A method for transforming business goals of a client into a set of engineering problems which, when resolved, make the business goals achievable.

1. The method for transforming a business goal into a set of engineering problems PDMA Research Forum Sept. 29, 2007 Len Malinin

2. Initial Situation How can we increase our revenues from product X or profits by %%? What product innovations will help me to achieve that?

3. Main Parameters of Value (MPVs) MPV? An attribute of a product that represents a critical element of its functionality and that bears heavily on the customer’s purchasing decision

4. Main Parameters of Value (MPVs) “ You’re telling me that all the Hospital Purchasing Organizations care about 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…”

5. 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

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

9. 2. Identify MPVs of a product for the primary and other 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 Driver Retention Cost Maintenance Cost Fuel Cost Repair Cost Legal Compliance Cost Fleet MPVs Engine Losses Aerodynamic Losses Rolling Friction Losses Sub MPVs Fleets OEMs Metal company End Users Stakeholders

10. 3. Select a set of MPVs for improvement... Fleet MPV: Fuel Cost … based on the client’s core competencies, problem scale, restrictions (can be iterative process). Driver Retention Cost Maintenance Cost Fuel Cost Repair Cost Legal Compliance Cost Fleet MPVs Engine Losses Aerodynamic Losses Rolling Friction Losses Sub MPVs Fleets OEMs Metal company End Users Stakeholders

11. Fleet MPV: Fuel Cost 4. Determine underlying physical variables responsible for selected MPVs Use Functional Model or Cause-Effect Chain Approach Driver Retention Cost Maintenance Cost Fuel Cost Repair Cost Legal Compliance Cost Fleet MPVs Engine Losses Aerodynamic Losses Rolling Friction 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

13. 5. Select the underlying variables for improvement 2. From known references 5.1. Determine Coefficients of Sensitivity of MPVs with respect to the Underlying Variables

14. 5. Select the underlying variables for improvement 3. Through interviews and “fuzzy” references 5.1. Determine Coefficients of Sensitivity of MPVs with respect to the Underlying Variables Driver Satisfaction: May increase driver retention and recruiting; reduce noise levels >= 10% Maintenance Cost: Value of uptime = $500/day/truck in revenue Corrosion 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 residual Nicer 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

18. Example 3 Variation of drag coefficient with gap length between tractor and trailer (wind tunnel model) ∆ MPV / ∆V 2 = 0.6 (Example 2). At baseline dimensionless gap = 0.2, ∆V 3 = 20%  ∆V 2 = = 14.8%, ∆ V 2 / ∆V 3 = 0.74, Z 13 = ∆MPV / ∆V 3 = 0.6 * 0.74 = 0.42. MPV 1 = Fuel consumption V 2 = Aerodynamic drag V 3 = Tractor-trailer gap 5.1. Determine Coefficients of Sensitivity - Examples

19. 5. Select the underlying variables that yield maximum MPV improvement v 3 close to its limits MPV 3 not selected for improvement z ij are low Selected for Solutions z n3 z 33 z 23 z 13 v 3 … z nm z n2 z n1 MPV n z 3m z 32 z 31 MPV 3 z 2m z 22 z 21 MPV 2 z 1m z 12 z 11 MPV 1 v m … v 2 v 1

22. 7. Solve the selected problems 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. Gap with VGs Baseline

23. 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. Back propagating the effect of solution to the initial MPV Dust repelling by positively charged mirror Reduced frequency of cleaning Time saved per maintenance cycle Labor saved per maintenance cycle Reduced maintenance cost

24. 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 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 7. Solve the selected problems