Malinin PDMA Presentation

www.GEN3.com

The method for transforming a business goal into a set of engineering problems

PDMA Research Forum

Sept. 29, 2007

Len Malinin

© 2007 GEN3 Partners, Inc. Confidential2 2

How can we increase our revenues from

product X or profits by %%? What

product innovations will help me to achieve that?

Initial Situation


MPV?An attribute of a

product that represents a critical element of its functionality and that bears heavily on the

customer’s purchasing decision

Main Parameters of Value (MPVs)


“You’re telling me that all the Hospital Purchasing Organizations careabout is the Cost Components? And that the MPV set that’s relevant to me, your patient, is not relevant for their purchase decision!? I’m suddenly feeling really nauseous…”

Main Parameters of Value (MPVs)


Steps Required to Translate Business Needs into Product Innovation Problems (for industrial products)

1. Identify stakeholders in the value

chain and the primary

stakeholder

5.2. Determine distance

to physical/technological

limits for the Variables

2. Identify MPVs of a product for the primary and other

stakeholders

3. Select a set of MPVs

for improvement

4. Determine underlying physical variables

responsible for selected

MPVs

5.1. Determine Coefficients of

Sensitivity for the Underlying Variables

6. Formulate and prioritize

Key Problems for Underlying Variables

5. Select the underlying

variables that yield

maximum MPV

improvement

8. Back propagate the

solution to estimate

business impact and success

criteria

7. Solve the selected problems


The success criteria of an innovation project are often determined by the MPVs of the primary stakeholder (the nearest customer in the value chain), and not by those of the end user. Before determining the MPVs, we need to ask ourselves:

• To whom do we sell the new product?

• What is the value chain for the product?



stakeholder

1. Identify stakeholders in the value chain and the primary stakeholder


There are several sets of MPVs, for different stakeholders within the value chain• For instance, with heavy trucks:

─ MPVs of Structural Component Manufacturer

─ OEMs’ MPVs (Mercedes-Benz, Paccar, Volvo, etc.)

─ Fleets’ MPVs (WalMart, UPS, etc.)

─ End users’ MPVs (Owner/Operator, Contractor, or Fleet-employed truck drivers)

Fleet MPV: Fuel Cost

1. Identify stakeholders in the value chain and the primary stakeholder


Next, we analyze how the Purchase Decision Making is

affected by the MPVs. We aim to bring the MPVs to the

common denominator, e.g., express them as cost components, because

purchase decision-making is driven by cost structure.

.

2. Identify MPVs of a product for the primary and other stakeholders


2. Identify MPVs of a product for the primary and other stakeholders

Driver Retention Cost

Maintenance Cost

Fuel Cost

Repair Cost

Legal Compliance Cost

Fleet MPVs

Engine Losses

Aerodynamic Losses

Rolling Friction Losses

Sub MPVsFleets

OEMs

Metal company

End Users

Stakeholders

Example: Class 8 Truck

MPVs of a truck for a fleet include operation cost components, which are an important factor in the decision making process. To derive the fleets’ set of MPVs, we ignore the manufacturing process, which determines the OEMs’ set of MPVs



3. Select a set of MPVs for improvement...


Maintenance Cost

Fuel Cost

Repair Cost


Fleet MPVs

Engine Losses

Aerodynamic Losses


Sub MPVsFleets

OEMs

Metal company

End Users

Stakeholders …based on the client’s core competencies, problem scale, restrictions (can be iterative process).




Maintenance Cost

Fuel Cost

Repair Cost


Fleet MPVs

Engine Losses

Aerodynamic Losses


Sub MPVs

Speed

Air viscosity

Surface energy

Yaw angle

Air temperature

Air density

Drag coefficient (Cd)

Physical variables

Fleets

OEMs

Metal company

End Users

Stakeholders

4. Determine underlying physical variables responsible for selected MPVs

Use Functional Model or Cause-Effect Chain Approach


For instance: MPV = fuel consumption, Cd=drag coefficient

5. Select the underlying variables for improvement

Three possible methods for determining Coefficients of Sensitivity:

─ 1. Through tested analytical models

─ 2. From known references

─ 3. Through interviews and “fuzzy” references

1. Through tested analytical models

Express the right-hand part via Cd

5.1. Determine Coefficients of Sensitivity of MPVs with respect to the Underlying Variables


2. From known references




3. Through interviews and “fuzzy” references

Driver Satisfaction: May increase driver retention and recruiting; reduce noise levels >= 10%

Maintenance Cost: Value of uptime = $500/day/truck in revenueCorrosion reduction could add 1-2 years on 10-year life for private fleet — 40 hrs/year for new truck; 120 hrs/year for 5-year old truck

Residual Value: Less corrosion could increase residualNicer cab and “chrome” can increase residual up to 10% in 5 th year of life

Increased Payload: 1% weight reduction = 1% more cargo for weight-sensitive hauls, yielding 1% less miles that need to be driven (cost = $1.33/mile x 122,000/tractor/yr)

