Peter Žilnik, Danfoss Hydronic Balancing & Control

6 million tons CO2 could be saved per year

by fully utilizing the potential of pressure independent control valves for in-door climate solutions.

Projects in Danfoss Hydronic Balancing & Control

Peter Žilnik, Danfoss Hydronic Balancing & Control

1. Introduction

2. Product Projects • NPD – New product Development

o PDP - Product Development Program in Danfoss o DMP – Danfoss Milestone Process

• NPA – New Products Adaptations

3. Other Key Projects • HBC Roadmap • Project Charter • Project List

Peter Žilnik, Danfoss Hydronic Balancing & Control

Weak project culture

Projects are at home in Product Development

Danfoss HBC is Project driven organization

Limited overview of overall key activities

No prioritization cross-functionally

Lack of overall resource management

Isolated / poor execution of great ideas

Wishful thinking in execution

Product Development

Process Improvements

Organization

IT development

Marketing

Quality

Logistics

HR

Business Development

Key Projects as Strategy realization

More efficient in project execution

Step further in resource management

Closer connection between functions

Personal development

1995 2000 2005 2010 2015 2020

Product Development

Peter Žilnik, Danfoss Hydronic Balancing & Control

Product Projects

Other Key projects

HBC Roadmap

Peter Žilnik, Danfoss Hydronic Balancing & Control

Product projects (by complexity of Execution)

• New Product Development - NPD

• New Product Adaptations - NPA

• (Change Control – CC)

• (Tasks – JDI)

Product Projects

Other Key

projects

Roadmap

Peter Žilnik, Danfoss Hydronic Balancing & Control 6

FRONT END

Input to and output from technology management

Running Projects

New Business cases

New Portfolio

M0

M1

M3 M5 M6

Concept design

Detailed design

Verification & launch execution

Ramp-up Cash

Front End ideation Execution & Launch

Refining

Screening

M-1

Heart Beat

...

Region C

Region B

Region A

Application

...

target area

App 1 App 2 ...

Region

Idea Idea

Idea

Idea

Idea Idea target area

Idea

Idea Idea

Idea

Idea

Idea Idea

Idea

Other ideas from the organisation & customers

Idea Idea Idea

PDP aims to introduce and support tools and processes from idea to profit

Peter Žilnik, Danfoss Hydronic Balancing & Control 7

Running projects

Screening Refine

Screen ideas

Rank ideas New Business cases

New Portfolio

Input to and output from technology management

Roadmap

Road- map

0

10

20

2009 2010 2011

Value Creation

Idea generation – FE Pilots Idea management Portfolio management

New Business cases

PDP Front End tools & processes

...

Region C

Region B

Region A

Application

...

target area

App 1 App 2 ...

Region

Idea Idea

Idea

Idea

Idea Idea target area

Idea

Idea Idea

Idea

Idea

Idea Idea

Idea

Other ideas from the organisation & customers

Idea Idea Idea

Objective filter criteria

Value proposition, market rationale and business case for each idea

Short-list of business cases

New portfolio with transparent ranking of projects

Project roadmap including all running projects

Resource plan taking constraints into account

More, better quality ideas documented in idea profiles

Customer requirements captured in lead-user workshops

Application know-how build-up

Key deliverables

Gain customer insight and application know-how to identify new innovative products for growth

Refine ideas and build business cases to focus on products with high value proposition / growth potential

Re-prioritize entire project portfolio to maximize cash curve and reach target Objectives

Peter Žilnik, Danfoss Hydronic Balancing & Control

8

An example of a successful frontend process: American Idol

Regional Auditions

~ 10,000 Aspiring singers

164 Promising candidates

Finalist Selection

14 Weekly Televised Events

24 Candidates evaluated

in detail

The “American Idol” Innovation process

Winner

The concept first introduced to TV in 2001 – Britian’s “Pop Idol”

Candidates skills and image continually refined

Copyright © ▪ For internal use only ▪ Property of Danfoss Business System 9

Cash Trap!

Idea generation Product development Realization

Time

Cumulative

cash flow Launch

Invest-

ment

1

Speed to

market 2

Time to

Scale 3

Output of the Business Case: Cash Flow Curve 4 Factors Determine The Shape Of The Cash Curve

Support

costs

4

Peter Žilnik, Danfoss Hydronic Balancing & Control 10

Outcome of Portfolio Management – is a Road Map of product projects

Input Output

Project selection

Resource plan (existing projects)

Project A

Project B

Project C

Projects 2008 2009 2010

Project roadmap

B A C E

D H

G F

Complete project portfolio

B A

C E

D

H

G F

1111111– Name/skill

1111111– Name/skill

1234433Project B

0,5111– Name/skill

0,5111– Name/skill

––1222Project A

121110987654321121110987

20092008Projects

1111111– Name/skill

1111111– Name/skill

1234433Project B

0,5111– Name/skill

0,5111– Name/skill

––1222Project A

121110987654321121110987

20092008Projects

Resource plan (new projects)

