1 Managing New Technology Introduction: Life Cycle Phases Team Members: Jhon Benavides Sabrina Patino Russ Watt June 5, 2009 Solar Plus.

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Managing New Technology Introduction:

Life Cycle Phases

Team Members:Team Members:

Jhon BenavidesJhon Benavides

Sabrina PatinoSabrina Patino

Russ WattRuss Watt

June 5, 2009June 5, 2009

Solar PlusSolar Plus

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• Top 3 Solar Panel Manufacturer for US Home Market (Revenue) with at least 30% Year 1 Profit Margin for new product.

• In the next year Solar Plus will:– Complete Milestone 3 in the introduction of a new Solar Panel employing a

technology with improved efficiency and/or cost to the market.

• In the next 2 years Solar Plus will:– Successfully Launch this product with 30% Gross Margin by the end of 2Q11.– Increase install base by 28% from 3Q09 installations.– Begin Sales in Canada and Mexico—will require CSA and UL-MX Nom Mark

Approval.

• In the next 5 years Solar Plus will:– Release second generation of product no later than 1Q12 with at least 30% Gross

Margin and increase installation by 21% from 1Q10 installations.– Complete Milestone 3 with next new technology with improved efficiency and cost

by 2Q13.– Begin Sales in EU—will require

• New Product Introduction will support Top 3 Manufacturer Goal based on current projections.

Company Vision and GoalsCompany Vision and Goals

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• Total Cost of Ownership and Payback Period remain as the largest barriers to purchase for the homeowner.

• Increases in Conversion Efficiency and Reduction in Cost will continue to address these issues along with the expected increase in energy pricing.

– We cannot dictate energy pricing, but we can impact efficiency and cost.

– We expect the payback period for 2Q13 product to be less than Four Years.

– Both efficiency and costs are major areas of research by numerous startups, universities and national labs.

• Different Materials (carbon nanotubes, organic dyes, printed plastics)• Different Processes (Silicon cutting, light collectors)

• We intend to be the preferred manufacturer of resellers through the focus on reliability through design and ease of installation.

– Both deliverables are significant efforts during entire development cycle.

New Product GoalsNew Product Goals

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President & CEO

VP Technology Evaluation

VPMarketing

VPManufacturing

VP Service

VP Engineering &

DesignVP Quality

VP Distribution

Agent Network

Corporate StructureCorporate Structure

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Gap AnalysisGap Analysis

What exists today?• Existing Solar Cell Technologies use single crystalline silicon that

offers high wattage costs that hampers the diffusion of solar energy use.

Sector Growth• The current Macro Economic situation in the world today has

sparked a renewed interest in “alternative energy sources”.• Installations (California alone) are on a excellent growth curve.

www.solar.coolerplanet.com

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Gap AnalysisGap Analysis

Business Opportunity• Multi-crystal silicon enables the production of 27% more efficient

solar cells than the conventional technology available in the market today

• New cell technology reduces the cost per watt by 21% allowing to expand current available market.

• The largest barriers to more installations are payback period and initial costs of solar cells.

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PLC - Phase Gate ModelPLC - Phase Gate Model

Idea Creation

Concept Evaluation

Planning & Specification

Design & Development

Evaluation

Production

Obsolescence

Phase Gate1

Phase Gate2

Phase Gate3

Phase Gate4

Phase Gate5

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Phase Gate ReviewPhase Gate Review• Members: VPs of,

– Mfg– Service– Distribution– Finance– Engineering– Purchasing

• Main deliverable: review phase progress and make decision to move forward to next phase if resources and objectives continue to align to corporate strategies.

• Outcome:– Pass– Fail– Request further information, go back to previous stage

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Phase Gate Phase Gate Evaluation Check ListEvaluation Check List

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• Primary Phase Owner: VP of Technology Evaluation• Solar Plus will outsource the development of solar technologies due to,

– We are a small company; it will free up substantial amount of internal resources

– Will leverage the use of new technology equipment and use of testing labs– Ensure technical expertise

• Ideas are submitted in 2 ways: – VP Technology Evaluation will attend trade shows, monitor university

studies, the National Renewable Energy Lab to identify new technologies– Any employee can submit an idea

• Ideas are entered into New Product Online System and a tracking number is assigned for traceability and accountability

• What is the New Product Online System? An online web interface tool that contains all product ideas. All members of the Technology Evaluation Committee receive an email to notify of idea submission.

