Demo29396.doc - Rev. 17 - 29/12/00 Pag. 1 of 22 PART I Title Electronic services for refrigeration plants AE number and associated TTN AE29396 - Tecnopolis CSATA AE Abstract Società Tecnica del Freddo (S.T.F.) is a firm that produces different sized refrigerating plants and other products for freezing, water refrigeration, etc. S.T.F. has 9 employees, 2 of which have skills in the electrical field. The company addresess only the Sicilian local market, owning the 50% of share, with an annual turnover of about 1 MEUR. The experience of the company mainly covers electro-mechanical and thermotechnical areas, while demanding to external consultant the design of the equipment control boards. The old product was based on traditional PCBs, discrete devices and simple digital ICs, other than relays and control switches. The very poor performances of the existing controller prevented the company to compete with more sophisticated solutions in terms of cost and features offered by competitors. By this AE S.T.F. intended to introduce the microcontroller technology in its products in order to improve controller performances, add new features for the remote management like autotest and remote control. By the introduction of the microcontroller technology in the refrigerating plants, the company changed its market strategy from only selling stand-alone refrigerating plants, to the provision together with the sold plant of a full support service, allowed by the remote connection capabilities. This put the company in the position to sensibly increase the selling price, taking into account of the added benefit which results to the customers. Consequentely, the company will reach good profits, even with a small volume production. In addition, a strenghten of the market position against competitors is expected, since the new S.T.F. offer will result very attractive for the customers. Considering the AE total cost of 57 KEUR, the payback period is 5 months, with a ROI of 1000% over three years.
Transcript
Demo29396.doc - Rev. 17 - 29/12/00 Pag. 1 of 22
PART I
TitleElectronic services for refrigeration plants
AE number and associated TTN
AE29396 - Tecnopolis CSATA
AE Abstract
Società Tecnica del Freddo (S.T.F.) is a firm that produces different sized refrigeratingplants and other products for freezing, water refrigeration, etc.
S.T.F. has 9 employees, 2 of which have skills in the electrical field. The companyaddresess only the Sicilian local market, owning the 50% of share, with an annual turnoverof about 1 MEUR.
The experience of the company mainly covers electro-mechanical and thermotechnicalareas, while demanding to external consultant the design of the equipment control boards.
The old product was based on traditional PCBs, discrete devices and simple digital ICs,other than relays and control switches. The very poor performances of the existingcontroller prevented the company to compete with more sophisticated solutions in terms ofcost and features offered by competitors.
By this AE S.T.F. intended to introduce the microcontroller technology in its products inorder to improve controller performances, add new features for the remote managementlike autotest and remote control.
By the introduction of the microcontroller technology in the refrigerating plants, thecompany changed its market strategy from only selling stand-alone refrigerating plants, tothe provision together with the sold plant of a full support service, allowed by the remoteconnection capabilities.
This put the company in the position to sensibly increase the selling price, taking intoaccount of the added benefit which results to the customers. Consequentely, the companywill reach good profits, even with a small volume production.
In addition, a strenghten of the market position against competitors is expected, since thenew S.T.F. offer will result very attractive for the customers.
Considering the AE total cost of 57 KEUR, the payback period is 5 months, with a ROI of1000% over three years.
The company has 9 employees including 7 technicians (2 of which are electricians) and 2administrative units.
The annual turnover is of 1 MEUR.
One technical manager and the two electrical technicians have been involved in thisexperiment.
3. Company business descriptionS.T.F. was established in 1987 and it is a company which produces general-purpose andcustomised refrigerating plants.
Industry Sector: 29 - Machinery
ProdCom: 2923 - Non-domestic cooling and ventilation equipment.
S.T.F. fabricates refrigerating equipment ranging from the smallest ones (10 m3 forapplications as cold rooms for hotels, kitchens, etc.) to those for industrial needs (10,000 -20,000 m3 cold rooms). Additional products are: refrigerating systems for ice production,water chiller, freezing plants for fish, vegetables, end meat.
