there’s an APP for that! (Affordable Pressure Pump)Need Water?

Laura Jones

Nate Meng

Isaac Penny

Team Need Water?

IDE

Myanmar

&present:

a valve story: redesigning the pressure pump

target: valve system

thebigidea

Simplify the design of the pressure pump

to make it more affordable and robust

result:

47 fewer parts$10 price reduction

INTRODUCTION

USER + NEED = INSIGHT

BUSINESS CASE

HOUSEHOLD ECONOMICS

IMPACT ON A FAMILY

NATIONAL IMPACT: SALES

FORECAST

DESIGN DIRECTION

MEET PP VERSION 1.0

LESSONS FROM THE PRL

MEET THE PROTOTYPE

FUNCTIONALITY

IMPLEMENTATION PLAN

CHANGING THE IDE PRODUCT MIX

DISTRIBUTION AND MARKETING

PRICING STRATEGY

SALES DRIVERS AND COST

SAVERS

BENEFITS TO IDE

NEXT STEPS

TESTING

INTELLECTUAL PROPERTY

MANUFACTURING

user: a poor farmer in

myanmar

He can water only a small area & makes little

profit

double.

Meet AungKoKo.

Cash crop farmer. Son uses hand pump.

He feels like giving up.

Considering buying a Suction Pump.

Dry season income: + $1/day.

With a Pressure Pump, he could earn

(the benefits of a Pressure Pump)

safetyconvenienc

e

flexibili

ty

needs…

carrying 60 lbs of H20 for six

hours a day in 95° heat11-yr old treadling 8 ft in

the air in 95° heat

(the drawbacks of a Suction Pump)

to eliminate…

unnecessary

labor

danger

NA

RG

IS

$25-$35 products

are in the pricing

sweet

spot

Why this price point? Despite unprecedented economic hardship

users can still save to purchase. Value is more important than

ever.

at a cost of $35 US or less…U

NIT

S S

OL

D

YEAR

P.O.V. A poor farmer in

Myanmar needs

the convenience,

flexibility, and

safety of a

Pressure Pump at

the cost of a

Suction Pump

(Why? More Plot for your

Kyat*)

Users get more plot for their

Kyat*(*Kyat = Myanmar currency)

A Pressure Pump user can irrigate 2X as much

land as Suction Pumps during the dry season,

Suction Pump User Pressure Pump User

Dry Season Dry Season

days $180.00 days $180.00

plot size (acres) 0.27 plot size (acres) 0.50

average revenue/acre $1,000.00 average revenue/acre $1,000.00

revenue/season $270.00 revenue/season $500.00

cost/acre $400.00 cost/acre $400.00

cost/season $108.00 cost/season $200.00

household profit $162.00 household profit $300.00

and earn roughly 2X the income

school expenses for 3 children

6 flocks of ducks

1 extra meal/day all year for a family of 4

1 fishing net

3 months of medical care for tubercular child

seed funding for a small business1 pig

repurchase of pawned items

44 mosquito nets

6 flocks of chicks

additional agricultural inputs

Enabling users to upgrade from suction to pressure

pumps will have significant country-wide impact

Wealth created by the APP in a single year: 22,143 * $138

=

$ 3,055,738 inMyanmar

We

are

here

(2009)

NA

RG

IS

design direction.

inside the existing IDE pressure pump:the 4-valve system

prototyping process

from four to one

12

34

the two finalists: rotary vs. slider

Rotary

Valve

Slider

Valve

meet the winning slider valve

more about the slider valve

position 1 position 2

preliminary testing

performance testing

Flow Rate

25% of current Pressure

Pump (200 gallons/hr)

Port size is limiting

factor:APP port is 1/10 the size of

existing port, can be made

larger

implementation plan.

At $35, the APP should replace the current pressure

pump and largely replace the mobile suction pump

The APP simplifiesIDE’s product line

Remember the

pricing sweet

spot?($25-$35)

UN

ITS

SO

LD

YEAR

who else needs to buy in?Demonstrators are the key to distribution and marketing. They

control channel & need to see market potential (price + benefits)

Currently, every customer must make a trade-off

Suction

Pump

Elevated

Suction

Pump

Pressure

PumpAPP

Convenience

(labor-saving)

Flexibility

(output

inter-changeability)

Safety

Affordability

Maintenance

Overall Benefits

None Low Med Hi Very Hi

options within current IDE product line

The APP simplifies the decision and reduces

the guess-work for the demonstrator

dominant low-end

choice

dominant high-end

choice

insights on adoption:in order for users to buy it, demos

need to show it. They usually show 2 models per demonstration

Current IDE Product

expensivecheap

difficult to assemble

easy to assemble

Mobile Frame

Tripod

Pump Head

Pressure Pump

APPFrequently

Demo’d

KEY

Targeted niche

New demo

set

Demonstrator adoption is driven by unit sales potential

(linked to commission) and ease of installment

How to hit the $35 price point?

