Project & Product Management Portfolio V6
- 1. PROJECT AND PRODUCT MANAGEMENT PORTFOLIO 1992 - 2008 Steven Citron Oceanside, CA 92056 425-765-7887
- 2. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Table of Contents Section Page Product Development Projects & Related Product Management Responsibilities Industrial Work Platform 1 SuperLift Advantage 2 SuperLift Contractor 3 SuperTower 4 Load Lifter 5 Genie Lift 6 AWP Super Series 7 IWP Super Series 8 DPL Super Series 9 GS-1530/1930 Electric Scissor Lifts 10 TMZ-34/19 Trailer-Mounted Booms 11 TMZ-50/30 Trailer-Mounted Booms 12 GS-2032, 2046, 2646, & 3246 Electric Scissor Lifts 13 GS-2668 & 3268 Rough Terrain Scissor Lifts 14 GS-4390 & 5390 Rough Terrain Scissor Lifts 15 Genie Runabout 16 Genie Trailer-Mounted Light Towers 17 GS-2632 Electric Scissor Lifts & GS3384 Rough Terrain Scissor Lifts 18 Bil-Jax Summit Series Trailer-Mounted Boom Family 19 - 20 Bil-Jax X-Boom Series 21 -22 MEC Self-Propelled Boom Family 23 - 24 Branding/Private Labeling/Strategic Partnerships Projects ATD 25 Stanley Hydraulic Tools 26 BPI 27 Business Development/Assessment Processes Product Rationalization 28 New Business/Product Assessment Process 29 - 31 QFD - Quality Functional Deployment / House of Quality 32 - 33 Summary 34
- 3. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: IWP (Industrial Work Platform) Project Type: New Product Development Project Drivers: • Continuous customer requests for an outriggerless aerial work platform. • Strategic advantage to integrate such a product into the company's portfolio. Goals/Targets: • Develop and introduce the industry's first industry s outriggerless manually propelled aerial work platform. • Project outcome must meet planned targets to ensure corporate profitability. and customer satisfaction. Results: • Project completed on time and within budget. • Significant sales revenue impact. • High level of customer satisfaction achieved. Duration: 1 year Base Models: 2 Configurations (approximate): 50 No pictures available of original model Current model depicted model. depicted. Budget (approximate): < $1 000 000 $1,000,000 Cross-functional team size: 12 Page 1 of 34
- 4. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: SLA (SuperLift Advantage) Project Type: • Redesign of existing multi-model product family. Project D i P j t Drivers: • The original product line had not been improved for over 15 years. • The company was losing sales revenue and market share to competitors who had developed superior products. Goals/Targets: • Improve product to meet or exceed customer expectations. • Integrate new and exciting features to re- establish market dominance. Results: • High level of customer satisfaction. • 50% sales increase. • Re-established market dominance. Base Models: 5 Configurations (approximate): 500 Project Duration: 1 year Budget (approximate): > $1,000,000 Cross-functional team size: 12 Page 2 of 34
- 5. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: SLC (SuperLift Contractor) Project Type: • Redesign of existing multi-model product family. Project D i P j t Drivers: • Although there was a high level of customer acceptance for the SLA product line, there was a significant market segment that requested a lighter-duty product family that was similar to the original SuperLift models. Goals/Targets: • Develop and introduce a lighter-duty version of the SLA product line to meet the market demand for a lower price point product family. • Establish key feature differentiation while maintaining a significant level of commonality with the SLA product line. Results: • High level of customer satisfaction. • The introduction of the SLA & SLC product lines resulted in a 100% sales increase over the original SuperLift product family. • Re-established market dominance. Base Models: 4 Configurations (approximate): 100 Project Duration: 1 year Budget (approximate): < $1,000,000 Cross-functional team size: 10 Page 3 of 34
- 6. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: ST (Super Tower) Project Type: • Redesign of existing multi-model product family. Project D i P j t Drivers: • Transfer technological elements from the SLA project to the ST product line to optimize manufacturing commonality, improve product features, and reduce overall costs. • Integrate improved features and reliability specifically targeted for this product line based on customer feedback and historical warranty data. Goals/Targets: • See "Project Drivers" section above Results: • Project completed on time and within budget. • Significant sales revenue impact. • High level of customer satisfaction achieved. Base Models: 4 Configurations (approximate): 40 Project Duration: 1 year Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 4 of 34