The company organisation includes the functions of design office, commercial office,production facilities and a group which provides maintenance services for customers.
By this AE S.T.F. has been put in the position of increasing its business by changing itsmarket strategy. In fact, it became from a simple equipment manufacturer a real full-service provider which uses up-to-date communication technologies to interface itscustomers, thus satisfying their need of receiving a timely control, maintenance andprevention support.
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4. Company markets and competitive position at the start of the AES.T.F. market is currently represented only by the Sicilian one, where the company has the50% of share. This local market is valuable in 2 MEUR per year.
Typical S.T.F. customers are: hotels, food industries, chemical industries, ice-creamproducers, retailers, etc.
In Sicily the company has four main competitors which share the remaining 50% notcovered by S.T.F.
The local competitors offer products with similar performances of the S.T.F.'s ones and,being impossible with the existing technologies to reduce selling prices, the only way toincrease the market share is to improve the equipment performances by adding features.
None of the local competitor already uses microelectronics devices in its product, whilst atNational level exists a more sophisticated offers, but no one providing the remote managedcustomer support.
5. Product or process to be improved and the reasons to innovate
The existing product to be improved through this AE is a refrigerating equipment, whosestructure is depicted in the following block diagram:
The Control Unit includes:
• power supply (PS)
• "control logic" block, formed by the following four sections:
- defrosting control (A)
- fan delay control (B)
- pump-down control (C)
- icing water on finite pipe of evaporation control (D)
PS
CLT T T T
P PP P
Air Consensing Unit
Compressor
Air-Cooler
Cold-Room
A B C D
Control logic
Control unit (CU)
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• power control switches (T);
• thermal protection switches (P)
• operation control lamps (CL) for the plant operation/stop signalling.
Old Control Unit
The control unit (CU) has the following functions:
1) acquiring the cold room temperature;
2) performing a simple management of the equipment operation (with A, B, C, Dsections);
3) controlling a time-dependent defrosting.
It consists of a PCB with discrete electronics, SSI digital ICs, relays and power controlswitches. The overall dimensions of the PCB are 40 x 40 cm².
The existing control unit results inadequate for effectively managing the refrigerationequipment for the following limitations:
• only the cold room temperature is monitored
• it is unable to handle fault events
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• the defrosting is only time dependent
• It is not as flexible and programmable as required to be adapted to different operatingconditions (external temperature, temperature cycling in the cold room, etc.), and tosave energy
• It doesn't perform any periodical equipment test
• lack of alarms signalling or messages
• no remote control is availabe so the networking with a central unit is prevented.
Particularly, If the refrigerating equipment goes down, the refrigerated goods (expeciallyfood or chemicals) may be damaged. In this case, the owner of goods has losses a lot ofmoney.
The weaknesses of the control unit limits the overall performance of the equipment and,being the competitors' selling prices lower than S.T.F.'s, the company cannot afford theNational market, while having serious difficulties in manteining its local market share.
To only way to overcome the above technical limitation is to perform a technological stepup allowing to carry out a powerful control board.
6. Description of the product or process improvements
The new product has the same structure of the old one, except for the control system thatis microcontroller based in the new version.
The new solution is based on the MICROCHIP® PIC microcontrollers, equipped withuseful interfaces, like IIC® (Inter Integrated Connection) serial bus. in order to design aboth expandable and flexible for future upgrade system, it was chosen to use a multi-microcontroller architecture, based on a very powerful device such as PIC 17C756 tomanage the entire system and the remote control facilities, through RS-232 or modem, andto make the daily system monitoring; it is supported by some specialized, less powerfulmicrocontrollers, like PIC 16C74, to manage locally each task.
The main unit based on PIC 17C756 can communicate with all «other peripherals» (PICs16C74) via IIC® serial bus, in order to acquire all the local data related to each task. Thisunit acquires the whole condition of the system as a supervisor that administrates all thetasks assigned to every slave (that knows only the local status) and, in case of danger, ittakes control over them.
