Typical Business >$100M Sales Organizations Typical Business >$100M Sales CEO, Business Leader Marketing Sales Engineering Research Manufacturing Operations HR Legal Finance Info Technology Service Operations

Typical Business Roles CEO – Chief Executive Officer Sets Strategic Direction Formulates and Drives overall Operating Plan Allocates Funding to Supporting Functions Sets/Approves Supporting Function Annual Goals Company Image and Morale Meets Strategic Commitments: OM, CM, Cash, Net Income, etc Ultimate Responsibility for Quality

Typical Business Roles Marketing & Sales Assess Customer Needs & Satisfaction Determine Market Size, Demographics Transform Customer Needs into High Level Product Definitions Communicate Product Definitions to Eng Drive Promotion and Advertising Assess Competitive Product Features Set Sales Prices Determine Suitable Distribution with Mfg Predict/Communicate Sales Volume & $ for each Product on Annual Basis

Typical Business Roles Engineering Transform High Level Product Definition into Quantifiable and Verifiable System Requirements Estimate Resources Required for Proposed Product Development Provide Technology and Design Solutions to System Requirements Develop System Architecture, Requirement Flowdown, and Detailed Design Solutions Integrate and Verify Block and System Level Requirements Provide Mfg with all documentation to produce the product Provide/Integrate Competitive New Technology

Typical Business Roles Manufacturing & Operations Purchase & Procurement of Materials MRP (Material-Resource Planning) Build, Produce, Distribute the Products Develop Automated and Manual Assembly Develop Automated and Manual Processes Drive for Lower Cycle Time, Inventory, Defects, Rework, Variable Costs, Safety Drive Promotion and Advertising Justify Equipment Expenditures, ROI Maintain Product Mfg Records Shipping and Receiving

Typical Business Roles Info Technology (Supporting Function) Provide Computer Automation of Manual Functions including Order Entry, Purchase Orders, Shop Orders, Inventory, Payments, and Shipping Orders Support eBusiness Transactions Provide Basic Computer Platforms to Departments including HW, OS, Email, Internet, Word Processing, Spreadsheet, Charting, E-CAD, etc Provide Networking, File Storage and Server Infrastructures

Typical Business Roles Finance (Supporting Function) Manage Accounts Payable Manage Accounts Receivable Provide Periodic Accounting Summary of Base Cost, Var Cost, OM, CM, Net Inc & Cash Provide Operating Plan Assessment Allocate Depreciation Provide Tax Justification and Payment Drive Controllership, Identify and Reduce Unnecessary Costs Manage Company Payroll

Typical Business Roles Human Resources & Legal (Supporting Functions) Find Qualified New Hire Candidates Drive Periodic Performance Assessments and Salary Actions Drive Compliant & Legal Operations Formulate and Communicate Company Policies including vacation, work rules, sick leave, disability, bereavement, internal job posting, seniority, use of company assets, job elimination Provide Employee Complaint & Appeal Systems Manage Intellectual Property Usage/Ownership Manage Company Legal Actions

Business Planning Process Culminates in 1 Year Operating Plan Typical Annual Business Planning Processes Month 1 Month 5 Month 6-7 Month 9-12 Month1 Tech Platform Products LT Financial ST Financial Tech Technology Assessment And Planning 3-5 Year Platform Plan 3-5 Year Product Plan 3-5 Year Financial Estimates 1 Year (Next Year’s) Operating Plan Technology Emphasis Business Emphasis Technology Capability Over Time Competitive Differentiation Technology Ownership Common Hardware and Software Platforms Platform Owners & Roadmaps Market-Backed Multi Year Roadmap Competitive Differentiation Product Plan Linked to … Technology Plan Linked to … Resource Plan Financial Plan Business Planning Process Culminates in 1 Year Operating Plan

