opportunities in tough times

www.GEN3.com

G3:ID ProActive: Opportunities in Tough Times

=+APPLIED DISCIPLINE

GLOBAL KNOWLEDGE

PREDICTABLE IMPACT

Feb. 25, 2009

Len Malinin

© 2008 GEN3 Partners, Inc. Confidential 2

“Don’t think of R&D, new product development, and

capital expenditures as fixed costs. They are

investments — places to set priorities. Don’t delay: By

the time your new products are ready, and your new

facilities are in place, they will be sources of competitive

advantage.”— Strategy + Business 12/16/08


Introduction

Severe economic times are causing your competitors to become protective and reactive, a posture that your business can benefit from by getting ahead now.

GEN3 offers G3:ID ProActive, a smart and lean package of services aimed at empowering your business to proactively respond to economic challenges while gaining new strengths

G3:ID ProActive includes:

─ Cost Reduction

─ Productivity Boost

─ Product Improvement

─ IP Enhancement

─ MPV Analysis

─ Portfolio Assessment



GLOBAL KNOWLEDGE

PREDICTABLE IMPACT

GEN3 is the Open Innovation Services Provider – combining a systematic methodology and a global knowledge network of thousand of scientists and engineers, producing real innovation impact.

Speed-to-Market

Predictable Results

IP Ownership by the Client


Who Are Using G3:ID ProActive?

http://www.businessweek.com/technology/content/dec2008/tc20081223_490913.htm

http://www.abb.com/

http://www.realestatehow.com/uploaded_images/avery-dennison-799540.jpg

http://www.fenwalinc.com/Pages/VariationRoot.aspx

http://www.gambro.com/


GEN3’s Unique Perspective

Use a scientific problem solving approach; don’t rely solely on inspiration

Innovate against the right product, not every product

Improve only features the customer will pay for, not all features

Address key problems, not initial problems

Focus on functions, not design components

Resolve contradictions, don’t compromise

Select evolutionary winners, not losers

Utilize global knowledge to complement client expertise

Adapt existing solutions, don’t always invent


The Evolution of the Science

TRIZ

ITD

TRIZplus

G3:ID

Evolution of the Innovation Discipline

Val

ue to

Clie

nt


The Evolution of the Science

TRIZ

Did I solve the problem

right?

Did I solve the right

problem?

Did I find a practical

solution to the right problem?

Did I deliver significant

movement along product MPV?

ITD TRIZplus G3:ID


What Methodology Advancements have there been?

TRIZ

Did I solve the problem

right?

Did I solve the right

problem?

Did I find a practical

solution to the right problem?

Did I deliver significant

movement along product MPV?

ITD TRIZplus G3:ID

• ResolvingContradiction

• ARIZ• TESE

• Standard Solution

• Functional Modeling• Trimming

• Feature Transfer• CEC

• FOS/GKN• S-Curve

• Substantiation Tools• IP Evaluation

• Parallel Evolutionary Lines

• MPV Analysis• Innovation Roadmapping

• Business Impact Justification

• MT/TESE• Synergy Index

1960 1980 2000 Today


History of G3:ID


Innovation Defined

Significant movement along the main parameters of

customer value.


G3:ID ProActive Cost Reduction

G3:ID ProActive Cost Reduction – reduce cost while improving products and processes to increase their competitive strength, including:

─ Reduce Materials – G3:ID is the most powerful tool to analyze and reduce material while improving cost and functionality. G3:ID focuses on functions, not on components, identifying harmful, wasteful, or excessive functions and algorithmically trimming them.

─ Example: A switch with two different plastic halves which required separate tooling and excessive material use was functionally analyzed and redesigned to be construed with two identical halves, saving the client, one of the largest companies in the world, millions of dollars

Original Switch Redesign New Switch



Reduce Energy – the power of G3:ID to identify redundancy, contradictions, or useless process stages has helped dozens of businesses reduce their energy costs.

Example: The production process at a paper manufacturer was analyzed and redesigned to utilize 99% less water and, as a result, 30% less energy for drying.