- 7. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: LL (Load Lifter) Project Type: • Redesign of existing multi-model product family. Project D i P j t Drivers: • Evolution of product costing eventually drove product pricing higher than the market would bear, resulting in significant reductions in sales. Goals/Targets: g • Reduce cost by 50%, allowing product to be sold at an acceptable price point. Results: • Reduced costs by 66%. • 50% sales increase. • Achieved improvements in functionality and reliability as outlined in project plan. Base Models: 2 Configurations (approximate): 20 Project Duration: 9 months Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 5 of 34
- 8. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: GL (Genie Lift) Project Type: • Redesign of existing multi-model product family. Project D i P j t Drivers: • Customer feedback for product improvements. • Corporate cost reduction targets. Goals/Targets: • Improve p p profit margins through a 25% g g reduction of product cost. • Improve features, functionality and reliability. Results: • Reduced costs by 30%. • 40% sales increase increase. • Achieved improvements in features, functionality and reliability as outlined in project plan. Base Models: 12 Configurations (approximate): 720 Project Duration: 9 months Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 6 of 34
- 9. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: AWP Super Series (Aerial Work Platform) Project Type: • Redesign of existing multi-model product family. Project Drivers: • Original product family had a long history of strong sales revenue and profit generation. • Competitive pressure resulting in 3 successive years of significant market share losses in a product category that had been originally established by the company. • Significant "pride factor" throughout many levels of the organization. Goals/Targets: • Improve product competitiveness and re-establish market leadership. •R d Reduce costs t improve profit margin. t to i fit i Results: • Sales increase resulting in market share as high as 80% within two years of product introduction. • Achieved significant feature, functionality, and reliability improvements as outlined in project plan. • Reduced costs by 20%. Patented design improvements allowed the manufacturing team to establish a timed production flow line, reducing product assembly time by 25%. • A key competitor completely withdrew from the market shortly after losing a patent infringement suit for copying elements of our design. Base Models: 18 Configurations (approximate): 10,000 Project Duration: 1 year Budget (approximate): > $1,000,000 Cross-functional team size: 12 Page 7 of 34
- 10. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: IWP Super Series (Industrial Work Platform) Project Type: • Redesign of existing multi-model product family. Project D i P j t Drivers: • Transfer technological elements from the AWP project to the IWP product line to optimize manufacturing commonality, improve functionality, and reduce overall costs. • Integrate improved features and reliability specifically targeted for this product line based on customer feedback and historical warranty data. Goals/Targets: • See "Project Drivers" section above. Results: • Project completed on time and within budget. • Significant sales revenue impact. • High level of customer satisfaction achieved. • Refer to AWP Super Series Project results for related market share, cost reductions and manufacturing improvements. Base Models: 3 Configurations (approximate): 3,600 Project Duration: 9 months Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 8 of 34
- 11. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: DPL Super Series (Dual Personnel Lift) Project Type: • Redesign of existing multi-model product family. Project Drivers: •TTransfer technological elements f f t h l i l l t from the th AWP project to the DPL product line to optimize manufacturing commonality, improve functionality, and reduce overall costs. • Integrate improved features and reliability specifically targeted for this product line based on customer feedback and historical warranty data. Goals/Targets: • See "Project Drivers" section above. Results: • P j t completed on ti Project l t d time and within d ithi budget. • Significant sales revenue impact. • High level of customer satisfaction achieved. • Refer to AWP Super Series Project results for related market share, cost reductions and manufacturing improvements. Base Models: 3 Configurations (approximate): 720 Project Duration: 9 months Budget (approximate): < $1,000,000 Cross-functional team size: 10 Page 9 of 34