$ Base Costs $ $ Variable Costs $ Cost Associated with developing a product plus all costs not associated with an individual production unit Product Design Engineering Compensation and Benefits (Salary) Eng and Mfg Capitol Equipment Depreciation Office supplies, tools, computer rental, network, etc Travel and Living Expenses RTS – Ready-to-Serve typically includes Eng Management, Administration and other support staff Base costs are those that stay the same regardless of production volume $ Variable Costs $ Cost Associated with an individual production unit Product material costs Product labor and scrap costs Product Shipping, Distribution and Installation costs Product Warranty costs Cost of Selling Product – Commisions Variable Costs scale with production volume

Basic Business Financial Terms Sales to Net Income Walk Cash Flow and Net Cash is also Very Important Total Sales $ Revenue Variable Costs $ - COGS - DSC Contribution Margin $ (CM) Base Costs $ - C&B - RTS Operating Margin $ (OM) Financial Costs $ & Taxes Net Inc $ COGS = Cost of Goods Sold (Inventory Value of Goods including material, production costs, scrap) DSC = Direct Selling Costs (Installation, Warranty, Sales Commissions) C&B = Compensation & Benefits (Salaries of Engineering & New Product Development Staff) RTS = Readiness To Serve (Support and Infrastructure, Management, Depreciation, Facilities) Financial Costs = Other Costs and Income (Royalties + Investments +/- Interest Expense/Income)

Basic Business Case For A New Product Program Inputs Estimated Average Product Selling Price (ASP$): Estimated Annual Product Sales Volume in Units: Estimated Per Unit Cost of all Parts & Materials @ above volume: Estimated Per Unit Cost of all Assembly, Test & Mfg @ above volume: Estimated Total Development Cost in $ incl Labor & Material: (In this class we will assume 1 Hr of Eng = ~$150) Calculate the Annual Sales Revenue $ = ASP$ * Annual Volume Calculate the Annual Var Costs $ = (Unit Material $ + Mfg $) * Annual Volume Calculate the Per Unit CM$ = ASP$ – (Unit Material $ + Mfg $) Calculate the CM% = Per Unit CM$/ASP$ Calculate the Annual CM$ = Unit CM $ * Volume = Annual Sales $ - Annual Var Costs $ Calculate the ROI (Return on Investment) Time in Years = Est Dev Cost $/Annual CM$ Outputs

Industry Compliance Control Systems Management Design Controls Production & Process Controls Corrective & Preventive Actions Equipment & Facility Controls Material Controls Records, Documents, & Change Controls Controls

Terms and Definitions Design Inputs Requirements, Constraints and other information which is needed to formulate a set of design outputs for a given product. Design Inputs must include customer (user) level as well as product/system level. Design Outputs All drawings, documents and other information necessary to describe the constituent parts, assembly, manufacturing process, service and disposal processes for a product. Design outputs from one team often become the design inputs to another team. All Design Inputs/Outputs Must Be Reviewed in Many Industries… …. ie Aerospace, Transportation, Medical, etc

Terms and Definitions Reviews Peer review of design inputs and design outputs are a mandatory part of many industry product development processes. Reviews must include objective evidence of attendees, documented issue list with dispensation actions, signatures and dates. Reviews must include appropriate stake holders (management, customers, other design teams) plus at least 1 unbiased, knowledgeable external reviewer

Terms and Definitions Verification Validation Design analysis, simulation or prototype testing which provides objective evidence that a design meets all of its block or product level requirements. Verification is used to prove that a design meets all of its specifications. Is performed at component, block and product levels Validation Product field, clinical or customer trial which provides objective evidence that a product meets its customer (user) requirements. Intended use is an important part of the product labeling. Is only performed at the product level