The main unit and the peripheral unit are illustrated by the following block schematics:
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The revised controller comprises:
• control logic;
• power supply (PS);
• liquid crystals alphanumeric display (LCD);
• serial communication port RS232
• buzzer for acoustic signalling
• keyboard
• external temperature sensor
System Bus Interface
PIC 17C756
External Memory (opt.)
Digital I/O3x4 OR 4x4
Matrix Keyboard
16 K x 16ProgramMemoryDigital I/O
USART #1MODEM / PC-TERMINAL
I 2 CIIC Serial Bus
N. of peripherals on IIC
USART #2
4X20 OR 4X40
SERIAL
LCD - MODULE
Digital I/O
GENERAL
STOP & ALARMS
User interface
I2
C serial bus
I2 C
DIGITAL & ANALOGI/O
8k x 14Program Memory
PIC 16C74
Taskto manage
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The control logic includes:
• Multi-controller MCU board
• Input interface to protect the microcontroller from high voltages
• Output interface with power buffers to drive the power control switches
The added features allowed by the new solution are:
1) acquisition of a complete set of operation parameters.
2) variable cold room set point according to day by day schedule;
3) optimized equipment management to ensure the proper behaviour according to thecustomer specifications, the reduction of the stressing conditions and theimplementation of energy saving strategies;
4) more flexible management of the defrosting procedure;
5) check of the different part of the equipment, with the insertion of the autotest function todetect and prevent faults, reducing maintenance costs;
6) trend-storage of various analogue variables at different timing (tracing facility);
7) diagnostic messages and alarm signals trasmission, acoustic, by the inside speaker,and through RS-232, by phone or by radio;
8) remote control of the equipment by a personal computer, through RS-232communication.
The improvements achieved with the new version of the controller result in the followingmain benefits:
• increased performance/cost ratio. The performances are sensibly higher than those ofthe old product, while the cost is nearly equal to previous one
• the operation set point is customisable in accordance to specific user needs
• increased safety operation
• higher reliability and lower fault risk
• reduced maintenance and repairing costs
• re-programmability of the equipment through the remote connection
• remote management of the installed equipment in absence of the local operator
The results achieved make this product suitable for all applications, even in the mostcritical cases, where a traditional equipment is inadequate.
An additional benefit of the remote connection to the customers' plants will be thecapability of constantly monitoring the behaviour of the installed control system in order totimely correct eventual bugs in the firmware of the system. Moreover, the networking withcustomers will allow to effectively manage the plant security by remotely detecting asystem malfunctioning, even in case of unattended plants, and then promptly recovering
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the situation.
The new control unit
7. Choices and rationale for the technologies, tools and methodologies
To move from the traditional controller to a more efficient up-to-date control system, thefollowing solutions have been evaluated:
• use of standard digital ICs (SSI-MSI),
• use of a microprocessor
• a microcontroller based solution
• a digital ASIC implementation.
The first solution was skipped out as it would have produced a too expensive, un-satisfactory result due to the high number of ICs to be used and to the waste of PCB sizeand complexity.
The computational capability of a microprocessor was considered eccessive and costly forthe requirements of this application.
The ASIC solution was discarted being too difficult to afford and uneconomic due to thesmall volumes required.
Then, S.T.F. decided to undertake the microcontroller-based solution, which has beenconsidered a good trade-off between features increased and technical and economicalpraticability of the access to the new technology.
Consequently to this decision, a technical analysis on the different families ofmicrocontrollers has been performed which led to the choice of the MicroChip PICmicrocontrollers.
The PIC family has been chosen due to the following positive aspects it presents againstother microcontrollers:
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• powerful hw resources made available by these devices
• low-cost
• user-friendly development tools availability
• very diffused and provided of a rich application notes library
HW design methodologies
The FU took the opportunity of setting up an up-to-date microcontroller developmentsystem consisting of:
• Pentium PC workstation
• OrCAD software for PCB layouting
• Eagle CADsoft for circuit schematic
• Microcontroller emulator board
• Complete set of technical documentation (manuals, application notes, etc.),
SW development methodologies
The PIC software code for this application has been developed by the use of high-levellanguage, in-circuit emulator, simulator, macro assembler and EPROM programmer.
