Preface

Early in my career, I was given a rather unique opportunity that would have a profound effect on not only my professional career, but my life. My employer at the time, Rockwell Automation, was trying to expand into other international markets where our market share was still very small. One such market, Japan, was in the middle of a manufacturing renaissance, as epitomized by the book The Machine That Changed the World, by James Womak. The book presented how Toyota and many other Japanese companies had embraced the teaching of Edward Deming to completely revamp their manufacturing processes. Where Japanese products and manufacturing were once regarded as junk, they were now manufacturing the highest quality and most efficient goods in the world.

My employer, Rockwell Automation, was a manufacturer of industrial automation and control equipment under the brand Allen-Bradley. Allen-Bradley had a very good reputation for quality in most of the world. Even the Allen-Bradley logo proudly exclaimed "Quality".

At Rockwell Automation, we prided ourselves on the quality of the products we produced and, recognizing the rapidly expanding market of Japan, we struggled to understand why our products did not enjoy more commercial success in the Land of the Rising Sun. During this same time period, we also entered into a partnering agreement with a company called Nippondenso.

Nippondenso was originally a part of Toyota but later became an independent company after World War II as the Supreme Command for the Allied Powers reshaped the Japanese automobile industry and Toyota was forced to spin off Nippondenso, although Toyota still maintained a sizeable minority share in the company. Nippondenso was, and still is, a large automobile parts supplier creating much of the components in a Toyota automobile. It would later expand to servicing the vast majority of automobile suppliers. While Nippondenso, now called simply Denso, was then largely an automobile parts supplier (with roughly 98% of their 2016 revenue of $40B coming from automobiles), they continued to explore other market opportunities and segments, creating divisions for robotics, data acquisition, and a division whose responsibility was to use expertise acquired from new technology in the automobile sector and apply it to OEM/ODM (Original Equipment Manufacturing/Original Design Manufacturing) markets.

It was a highly agreeable relationship between Rockwell Automation and Nippondenso. Nippondenso was looking for ways to expand their business by providing OEM/ODM design and manufacturing services and Rockwell Automation was trying to expand their product portfolio while setting up a sales channel for Japan. Rockwell Automation would contract Nippondenso to create products for the Japanese market based on the Rockwell Automation specifications, and Nippondenso would create a joint venture sales channel in Japan called AB-Denso to help sell both the newly designed products as well as the legacy Rockwell Automation products to the Japanese market. In particular, Toyota and Nippondenso's own manufacturing entities were seen as a significant opportunities.

After 3-4 years, Rockwell Automation had smaller, less expensive products produced by Nippondenso that were a better fit for the Japanese market, but still did not generate the volume of sales anticipated through the joint venture. Nippondenso explained that the new products were a great improvement over the original legacy products, but were still missing many of the features and the responsiveness exhibited by the Japanese competitors. Additionally, the quality was found to be substandard for the Japanese market. Rockwell Automation believed that they had more than enough of the key features to be successful and did not have a quality problem. They believed the issue had more to do with a lack of understanding how to apply the products in real-world applications than with any features or quality issues.

To resolve this issue, Rockwell Automation decided to send a member of their applications team to live in Japan and work with Nippondenso for three years to help train the Japanese staff and work with key customers such as Toyota on how best to use the Rockwell Automation technology in their applications. I was presented the opportunity and jumped at the chance to embark on this new adventure.

It took me very little time to realize that the Nippondenso view was the correct one. The Japanese engineers and staff, especially at Toyota and Nippondenso, were very well versed in applying automation technologies to solve real-world manufacturing challenges and they were every bit as good, if not better, than the engineers I had worked with in the USA. Rockwell Automation products were and still are considered world class with respect to quality, but were not at the same level of the Japanese competitors for the Japanese applications. Additionally, many of the features found on the Japanese-based automation products were missing from the offerings by Rockwell Automation, as they opted to focus on alternative feature sets required by other markets and customers.