Stadtmiller 6 Project Steps “Electronic Project Management & Design” Research and Gather Information (Chapter 5, Lab 1) Market and Competitive Assessments Key Component and Technical Feasibility Information Define the Product, Develop Design Specs (Chapter 6, Labs 1,2 & 4) Standard Requirements – Common; Performance Requirements – Unique Block Diagram and Assignments Develop a Program Plan (Chapter 7, Lab 3) Specific to Design Blocks and Product Needs Common tasks based on Check List Execution, Detailed Design Phase (Chapters 8-11, Labs 5-8, 10) Detailed Design Packaging and Component Selection, Mfg Process Design Prototype Design and Construction Design Verification (Chapter 12, Labs 8-9) Mfg Test and Calibration, Serviceability, Obsolescence Environmental Stress Screening, Design for Reliability, Design for Manufacturability Conclusion, Institutionalize Design Knowledge and Improvements

Typical Industry Product Development Process Business Planning & Definition Execution Commercial Introduction & Production Ramp Full Production Product End 0f Life Milestones are used to control and monitor product development execution A program cannot proceed to the next milestone tasks until Management has approved the current milestone Each milestone requires specific tasks & documentation, checklists and review Some milestones may be skipped if the programs are smaller 1 2A 2 3 4 5 6 7 8 9 3A Program Timeline 0 Business Case Confirmed 1 System Design, Funding Committed 2A External Evaluation Authorized 2 Detail Design Complete, Xfer to Mfg 3A Sales Announcement Pilot Production Authorized Full Production Authorized Customer Satisfaction Confirmed 6 Authorization to Stop Sales and Production 7 Communicate End-of-Life to Customers 8 Decisions to Scrap Spare Parts 9 End of Product Life and Data Management Plan to spend some time on this slide. Talk through the meaning of each of the milestones. Note that the framework is proven. The framework has been consistent at GEHC since the 1980’s and is very similar to many other companies benchmarked Multiple ME Milestones There are two main reasons: A major project may be divided into incremental versions of hardware/software that are evaluated externally at different points during the design phase. (In this case, the multiple ME milestones are planned.) Customer feedback after ME may drive program teams to make changes that require additional external evaluation(s) or to validate the changes. (In this case, the second ME is unplanned; it is repeated to address serious issues.) Multiple M3 Milestones Release of a product or service in a foreign region requires the region to be ready to begin shipping a product or to use a service. Readiness may involve regulatory clearance, infrastructure, service metrics, or field training. (In this case, the multiple M3 milestones are planned.) Customer feedback after M3 may drive program teams to make significant changes that require additional pilot build(s) to validate the changes. (In this case, the second M3 is unplanned; it is repeated to address serious issues.) Multiple MS Milestones The most common reason for planning to execute multiple MS milestones is that the clearance to market and sell products in multiple countries or regions can lead to staggered regional sales announcements. Many countries and regions have unique requirements that manufacturers must satisfy to obtain special permission to market and sell in those areas. Multiple M4 Milestones Multiple M4 milestones should only be considered after other alternatives have been exhausted. Products or services should be released to all targeted regions at M4, unless business or competitive pressure demands otherwise. For a new product, the most common reason for planning to execute multiple M4 milestones is that the clearance to ship products to multiple countries can lead to staggered regional product introductions. (Many countries and regions have unique requirements that manufacturers must satisfy to obtain special permission to ship to those countries.) For a new service, the most common reason for planning to execute multiple M4 milestones is that regional readiness to start full use of the service can lead to staggered regional releases. (Each region has service metrics that must be satisfied to fully release the service in that region). Reference Information PRD Phase Definitions Phase 1 – Business Planning & Definition The Business Planning & Definition phase involves the identification of opportunity or need. The project team establishes project goals based on customer needs and intended use, and then develops detailed requirements and formal plans to accomplish project goals. Phase 2 – Execution The Execution phase involves designing the product or service. The program team builds and tests prototypes to verify the product or service meets requirements. Phase 3 – Commercial Introduction The Commercial Introduction phase involves the sales announcement of the product or service. Production pilot units are built, shipped, and installed at customer sites. Phase 4 – Production The Production phases involves initiating full production. The production units are shipped and installed at customer sites. Phase 5 – End-of-Product Life The End-of-Product Life phase involves the decision to discontinue production of the product. This decision is followed by discontinuing service at a later date.

