In business, entrepreneurs are often told to develop a thick skin—the ability to not be deterred by criticism. Learning from feedback and maintaining the drive and tenacity that brings good ideas to fruition is an essential skill for businesses to survive, but in Fredericton, New Brunswick, Smart Skin Technologies (Smart Skin) is proving that a bit of “thin skin” is also good for business.
Smart Skin has developed and commercialized a pressure-sensitive “thin skin” sensor technology to help top international beverage brands identify issues on their bottling and canning production lines, helping them minimize breakage, improve efficiency, and reduce downtime.
Now, the technology has been adopted by some of the world’s largest pharmaceutical companies manufacturing and packaging vaccines against a host of viruses including SARS-CoV-2. While much of the COVID-19 pandemic focus has been on the efficacy of new vaccine candidates, Smart Skin’s technology is offering a solution to a critical step of the challenge—making sure that every drop that can be produced gets to market.
The journey to becoming an essential service wasn’t straightforward and didn’t happen overnight. This is a story of vision, commitment, a lot of R&D, and even a little luck, paired with careful guidance and an evolution of support from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP).
Smart Skin first turned to NRC IRAP for support in 2009. Developed by Chief Technology Officer Kumaran Thillainadarajah, Smart Skin’s technology was originally intended to be used as a prosthetic skin that could go over a limb, giving people a sense of touch; however the company was still trying to develop its technology on a shoestring budget.
“As a platform technology, it was not feasible back then to raise all the money we needed from private investors alone,” Kumaran recalls. “We needed to find other sources that would invest in pioneering new research and development in Canada. So we turned to NRC IRAP.”
That was the beginning of a long-standing relationship with the company—one that would stretch over more than 10 years, with NRC IRAP providing a wide variety of advisory services while supporting 9 research and development projects. Each success contributed to Smart Skin’s growth: expanding from 4 employees in 2011 to 30 employees today, doubling the company's revenue annually for 3 years, and identifying prospects for substantial growth in its future.
Jean Desrosiers, the NRC IRAP industrial technology advisor (ITA) working with Smart Skin since 2015, describes some of the firm’s earlier projects. “In the beginning, the first few projects we supported all centered on prosthetic-skin technology. This included providing advice and funding to help the company build its workforce and hire young professionals to assist in its R&D. Over time, every project was a building block to the next step in the company’s evolution.”
Kumaran agrees. “As a start-up, you’re always innovating and trying to get new tech into the market as quickly as possible. NRC IRAP took that into consideration in the earlier days and have been a great source of support in our development over the years. Meanwhile, it has been easier to attract funding from other sources given that NRC IRAP support helps boost investor confidence.”
Game-changing technology in a new market
In 2015, Smart Skin made a major business transition when it discovered a new market for its technology: the bottling and packaging industry.
“We realized there was a huge opportunity to help customers know exactly where they were breaking or damaging their products on the packaging line,” says Kumaran.
To achieve this market shift, Smart Skin again turned to NRC IRAP for their support in developing its new bottling technology.
The company began using their skin technology to coat a “mock bottle”—also known as a drone—that could be placed on conveyer belts at bottling plants. Equipped with thousands of independent pressure sensors on the surface, the drone became a diagnostic tool for measuring and identifying pressure points and weak spots on the production line, offering a unique solution for bottlers to improve the efficiency of their operations and minimize product breakage in the production process.
This project was a resounding success for Smart Skin, which saw the company more than double its revenue in a year. Smart Skin also won several prestigious awards from customers, including consecutive Supplier of the Year Awards from Coca Cola.
Until a few years ago, Smart Skin would build products as customers needed them.
“When customers come to us because a packaging line has gone down, that is an immediate issue that needs fixing—but it could take us months to work on a solution,” says Kumaran.
However, with time and experience, the company built a solid understanding of the myriad issues affecting packaging lines and their customers’ requirements. Coupled with advisory and financial assistance from NRC IRAP, Smart Skin was able to invest aggressively in R&D and respond more quickly to customer demand.