- 12. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: GS-1530/1930 Scissor Lifts Project Type: New Product Development Project Drivers: • Initiative to grow sales revenues in other aerial work platform product categories categories. • Initiative to become a "full line" supplier of aerial work platforms. • Strong customer feedback requesting that we enter this product category for our future business survival. • Strategic defense of existing product lines against encroachment b scissor lift i t h t by i manufacturers. Goals/Targets: • Develop a 15 and 19 ft mini-scissor lift product line that meets or exceeds customer requirements. • C t a compelling " l proposition" t Create lli "value iti " to ensure market success. • Develop scissor lift production facility from the ground up, including building construction, capital equipment acquisition and installation, and hiring a new production team. Results: • Introduced product innovations that provided key sales advantages to effectively compete against existing competitors. • World leading scissor lift manufacturer possessing the l i h largest and most efficient d ffi i ¹ This project had been managed by an outside consulting firm for scissor lift production facility in the world. two years prior to my involvement. This was the largest single • The overall scissor lift product family undertaking in the history of the company as it involved a significant financial investment and a high level of coordination. accounted for 30% of the total corporate The construction of the facility, the acquisition and installation of sales revenue in 2002. large amounts of capital equipment, the hiring and training of hundreds of new production team members, and the Base Models: 2 development of the initial p p product line made this p j project extremely y challenging. Configurations (approximate): 160 Project Duration: 1 year¹ Budget (approximate): > $30,000,000 Cross-functional team size: 20 Page 10 of 34
- 13. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: TMZ-34/19 (Trailer-Mounted Boom) Project Type: New Product Development Project Drivers: • Initiative to grow sales revenues in other aerial work platform product categories. • Initiative to become a "full line" supplier of aerial work platforms. • Strategic defense of existing product lines against encroachment by trailer-mounted boom manufacturers. Goals/Targets: • Develop and introduce a 34 ft. trailer- mounted boom to effectively compete against existing manufacturers. • Ensure product meets or exceeds customer requirements. • Create a co pe g "value p opos t o to C eate compelling a ue proposition" ensure market success. Results: • Introduced patented product innovations that provided key sales advantages to effectively compete against existing competitors. competitors • Dominant market share achieved within two years of product introduction, estimated to be at least 50%. • Added $10,000,000 to overall company sales revenues during the first year of production. Base Models: 2 Configurations (approximate): 160 Project Duration: 1 year Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 11 of 34
- 14. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: TMZ-50/30 (Trailer-Mounted Boom) Project Type: New Product Development Project Drivers: • Initiative to grow sales revenues in other aerial work platform product categories. • Initiative to become a "full line" supplier of aerial work platforms and to continue to fill out our trailer-mounted boom product family. • Strategic defense of existing product lines against encroachment by trailer-mounted g y boom manufacturers. Goals/Targets: • Develop and introduce a 34 ft. trailer- mounted boom to effectively compete against existing manufacturers. • Ensure product meets or exceeds customer requirements. • Create a compelling "value proposition" to ensure market success. Results: • Introduced patented product innovations that provided key sales advantages to effectively compete against existing competitors. • Dominant market share achieved within two years of product introduction, estimated to be approximately 50%. • Added $15,000,000 to overall company sales revenues during the first year of production. Base Models: 3 Configurations (approximate): 150 Project Duration: 1 year Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 12 of 34
- 15. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: GS-2032, 2046, 2646, & 3246 Scissor Lifts Project Type: New Product Development Project Drivers: • Refer to GS-1530 & 1930 Scissor Lift Project. Goals/Targets: • Develop and introduce additional electric scissor lift models, necessary to fill out the complete product category, that meets or exceeds customer requirements. Results: • Refer to GS-1530 & 1930 Scissor Lift Project. Base Models: 4 Configurations (approximate): 320 Project Duration: 1 year (overlapping with GS1530/1930 Project) Budget (approximate): Included in GS-1530/1930 Project j Cross-functional team size: 20 Page 13 of 34