My role changed multiple times during my stay in Japan as Rockwell began to realize that our products were not the global products we had believed them to be, but were really USA-centric and were designed and produced with the needs of the USA automobile market at their core.

Many in Rockwell Automation believed that the Japanese customers, and Toyota in particular, were the leading customers in the world and that if our products could satisfy their demands and applications, we could satisfy the vast majority of customer's wants and needs. Unfortunately, the will was not there to do a wholesale revamp of our products and offerings in order to be successful in Japan, so instead we offered incremental improvements, but never enough to capitalize on the larger market opportunity.

I did not realize it at the time, but I walked away with a number of methods and practices that would have a significant impact on the next phase of my career. I left Japan with an understanding of the Toyota manufacturing process, TQMS, Kaizen, competitive breakdowns, the five whys, and more. I learned how world-class customers think and make buying decisions and realized just how well customers can understand their applications and needs, but not have the ability to articulate these needs in a form that can be handed to an engineering team to develop. For that, a company needed a strong product management function to translate the customer wants and needs into product requirements that could be built.

As I rotated back to the United States, I was given the opportunity to join a team who was developing a next generation remote I/O system for Rockwell Automation. Then current remote I/O systems were either large and bulky with a lot of wasted space, or small and purpose built with little flexibility.

Existing remote I/O alternatives

With all the offerings in the market, the customers would need to install a large number of terminal blocks to accept every wire coming from the field devices the system was controlling/monitoring. The customer would then run wires from the terminal block through the panel to the automation device, whether it was a controller or a remote I/O system. This would require a large number of terminal blocks inside every panel. Additionally, there was a large amount of wire and space inside the panel allocated to running all the wires from the terminal block to the automation device, whether it was a controller or a remote I/O system as follows:

Wiring inside a typical panel

This system resulted in extraneous costs to the customer well beyond the price of the actual automation equipment. The customer needed to buy a large amount of terminal blocks and buy a larger panel to accommodate all of them. They also needed to run a large amount of wires from the terminal blocks to the automation equipment. This resulted in additional costs for the wire and channels to run the wire and even more space inside the panel. The larger cost was the manpower to label each side of every wire, run each wire inside the panel from the terminal block to the termination on the automation equipment, and then troubleshoot each wire to ensure they were run correctly. This system also resulted in hidden costs, as many times wires were misrun or mislabeled, resulting in start-up delays. Even after the system was started up there could be more hidden costs as each wire was a point of failure, and the more wires in a system, the higher the probability that a wire would vibrate loose or create an intermittent connection.

By the time I joined the team we already had a concept in place, which was derived through another joint venture we had with a Swedish company, Satt Controls. This next generation I/O system was very similar to another offering by the largest European automation supplier and my job was to go out and get market feedback to justify the large investment we had already spent on the technology licensing and tooling of this new product. I was given a list of questions to ask and a product mock-up to show the customers. Myself and a number of others from product management and engineering went out for our first round of interviews.

Original next generation remote I/O concept

Our first customer visits did not go especially well. After presenting the new remote I/O concept to the customers we met, most spent time offering criticism rather than providing feedback to the questions on our questionnaire. They explained that while the concept was somewhat different than what they were currently using, it did not offer significant advantages over the current offerings and would not have a compelling reason to change to this new product. They also shared with us that this concept was way too high and needed to be thin enough to fit in a standard 100mm deep panel.

Based on the first few visits' I began modifying our interview guide and started to ask more probing questions about what issues the users faced and what changes they would need to see with our current and future products to better meet their needs. I also asked them to help us understand how the perfect remote I/O system would look and operate. I slowly began to understand how the customers were focused on things like installation costs and total installed cost instead of simply the product price or some new feature. Many of the interview team derided me for moving too far from our original task, while others saw what I saw and realized the path we had already set for our next generation product was the wrong one and would result in a failed product if we attempted to bring it to market.