Phase 0: Phase 0: Concept EvaluationConcept Evaluation

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Members: Tech Evaluation Committee comprised of VPs• Tech Evaluation (owner)• Mfg• Service• Finance• Marketing

Frequency: monthly

Method: • Each idea is presented by the person who submitted idea into online tool. • 10 Min presentation to describe idea and committee to have a chance to

ask questions. • Based on team member input, list of projects is prioritized. • Concepts can be approved, approved upon more info, fail to delay at a later

time, or fail (not aligned to corporate strategies). • Approved Ideas officially enter Phase 0, and Product Development Cycle

Time Starts

New TechnologyNew TechnologyReview CommitteeReview Committee

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• NASA Method to assess the maturity of a technology

• Process is based on answering a set of predetermined questions for each level.

• Each stakeholder group, has submitted their list of questions that must be answered during presentation.

• Examples:– Have submissions been made to begin UL (or

equivalent) certification?– What is the maximum demonstrated efficiency

which this technology? Describe the experimental setup used and what was the sample size used for this demonstration?

• A numerical TRL rating will be given to each idea. Generally, no idea with a rating lower than 4 will be slotted into a product.

• On some rare occasions, a level lower than 4 will be considered when the business benefit is much larger than other options.

• Risk is openly discussed and the group must concur on the TRL rating.

TRLTRL

Source: Wikipedia

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• Outputs

– Technology Readiness Level (TRL) Assessment– Preliminary Business Case– Preliminary Cost Model– Strategic Fit Summary– Risk Analysis/Identification– Preliminary Budge to complete phase– Core Team Assignments– Project Manager Assignment– Metric on how long phase 0 takes to complete

• Main deliverable: a prioritized list of approved projects reviewed by Review Committee.

• Phase gate review committee will decide, at this point, for projects that are approved, whether it will be outsourced or produced in house. (Make/Buy decision)

• Outcome:– Pass– Fail– Reconvene at later date for more information– Fail, delay for future review

Phase 0 - OutputsPhase 0 - Outputs

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• Primary Phase Owner: Project Manager

• Outputs:– Core Team is assigned– QFD used to create Product Definition (Marketing)– Risk Mitigation Plans and FMEA (Eng)– Budget for prototypes, testing, capital equipment (Finance w/ Eng

& Mfg)– Resource plan for functional areas (Core Team Member for Each

area)– Metric for time to complete phase 1 is captured and recorded

(Project Manager)– Schedule for Remaining Stages (Project Manager)

• Team is ready to move on to next phase if checklist with above required outputs is met and phase is approved by Phase Gate Committee.

Phase 1: Phase 1: Planning & SpecificationPlanning & Specification

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• Phase Owner--Project Manager

• Outputs of Phase

– Lab Manufactured Prototypes (Engineering)

– Completed Drawings and Specifications (Engineering)

– Functional, Reliability and Installation Test Plans (Engineering)

– Prototype Test Results (Engineering)

– Prototype Failure and Root Cause Analysis (Engineering)

– Potential Supply Chain Established (Purchasing)

• Completed Drawings and Specifications leading to a Manufacturing Acceptance Signoff are the most important Deliverables for the Phase.

Phase 2:Phase 2:Design and DevelopmentDesign and Development

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Manufacturing sign-off formManufacturing sign-off form

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• Phase Owner: Project Manager• Outputs of Phase

– Manufacturing Support Build Occurs in Pilot Plant with Process Development Personnel with parts that are not fully qualified (Manufacturing)

– Manufacturing process flow chart and capital expense plan (Manufacturing)

– Quality Systems, Prototype Yields and Costs Established (Manufacturing)

– Production Cycle Time and Yield Targets Established Continues to Phase 4 (Manufacturing)

– Distribution and Final Product Logistics Plan (Distribution)– Final Cost Targets Established (Finance)– Marketing Collaterals and Promotion Materials Prepared (Marketing)– Manufacturing Process Flow Defined and Capital Equipment Plan

(Manufacturing)• Completion of the milestone represents commitment to Pilot Production.

Phase 3:Phase 3:EvaluationEvaluation

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• Phase Owner: Manufacturing

• Outputs of Phase

– Supplier Qualification and First Article InspectionsManaged by manufacturing quality Control team and design eng.