Fabrication Technologies
The PCB fabrication for the new controller solution has been committed to a specializedfactory, to ensure the best realization and the highest reliability of the board. The electroniccomponents mounting, in traditional technique has been commited to S.I.E.N.A., thesubcontractor in charge of the fabrication task, which has already collaborated with S.T.F.to assemble some parts of the existing refrigerating equipment.
Test methods.
The microcontroller board has been tested stand-alone, before its installation in thecomplete equipment; this to check its behaviour in all possible operating conditions. Duringthe test all kinds of input signals have been generated and the correspondent circuitresponses have been checked.
At system level, the whole refrigerating equipment has been tested, by analyzing both itsoperation in several working conditions and the control system performances.
The test equipemnt utilised consisted of oscilloscopes, a logic state analyzer, as wella asof various general-purpose instruments as waveform generator, power suppliers, etc.
8. Expertise and experience in microelectronics of the company and thestaff allocated to the project
The S.T.F.'s technical staff includes 7 technicians (2 of which with skills in the electrical
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field).
The existing technical experience of the company mainly referred to electro-mechanicaland thermotechnical areas.
S.T.F. engineering laboratory is equipped with:
• Standard PC with general purpose software;
• graphic design tools;
• basic electronics instrumentation (multimeters, power supplies, analog and digitalmeasurement instruments, oscilloscope, etc.);
• assembly machinery for electro-mechanical equipment fabrication.
Due to the lack of expert in electronics, the company cannot design internally the controlboard of its equipment, but committes the electronic design to external engineers.
By this AE, S.T.F. aimed and obtained to acquire the know-how and the practical espertiseto develop by itself the microcontroller based boards.
For the scope of this experiment the company involved one technical manager and twoelectrical technicians.
9. Workplan and rationale
The whole project was divided into workpackages, each representing a main projectphase, while splitting the most complex activities into simpler tasks.
In the following, are reported task description, actual time scheduling and effort and costsrealted to this AE.
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Tasks description
WorkPackage
Task Description
WP 1 1.1 Project technical management
WP 2 2.1 Training
WP 3 3.1 Specification definition
WP 4 4.1 Microcontroller-board HW design
4.2 Microcontroller-board to refrigerating systeminterfacing
WP 5 5.1 SW development
WP 6 6.1 Microcontroller-board realization
6.2 New Refrigerating equipment prototyping
6.3 Whole system integration
WP 7 7.1 Microcontroller-board testing
7.2 System testing
Task 1.1
This task implies the general management of the project, including work breakdown amongpersonnel, periodical coordination meetings, material orders, writing of technical reportswith pictures, photographs, schemes.
Task 2.1
The courses held by the subcontractor CRES represented the basics for transferringmicrocontroller knowledge and know-how to S.T.F. and to start the implementation phases.
Task 3.1
The objective to obtain a good specification has been one of the most important targetpursued by the FU. With the CRES assistance, S.T.F. team identified all controllerfunctions, the input/output signals, defined the design parameters, tolerances, etc..
Task 4.1
The microcontroller-board HW design has been one of the most important step in thewhole experiment development and has been carried out by the subcontractor CRES, withthe constant participation of the FU for the learning on the job purposes.
Task 4.2
Since the use of a microcontroller based board, more powerful than the existing one,allowed the expansion and improvement of the controlled operations, a great care hasbeen provided in designing the functional interface between the equipment and controllerboard (commands, alarms, information display, etc.) .
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Task 5.1
The software code development for the current application required two work steps: firstly,the algorithms definition to implement the temperature control, the energy saving thesystem-to-user communication protocol, etc; secondly, their transcription in software codewith the related testing and debugging. As in previous development phase, the task hasbeen accomplished by the subcontractor CRES with the related training on the job to theFU personnel.
