Working with leadusers in product development

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Working with lead-users in product development
Magnus WikströmRD DirectorKorsnäs Development
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Lead User - methodology for innovative product
development

• Eric von Hippel, Massachusetts Institute of
  Technology
• if you want to develop major new products, do
  not study average users
• look ahead of target markets or extreme users
  in other application areas

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Define a fundamental question and seek the answer
among users ahead of your target market

• An example - Improved braking systems for cars

ABS brakes for cars stems from technology for
trains
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Korsnäs business idea
In selected markets, Korsnäs is the major
supplier of unique, competitive packaging
materials based on virgin fibre. Products and
processes shall contribute towards low resource
consumption, sustainability and profitability
throughout the entire value chain.
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Korsnäs today

• Kinnevik group
• Sales MSEK 4550
• 1050 employees
• 700,000 mty converted products

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Main products
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Product life cycles within time unique products
have to be replaced with new innovative products
Volume x Profit margin
Commodity product
Time
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Continuous update of product portfolio
actions 2005

• Major rebuild of PM4 to a board machine new
  drying section and installation of coating
  stations

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Continuous update of product portfolio
actions 2005

• Major rebuild of PM4 to a board machine flakt
  dryer and Clupack replaced by drying cylinders
  and installation of three coating stations
• Two-ply sack paper is phased out

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Continuous update of product portfolio
actions 2005

• Major rebuild of PM4 to a board machine flakt
  dryer and Clupack replaced by drying cylinders
  and installation of three coating stations
• Two-ply sack paper will be phased out
• The business area fluff pulp will be phased out
  and TM6 will be taken out of service in May 2006

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Continuous update of product portfolio
actions 2005

• Major rebuild of PM4 to a board machine
  installation of three coating station and
  dismantling of flakt dryer and Clupack unit
• Two-ply sack paper will be phased out
• The business area fluff pulp will be phased out
  and TM6 will be taken out of service
• Establishment of a new product area folding
  carton

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Paperboard for Tetra Recart Tetra Pak turned to
a supplier that had a record for innovation of
new paperboard products

• Supplier of liquid packaging board since 1974
• Selected as cooperation partner for the project
  1997
• Subproject with leaders from both parties

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Paperboard for Tetra RecartTetra Pak as a Lead
User of paperboard

• Tetra Pak had an extreme need for paperboard that
  could withstand retort conditions (steam at 130
  ?C for two hours)
• Ordinary liquid packaging board could not meet
  the requirements for retortable packaging
• Requirements
• Extreme resistance to edge penetration of
  moisture
• Special folding and converting properties
• Uncoated board with excellent printing
  characteristics
• Closed board surface

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Paperboard for Tetra RecartDevelopment work in
mill scale was carried out simultaneously with
research and pilot experiments

• Several years of machine trials to fine tune the
  moisture resistance, converting and folding
  properties
• Focus areas
• Sizing
• Fiber treatment in different unit processes
• Fundamental research platform
• KTH/STFI leading competence in paper chemistry
• Post-graduate student at Korsnäs edge absorption
• Complementary studies on pilot machines

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High calendering intensity closes the fiber
surface
Paperboard for Tetra RecartNew surface treatment
method developed
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Paperboard for Tetra RecartLong nip hot
calendering - new surface treatment method

• Initial tests in own pilot plant
• Scale-up project in cooperation with Metso and
  Albany
• Installed on PM4
• Used for production of new uncoated product, e.g.
  paperboard for Tetra Recart

High temperature High, but even pressure Long
dwell time
Board web
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Paperboard for Tetra RecartResult from
cooperation project

• Problems solved and target properties achieved
• Market introduction 2001
• Korsnäs is still single supplier of the
  paperboard for Tetra Recart

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Paperboard for Tetra RecartTetra Pak as a Lead
User

• Lead User with extreme needs
• Tetra Pak defined the requirements for a
  paperboard that did not yet exist
• Initiative for cooperation upstream
• Korsnäs could not have initiated the development
  of Tetra Recart system
• Creation of an entire food packaging system - the
  initiative had to come from a company that was in
  the center of the complexity

• Relevance of Lead User in the development of long
  nip hot calendering
• Korsnäs had extreme needs - new surface treatment
  method
• Downstream - value driver identified from market
  input
• Upstream - cooperation partners for technical
  solutions

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Using the Lead User methodology in our industry

• Identify the value drivers
• Frame the right questions
• Look for extreme users - inspiration, know-how or
  cooperation
• Most suitable for end user applications
• In business to business most applicable for
  non-complex innovations

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Needs for becoming successful in joint product
development

• Internal competence!
• From the supplier perspective
• To qualify as the preferred supplier for joint
  product development
• From the customer perspective
• To be able to put high demands on the supplier
• To gain something more than the suppliers
  standard package of customer support
• Also needed for cooperation with external
  research partners
• Competent individuals and critical mass within
  the RD organization

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Needs and challenges for a large organisation to
be innovative

• Selectivity
• Balance the long-, mid- and short term activities
• Implement an effective tollgate system
• Small markets do not solve the growth needs of
  large companies
• It takes time to change the behaviour in B2B
  markets
• ? Long payback time for investments and
  development costs for technical break through
• A visionary owner with long term perspective
• Markets that do not exist cannot be analysed
• ? The decision cannot always be taken just from
  hard facts
• ? A need for braveness and visionary thinking
• Company leadership with Persistence, Visions and
  Courage!

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Congratulations Tetra Pak!