Operating Model
Product Development, Transfer, Repeat Orders, and Supply Chain Execution
1. Core Principle
The organization is vertical. The work is horizontal.
Departments define accountability. Processes define how work moves across those departments. All product development, transfer, repeat, turnkey, and tolling workflows are inherently cross-functional.
2. Functional Structure Clarification (R&D vs Product Development)
Separation of Roles:
The operating model is divided into two coordinated contexts: Grow and Run.
Product Development operates within Grow, where cross-functional work is focused on defining new products, closing technical gaps, and preparing opportunities for execution.
PETS operates within Run, where cross-functional work is focused on execution readiness, repeatability, sustainment, and controlled change.
Both contexts perform R&D, but with different intent:
Grow R&D is focused on define;
Run R&D, through PETS, is focused on sustain.
PETS (Process Execution & Technical Support): PETS is the system owner of repeatable execution, including BOM control, master data, execution readiness, in-spec sustainment within approved boundaries (v1.x), and authorship of the Master Manufacturing Record (MMR) using approved technical inputs.
R&D (Technical Authority — Define)
- Responsible for formulation development
- Executes bench and pilot work for new or undefined products
- Responsible for technical feasibility and problem-solving
- Defines initial specifications (v0.x → v1.0)
- Defines the validated process and provides the technical inputs required for execution
- Owns material changes requiring revalidation (v2.0)
Product Development (Program / Commercial Execution)
- Responsible for project execution after qualification
- Owns customer interface post-qualification
- Coordinates the cross-functional workflow
- Owns timelines, scope alignment, and handoffs
- Drives transition into repeatable execution
PETS / Run R&D (Sustain)
- Authors the Master Manufacturing Record (MMR)
- Translates R&D-defined process inputs into execution-ready records, BOMs, and master data
- Maintains specifications and master data in execution
- Executes repeat and minor technical changes within v1.x boundaries
- Supports validated transfers and repeatable execution
- Maintains BOM readiness and execution controls
- Escalates out-of-bound changes to R&D
3. Order Qualification and Routing
Qualified Order Gate:
Entry into Product Development or Transfer workflows requires defined scope, a high-level estimate, and a confirmed technical path.
Commercial Ownership: Commercial owns opportunity intake, initial screening, and order classification.
Product Development Ownership: Product Development owns cross-functional execution after qualification.
| Order Type |
Entry Criteria |
| Product Development |
No existing validated product; new formulation or technical development required |
| Transfer – Validated |
Existing product, validated process, complete specifications (v1.0), and known materials/suppliers |
| Transfer – Requires Work |
Any gap in formulation, specifications, process, sourcing, or execution readiness |
| Repeat Order |
No change to specification, BOM, supplier, or process |
| Repeat Order w/ Changes |
Any proposed change to specification, BOM, supplier, or process |
Transfer – Validated (No Technical Work Required)
- Formulation fully defined
- Specifications complete and approved (v1.0)
- Process proven with no scale-up or performance uncertainty
- Materials known, sourceable, and within approved boundaries
- No unresolved quality, sourcing, or execution gaps
- PETS is responsible for classification; Quality is accountable for validation of criteria
- If any criterion fails, the work routes to Transfer – Requires Work
4. Cross-Functional Process Paths
Commercial Intake
→ Qualification
→ Routing
→ Define (R&D)
→ Validate (Quality)
→ Enable (Procurement)
→ Execute (Operations)
→ Sustain (PETS)
| Order Type |
Cross-Functional Flow |
| Product Development |
Commercial → Product Development → R&D → Quality → Procurement → Operations → PETS |
| Transfer – Validated |
Commercial → PETS → Quality → Procurement → Operations |
| Transfer – Requires Work |
Commercial → Product Development → R&D → Quality → Procurement → Operations → PETS |
| Repeat Order |
Commercial → PETS → Procurement → Operations |
| Repeat Order w/ Changes |
PETS (v1.x) or R&D (v2.0) → Quality → Procurement → Operations |
5. Specification Lifecycle (Control Backbone)
v0.x
Draft / development stage
v1.0
Locked specification for execution
v1.x
Minor controlled changes within PETS scope
v2.0
Material change requiring R&D redefinition and revalidation
Execution Rule:
No purchasing, production, or system transaction may occur without an approved specification version (v1.0+) and the corresponding released execution data.
6. Business Model Overlay
| Model |
Ownership / Process Implication |
| Turnkey |
Full internal control across formulation, sourcing, specifications, and manufacturing |
| Tolling |
Customer may own formulation, but internal validation, supplier approval, and execution controls still apply before manufacturing |
| Hybrid |
Shared ownership model; interface points and decision rights must be explicitly defined before execution |
7. Execution Control Rules (Non-Negotiable)
- All component purchases and receipts must be recorded in Wherefour for any production outcomes to be considered for release.
- No production without validated process, approved MMR, and released BOM / master data
- R&D defines the validated process and provides the appropriate technical inputs for execution
- PETS authors the MMR and prepares execution-ready records and master data
- Quality must review and sign off on the MMR before any production activity
- All changes must go through formal change control
- Supplier qualification is required for all new or modified materials
- Quality is the control authority for specifications, MMR approval, supplier approval, and change control
- No product may transition from lab to production without passing through PETS for MMR creation and Quality approval
8. Critical Cutovers
- Commercial → Product Development or PETS (correct classification)
- Product Development / R&D → Quality (specification approval and validation)
- R&D → PETS (validated process definition and technical inputs for MMR creation)
- PETS → Quality (MMR review and approval)
- Quality → Procurement (supplier approval and production eligibility)
- PETS → Procurement (released BOM / master data for execution)
- Procurement → Operations (material readiness)
- Operations → PETS (repeatable execution and sustainment)
9. Org Chart RACI Model (Accountability Across Functions)
This section maps the enterprise structure to a clear RACI (Responsible, Accountable, Consulted, Informed) model to reinforce that while processes are cross-functional, accountability remains defined.