Fuel Economy: >1% increase in fuel economy worth paying for; avg 5.7 MPG




MPV Sub-MPVs 1 Sub-MPVs 2 Physical variables

FuelEconomy

Aerodynamic losses • Drag coefficient (Cd)• Air density• Air viscosity• Speed• Yaw angle• Surface energy• Air temperature

Engine performance • Combustion temperature• Density of air-fuel mixture• Pattern of fuel spray• Air temperature

Rolling friction • Road roughness• Profile of the tire tread • Mechanical (viscous-elastic) parameters of the tire• Coefficient of linear expansion• Area of the tire-road contact• Load per axle • Friction coefficient in the bearings

Cd

0.19

0.6

0.7

0.35

5.2. Determine distance to physical/technological limits for the Variables

5.2. The greater the distance to the physical limit, the greater the parameter improvement that can

be achieved

5.2. The greater the distance to the physical limit, the greater the parameter improvement that can

be achieved



Example 1

Baseline: V1 = 60 mph, Cd = 0.6.

For the Cd = 0.6 curve, 10% change in speed 12% change in fuel consumption.

∆V1 = 10% ∆MPV = 12.1%.

Z11 = ∆MPV / ∆V1 = 1.21.

5.1. Determine Coefficients of Sensitivity - Examples

MPV1 = Fuel consumptionV1 = Truck speed

1

111

V

MPVZ


Baseline: V1 = 60 mph, Cd = 0.6.

At V1 = 60 mph, 10% change in aerodynamic drag 6% change in fuel consumption.

∆V2 = 10%; ∆MPV = 6%.

Z12 = ∆MPV / ∆V2 = 0.6.

Example 2

MPV1 = Fuel consumptionV2 = Drag coefficient

2

112

V

MPVZ



Variation of drag coefficient with gap length between tractor and trailer (wind tunnel model)

∆MPV / ∆V2 = 0.6 (Example 2).

At baseline dimensionless gap = 0.2, ∆V3 = 20% ∆V2 = = 14.8%,

∆V2 / ∆V3 = 0.74,

Z13 = ∆MPV / ∆V3 = 0.6 * 0.74 = 0.42.

MPV1 = Fuel consumptionV2 = Aerodynamic dragV3 = Tractor-trailer gap

32

113

2

V

V

V

MPVZ

Example 3



v1 v2 v3 … vm

MPV1 z11 z12 z13 z1m



…

MPVn zn1 zn2 zn3 znm

v3 close to its limits

MPV3 not selected

for improvementzij are low

Selected for Solutions

5. Select the underlying variables that yield maximum MPV improvement


• Formulate the set of problems: How to change a physical parameter

vi in a way that improves MPVj

• Prioritize the problems, based on the client’s core competencies, match with the client’s strategic directions, development time, problem scale, restrictions

6. Formulate and prioritize Key Problems for Underlying Variables


6. Formulate and prioritize Key Problems for Underlying Variables

• Many aerodynamic devices of a truck are useful at the cruising speed, while during docking or maneuvering they present a hurdle for the driver.

• The devices are needed at the cruising speed and not needed at other times.

• Problem Statement 1: Design dynamic (extendable, folding) devices that can be deployed on demand.

• Problem Statement 2: Use resources of the environment (“the super-system”) to generate the required aerodynamic features only at a high speed.

How to change a physical parameter vi in a way that improves MPVj

Example: How to reduce drag coefficient and reduce fuel cost



Gap with VGs Baseline

Example. Vortex generators can be interpreted as “virtual cab extenders” which streamline the airflow around the tractor-trailer gap at a high speed.

Problem Statement 2: Use the incoming airflow to generate the required aerodynamic features only at a high speed.


8. Back propagate the solution to estimate business impact and success criteria

Changing adhesive properties of the surface repels dust and reduces MPV Maintenance Cost.

Dust repelling by positively charged mirror

Dust repelling by positively charged mirror

Reduced frequency of cleaningReduced frequency of cleaning

Time saved per maintenance cycle Time saved per maintenance cycle

Labor saved per maintenance cycleLabor saved per maintenance cycle

Reduced maintenance cost

Reduced maintenance cost

Back propagating the effect of solution to the initial MPV


Steps Required to Translate Business Needs into Product Innovation Problems (for industrial products)



stakeholder

5.2. Determine distance

to physical/technological

limits for the Variables

3. Select a set of MPVs

for improvement

2. Identify MPVs of a product for the primary and other

stakeholders

4. Determine underlying physical variables

responsible for selected

MPVs

5.1. Determine Coefficients of

Sensitivity for the Underlying Variables

6. Formulate and prioritize

Key Problems for Underlying Variables

5. Select the underlying

variables that yield

maximum MPV

improvement

8. Back propagate the

solution to estimate

business impact and success

criteria


Malinin PDMA Presentation

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