“NRC IRAP really helped us flesh out our portfolio, grow our business, have products on the shelf when customers needed them, and address many more issues than we could have without its support.”
Another NRC IRAP project also allowed the company to work on improving its sensor technology and add new data collection points to better the customer’s ability to run the Smart Skin drone through more specialized applications in its production line. Smart Skin continues to introduce new innovations to its product, ensuring it can not only diagnose but also withstand the conditions of specialty equipment.
Discovering SaaS as a new revenue source
After seeing their success, it soon became obvious that there were new opportunities to increase sales.
Originally, Smart Skin’s drone came with software that could easily be stored and accessed at the client site. This made it easy for customers to implement or share the product, but challenging for Smart Skin to support as it required more in-person visits for technical assistance. The company was seeing quick adoption of their product, but a growing need for it to be reconfigured to meet customer scale.
This challenge prompted a meeting between Smart Skin and 4 NRC IRAP ITAs who brainstormed ways to ensure the company would not only reap the full commercial benefits of their technology, but also allow customers to better adopt processes tailored to their specific products and packaging lines. The meeting resulted in a major shift in the company’s operations as they adopted a new software-as-a-service (SaaS) strategy with a cloud service. Not only did this allow the company to significantly improve their revenue, it also improved product reliability and overall customer satisfaction.
Meeting new market needs
In fall 2018, Smart Skin embarked on a project in yet another new market, marking another major milestone in the company’s evolution. Having received close to $3 million in funding from NRC IRAP and a large private investment from several firms including multinational manufacturer Schott Glass, Smart Skin is now being adopted by several of the world’s largest pharmaceutical companies.
In the span of only 24 months, the company went from having zero to 15 large pharmaceutical clients—a remarkable feat and rapid industry adoption that speaks to the versatility of Smart Skin’s technology.
“The pharmaceutical glass industry has always erred on the side of caution,” says Jean. “There’s a lot of potential for container breakage and waste of valuable product as a result. The industry goes to great pains to do quality control, but they realized they could optimize their efficiency by having better processes in place to detect issues that could impact product quality.”
The R&D project is focussing on enhancing Smart Skin’s technology to handle smaller and lighter containers than ever before.
“Basically, we’ve taken the same technology we used for the bottling industry and put it into a tiny vial, ampoule or syringe that is the size of your pinky finger,” says Kumaran. “We weren’t sure we could bring the functionality down to that size, and it was incredibly challenging, but we were able to develop sensors we didn’t ever think were possible.”
“It was a big hinge moment when Smart Skin was approached by the pharmaceutical glass sector,” says Jean. “Back when this project started it was one of the largest projects ever supported by NRC IRAP, and it’s a really exciting endeavour with the potential to change Smart Skin’s business. It’s a testament to how far the firm has come since the beginning and how a progression of support and guidance from NRC IRAP can help firms pursue new opportunities as they arise and grow in ways they never dreamed possible."
Kumaran agrees. “Our growth over the last decade has been closely tied to our ability to develop new technology that responds to problems others in the market are not tackling yet. Put simply, we would not have gotten to this point without the support of NRC IRAP.”
Canadian solutions to global problems
Smart Skin has already started receiving accolades for its application in the pharmaceutical industry. In 2020, the firm was recognized at the Paris PharmaPack Awards as the Best Innovation in Machinery.
2021 will likely be the largest vaccination rollout the world has ever seen, and Smart Skin shows how Canada and Canadians are responding to this global pandemic, using their innovative ideas and technologies to protect our health and save lives.
As Smart Skin’s customers have adapted to COVID-19, the firm has adapted with them, becoming an essential service and keeping their plants running. With the success of so many vaccines, the focus has already shifted to scaling up production and ensuring that every drop of a vaccine reaches people safely and reliably.