- 16. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: GS-2668 & 3268 Rough Terrain Internal Combustion Scissor Lifts Project Type: New Product Development Project D i P j t Drivers: • Initiative to grow sales revenues in other aerial work platform product categories. • Initiative to become a "full line" supplier of aerial work platforms. • Continued customer feedback requiring the development of additional scissor lift models to complete a similar product category. • Strategic defense of existing product lines against encroachment by scissor lift manufacturers. Goals/Targets: • Develop and introduce an initial rough terrain internal combustion scissor lift product family that meets or exceeds customer requirements. Results: • Introduced product innovations that provided key sales advantages to effectively compete against existing competitors. • The overall scissor lift product line accounted for 30% of the total corporate sales revenue in 2002. Base Models: 2 Configurations (approximate): 240 Project Duration: 1 year Budget (app o udget (approximate): > $1,000,000 ate) $ ,000,000 Cross-functional team size: 15 Page 14 of 34
- 17. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: GS-4390 & 5390 Rough Terrain Internal Combustion Scissor Lifts Project Type: New Product Development Project Drivers: • Initiative to grow sales revenues in other aerial work platform product categories. • Initiative to become a "full line" supplier of aerial work platforms. • Continued customer feedback requiring the development of additional scissor lift models to complete the p p product category. g y • Strategic defense of existing product lines against encroachment by scissor lift manufacturers. Goals/Targets: • Develop and introduce additional rough terrain scissor lift models neccesary to models, fill out the complete product category, that meets or exceeds customer requirements. Results: • Introduced product innovations that provided key sales advantages to effectively compete against existing competitors. • The overall scissor lift product line accounted for 30% of the total corporate sales revenue in 2002. Base Models: 2 Configurations (approximate): 120 Project Duration: 2 year Budget (approximate): > $1,000,000 Cross-functional team size: 10 Page 15 of 34
- 18. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: GR (Genie Runabout) Project Type: New Product Development Project Drivers: • Initiative to grow sales revenues in other aerial work platform product categories. • Initiative to become a "full line" supplier of aerial work platforms. • Customer feedback requesting the development of these models. • Strategic defense of existing product lines against encroachment by other aerial g y work platform manufacturers. Goals/Targets: • Develop and introduce a multi-model family of self-propelled vertical mast booms to effectively compete against existing manufacturers by ensuring the product line meets or exceeds customer requirements. • Create a compelling "value proposition" to ensure market success. Results: •I t d Introduced product innovations d d ti ti that provided key sales advantages to effectively compete against existing competitors. • Dominant market share achieved in this product category within two years of product introduction. • Added $ $7,000,000 to overall company sales revenues during the first year of production. Base Models: 3 Configurations (approximate): 480 Project Duration: 1 year Budget (approximate): < $1,000,000 Cross-functional team size: 6 Page 16 of 34
- 19. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project: TML (Trailer-Mounted Light Towers) Project Type: New Product Development Project Drivers: • Corporate initiative to diversify the company's product portfolio to grow sales revenues from existing product categories outside of the company's core product lines. • Corporate initiative to develop products that are counter-cyclical to existing product portfolio to allow for increased productivity and consistent quarterly sales revenue generation. Goals/Targets: • Develop and introduce a line of trailer- mounted light towers. • Ensure product meets or exceeds p customer requirements. • Create a compelling "value proposition" to ensure market success. Results: • Introduced patented product innovations that provided sales advantages to effectively compete against creatively stagnant competitors. • 10% market share achieved within two years (and growing) in a highly competitive product category dominated by companies with strong brand name presence directly related to this product type. • Added $5,000,000 to overall company sales revenues in 2002. Base Models: 2 Configurations (approximate): 32 Project Duration: 1½ years Budget (approximate): < $1,000,000 Cross-functional team size: 8 Page 17 of 34
- 20. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: GS-2632 Electric Scissor Lifts & GS-3384 Rough Terrain Scissor Lifts Project Type: New Product Development Project D i P j t Drivers: • Continued expansion of scissor lift product family. Goals/Targets: • Similar to previously listed scissor lift g targets Results: • Successful introduction of both products per project schedules and budgets. Base Models: 2 Configurations (approximate): 140 Project Duration: 1 year each Budget (approximate): < $1,000,000 Cross-functional team size: 8 - 10 Page 18 of 34