while the APP requires a subsidy to hit the necessary

price point, the robustness of the product will offer

IDE compensatory benefits…

Product Pump HeadTripod Suction

Mobile Suction IDE PP APP

Retail Price $15.00 $25.00 $35.00 $45.00 $35.00

Production Cost (COGS) $14.41 $27.15 $36.63 $39.27 $34.31

Contribution Margin to Distribution & Marketing $0.59 -$2.15 -$1.63 $5.73 $0.69

Estimated Distribution & Marketing Cost (20%) $3.00 $5.00 $7.00 $9.00 $7.00

Required Subsidy to Distribution & Marketing $2.41 $7.15 $8.63 $3.27 $6.31

word of mouth

demonstration

s

material

costs

direct labor

Replacing the current pressure pump with the APP,

will increase sales while decreasing overhead costs

COGS

units sold

replacement

retail priceparts

field repairs

rework in

QC

distribution

& marketing

cost

IDE benefits…

simpler

productcheaperbetter

complaintsfewer

reworksrepairsreplacements

reputation

impactbetter

efficiencyuse of funds

more units sold

positive word-of-mouthdemonstrations

Durability and User Feedback: Key to success and design

iteration

Forty pump field test: Three Months

Manufacture valve components in US:

High tolerance (0.005”)

Lowers integration

time

Will give IDE|M right of first refusal on Intellectual Property

Estimated cost $14,422

H2 get from design to manufacturing:

fieldtesting

manufacturing

ProcessesBasic Lathe and Mill

Welding for valve attachment

Injection Molded Valve / Body

MaterialsPlastic Valve / Body for

Corrosion

TimelineInitial Production in Myanmar

Import some components, if

cost savings can be realized

export in

test market

(India)

what next?increase

port size

field test

Sell via IDE

Myanmar

collect

feedback

export

worldwide

manufacture

in-country

determine IP

strategy

stabilize

manufacturi

ng

determine

whether to

license

manufactur

e in China

iterate on

manufacturi

ng

file

provisional

patent

secure

product

patent

iterate on

design

APPcan offer poor

farmers in Myanmar

the convenience,

flexibility, and

safety of a

Pressure Pump

at the cost of a

Suction Pump

the

(no more 11-yr-olds treadling 8ft in the

air)safety

convenienc

e

flexibilit

y

&

With a $35

investment in

the APP, he

could earn an

extra

$138each year

David Klaus

Yin Mon Soe

Yu Yu Aung

Jeff Burkebile

Krista Donaldson

Stuart Coulson

AnurupaRao

Alan Asbeck

Vicky Chiang

IDE TEAM COACHESJim Patell

Dave Beach

Erica Estrada

CarlyGeehr

TEACHING TEAM

Audience!

thanks to…Jim Taylor

Debbie Taylor

SPONSORS

there’s an APP for that! (Affordable Pressure Pump)Need Water?

Laura Jones . Nate Meng . Isaac Penny

appendices

customer care report data

Pressure Pump breakage statistics as compared to other models

quality control team data

16.4%

33.4%

20.6%19.5%

1.6%0.4%

1.5%0.0% 0.1%

2.1%

65.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

1. Inlet pipe 2. Junction box

3. Cylinder base

4. Outlet spout

5. Handle 6. Bracket 7. Cylinder inside

8. Rocker Shaft

9. Channel 10. Water test

All

Perc

en

tag

e o

f P

um

ps i

nsp

ecte

d

Type of Pump Head Rework*

2. Pump head reworks* by type, n=2272(through 13 February 2009)

All refers to the # of

pumps that had at

*First 765 do not count multiple

REMOVED in APP

quality control team data

wild guess

PP=Pressure Pump informed data

Sources formula output

1: Krista donaldson, "PPH_only" assumption

QC Case (annual) Base Case Low Case w/ APP High Case w/ APP

Quality control team monthly salary 300 300 300

Months/year 6 6 6

Quality control team annual salary 1800 1800 1800

Junction box rework 33% - -

In pipe rework 21% - -

Outspout rework 20% - -

Other failure 26% 39% 26%

Direct cost of QC work $1,800.00 $704.70 $469.80

Annual savings $1,095.30 $1,330.20

Average savings $1,212.75

but, if this is such a huge opportunity, why is

the $35 pressure pump not already available?

The goal of the first Pressure Pump team was similar to ours—

design a pump that cost ~$30. But, from design to

manufacturing, on the fly decisions increased part-count and

price. The APP simplifies the design without sacrificing

functionality.

2006

“Under

Pressure”

Target Cost: $25

Part Count: 14

2009

APP

Retail Cost: $35

Part Count:98

2007

IDE Pressure

Pump

Retail Cost: $45

Part Count: 148

a timeline

slider valve: position 1

slider valve: position 2

Leakage Test•Leakage Test

•Supposed to come out

Pressure Port

•Combined Leakage out

incorrect ports was 23%

Field Test Cost Breakdown

Additional design opportunities

reinforced tripod frame

treadles sold separately

plastic valve

change chain to wire

plastic pump head

port-size comparison

there’s an APP for that! (Affordable Pressure Pump)

Need Water?