features of the initial product line, such as the main application(s), size, rate of discharge, and ampere-hour capacity. Technology and marketing groups generally make the decisions to pursue new technologies. Companies conduct regular reviews of their technical pro-grams with sales and marketing groups at least once a year and sometimes quarterly. The production operations get involved during the advanced development stage of product introduction in order to assist in the transition to market introduction.

Although many R&D projects are undertaken, few are selected for commercialization. The commercialization decision occurs when a project transitions to applied research. George Heilmeier, Chairman Emeritus, Telcordia (formerly Bellcore) provided us with the paradigm in Table 1.

This catechism is a succinct but generally representative view of how one might rate the value of a technology project and its chances of success. Several vice presidents of sales and technology said that an R&D project must have definite potential to contribute significant sales and profits to be carried forward.

Table 1. "Catechism" for Screening "Winners"

  1. What are you trying to do? (No jargon, please.)
  2. How is it done today? What are the limitations of current practice?
  3. What is new in your approach, and why do you think it can succeed?
  4. Assuming success, what difference does it make to us and to our customers?
  5. What are the risks and what can we do about them?
  6. How long will it take? How much will it cost? When are the mid-term and final exams?

Source: George Heilmeier, Chairman Emeritus, Telcordia.

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Date created: July 21, 2005
Last updated: August 4, 2005

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