Task 6.1
This task (microcontroller-board realization) was fully developed by subcontractors CRESand S.I.E.N.A. in order to ensure a quick and successfull prototype realization.
Task 6.2
In this task, the FU took care of the realisation of the new refrigerating equipment prototypeutilising the revised micro based control board.
Thi activity has been carried out by the FU through the S.I.E.N.A. subcontractor support,which contributed for the following aspects:
• optimization of the refrigerating process
• setting up of mechanical devices
• verification of the proper refrigerating power of the equipment
• installation of sensors, displays and communication devices
• fabrication of non-standard parts
• assembly of all required accessories (brackets, wire connectors, etc).
Task 6.3
This task concerned the integration of the microcontroller-board with the refrigerating unit.The related activities required particular attention to electromagnetic compatibilityproblems, which implied wire and cable shielding, proper device positioning, etc. TheS.I.E.N.A. subcontractor assisted the FU in developing this task.
Task 7.1
The test of the microcontroller board has been initially performed by stand-alone and byusing the microcontroller in-circuit emulator.
A detailed test program has been prepared to check all possible operating conditions andinputs. The support has been given by CRES.
Task 7.2
The complete refrigerating system test has been performed during this task. Theoperational test has been executed on the whole equipment according to the test planissued in the controller test phase. The task was mainly accomplished by the FU withsome assistance of the subcontractor CRES.
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Time Schedule
Task Description Months
1 2 3 4 5 6 7 8 9 10
1.1 Project technical management
2.1 Training
3.1 Specification definition
4.1 Microcontroller-board HW design
4.2 Microcontroller-board to refrigeratingsystem interfacing
5.1 SW development
6.1 Microcontroller-board realization
6.2 New Refrigerating equipment prototyping
6.3 Whole system integration
7.1 Microcontroller-board testing
7.2 System testing
(°) Actual: dark bars; Planned: dashed bars.
The shifting of the actual workplan with respect to the planned has been essentially due tothe late delivery of the microcontroller development system which caused delays in thetasks 4.1 and 5.1, this resulting in a two months extention of the overall duration.
The extension of the task 4.1, produced by a late arrival of the materials for the electronicinterface, did not affect the whole duration having been absorbed by the delays onprevious tasks.
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Effort and Costs
The following table summarizes actual and planned FU’s effort, as well as thesubcontractors' costs.
The risks perceived by the F.U. when evaluated this AE in conjunction with the TTN andthe subcontractor CRES, can be as follows summarised:
1) complete absence of FU technical knowledge and know how in microelectronics at thestart of the AE;
2) the significant effort needed by the company to move from the electromechanical basedapproach to the new one required to introduce more sophisticated electronics;
3) the increased attention required to decouple circuits avoiding EMC problems.
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The FU complied with the above risks by the following actions:
• scheduling specific training on the new technology to reduce the existing gap;
• fully exploiting the subcontractors support through a learning by doing approach duringthe development of the AE (design and fabrication);
• committing the PCB realisation to a specialised company to ensure the best quality andto prevent any EMC problems;
10. Subcontractor information
For the scope of this AE, the FU needed to get the support of a competence centre inmicroelectronics and of a specialised system integrator. The first one would have beenable to provide either training and assistance during the development phases, while theother capable of technically supporting the FU in the new controller board and equipmentassembly.
As first subcontractor has been selected CRES taking into account the following criteria:
- in Sicily it represents the only independent development centre which providetechnology transfer on microelectronics applications.
- It has a strong experience in this field having supported several smallcompanies in innovation projects.
- It has a strong link with the local university, this allowing to benefit also of ascientific support on high-end technologies.
Furthermore the level of confidence on the CRES support in carrying out similar projects isconsideraby high (it is linked to the Tecnopolis TTN and it acts as subcontractor in otherapproved AEs).