Water-deposition

Technology

Air-deposition

Technology

Mechanical

Functions Water Air

Physical and

Chemical

FunctionsWater Binder

Proposed

Technology

Air

Water


Proposed Technology: Functional Comparison


Low Moisture Paper Manufacturing



G3:ID ProActive Cost Reduction.



G3:ID ProActive Productivity Boost

G3:ID ProActive Productivity Boost – Thanks to its ability to identify unsuspected problem areas and offer straightforward solutions, G3:ID is highly effective at achieving immediate productivity increases without the need for long development cycles, substantial capital expenditures, or additional resources.

Example 1: A low-fat peanut butter production process was developed for one of the largest consumer products companies in the world, increasing production speed by a factor of 3.

Example 2: A toner filling device was developed for one of the most prominent printer manufacturers, improving its toner filling capacity by a factor 8.

Original device: clogging issues New device: vibration prevents clogs


G3:ID ProActive Productivity Boost

Example 3: Make production of automotive spaceframe more flexible, suitable for various models produced in low volume (8/12 cylinders, 2/4 seater, …)


Corvette Z06 Space Frame

G3:ID ProActive Productivity Boost. Flexible Design of a Spaceframe

Castings

Extrusions


Key Problem

The spaceframe should be assembled using many small parts to ensure flexibility; at the same time, it should be assembled using a minimum number of large parts, to reduce assembly cost

Concept Idea

To manufacture the Spaceframe from one or several bent extruded beams

Advantage

—Fewer:

• Component parts, including cast components

• Steps for assembly

• Joints



Origami - Sequence of Bending


Patent pending


Origami Front Module


Patent pending


Origami Front Module (with castings)


Patent pending


Corvette Z06 Origami Space Frame – Round Tube


Patent pending


G3:ID ProActive Product Improvement

G3:ID ProActive Product Improvement – G3:ID identifies the technical parameters that drive sales and determines which parameter(s) to improve to achieve immediate and noticeable superiority compared to the nearest competitor. Noticeable superiority fuels increased sales and facilitates word-of-mouth and other viral marketing mechanisms that allow for leaner marketing budgets.

Example 1: New parameters for teeth-whitening, developed by GEN3, were such a significant improvement over the nearest competing product that P&G had a record-selling launch year and captured the market hands-down with White Strips.

Original method: tray with whitening substance New method: strips


Next Generation PICC (Peripherally Inserted Central Catheter)

tip

body

Example 2: Develop design for Peripherally Inserted Central Catheter which has higher strength under high pressure. The scope includes design and materials.

New DesignNew Materials


Patent pending. Patent applications US 20070135751, 20080097350, 20080097316, 20080086096.


Next Generation PICC. Requirements to Venous Catheter

Third Stage: Next generation (very high

pressure, option to reduce diameter)

First Stage: Better quality

Second Stage: Higher pressure/ flow rate

Short Term

Middle Term

Long Term

100

300

P, psi

Project GoalsAdditional Desired

OutcomesBeyond Expectations

Time

0

500

60 psi

300

psi




The Method of Why

HAMLET Will you play upon this pipe?GUILDENSTERN My lord, I cannot.…

HAMLET Do you think I am easier to be played on than a pipe?

G3:ID ProActive Product Improvement.Next Generation PICC

Socrates


GEN3 What properties are needed in the catheter?

CLIENT It needs to be white, so it looks nice.

Needs be radiopaque, so we can see it on X-Ray.

Needs to be alcohol-resistant, since we disinfect the skin.

We try to find the best material which meets all requirements.

GEN3 How do you make it radiopaque?

CLIENT We add BaSO4 to the polymer. But it makes it less alcohol resistant and reduces strength under pressure.

G3:ID ProActive Product Improvement.Next Generation PICC Next Generation PICC

Distal end

Proximal end

Dialog with Client



GEN3 Does the catheter have to be white inside?

CLIENT No, only on the outer diameter.

GEN3 Does it have to be radiopague over the whole length?

CLIENT No, only on the distal end.

GEN3 Does it have to be alcohol-resistant over the whole length?

CLIENT No, only at the proximal end.

GEN3 So the requirements to the different parts of the catheter are different?

