5 Metso R&D Investments in R&D 2002 Wärtsilä Metso Andritz Sandvik Atlas Copco Astec 3.7 3.2 3.0 4.0 3.4 1.6 R&D, % of sales Voith 4.6 3.1 2.5 Bold figures according to annual reports, italic figures according to 2003 R&D Scoreboard published by Britains Dept. of Trade and Industry 3.5 4.6
6 Metso R&D RTD locations M ilwaukee Shrewsbury Biddef or d Toronto ClarksSummit Metso Paper Metso Automation Metso Minerals Mâcon Jyväskylä Tampere Valkeakoski Sundsvall Pori Turku Raisio Helsinki Järvenpää Anjalankoski Kajaani Oulu Hollola Karkkila York Pittsburg Orléans Kelowna Sala Trelleborg Belleville Sherman Düsseldorf Karlstad Hannover Varkaus Nastola Lansdale Danville Colorado Springs Ersmark Metso Ventures Surahammar Willich
8 Metso R&D RTD Project portfolio 2003 Technological Uncertainty 18% 24% 8% 17% 11% 9% 7% 4% 2% Incremental Innovations (50%) Radical Research (10%) Incremental Research (10%) Radical Innovations (30%) Low Medium High (D:Improve- ments) (F:New to Market) (E:New to Metso) Novelty/ Potential LowMediumHigh (C: Research) (B: Concept Development) (A: Product Development) Short termMedium term Long term Systematic Technology Management forms the common R&D-language in international corporation It is a pre-requisite for transparent and (to certain degree) commensurate decision-making It promotes continuous development and learning
10 Innovation Metso Innovation Process Idea mgmt Feasi- bility Research & Develop- ment Solution development Launch Re- view GatesProject phases Metso Innovation Process will provide a framework for capturing Metsos technology synergies and developing solutions for the customers needs
11 Objectives and Tasks MG2 requirements MG2 Research & Develop- ment Design and describe product operations and functions Generate and select product concept Assess technical viability Check IPR issues Define preliminary design, cost structure, operational plans Make cash flow estimation and financial projections Define product offering & launch plan for each segment, Develop operational model and plans Technical concept and viability solved IPR issues solved Business plan version 2 Marketing and launch plan Operational model and plans Innovation Example of MIP project phase: R&D
12 Innovation Innovation process - example Time Performance effenciency cost reduction Spray coating/sizing MSP coating Blade coating 200020101990 Moment for long-term strategic decision Curtain coating Dry coating
16 Challenges Business trends for heavy industry Declining total market for heavy industry world-wide - Growth opportunities in mature businesses stay difficult to identify - Only few big global competitors Commodity trap – poor product differentiation - Differentiation is vital in all business processes - Quality and differentiation important success factors on mature markets Ability to forecast and react - Trends change faster - Listening to the customer interface is important Mental attitude downwards - lack of drive to create growth
17 Challenges Future competence Partner network Business models Technology fusion Focus in past Focus today Focus in the future Integration of different competencies Speed and customer-orientation Specialization and differentiation Flexibility and quality Networking
18 Metso persons Metso Systems Machine Customer Systems Customer persons SERVICE BUSINESS CONCEPT Service and maintenance orchestration Service information management Remote Service concept Challenges Life-cycle management Interaction of business model, technology development and partnerships & alliances - early on in the development phase Emphasis on life-cycle thinking - also R&D must focus on the best life-cycle performance
20 Research networking - forest cluster LWC paper making roadmap Central Europe & Scandinavia North America China New knowledge from 2007 onwards 2010 ? 2000 - 2010 1970 - 1985 1985 onwards Finnish orchestration capability? Finnish orchestration capability?
21 Research networking - forest cluster Metso technology focus Efficiency improvement Product development programs Strategic research Joint development programs Forest cluster research TEKES EU Metso RTD Metso RTD
22 Research networking - forest cluster Horizontal and vertical innovation Future interactive business system Raw material supplier Technology Pulp & Paper Maker Printer Consumer Productio n concepts Product concepts Demand concepts Publisher Omya Basf Springer Voith Voith Fabrics Heidelberg
23 Research networking Building competencies Yueyang Beijing Shanghai Paper quality measurements Sensor calibration Process line start-up Wet end chemistry knowledge center Paper technology knowhow Pilot facility Åbo Akademi, Finland Jinan International market requires global thinking in R&D - orchestration of business and research partners resources Partner networks build new qualifications for innovation - both horizontal & vertical
25 Competitiveness from technology New breakthrough technologies Virtual reality and simulations in design, R&D, and training Prosessiauto- maation kehitys alusta muuttuu langattomaksi Biotechnology opens new opportunities Micro machines, sensors, nanotech Customized digital printing Wireless process automation Lite designs
27 Summary Internationalization of R&D Systematic Technology Management provides the necessary transparency for continuous improvement and learning - a pre-requisite for effective R&D in an international company Coupling of R&D with business model and partnership development is necessary - increased focus on life-cycle thinking! Active orchestration is vital for effective and international R&D - ensure critical mass in developing the well focused core of your business; Develop simultaneously your capabilities to orchestrate everything around it The human factor - personal relationships and trust - should never be underestimated; Promote international mobility of R&D staff! Core Partners Certified partners
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