+

Copyright © ▪ For internal use only ▪ Property of Danfoss Business System 12DD_PDP-test pilot_1st Portfolio management workshop_28Feb08-TFl-CPH_v1.ppt

New project roadmap requires F&B/Industry and Platform HW resource plans until end of 2009

Jan08

Feb08

Mar08

Apr08

May08

Jun08

Jul08

Aug08

Sep08

Oct08

Nov08

Dec08

Pre-N1 projects

Mature projects

Dec09

Nov09

Oct09

Sep09

Aug09

Jul09

Jun09

May09

Apr09

Mar09

Feb09

Jan09

Current F&B/Industry projects

Current F&B/Industry projects F&B/Industry resource allocation for 2008/2009 F&B/Industry resource allocation for 2008/2009

Stable portfolio with new F&Band industry

projects

Preliminary portfoliowith new

F&B projects

P403

P422 Crane

P403-2

P423-II

P442 safety

P422-3

P422-4

P441 powerl ink

P443 Profinet I RT

Industry

/F&B

P408 1-3

P424

P436 12/ 18

P437 step up/ down

P440 AFE

P445 Liqu id cooled

High power

PrM

(USA)

P402

P406

P426

P428-A+B

P418

P419

P432

P422-2

HVAC/

Water

P618

P619 Basic HVAC

China

P434 DanishP435 DTC,

P417 –abc

P417-E

P603 RohS

P357 MCD500

P438 Blue Ocean

Non-standard

P404

P430

P420

P429P650

P439

PlatformHW

F449

P400 perf. optim.

F…. FCD w. FC300 perf.

Technology

P601 Micro

P608 Micro ext.

Micro

incl. adaptation of HW and

Application SW

Resources available for

planning

Example: F&B/Industry – actual resource data is

being generated

Not covered by current resource planning – must be estimated

FTEs

Covered by existing DD resource planning process (1 year from current month)

Comment:

Show updated picture of available

resources (just total FTEs)

Backup with dump from Excel with

availability by function

Comment:

Show updated picture of available

resources (just total FTEs)

Backup with dump from Excel with

availability by function

Peter Žilnik, Danfoss Hydronic Balancing & Control 11

EXECUTION

Input to and output from technology management

Running Projects

New Business cases

New Portfolio

M0

M1

M3 M5 M6

Concept design

Detailed design

Verification & launch execution

Ramp-up Cash

Front End ideation Execution & Launch

Refining

Screening

M-1

Heart Beat

...

Region C

Region B

Region A

Application

...

target area

App 1 App 2 ...

Region

Idea Idea

Idea

Idea

Idea Idea target area

Idea

Idea Idea

Idea

Idea

Idea Idea

Idea

Other ideas from the organisation & customers

Idea Idea Idea

PDP aims to introduce and support tools and processes from idea to profit

Peter Žilnik, Danfoss Hydronic Balancing & Control 12

PDP’s focus in execution is on time, cost and quality

M0 M1 M3 M6

Recommended mandatory milestone for all of project Critical internal milestone for part of project

Clear start point for all projects.

Appoint PL

All resources needed (front loading)

Avoid wasting time with “pre” project work.

Fixed time between M0 and M1

No concept or specs until customer requirements are clear

Corrective actions to Cost, Quality, Time deviations

Continuous risk mitigation and problem solving

Product launch plans implemented

Installation of production equipment

Ramp up of production and sales

Finalize Design Product Validation &

Qualification

Customer

Value

Concept

Definition

Proof of

Concept Ramp-Up

Supply Ch.

build-up

Supply Ch.

Start-up Concept Definition Process Design Ramp-Up

Launch Deployment Launch Prep. Launch Goals & Strategy Launch Plans Sales

Ramp-Up

M5

Project

Prep.

Supply Chain Prep.

M½ M2 M4

Peter Žilnik, Danfoss Hydronic Balancing & Control 13

Optimize team coordination and communication efficiency

Organize essential project information in one location to strengthen decision-making

Strengthen team commitment

Simplify planning process

Emphasize critical path considerations

Stand-up Meeting Visual Project Board

Visual Project board & stand-up meetings provide an integrated system for workflow management

Peter Žilnik, Danfoss Hydronic Balancing & Control 14

The main objective of Market Launch is to create Sales Velocity !!!