| Process Area |
R (Responsible) |
A (Accountable) |
C (Consulted) |
I (Informed) |
| Formulation / Development |
R&D |
R&D |
Product Development, Quality |
Operations, PETS |
| Component Specifications |
R&D (define) / PETS (maintain in execution) |
Quality |
Procurement, Operations |
Product Development |
| Product Specifications |
Quality |
Quality |
R&D |
Product Development, Procurement, Operations |
| BOM & Master Data |
PETS |
PETS |
Operations, Procurement |
Finance |
| MMR Authoring |
PETS |
Quality |
R&D, Operations |
Product Development, Procurement |
| Supplier Qualification |
Quality |
Quality |
Procurement, Product Development |
Operations |
| Sourcing |
Procurement |
Procurement |
Quality, Product Development, PETS |
Operations, Finance |
| Purchasing |
Procurement |
Procurement |
Operations, Finance |
PETS |
| Production / Operations |
Operations |
Operations |
Quality, PETS |
Finance |
| Change Control |
Quality |
Quality |
R&D, Product Development, Procurement, PETS, Operations |
All Functions |
Specification Ownership by Lifecycle Stage
| Lifecycle Stage |
Spec Version |
Responsible (R) |
Accountable (A) |
Key Role |
| Product Development |
v0.x → v1.0 |
R&D |
Quality |
Define component requirements, formulation, and performance expectations |
| Transfer – Requires Work |
v0.x → v1.0 |
R&D |
Quality |
Close gaps and establish validated specifications and execution conditions |
| Transfer – Validated |
v1.0 |
PETS |
Quality |
Verify, adopt, and execute against existing approved specifications |
| Repeat Order |
v1.0 |
PETS |
Quality |
Maintain and execute against approved specifications without change |
| Repeat Order w/ Minor Changes |
v1.x |
PETS |
Quality |
Control approved in-boundary changes within execution limits |
| Repeat Order w/ Material Changes |
v2.0 |
R&D |
Quality |
Redefine and revalidate changes that affect formulation, performance, or process capability |
MMR Ownership by Lifecycle Stage
| Lifecycle Stage |
MMR Status |
Responsible (R) |
Accountable (A) |
Key Role |
| Product Development |
Not yet production-released |
R&D / PETS input planning |
Quality |
R&D defines process; PETS prepares for execution translation |
| Transfer – Requires Work |
Draft to approval |
PETS |
Quality |
Create MMR from validated technical inputs before production use |
| Transfer – Validated |
Approved |
PETS |
Quality |
Adopt and confirm execution-ready manufacturing record |
| Repeat Order |
Approved / maintained |
PETS |
Quality |
Maintain approved MMR for repeatable execution |
| Repeat Order w/ Minor Changes |
Revised within boundary |
PETS |
Quality |
Update execution record within approved change limits |
| Repeat Order w/ Material Changes |
Requires redefinition |
R&D inputs / PETS authors new record |
Quality |
R&D redefines process; PETS issues updated MMR for approval |
Component Specification Principle:
R&D defines what a component must do. PETS maintains approved specifications during execution. Quality owns and approves all component specifications as the control authority.
MMR Principle: R&D defines the validated process, PETS authors the MMR, and Quality must sign off before the record is released for production.
Interpretation: Processes cut across all functions, but accountability does not. Each step has a defined owner and executor to prevent ambiguity in cross-functional work.
10. Sourcing Model (Distributed Execution, Centralized Control)
Core Principle:
Sourcing is distributed in execution but centralized in control. R&D and PETS may identify and evaluate materials, but no material or supplier may be used for production without Procurement ownership and Quality approval.
A. Types of Sourcing
| Type |
Primary Owner |
Purpose |
Constraints |
| R&D Sourcing (Exploratory) |
R&D |
Identify and evaluate new materials for formulation and development |
Pre-approval not required; not production eligible |
| PETS Sourcing (Operational) |
PETS |
Support repeat orders, validated transfers, and alternates within approved boundaries |
Must remain within approved specification boundaries (v1.0 / v1.x) |
| Procurement Sourcing (Commercial) |
Procurement |
Select suppliers, negotiate terms, and own supplier relationships |
Required for all production materials |
B. Sourcing Decision Logic
| Scenario |
Who Can Source |
Constraint |
| New Product Development |
R&D |
Exploratory only; must transition to Procurement before production use |
| Transfer – Requires Work |
R&D |
Must transition to Procurement after validation |
| Transfer – Validated |
PETS |
Only within approved specifications and validated boundaries |
| Repeat Order |
PETS |
No new sourcing unless change is triggered |
| Repeat Order w/ Minor Changes |
PETS |
Must remain within approved specification boundaries |
| Repeat Order w/ Material Changes |
R&D |
Requires redefinition and revalidation |
| Production Supply |
Procurement |
Mandatory owner; requires Quality approval |
C. Control Rules
- No material or supplier is used in production without Procurement ownership
- All suppliers must be approved by Quality prior to use
- PETS may evaluate alternates only within approved specifications
- Any sourcing that impacts formulation, performance, specification, or process capability triggers R&D involvement
- Any material introduced outside Procurement invalidates the production pathway until requalified
Summary: This model separates organizational structure from operational execution. Order type determines the path, specifications control execution, and accountability remains fixed while cross-functional processes move the work. R&D defines the validated process, PETS authors the MMR and execution records, and Quality signs off before production release.