- 21. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: Bil-Jax Summit Series Trailer-Mounted Boom Product Line Project Type: New Product Development Project Drivers: Bil-Jax • Bil Jax had an outdated product offering and had been experiencing downward trending market share for several successive years. • Company was the leading scaffolding manufacturer in North American but was looking to their powered access business for f expansion. i Goals/Targets: • Improve product competitiveness and re-establish market leadership. • Reduce costs to improve profit margins. Results: • Successful introduction of entire product family per project schedules and budgets. • Catapulted Bil-Jax back into a market leadership position for this product category. • Product offering and appeal was leveraged t d l d to develop new i t l international ti l distribution channels. • Product offering and growth positioned the company as an acquisition target for a number of companies. Base Models: 24 • Bil-Jax was purchased by the world's third largest aerial work platform Configurations (approximate): 1 000's 1,000 s manufacturer following the introduction of Project Duration: 2 years this and the X-Boom product lines. Budget (approximate): > $1,000,000 Cross-functional team size: 7 - 10 Page 19 of 34
- 22. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: Bil-Jax Summit Series (continued) Page 20 of 34
- 23. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: Bil-Jax X-Booms Self-Propelled Boom Lift Product Line Project Type: New Product Development Project Drivers: company s • Substantially grow the company's revenues and market presence within the powered access industry. • Create and establish a leadership position in an innovative new product category. Goals/Targets: • Position Bil-Jax as an innovator and leader within a new product category. • Leverage maximum commonality of parts with the Summit Series trailer-mounted boom family. Results: • Developed a new family of hybrid self- propelled boom lifts that would provide the transportability of trailer-mounted booms with the on-site maneuverability of conventional self-propelled booms. • Successful introduction of two of the eight base models prior to my d b d l i departure from the company. • Significant sales revenues and market acceptance achieved. Positioned Bil-Jax as more than just a scaffold and trailer- Base Models: 24 mounted boom manufacturer, allowing them to leverage the International markets Configurations (approximate): 1 000' C fi ti ( i t ) 1,000's as a new product category leader. Project Duration: 2 years • Maximized common components and major sub-assemblies from the Summit Budget (approximate): > $1,000,000 Series trailer-mounted boom product Cross-functional team size: 7 - 10 family to create this new product line. Page 21 of 34
- 24. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: Bil-Jax X-Booms Page 22 of 34
- 25. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: MEC Aerial Work Platforms M40T & M46TJ Self-Propelled Booms Project Type: New Product Development Project Drivers: • MEC offered a full line of scissor lifts but did not have any self-propelled boom lifts in its product portfolio. They need to be a full line provider in order to be strategically positioned for substantial growth. Goals/Targets: • Develop a highly competitive family of telescopic and articulating boom models that can be produced at a cost target that would ensure a competitive price position within the market. Results: • Prototypes built for key 2008 trade shows and were successfully marketed - we sold out our planned production capacity for nearly 6-months. Base Models: 8 • Each model is far superior in comparisons against competitive Configurations (approximate): 1,000's machines in the same product category Project Duration: 1 year in virtually every key published specification and feature. Budget (approximate): < $1,000,000 • Project was on budget and met their Cross-functional team size: 5 -6 margin targets for each model. Page 23 of 34
- 26. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Projects: MEC Aerial Work Platforms M40T & M46TJ Self-Propelled Booms Page 24 of 34
- 27. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Strategic Alliance/Private Labeling Company: ATD Northwest Products: Portable Video Surveillance Systems Business Activities: • Co-developed trailer-mounted video surveillance product. • Developed relationships, strategies and processes to facilitate mutually beneficial business arrangements. • Other details cannot be released due to proprietary agreements. A STRATEGIC OPPORTUNITY Page 25 of 34
- 28. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Strategic Alliance/Private Labeling Company: Stanley Hydraulic Power Tool Division Products: Multiple product lines. Business Activities: • Co-developed several product lines for both organizations to brand within their respective distribution systems. • Developed relationships, strategies and processes to facilitate mutually beneficial business arrangements. • Other details cannot be released due to proprietary agreements. Page 26 of 34