Particularly, the subcontractor profile is as follows.
CRES (Centre for Electronic Research in Sicily) is a 45 employees centre for appliedresearch established in 1974 in Monreale, Palermo.
Since 1985, CRES has been registered in the Register of Public and Private Laboratoriesrecognised by the Italian Minister of University and Scientific and Technological Research(Act 46/82) and is entitled to carry out studies, research and technological innovationtransfer to the benefit of small and medium enterprises (SMEs).
CRES has expertise and experience in the fields of microelectronics, integrated optics andlaser technologies, microwave, VLSI and informatics. Its general activity concerns thedesign, realization and testing, with proper equipment, of devices, and the softwaredevelopment. Specifically, CRES has a microcontroller applications laboratory in whichboard design, simulation and firmware are developed, It has carried out several industrialsolutions based on microprocessor/microcontrollers.
The subcontract between FU and CRES has been regulated by a formal contract issue.This contract states the subject of the activities, terms and conditions, the duration, as wellas the payment to be made by the FU to the subcontractor. It is also clearly stated thatownership and patents of the AE product belong to the FU and that the Italian Governmentlaws regulate everything not mentioned in the contract.
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The second subcontractor S.I.E.N.A., has been in charge for this AE of the provision oftechnical support to assembly the new refrigerating equipment.
S.I.E.N.A. was selected since its over ten-years experience in the realization oftechnological advanced refrigerating and energy equipment in fields such as tourisms, fooddistribution, refrigeration, aqueducts and telecommunications.
The S.I.E.N.A. manager come from a strong experience in the National Energy Dept.(ENEA).
The role of this subcontractor in the experiment mainly referred to:
a) optimization of the refrigerating plant operation and setting of mechanical devices, toverify the right refrigeration power of the plant;
b) PCB assembly and installation of sensors, displays and communication devices in thenew refrigerating system,
c) Technical assistence in testing the new refrigerating system, in particular for whatconcerns the energy saving performances.
The subcontract between FU and S.I.E.N.A. has been regulated on a commercial basis.The FU committed the work requested for this AE through a specific order and at thecompletion the subcontractor issued the related invoice.
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PART II
11. Barriers
The main barriers perceived by the FU in undertaking by itself this innovation of its productare of different nature:
1) Technical: lack electronic knowledge and the difficulty to migrate from simple hardwiredelectronics to microprogrammed devices adoption;
2) Economic: to afford autonomously the costs for training and consultancies;
3) Psychological: the fear to loose time and money, without significant results, inapproaching and utilising a new technology;
4) Cultural: lack of examples to imitate of similar companies having already afforded suchkind of innovation on refrigerating equipment.
12. Steps taken to overcome barriers and arrive at an improved productor processThrough the promotion events of FUSE initiative S.T.F. realised that approachingmicroelectronics technologies is not impossible for a small company and that cultural andfinancial barriers could have successfully been removed.
The analysis stimulated by the proactive FUSE action, to compare the technological andmarket position of the company against National and foreign competitors, convinced S.T.F.that a tehcnology step up would have significantly improved the actual company level.
From the above comparison, S.T.F. derived that no Italian companies was producingmicrocontroller-based, high performances, energy saving, remote controlled refrigeratingequipment, and that such featured product would have implied a very powerful commercialimpact.
Finally, the company relised that beside the removal of cultural, psychological barrier, theFUSE funding will have overcome the financial initial obstacle, while the contact with thesubcontractor CRES (e.g. a local support centre in microelectronics) capable of fullyassisting S.T.F. in training and in the first implementation would have allowed to afford thetechnical impact with the new technology.
13. Knowledge and experience acquired
The global target the FU aimed to reach with this AE was an increment in the capabilitiesto upgrade its technological know-how, making this aligned to the level reached by theother European companies working in the same sector.
This objective has been achieved by the main steps hereafter summarised.