Due to other project demands, the team was streamlined to two people for the remaining customer interviews; my engineering project manager counterpart, Gregg, and myself. We continued interviewing numerous customers in both the United States and Europe in an effort to create a more global product. We continued to modify the interview guide as we went, continuing to learn more about customer needs and wishing to validate our findings with multiple customers. Soon, common themes began to emerge. The need for lower installation costs, the requirement for a reduced footprint inside the electrical panel, the flexibility to mount the I/O system in any orientation, and the reduction of waste and cost necessitated by "the ways we always did things" as opposed to how things should be. We took it upon ourselves to modify some of the original models into a system we believed would be closer to the customers' needs.

Modified concept – reduced size and depth

The customers we interviewed did feel like the modified models were better than the original concept, but still fell far short of what was required. They offered additional feedback that the product needed to have enough terminations for ALL the wires on the product and the need to have terminations on one side of the product instead of two sides. They also explained how space inside the panel was key to meeting their requirements and that they really wanted the same kind of flexibility in their I/O system that they had with their terminal blocks: buy only what they need today but add more capability later; flexibility to mount horizontally, vertically, or both; small footprint inside the panel; modularity for communications, I/O types and differing terminal block types; and ease of wiring.

We believed we had discovered the horrible mistake Rockwell Automation was making, and we believed that we had developed an understanding of what we needed to produce instead. We took our findings to our senior managers and our findings were flatly rejected. As was explained to us, Rockwell Automation had already invested over $3 million in this new concept and were not prepared to walk away from it. I was disappointed and dismayed, but asked senior management if we could continue gathering market input and they reluctantly agreed.

We continued our customer visits and research, paying particular attention to searching out the customers who were not necessarily the largest customers for Rockwell Automation, but were the ones pushing the envelope in creating more advanced manufacturing processes and systems. At that time, the US automotive companies represented the majority of Rockwell's business, but were not the ones pushing Rockwell Automation into new directions.

For this reason, we made the conscious decision not to interview them for this new development. They were already getting what they desired due to their buying power over Rockwell Automation and we did not consider them to be lead users, whose needs would help push us to creating innovative solutions to customer problems (although they have changed their approach considerably since that time).

In addition to continuing our customer interviews, we also took the approach of creating wooden models based on what we believed the customers were telling us they needed. These models, along with the models of the initial concept, were pulled out at the conclusion of each interview to gauge whether either concept met the needs of the customer.

Customer-generated next generation remote I/O concept

This new customer-generated remote I/O concept appeared to meet many, if not all, of the requirements we had heard from our customers' including depth requirements, flexibility of communication modules and I/O types, and expandability without sacrificing space. Most importantly, by integrating the actual terminal block into the product design, we were able to eliminate the need for the customers to purchase and install terminal blocks in the cabinet (reducing space and costs) and run wires from the terminal blocks to the product (reducing expense and points of failure). We also discovered how installation costs would differ between the new customer-generated concept versus the current product and how much it cost to run wires inside the electrical panels. To help reduce the size and cost, we also determined what attributes were in the current product that the customer did not need, and most importantly, were not willing to pay for.

We went back to senior management, after meeting a multitude of customers representing multiple industries, segments, and applications, to share our findings. We had assembled the list of customers we had interviewed, our tabulated responses from those customer interviews, potential installation cost savings, and a series of direct quotations from the customers when reacting to the two potential concepts we were presenting at the close of the interviews.

We also explained the potential cost saving for the customer and how we could position this product. We explained that it would cost the customer approximately $1.00 to run each wire inside a panel based on labor alone. With the typical remote I/O system needing anywhere from 32-128 I/O points and each point needing 2-3 wires, we could save our customers $64-$384 using our system on labor alone. Then there were the benefits of more panel space, elimination of terminal blocks and wire channels, and reducing start-up time and costly failures once the system was running.

The overwhelming feedback we had showed that 95% of the customers greatly preferred the new concept versus the original concept, and we could save the customers a considerable amount of money in both materials and labor. From Rockwell's perspective, we could also extract a higher margin on this product versus our other products (and the alternative proposal) by charging a higher price. Our analysis showed we could charge a 10% premium over existing products and still have a compelling value proposition for our customers to save a large amount of money.