- 29. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Strategic Alliance/Private Labeling Company: Terex Handlers (Baraga Products Inc.) Products: Multi-model telehandler product line. Business Activities: • Private labeling of Terex Handlers through Genie's distribution system. • Developed relationships, strategies and processes to facilitate mutually beneficial business arrangements. • Other details cannot be released due to proprietary agreements. Other Notes: • Provided leadership for a similar project with a company in Italy that is now producing Genie branded telehandlers for our international sales offices throughout Europe, Asia, Africa, and Australia. Page 27 of 34
- 30. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Product Rationalization Projects Project Scope/Purpose: The product rationalization process is intended to identify products which do not fit into the corporation's overall strategy for one or a combination of the following reasons: • Low or no profit • Low sales • Unjustifiably unique or complex manufacturing processes. The process is conducted annually and produces a number of i iti ti d b f initiatives i l di including: • Price increase recommendations. • Cost reduction proposals targeted for specific product lines. • Initiatives to improve sales and marketing efforts to increase sales of targeted products. • Design for manufacturability initiatives. • Product obsolescence and related recommendations for production build- out and inventory disposition. Results: R lt • Significant improvements in organizational efficiency and profitability. Project Duration: 6 - 9 months Cross-functional team size: 6 - 8 Page 28 of 34
- 31. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO New Product/Business Assessment Project Scope/Purpose: • To evaluate and approve project proposals to ensure specific targets will be met. • Co-developed several tools that include strategic and financial evaluation criteria. A sample of one of these tools is listed below: CONTRIBUTION ASSESSMENT SHEET New Product Example 5/12/03 rev. rev F Sales Projection Projected Average net sell price $4,655 Current Sales Replaced by New Unit Sales forecast 3,236 Current Model Current Discount factor 0.6187 Average net sell price $0 Units sold per year 0 Per Unit Per Year % net Cannibalized Sales Current List price $7,523 Model none Average Net Sell Price $4,655 $15,062,672 Average net sell price $0 Lost unit sales per year 0 Average Discounts/Expenses 3.50% $163 $527,194 Average discount/expense 3.50% Net Sales $4,492 $14,535,479 Net replaced sales p $0 Variable Costs % net Current Variable Costs per unit savings Materials Costs Materials Costs Avg Direct Materials (BOM) $1,729 $5,595,044 Direct Materials (BOM) $0 $0 Outside Processing 0.04% $2 $6,173 Outside Processing Consumables 0.63% $29 $94,390 Consumables Inbound Freight - Direct 1.19% $56 $179,996 Inbound Freight - Direct Other - Direct Costs 0.87% $41 $131,549 Other - Direct Costs Inbound Freight - Allocated 0.13% $6 $19,396 Inbound Freight - Allocated Other - Allocated -0.09% -$4 -$14,118 Other - Allocated Indirect Materials total (non-BOM) $129 $417,387 Contribution Margin-Gross 56.58% $2,634 $8,523,047 Variable Operating Costs Variable Operating Costs Direct Product Team Labor 11.65% $542 $1,755,359 Direct Product Team Labor Indirect Product Team Labor 5.26% $245 $792,556 Indirect Product Team Labor Product Team Expenses 1.26% $59 $189,940 Product Team Expenses Corporate Overhead 0.00% $0 $0 Corporate Overhead Additional marketing $0 $0 Contribution Margin-Net $1,788 $5,785,193 Cost Reduction per Unit $0 per Allocated Fixed Costs Development Costs hour hours totals Fixed Operating Costs Engineering cost $40 0 $0 Product Team Expenses 2.41% $112 $362,861 Process set up labor $40 0 $0 Equipment Depreciation & Rent 1.73% $80 $260,006 Distribution set up cost $40 0 $0 Warranty Expense 2.85% $133 $429,783 Prototypes $0 Corporate Overhead 8.22% $382 $1,237,559 Testing and Certification $0 Sales and marketing 6.00% $279 $903,760 Tooling $0 Operating Profit $801 $2,591,224 Equipment $0 % Operating Profit 17.2% Other (patents, travel, etc.) $0 Total development cost $0 Cash and Earnings Impact Cash Impact of Program Investment Value of Program Development costs $0 Return analysis time (years) 3 Average weeks of on-hand inventory 2 Time to market (years) 1 Cost to develop inventory $336,549 Amount invested $3,281,708 Average days payment terms 90 Cost of capital 9.50% Cost to develop accounts receivable $2,945,158.58 $2 945 158 58 Incremental Operating Earnings (annual) $2,500,532 $2 500 532 Total investment: $3,281,708 net present value $2,991,893 Net Present Value (adjusted) $2,732,322 # of months from project start to first production unit 1 Return 56% # of months from project start to production at rate 12 300,000 200,000 Cash Flow 100,000 month 1 will be in the past on in 0 process projects -100,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 -200,000 -300,000 -400,000 Month (from project start) Operating Earnings Impact of Program Cost Reduction Impact (annual) $0 (positive value is a cost reduction) Sales Revenue Impact (annual) $14,535,479 (new net sales - old net sales) Operating Earnings Impact (annual) $2,500,532 (additional net sales * profit percent) + total cost reduction Page 29 of 34