1) theoretical and applied knowledge transfer committed to the subcontractor CRES andconsisting of:
Technical courses (lessons and lab. exercises)
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a) Microcontroller system hardware design (5 day courses);
b) Microcontroller system software code development (5 day course);
c) Microcontroller system testing (2 days course).
Learning on-the-job (during development phases) aimed at acquiring know-how andpractices to develop autonomously a microcontroller based solution. It included:
• specification definition for a microcontroller system;
• choice of the best microcontroller family and model for that application;
• commercial search and specification of microcontrollers parameters;
• microcontroller manual and technical documentation understanding;
• use of electronic CAD software;
• assembler and high level languages;
• programmming techniques for microcontroller software development;
• use of microcontroller system developing tools (emulator, EPROM programmer,software simulator, etc.);
• test instruments principles and operation for microcontroller systems.
Particularly, the following knowledges have been acquired:
• use of Cadsoft EAGLE, the software for the realization of the circuit schematics
• use of Microchip MPLAB IDE, the tool for developing PICs microcontrollers'software
• Use of PICstart Plus (a PICs programmer), the simulator and the MPLAB ICE2000In Circuit Emulator
• exploit the Internet facilities to find out components and data sheets, as well as tocontact outfitters, submit orders and getting commercial and technical information
Beside this technical aspects, the AE gave the FU the opportunity to learn how toeffectively prepare a complete project plan. All concepts have been acquired, from thepreliminary investigation on all possible technical solutions, through the economicassessment and the preparation of an executive workplan to the management of the wholeproject with the proper approach to interface suppliers and subcommitting activities to thirdparties.
14. Lessons learnedThe overall judgment of this AE is that it worked well and satisfactorily meat the FUexpectations.
The only aspect that the FU focused and that might warn the potential replicators refers to
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the approach to the hw / sw outfitters.
Actually, during the experiment S.T.F. while contacting all outfitters, ascertained that, forsome components such as the micro PIC 17C756, few of them owned stocks, so that, in ajust-in-time approach long delivery times have to be expected.
This has to be carefully taken into account when preparing the schedule of activities.
Moreover, even the evaluation of the qualitative and quantitative market offer of the toolsand facilities needed for the prototype development (e.g. computers, CAD software andrelated the materials) has to be early done to prevent delays and mismatching tospecifications.
As it happened for this AE, the FU suggests to fully exploit the competence of thesubcontractors involved in the project to perform properly the above analysis andevaluations.
15. Resulting product, its industrialisation and internal replicationThe FU by this AE reached the target of getting a first prototype of the new digitalcontrolled refrigerating unit. The successful in-house test performed revealed theconformity to the expected specification, putting the company in the position to pass to theindustrialisation phase.
This phase will start with the installation of some new systems in a few plants to be usedas beta-sites. This systems will be strongly monitored (thanks to the remote connection) toacquire data on the control system operation and its effectiveness.
After having introduced the necessary corrections and optimisations, the final version willbe assessed and the production will start.
The time schedule for the phases after prototyping are graphically shown by the followingdiagram.
1998 1999 2000 2001DevelopmentBeta-testFinal product assessmentStart production
Therefore, the industrialisation will last the end of 2000 including the following steps:
- Beta-test- Optimisation of the controller board and system layout- Best selection of parts to be adopted- New cabinet design and fabrication.
For the production will be used the same external service providers addressed during theAE.
The cost estimated to shift in the production will around 40 KEUR.
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The S.T.F. management after this experiment fully realised the importance ofmicroelectronics in innovating products and it plans to continue the adoption of theacquired technology for further applications in its productions.
Particularly, the flexibility and versatility given to equipment by the microcontroller solutionwill be exploited by S.T.F. to fully customise its installations in accordance to the end-usersneeds, by only re-programming the controller firmware. This will significantly improve thecompetitive position against other companies.
Standing the fruitful and successfull co-operation with the subcontractors involved, thecompany intends to access, when necessary, this external support even for futureimplementations.