Step 1-2: Team & Project Identification Project Suggestions Project Brainstorming Productization Aspects Team Formation Resource Assessment Logistics and Roles Review Initial Product Level Requirements Performance Requirement Formulation Standard Requirement Formulation Define Customer, Country, Demographics Outputs P1 (Steps 1-2) Projects Considered Selection Rationale Basic Product/Project Description Key Requirements Architectural Block Diagram Review

Step 2-3: System Design, Program Plan Inputs Define Product Source Power Requirements Define Product Elec Interfaces Define Product Mech Interfaces Define Safety Stds Define EMC Stds Basic Product/Project Description Key Requirements Architectural Block Diagram Define All Operating Modes Define Initial Assembly Levels Define PCB Count, Block to Board Allocations Block Electrical Interface Reqs Analog: voltage range, impedance, freq, etc Digital: Vih,Vil, Iih, Iil, Voh, Vol, Ioh, Iol, etc Product Level Requirement Allocation and Association to Blocks Requirement Flowdown to Blocks Block Interface Requirements Outputs: P2 (Step 2-3) Prod Level Std Reqs Defined Prod Level Perf Reqs Defined Block Diagram Defined Block Interfaces Defined System Allocation and Association of Prod Level Reqs Project Roles and Block Assignments Defined Project Plan, Tasks Defined & Estimated Scope & Resources Reconciled Block Task Estimates Product Level Estimates Resource Allocations Overall Project Plan Scope Add/Subtract Review

Step 4: Detailed Design Inputs Define Block Electrical Perf Reqs PS Voltage Range PS Current Range Analog Perf Gain, SNR, Freq Resp, Xfer Func etc Digital Perf Ops/Sec, Clock Freq Range, State Diagram Define Block Mechanical Reqs Define Connector Types Define Mech Mounting for PCB’s Define Mech Mounting for any Non PCB components Refine PCB Sizes Block Diagram Block Interfaces System Allocation & Association of Prod Level Block Tasks Defined & Estimated Block Scope & Resources Reconciled Final X-Check Block Electrical Interface Reqs Analog: voltage range, impedance, freq, etc Digital: Vih,Vil, Iih, Iil, Voh, Vol, Ioh, Iol, etc Signoff with Interfacing Teammates Execute Detailed Circuit Design Research Circuit Solutions Review Review Proposed Solution with Team Outputs: P3 Schematic Diagram Initial Parts List Design Equation and Theory of Operation: Nom Values of R, L, C Analog DFM Analysis: Tol%, Power, Comp Select, Digital DFM Analysis: DC Drive, Timing Firmware: State Diagram, VHDL, uCode Review Analog DFM and worst case analysis Digital DFM and worst case analysis

Step 5-6: DFM, DFR, Verification, Conclusion Inputs Define Block Verification Plan Procure Initial Prototype Components Breadboard Initial Prototype Verify functional performances in Lab Document Block Verification Schematic Diagram Initial Parts List Design Equation and Theory of Operation: Nom Values of R, L, C Analog DFM Analysis: Tol%, Power, Comp Select, Digital DFM Analysis: DC Drive, Timing Firmware: State Diagram, VHDL, uCode Procure Final Prototype Components Define PCB Layout for Final Prototype Define Production Parts List for Block Refine Prototype Parts List for Block Integrate Design Block Proto/Production Parts Lists Execute Overall PCB Layouts Construct Prototype PCBoards Integrate Prototype Define Prototype Verification & Validation Plan Execute Verif & Valid Conduct Reli Analysis Conduct Sustaining Analysis Develop User Manual Develop Overall Mfg Process Design Repair Strategy Review Outputs P4, Final Deliverables: Functional Prototype Verified System Requirements MS Word Design Report MS Powerpoint Project Presentation Objective Evidence of Robust Design Solution and Control Drawing Package for Mfg Review