Presented with this feedback and analysis, the senior management team agreed with our findings and authorized us to proceed with the project, which was to be called Flex I/O.

Armed with the knowledge of the customer needs we had acquired during our extensive VoC research, we assembled a product team who shared our passion and spirit that was fueled by customer insight. Not only did we ultimately create a new category of product in the industrial automation space, but we did so at a much more rapid pace than the company had ever witnessed before. We went from wooden models to finished product in just over 2 years with 10 different catalog numbers at release...largely because we never had to revisit and re-write customer requirements, which many projects do, resulting in large time delays. As a result of the engineering project manager being so intrinsically involved in all the meetings and interviews, he also understood why we could not compromise on any of the attributes or size considerations we had heard from the customers. We knew what what the customer needed and what had to be done; we just needed to execute. When the engineering team believes as you do what needs to be done, you'll find there is no challenge that cannot be overcome. In the picture below, observe how the form factor of the wooden model and the final product are virtually identical. I can assure you that it was not an insignificant engineering challenge to fit the necessary functionality into a package this small, but as the engineering team believed we had to meet this size requirement the same way I did, they found creative solutions to every engineering challenge that was presented in following photo:

Flex I/O wooden version 2 (left) and final released product (right)

The feeling that we were doing something different and ground breaking was probably similar to how the first iPhone team felt. The freedom to do what is right as opposed to doing what we have always done resulted in innovations all through the development process, not only in the engineering function. This project alone helped to redefine the way Rockwell Automation did product development, documentation, packaging, marketing, and industrialization; and personally affected every member of the team.

The final Flex I/O next generation remote I/O concept resulted in a platform that not only met all the customer requirements, but did so in a package that was significantly smaller than the original next generation remote I/O concept. The following photo of the Flex I/O system (on the left) includes a power supply, communications adapter, an input card, an output card, and all the associated terminals for wiring from the cards to the field devices. In contrast, the original next generation remote I/O concept on the right included a power supply and communications only. You would still require an additional input card, output card, and terminal blocks to match the functionality of the Flex I/O system, resulting in a package size more than triple that of the Flex I/O system:

Flex I/O - communications, power supply, output, and input (left) versus original concept – power supply and communications only (right)

Panel with 3 Flex I/O systems installed

The results of our efforts speak for themselves. Flex I/O was an overwhelming success. The product was featured on the cover of Instrumentation and Control System Magazine. It also received an Editor's Choice Award from Control Engineering Magazine and a Product of the Year award from Plant Engineering.

The team was recognized internally for their achievements and was awarded the Rockwell Chairman's Team Award. The Chairman's Team Award was established to recognize the one team that best exemplifies outstanding performance of employee teams in its many businesses. The award emphasizes the importance of teamwork in customer responsiveness, quality improvement, enhanced productivity, and reduced lead times, and is presented personally by the Chairman of Rockwell.

Our results went far beyond the recognition the team and product received and also resulted in a large positive impact right to the core of Rockwell Automation. As envisioned, we were able to increase our profitability of this product line versus the other currently available products and used our customers' own analysis of cost saving as part of our marketing campaigns. Our initial estimate of $200M of sales in the first three years, which was considered unrealistic by management, was met and exceeded, much to their surprise. Since release, the product line has continued to proliferate with a plethora of new modules and derivations. The average sales of Flex I/O has been in excess of $100M/year, and total sales of Flex I/O and its permutations has exceeded $3B. Rockwell Automation, recognizing the impact the team had on internal processes and methods commissioned Boston Consulting Group to analyze what the team was able to accomplish and how we did it in an effort to try to develop new best practices for the rest of the organization.

That project has shaped my product management career and expertise exponentially and contributes significantly to this book. The following chapters attempt to summarize the things I learned during the Flex I/O project about VoC, and the knowledge and methods I have acquired since that first VoC project. It is my hope that you will be able to apply much of the learning I have gained to your product or initiative.