CLIENT Yes.Distal end

Proximal end


Dialog with Client



Contradictions:

BaSO4 is needed for radiopacity, but at the same time BaSO4 is not needed, since it deteriorates strength of the catheter.

…

Resolution: Separation in Space: Make the catheter non-uniform

Contradiction Solution

Contradiction

Contradiction

Solution

Solution

Dialog with Client

Cause-Effect Chains




Different Requirements to the catheter (in Space)

0 — Not important; 2 — Important

02Flex test

0212Burst Strength

22Kink Resistance

1020Visibility

2222Chemical compatibility

201 1White color

2

0

Distal

2

0

ID

2

2

OD

2Tensile Strength

2Alcohol resistance

Proximal

TBD

TBD

ID – inner diameter, OD – outer diameter




Contradictory Requirements for the Elastic Properties Leads to Synthesis of New Material

Linearity at high elongations

0

500

1000

1500

2000

2500

3000

3500

0.00 50.00 100.00 150.00 200.00 250.00

Elongation, %

Str

es

s,

psi Burst

0

50

100

150

200

250

300

0.00 5.00 10.00 15.00 20.00

Elongation, %

Str

ess,

psi

High elasticity at low elongations (up to 10–15%)

For kink and flex

0 100 200 300 400 500 600 700

Str

ess

, psi

For kink and flex

For burst

Test data 4-parameter material model (Ogden) Desired curve (qualitatively)

750

4500

1500

2250

3000

3750

Elongation, %

Existing material




GEN3 Why do you need high pressure?

CLIENT During power injection, we need high flow rate through each lumen. We cannot increase diameter of the catheter in the vein.

GEN3 Can you direct the flow through both lumens?

CLIENT No, the connection system is setup to pump the medicines through each lumen separately.

GEN3 Do you pump through both lumens simultaneously?

CLIENT No Cross-section of catheter


Contradiction Solution

Contradiction

Contradiction

Solution

Solution

Dialog with Client

Cause-Effect Chains

Dialog with Client



Contradiction: The partition is needed to deliver different medicines, but during the power injection, the partition is not needed.

l

pRQ eff

⋅⋅∆⋅⋅

=η

π8

4

Folded partition During power injection

Efficiency of solution: Very high

(Flow rate ~ diameter4)


Resolution: Separation in Time: Dynamic partition



G3:ID ProActive IP Enhancement

G3:ID ProActive IP Enhancement – G3:ID understands the structure of IP like no other analytical tool, solving IP-related problems faster, at less cost, and with greater impact. Whether a client needs to strengthen its IP positioning through targeted product or process improvements or deconstruct a competitor’s patent for circumvention, G3:ID quickly pinpoints strengths and weaknesses and redesigns even the most complex technology with surgical speed and precision.

Example1: A key component of client’s Strategic Sourcing Initiative was an effort to reduce the purchase costs for a primary heat exchanger (PHE) currently supplied to the client by its sole source supplier, who also held the patent for the design of the PHE .

Gen3 was requested to develop a design that would bypass the patent without compromising performance.


Strategic directions for circumvention of a patent

Strategic directions for the circumvention of a patent

Direction 2:

Employment of design solutions of expired patents (can also be patentable)

Direction 1 :

Replacement of at least one claim element with the obtainment of a new property

Direction 3:

Development of heat exchanger element based on a new principle of operation

Short term Long term

Direction 4:

Invalidation of the patent

G3:ID ProActive IP Enhancement


Benchmarking of patents

Solving of adaptation problems

Concept ideas

Identify claims Function analysis

Identify independent claims Flow analysis

Cause-effect chains and disadvantages

Trimming

F-leading

Cause-effect chains of independent elements

Formulation of key contradictions

Feature Transfer Formulation of key

problems

Concept ideas

Patent infringement search

Concept ideas

Identify independent elements of independent claims

Formulation of conceptual directions

Direction 1Direction 2 Direction 3

Patent analysis Analysis of the objectDirection 4:

Invalidation of the patent

G3:ID ProActive IP Enhancement. Logics of patent bypassing


The logic of work for Direction 1

38

Claims

Dependent claims

Independent claims

Dependent Elements

Independent Elements

&

&

New Claims



Direction 1: Replace at least one claim element with obtainment of a new property

