need water powerpoint
TRANSCRIPT
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
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
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
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
&
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
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
Leakage Test•Leakage Test
•Supposed to come out
Pressure Port
•Combined Leakage out
incorrect ports was 23%
Additional design opportunities
reinforced tripod frame
treadles sold separately
plastic valve
change chain to wire
plastic pump head