- 32. New Product/Business Assessment Contribution Assessment Summary Worksheet Per Unit Net Sales Price $35,000 Costs Material cost $18,172 52% Labor $1,200 3% Overhead (2x) $1,200 3% SGA & all other $6,563 19% Total Costs Per Unit $27,135 78% Operating Income Contribution $5,681 16% Less: Taxes (40% of EBIT) $2,272 Net Income $3,409 Initial Capital Investment Development costs $137,358 Initial cost to develop inventory $85,718 Accounts receivable development cost $218,750 Total Investment $441,826 Investment Value of Project Return term (years) 10 Time to market (years) 1 Amount invested $441,826 Cost of capital 15% Net present value $4,416,796 Return 106% Project Summary Average Annual Sales Revenue Impact $3,850,000 Average Annual Operating Income (EBIT) $865,094 22% Units sold per year 50 100 200 150 150 150 150 100 50 - Annual Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Totals Average Sales 1,750,000 3,500,000 7,000,000 5,250,000 5,250,000 5,250,000 5,250,000 3,500,000 1,750,000 - $38,500,000 3,850,000 Variable costs (excl. dep) 1,028,614 2,057,229 4,114,457 3,085,843 3,085,843 3,085,843 3,085,843 2,057,229 1,028,614 - $22,629,514 2,262,951 Fixed costs (excl. dep) 328,161 656,323 1,312,645 984,484 984,484 984,484 984,484 656,323 328,161 0 $7,219,549 721,955 Operating Income (EBIT) 393,224 786,449 1,572,898 1,179,673 1,179,673 1,179,673 1,179,673 786,449 393,224 - $8,650,937 865,094 Taxes (40%) 157,290 314,580 629,159 471,869 471,869 471,869 471,869 314,580 157,290 $3,460,375 346,037 Net Income 235,935 471,869 943,739 707,804 707,804 707,804 707,804 471,869 235,935 - $5,190,562 519,056 Change in working capital (304,468) (304,468) (608,936) 304,468 - - - 304,468 304,468 304,468 $0 Operating Cash flow (68,533) 167,401 334,803 1,012,272 707,804 707,804 707,804 776,337 540,403 304,468 $5,190,562 519,056 Capital Investment -$137,358 Net cash flows -$137,358 -$68,533 $167,401 $334,803 $1,012,272 $707,804 $707,804 $707,804 $776,337 $540,403 $304,468 $5,053,204 505,320 Discount rate (WACC) 15% NPV¹ $4,416,796 ROI (IRR) 106% Assumptions Days A/R (45 days) 45 218,750 437,500 875,000 656,250 656,250 656,250 656,250 437,500 218,750 - Inventory (60 days) 60 171,436 342,871 685,743 514,307 514,307 514,307 514,307 342,871 171,436 - Payables and Accru. Exp. 30 85,718 171,436 342,871 257,154 257,154 257,154 257,154 171,436 85,718 - Working capital 304,468 608,936 1,217,871 913,404 913,404 913,404 913,404 608,936 304,468 - ¹ NPV calculated from EBIT
- 33. Product Assessment New Business Strategy • Linking new product development with organizational objectives. • By 2012 we will generate over 50% of Idea Idea our annual revenue with new products. Generation Screening Business Brainstorming: Analysis The first filter in Stage 1 Development Thinking of Test the NBD Process Stage 1 unlimited ways to Preliminary figures $ that eliminates for demand, cost, Rapid proto Marketing Final vary a product or solve a problem. ideas that are sales, and profit Stage 2 Evaluate Decision $ inconsistent with potential are • Cost and reactions of Full Sources: $ • Customer council the organization’s calculated. Market potential market • End users strategy or are Stage 2 Evaluation customers introduction $ • Sales reps obviously Entry Analysis: • Funding in a market • Rental companies inappropriate for • Alliances • Staffing test area. $ • Competitors other reasons. • Business • NPD • Team members • Manufacturers • Joint Venture Plan • Trade shows • Acquisition • Market Size. Is idea consistent with • Market Potential. Checklist for evaluating new product company goals? • Current Penetration. concepts: • Impact on existing 1. Contribution to pre-tax return on investment. product line & business. 2. Estimated annual sales. Not • The Competition. Yes No 3. Estimated growth phase of Product Life Cycle. Sure • Who buys the 4. Capital investment payback product? 5. Premium-Price Potential Proceed to Concept STOP • How will we get the Business Test 1 August 2007 product to market? Analysis
