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Competitive Advantage through New Product Development
Lee Gordon and Derek Gunn, Unifi
Nancy L. Cassill, Ph.D., NC State University

The NCSU College of Textiles has established a relationship with many global companies. Many of these companies have been challenged to implement new business strategies to be globally competitive. Unifi, one of the world's leading processors of polyester and nylon, is an example of a company that has placed importance on the design and development of new products.

Through most of the 1990's, the global polyester situation allowed Unifi to increase its sales and profits year after year. With basic business fundamentals, such as exceptional technical service, quality control, manufacturing and customer service, Unifi expanded market share at the expense of domestic competition. Through manufacturing expertise - such as the latest technology, newest machinery, and on-line quality monitoring - and value-added processes - such as package dyeing, covering, twisting, and beaming - Unifi became one of the world's largest textile suppliers.

The end of the 1990's brought dramatic change to the global polyester markets. Increased domestic polyester supply and new foreign competition eroded the foundation of Unifi's success and lower volumes and falling prices eroded profitability. Fabric imports impinged on our direct customers' businesses, further pressuring profits.

By 1999, Unifi decided that to raise the level of performance to previous heights, the business needed a more solid foundation - independent of volatile market dynamics. A two-pronged strategy was developed. First, the company focused on "Service Innovation" with such initiatives as FyberservSM (www.fyberserv.com) and Lead-Time Technology, a software system designed to ensure that Unifi produces the right product at the right time.

The second and most important building block was "Product Innovation". This was initiated with the completion in 1999 of a new Concept Development Center in Yadkinville, NC. Totally dedicated to new concepts, the center has helped increase the number of value-added products brought to market over the last two years. Such products as our moisture management yarn SorbtekTM (www.sorbtek.com) and A.M.Y.TM, a recent anti-microbial yarn introduction, have allowed Unifi to penetrate the performance apparel industry and become less dependent of the import-sensitive fashion apparel business.

Concept Development Center

Since the Concept Development Center is a valuable resource and represents a significant investment in capital, real estate, equipment and manpower, Unifi decided that it was important to get the best return on that investment. Through Six Sigma methodologies (www.ge.com/sixsigma), Unifi developed a Concept Assessment Process (CAP) to ensure that the company worked to develop products that would answer current market needs while enhancing profitability.

CAP was established to best utilize Concept Development Center resources and to screen and prioritize concepts from the "Idea Warehouse", a collection of potential concepts generated from market research, customer/retailer meetings, employee suggestions and supplier offerings. As developed, the process utilizes the "stage gate" approach. Following is a short summary of each gate.

Gate 1 follows a Pre-assessment process. During this process, fundamental questions are asked such as:

- Is the concept new to the industry?
- Does it offer unique value to the customer?
- Is there a target market?
- Is there a target price point?
- Is there a top tier customer asking for it?
- Does it align with Unifi's core competencies?
- Is raw material readily available?

Each question is afforded a weight and a score for a simple yes/no answer. The weighted scores are summed and if the process attains a high enough score, the concept moves through the gate and on to the next process.

Gate 2 follows the detailed "Assessment & Prioritization" process. In this stage, man-hours are spent in the form of market research and initial process development. The results should provide information in the following areas:

- Potential revenue based on price/volume relationship
- Longevity
- Differential attributes
- Perceived downstream market value
- Fit with Unifi's core competencies
- Breadth of application
- Development cost
- Organizational difficulty
- Technical support
- Profitability
- Defensibility

Each category is given a rank on a scale of 1 to 10 based on either a proscribed scale or discrete forecast that is unique to each category. Once again, this rank is multiplied by the category's pre-determined weight to reach a Category Score. The scores are then summed to arrive at a Concept Score.

Assessed concepts can then be prioritized based on their Concept Scores. Those with the highest score should be developed first because they have the highest likelihood for success and offer the greatest potential return on investment for the company. A Competitive Analysis and Business Case for chosen concepts would then be developed and presented for executive review. This constitutes Gate 3.

Gate 4 follows the Product and Process Validation stage. During this stage, actual yarn trials would be conducted and refined leading to fabric and garment production through customer partners. Initial assessments regarding quality, costing, price/margin, as well as customer acceptance would then be subject to validation. Success would then lead to a Feasibility Recommendation prior to Gate 5.

The purpose of the feasibility study would be to organize the validation work, establish a time to market, project a final volume forecast, and establish a commercialization budget. Acceptance of this study at Gate 5 would lead to Commercialization where customer targets are finalized and the Communications Plan is drawn up. Salesmen and agents are educated through training and distribution of sales collateral, advertising is mapped out and the company PR firm is brought into the picture. Gate 6 is the final stage before Product Launch where all the efforts culminate to bring the product offerings to the industry. Subsequent Benchmarking and Follow-up ensure that lessons learned are incorporated into the next concept evaluation.

Proactive steps such as the focus on value-added products, the establishment of a Concept Development Center, and the formulation of a Concept Assessment Process have allowed Unifi to emerge from the recent economic downturn as a stronger, leaner, and fiscally healthier company. Unifi is ready to lead the textile upswing by providing new and innovative products on a global basis. With sales and manufacturing bases in the US, Europe and South America, new sales offices in Hong Kong, and an agent network that spans the globe, Unifi is in a position to remain a global textile leader for years to come. Unifi's mission - Provide innovative fibers and competitive solutions© - says it all.

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Last Site Revision:
February 9, 2006