Identify claims Identify independent claims

Cause-effect chains of independent elements

Formulation of key contradictions

Formulation of key problems

Patent infringement search

Concept ideas

Identify independent elements of independent claims

Formulation of conceptual directions

Function analysis



SS PHE: Based on this analysis, 20 concepts were identified – 4 of which appear interesting

Concept 1.2.3 Concept 1.3.3

Concept 1.3.2

Concept 1.3.1

Concept 1.2.6

Concept 1.2.5

Concept 1.2.4

Concept 1.2.2

Concept 1.2.1

Concept 1.1.5

Concept 1.1.3

Concept 1.1.2

1. Replacement of at least one claim

1.1 Changing the shape of the cross-section of the tube

1.2 Changing the shape of flow

section

1.3 Changing the external shape

Concept 1.3.4Concept 1.1.1

Concept 1.1.4

2. Employment of already expired patents

3. Development of a new principle of action

Concept 2.1

Concept 2.2

Concept 2.3

Concept 3.1

Concept 3.2

Direction 1: Replace at least one claim element with obtainment of a new property


Patent pending


G3:ID ProActive Analysis of Main Parameters of Value (MPVs)

G3:ID ProActive Analysis of MPVs – Customers buy products for a variety of reasons, however, a limited number of parameters really influence the customer’s buying behavior. These parameters, which are responsible for the purchase decision, are called the Main Parameters of Value (MPVs). When developing a new product, it is critically important to determine for which characteristics the market will be willing to pay premium price.

Example: A company making metal panels for commercial trucks wants to design a next generation product and determine its characteristics.


There are several sets of MPVs, for different stakeholders within the value chain

─ 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



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

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





Maintenance Cost

Fuel Cost

Repair Cost


Fleet MPVs

Engine Losses

Aerodynamic Losses


Sub MPVsFleets

OEMs

Metal company

End Users

Stakeholders

3. Select a set of MPVs for improvement, based on the client’s core competencies, problem scale, restrictions (can be iterative process).



4. Determine underlying physical variables responsible for selected MPVs



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

Use Functional Model or Cause-Effect Chain Approach



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

∂∂=

5. Determine Coefficients of SensitivityExample



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 35. Determine Coefficients of Sensitivity


Example


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

6. Select the underlying variables that yield maximum MPV improvement



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.

7. Solve the selected problems

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


Patent pending. US patent applications 20070200390, 20070235590


G3:ID ProActive Portfolio Assessment

G3:ID ProActive Portfolio Assessment – Now more than ever, product focus is essential. Underperforming products in strong markets must be quickly improved; those in weak markets discontinued. Performance is not just a measure of sales; it’s how all your products from all segments compare in terms of objectively measured relative value versus your key competitors. G3:ID’s ability to objectively separate your product portfolio into 4 basic categories — “Don’t Touch,” “Innovate,” “Discontinue,” or “Seek New Market” —is unmatched.

Example: Products from multiple divisions, as diverse as plastic bags to bottle caps to food containers, were assessed and recommendations were made to push the technical parameters of multiple unexpected winners up fast to gain quick advantage.

-20

0

20

40

60

80

100

120

140

Relative Customer Value

Gro

ss P

rofit

Pot

entia

l

Improve product features

to gain greater share of category profits

Improve profit margin

Expand into adjacent markets

Target Domain

-20

0

20

40

60

80

100

120

140

-20

0

20

40

60

80

100

120

140

Relative Customer Value

Gro

ss P

rofit

Pot

entia

l





Improve profit margin

Expand into adjacent markets

Target Domain


Representative Client Testimonial


GLOBAL KNOWLEDGE

PREDICTABLE IMPACT

“

”

There are four main reasons we continue to use GEN3

Breadth and depth of technical talent

Effectiveness of the methodology

Speed of project execution, and

The fact that there’s never an issue surrounding IP — we own it

Fortune 50 Consumer Packaged Goods Company


Len MalininPrincipalGEN3 Partners, Inc.Ten Post Office Square, Ninth FloorBoston, MA 02109(617) [email protected]

www.gen3.com

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