We will check enough parts to establish statistical significance

– Pilot Production build begins and produces first saleable product (conditional upon test results)

Performed Prior to Real Volume Production& we will use regular production personnel Root Cause Analysis

– Baseline Manufacturing Metrics Established (Yields, Cycle Time, etc.) Solar Plus will apply Pareto diagrams or analysis through quantity, cost and time measurements

– Quality systems operational (SPC)

– Samples sent for agency approval

– Field Service Training Scheduled and Executed

– Yield and Cost Targets Met

– Change Management process (with engineering involvement)

– Production Ramp Commitment

Phase 4:Phase 4:ProductionProduction

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– Continuous Improvement plans

Production Improvement Opportunities:

•Yield Improvement

•Manufacturing Cycle Time Reduction

•Cost Reduction

– Customer Satisfaction Surveys and feedback (Project Manager)

– Review of field reliability and service activity (Service)

– Ongoing SPC

– Supplier Feedback System Cost recovery Supplier scorecard Supplier Audit

– Customer Satisfaction Feedback System• Consisting of various methods to contact customers• Will use data to help for next product’s customer wants or to make changes to current product.

Phase 4:Phase 4:Production (continued...)Production (continued...)

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• Phase Owner--Marketing

• Objective: Elegant production stop of product

• Outputs

– Schedule for obsolescence (Marketing)

– Customer Service part planning (Service)Solar Plus will develop a process that is focused on minimizing the obsolescence risk in service parts as the product progresses through its life cycle

– Inventory of finish goods projections (Finance)

– Incoming Part Inventory (Manufacturing)

– Final Project Profit and Loss Summary (Finance)

– End of Life Tool Monitoring (Manufacturing)

Phase 5:Phase 5:ObsolescenceObsolescence

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Project ScheduleProject Schedule

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– Engage suppliers in all aspects of their quality management system, so that the supply-base is fully integrated into the QMS being rolled out.

Key requirements include:

– Supplier should be able to provide quality-related data to our company

– Feeding information from supplier’s quality system into manufacturer’s quality system

– Getting the supplier to use a manufacturer’s web-based quality management system

– Provide the right information to a key customer without having to deploy software in-house

Supplier Involvement in Supplier Involvement in Quality SystemsQuality Systems

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Supplier FeedbackSupplier FeedbackThe Use of a formal Supplier Rating SystemThe Use of a formal Supplier Rating System

Not Certified  – The quality process is not implemented yetCommunication with suppliers is open

Qualifying  – There is a formal commitment to quality, but the process is not yet implemented.

Certified  – Most of the agreed-upon requirements are met, but the quality process is only partially implemented. The supplier is working toward and committed to achieving a

preferred rating. Preferred  – The quality process is fully implemented. All key requirements are being met. 

Award  – A key supplier is eligible for Award. 

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– Cost of Poor Quality should be measured and tracked considering

• Scrap, Rework, Sorting and Inspections.

• MRB INVENTORY AND PROCESSING COSTS DUE TO INSPECTION FAILURE

• Line Shutdown due to incoming part issues

• Freight Costs due to expedited shipments to agent network.

• Warranty and recall expenses

– Cost Recovery Actions should be in place• Charge back to supplier for defective parts putting accountability and business

discipline into supply chain. Bonuses for exceptional quality.

• Quality Management System will be used to capture cost of poor quality to monitor costs for charge backs.

• System will be explained and agreed to before contracts are signed.

Supplier FeedbackSupplier FeedbackCost of Poor QualityCost of Poor Quality

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– Supplier Audit identify non-conformances in manufacturing process, engineering change process and ongoing quality measures at the supplier

– Non-conformances are addressed with corrective actions determined by supplier and manufacturer in a agreed-upon time frame.

– Future audits will ensure that corrective-action is in place and is effective.

– Manufacturing organization will audit all key suppliers at a frequency of at least once per year. Efficiency in the Audit Process will enable reach into the supply base beyond the key suppliers.

– Use of a supplier scorecard based on Audit Findings and Quality Record of supplier

• # of Corrective Actions Required per time period• Response time and Resolution time for Corrective Actions• Service Costs Incurred due to any quality spills to the customer• Performance against benchmarks

Supplier FeedbackSupplier FeedbackAuditsAudits

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– Implementing a Quality Management System (QMS) that provides a closed loop corrective action process to fix problems

– Identification of quality problem.– Initiate an investigation and identify the root cause of the problem– Create corrective actions to be approved– Implement appropriate action which represent procedures, training or

recalibrating the equipment– Use the entire information to initial a cost recovery with the supplier– Deploy a closed-loop, integrated quality management system.– Audits become a core driver into the corrective action process and become a

key tool for continuous improvement

Closed Loop Closed Loop Corrective ActionsCorrective Actions