- 34. IDEA GENERATION QFD: A process for translating customer expectations into CONCEPT SELECTION design and process parameters CONCEPTS/IDEAS CONCEPTS/IDEAS INPUT FOR THIS STEP = TECHNICAL MATRICES IDEAS (ONE FOR EACH SUB-SYSTEM) MARKET DATA TECHNICAL PRODUCT PRODUCT PLANNING MATRIX TECHNICAL PRODUCT SUB-SYSTEMS (MAST, BASE, ETC.) TECHNICAL MANUFACTURING PROCESSES Output/Results: Output/Results: Output/Results: Output/Results: - What the customer expects. - Technical (design) parameters which - Idea generation focused on - Allows systematic evaluation and - How important is each directly pay-off to customer expectations determining potential ways to selection of various concepts expectation (prioritized). for each sub-system. satisfy customer expectations. based on the best "balance" - Preliminary cost targets for - Prioritized importance rating for each - Many ideas generated for each between meeting the customer each sub-system of the design technical parameter based on its' customer expectation and the expectations and meeting the based on its' over-all over-all contribution to satisfying manufacturing process. strategies of the organization. contribution to customer customer expectations. - Rough screen evaluation and expectations. - Technical benchmarking parameters elimination to determine which - Preliminary risk analysis. and analysis. ideas have the most potential. - Rough cut competitive - Identification of positive and negative - Ideas re-categorized by affected benchmarking (using competitive correlations between parameters. sub-systems and then categorized literature and previous data). - Target values (specs) for design. by short, medium, and long term - Risk analysis on each specific implementation. technical parameter. - Ideas regarding manufacturing processes to be taken into consideration during the design phase. Steven Citron
- 35. QFD: A process for translating customer expectations into design and process parameters MANUFACTURING PROCESS MATRICES INPUT FOR THIS STEP = QUALITY PLANNING MATRICES TECHNICAL MATRICES MANUFACTURING PROCESS STEPS QUALITY CONTROL POINTS (DEBUR, CLEAN, WELD, PAINT, ETC.) PART CHARACTERISTICS MATRIX (only for the system chosen to be carried forward) MANUFACTURING PROCESS QUALITY CONTROL POINTS PARTS CHARACTERISTICS STEPS (THICKNESS, RADIUS, LENGTH, ETC.) QUALITY CONTROL POINTS MANUFACTURING PROCESS STEPS Output/Results: - Translation of technical parameters into specific parts characteristics that will Output/Results: Output/Results: meet the technical parameter target values. - Translates the critical part characteristics into - Control points for established process steps. process steps which will meet the necessary - Determines process control points to ensure requirements. process consistency. - Set cost/time targets for each basic function or process step. - Helps establish processes which will ensure - Identifies the most important process steps to achieve consistent output by limiting the variation in the parts characteristics. the manufacturing process. - Output provides data for detailed manufacturing flow - Set cost/time targets for each quality area. charts, allowing analysis and process improvement before, during and after product introduction. Steven Citron
- 36. STEVEN CITRON PROJECT AND PRODUCT MANAGEMENT PORTFOLIO Project & Product Management Experience: 16 years j g p y Project types: New Product Development Product Improvement Cost Reductions Product Rationalization p New Product/Business Development Strategic Partnership/Private Labeling/Branding Distribution Development Typical project durations: 9 - 18 months Typical cross-functional team size: 8 - 12 Formal Education and Training: • Leadership training • Value engineering • Management training (McGraw Hill) • Rapid new product development • Project management (multiple courses) • Formal & extensive QFD training • Total Quality Management • Total customer satisfaction • Lean manufacturing • Creative problem solving Project planning tools/process experience: GOAL/QPC Seven Management and Planning T l S M t d Pl i Tools: Other t l / Oth tools/processes: • Affinity Diagrams • Gantt Charts • Interrelationship Digraphs • Pert Charts • Tree Diagrams • Quality Functional • Matrix Diagrams Deployment & HOQ • Prioritization Matrices • Contribution Assessment • Process Decision Program Chart ( g (PDPC)) • Pugh's Concept Selection • Activity Network Diagram Process Other misc. problem solving tools • The Seven Quality Control Tools (7QC) Accomplishments: • Proven track record of product management and project leadership resulting in the introduction of several new and improved products, representing cumulative sales of several billion dollars, significantly impacting the success of a number of companies. • Responsible for product rationalization/life cycle management processes, results of which have contributed to efficiency gains and related improvements in profitability. • Served as project and product planning manager, responsible for market research, competitive benchmarking, final design specifications and leading cross-functional teams from concept generation through market introduction, sales, and customer support for over 100 products (primary model configurations) over the past 16 years years. • Several products mentioned above have received awards and recognition. Many are the industry benchmark, with market shares near or in excess of 50%. • Named inventor and co-inventor on several U.S. patents. Page 34 of 34