Idea generation Product development Realization

Time

Cumulative

cash flow Launch

Speed to

market 1

Sales Velocity =

( Volume / time) 2

Objective of Market Launch

Peter Žilnik, Danfoss Hydronic Balancing & Control

Product projects (by complexity of Execution)

• New Product Development - NPD

• New Product Adaptations - NPA

• (Change Control – CC)

• (Tasks – JDI)

Product Projects

Other Key

projects

Roadmap

Peter Žilnik, Danfoss Hydronic Balancing & Control

Work streams NP

D

NP

AConfirmed Project Scope

NP

D

NP

A Product and supply chain concepts

frozen NP

D

NP

A

Design Freeze

NP

D

NP

A

Q-release passed

NP

D

NP

A

Project Close Down

Project Milestone Summary Project Milestone Summary Project Milestone Summary Project Milestone Summary Project Milestone Summary

Project Charter (Fact Pack) Updated Bus. Case with Confirmed Targets Updated Business Case Updated Business Case Updated Business Case

X X Defined Milestone Deliverables (This document) Time Schedule Updated Time schedule Updated Time schedule Project Evaluation Report

X X Business Case update (Fact Pack) CAPEX Release plan Updated CAPEX release plan Updated Risk assessment and mitigation actions

Resource Contract (Fact Pack) Risk Assessment and Mitigation Actions Updated Risk Assessment and Mitigation Actions Updated Resource Contract

Quality Targets Updated Resource Contract X X Q-release

Updated Resource Contract Preliminary Plan for Transfer Responsibility to Line Plan for Transfer Responsibility to Line

Design and Development Review Conclusions Environmental Assessment

Design and Development Review Conclusions

Export Limitation Control

Technology assessment Concept IP FtO Preliminary Product Specification Approvals, Certifications & Conformity Declarations Updated Product Specification

IP Protection Goal DFMEA Product Specification

Product Requirement Specification Updated IP FtO IP FtO final

Product Concept Design Documentation IP Protection final

Technology Assessment Product Test and Approvals Plan & Documentation Product Test and Approvals Plan & Documentation

Product Test and Approvals Plan Design Line Approval Product Audit Plan

Updated DFMEA

Supply Chain Strategy Supply Chain Concept Supply Chain Design Sample Certificate Approval Variable Cost Evaluated Against Target

Critical Suppliers Identified PFMEA Updated PFMEA Evaluation of Supply Chain Ramp-up Performance

Supply Chain Technology Assessment Ramp-up Plan including Capacity and Capability Production Process Qualification

Supplier Evaluation, Approval and Agreement Updated Ramp-up Plan

Control Plans (Production)

H+S Assessment

Initial Value Proposition (Fact Pack) Functional Value Proposition Updated Functional Value Proposition Value Selling Package Launch Tracking Report

Customer Insight (Fact Pack) Customer Requirement Specification Global Launch Plan Updated Global Launch Plan Market Quality Report

Competitor Insight (Fact Pack) Launch Goals & Strategy Local Launch Plans Updated Local Launch Plans Updated Value Selling Package

Application Overview (Fact Pack) Updated Target Customers/Early Buyers & Influencers Pricing Structure Technical litterature

Product Positioning Plan for technical litterature

X Deliverables ready to be presented at milestone Deselected deliverable, see argumentation Predeselected for New Product Adaptation Choose Q-release statement: Page 1 of 2

M0

Project

Management

M3

Product

Portfolio

&

Launch

R&D

S/C

M6M5M1

Danfoss project Milestone Plan – NPA: Fast track Projects

Peter Žilnik, Danfoss Hydronic Balancing & Control

Other projects (designed for various complexity of Execution)

• Roadmap

Product Projects

Other Key

projects

HBC Roadmap

Peter Žilnik, Danfoss Hydronic Balancing & Control

HBC Roadmap Mechanism

Peter Žilnik, Danfoss Hydronic Balancing & Control

Project title Project Num: Strategic fit

Type: Category: Project mentor:

Project owner

Project Phase Execution Date Time: Deviations

General Status Costs: As planned

Project progress Scope: As planned

Project Start Project spend Estimate Actual

Expected End Costs/Cash (EUR)

Actual update/review Resources (mandays)

Core Project teamEV

ALU

ATI

ON

EXEC

UTI

ON

Completed from last review /sept.13 Planned until next review/jan.14

Key Milestones between start & end

Project Post-Evaluation report (plan vs. actual in success criteria, business impact, goals, deliverables…): Evaluation & Project closure date:

Short Comment to currect status:

PROJECT CHARTER

Key assumptions Major Risks

Project Aim (goals, scope, objectives, business Impact…)

Key Project Benefits Success criteria

PRO

JECT

DA

TA

Peter Žilnik, Danfoss Hydronic Balancing & Control

Project List

Estimated

cost/cash

Estimated

resoures

(mandays)Started

Link to

Project

Charter

Project

closure

date Key Project BenefitProject Title

Project

owner /

manager

Strategic

fit Category TypeGeneral Status

Expected

conclusion Progress

Peter Žilnik, Danfoss Hydronic Balancing & Control

Thank you!