16. Economic impact and improvement in competitive positionThe product that has been improved through this AE is a madium-sized refrigeratingsystem of 15 HP power, whose standard controller has been replaced by a microcontrollerbased board.
The following table compares the cost, item by item, of the existing product against thosefor the new version achieved by this experiment.
Item Present product costs(KEUR)
New product costs(KEUR)
Materials (excluding control system) 30.000 30.000
Materials (control system and sensors) 0.750 2.250
Assembling 6.000 5.500
Other 0.500 0.500
Total cost 37.250 38.250
The product cost increase is very low (1 KEUR), considering the total cost of the wholenew product (38.250 kECU). This increase is mainly due to a higher number of sensorsand electronic components used in the new product, rather than the microcontroller basedPCB. The simple replacement of the old controller with a new one having sameperformances but utilising a microcontroller would have implied a sensible cost reduction.
The added features, instead, even with a slightly cost increase will result in a moreattractive, performant equipment, this bettering the competitive position of the company inthe market.
The major profit achievable by S.T.F. with the launch on the market of the revisedrefrigerating equipment is shown in the following table.
Demo29396.doc - Rev. 17 - 29/12/00 Pag. 21 of 22
Present product (KEUR) New product (KEUR)
Sale price 44.750 52.500
Total cost 37.250 38.250
Profit/each system 7.500 14.250
The market plan for the existing product can be summarised in the table below.
Year 1996 1997 1998 1999(forecast)
2000(forecast)
2001(forecast)
2002(forecast)
2003(forecast)
N. of soldsystems
16 15 12 10 8 6 4 2
Total profit(KEUR)
120.0 112.5 90.0 75.0 60.0 45.0 30.0 15.0
The decrease in the number of sold systems is due to the prevision that, in the next years,some competitors can introduce on the market a refrigerating system with performancescomparable to those achieved by S.T.F. with this AE.
With the new product, the forecasted plan becomes as follows.
Year 2001 2002 2003
N. of sold systems (forecast) 15 18 20
Total profit 213.75 256.50 285.00
The expected increase in profits are due to the fact that the product will result verycommercial attractive and that S.T.F. aims, with the new production, at expanding itsbusiness towards the National market, to get a 2% share; while increasing from 50% to60% the local share.
By the introduction of the microcontroller technology in the refrigerating plants, thecompany changed its market strategy from only selling stand-alone refrigerating plants, tothe provision together with the sold plant of a full support service, allowed by the remoteconnection introduced.
This put the company in the position to sensibly increase the selling price, taking intoaccount of the added benefit which results to the customers. Consequentely, the companywill reach good profits, even with a small volume production.
In addition, a strenghten of the market position against competitors is expected, since thenew S.T.F. offer will result very attractive for the customers.
Considering the AE total cost of 57 KEUR, the payback period is 5 months, with a ROI of1000% over three years.
Demo29396.doc - Rev. 17 - 29/12/00 Pag. 22 of 22
Fig.1 - Profit Increase
17. Added value to the portfolio and target audience
Since the company belongs to the Machinery sector (29), with a specific reference to theproduct code 2923 - Non-domestic cooling and ventilation equipment, this AE is obviouslyof use for similar companies working in the same field.
Moreover, the specific situation of the company may stimulate the replication amongst FUsoperating in the same context and having a similar starting point:
• Industrial environment not favourable
• Absence of microelectronics basic skills
• Scarce availability of technical supporting centres
It has to be pointed out that one of the main barrier encountered by S.T.F. in affording suchexperiment has been the lack, amongst similar firms, of succes cases to imitate. It isimportant, therefore, to give maximum diffusion in Sicily of this AE, to be adopted as a firstexample of fruitful microelectronics application to a traditional product.
It is also important to highlight that the FU is convinced that its experience has to bespread even to its local competitors. Particularly, the successful choice of adding value tothe product by associating a full-service support has to be diffused as an important marketstrategy change.
In fact, the FU is aware that the general growth of the Sicilian industrial environment willresult in benefits for all the local community.
