Technology Evaluation. David A. Berg Queen s University Kingston, ON November 28, 2017

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1 Technology Evaluation David A. Berg Queen s University Kingston, ON November 28, 2017

2 About me Born and raised in Alberta Queen s alumni (as well as University of Calgary & Western) Recently retired from DuPont Canada: 31 years in Research & Development; all in Kingston Worked with multiple DuPont BUs: Polyethylene, Nylon, Polyester, DuPont Protection Technologies, DuPont Industrial BioSciences, DuPont Crop Protection Chemicals Multiple roles: Research Scientist, Project Leader, Technology Manager, Global Process Owner for Technology Selection and Basic Data Development Volunteer Work: Providence Care Vice Chair and Board Member (2015 present) Eastern Lake Ontario Regional Innovation Initiative Board Member ( ) Canadian Society for Chemical Engineering Treasurer and Board Member ( ) Queen s University Industrial Advisor for TEAM (1994 present)

3 Presentation Outline Development and Scale-Up of Chemical Processes: Approach to Scale-Up Business Justification for Piloting Effective use of Process Modeling and Piloting Stage-Gate Models for Managing Innovation: Framework, Elements, and Benefits Discussion Exercise: Project Review Questions Commonly Used Tools: Technology Risk Assessments Technology Readiness Levels Techno-Economic Assessments

4 What Scale-Up is Not

5 Think Scale-Down, not Scale-Up 1. Start first with the end in mind: Define what business success means: o Process economics (e.g. capital investment & operating cost) o Process CTQs (e.g. overall yield, catalyst consumption, energy consumption, ) o Product CTQs (e.g. product specification, purity, ) Develop high level design for the commercial process: o Batch vs. continuous? o Reactor design? o Product specifications? o Process flow diagram? Iterate on design to meet success targets 2. Then scale-down the planned commercial process to design lab and pilot scale processes

6 Structured Approach to Process Scale-Up Full-Scale Commercial Plant Market Development Unit Commercial Production Laboratory Reactors Concept Feasibility Assessment Reaction Kinetics Data for Modeling Process Development Unit Process Design and Optimization Basic Data for Scale-Up Samples for Customer Testing Process Demonstration Basic Data for Commercial Plant Samples for Market Development Scale-Up Ratio Z Scale-Up Ratio X Scale-Up Ratio Y Reproduced from Reduce Piloting Time and Cost, D.A. Berg and M.T. Cleary, Chemical Engineering Progress, July 2011

7 Types of Pilot Plants

8 Determining Process Scale-Up Ratios How do you decide on what is an appropriate scale-up ratio? What factors need to be considered?

9 Determining Process Scale-Up Ratios Very complex issue Specific to: Process technology Management s comfort with the level of scale-up risk Factors that influence scale-up ratios: Customer sample requirements for product development Chemical reactor: o Phases: gas, liquid, solid, biological, o Batch vs. continuous o Design: stirred tank, fluidized bed, tubular, column o Effects of mixing o Effects of heat and mass transfer Other unit operations: separation, particle size reduction,

10 Business Justification for Piloting Challenges: Developing and piloting new technology is costly Businesses have limited budgets, and are under significant pressure to reduce the cycle time and cost of development Scale-up risks are not always well understood Consequence: Some businesses take higher levels of risk than is often warranted: Not building an integrated pilot plant Not evaluating the effect of recycle Not using real life feeds Not building the right scale of pilot plant

11 Business Justification for Piloting Challenges: Developing and piloting new technology is costly Businesses have limited budgets, and are under significant pressure to reduce the cycle time and cost of development Scale-up risks are not always well understood Consequence: Some businesses take higher levels of risk than is often warranted: Not building an integrated pilot plant Not evaluating the effect of recycle Not using real life feeds Not building the right scale of pilot plant You always build a pilot plant, it s just that sometimes it s at the commercial scale Kate Threefoot, DuPont Research Fellow

12 Business Justification for Piloting Developed by Independent Projects Analysis (IPA)

13 Business Justification for Piloting Developed by Independent Projects Analysis (IPA)

14 Business Justification for Piloting Developed by Independent Projects Analysis (IPA)

15 Contingency Planning for Underdeveloped Projects See RAND Cost Growth worksheet in CHEE 470 economics model spreadsheet Developed in the early 1980s RAND became the basis for the IPA organization Provides a basis for comparing actual vs. estimated costs for new technology projects employing underdeveloped technology

16 Framework for Visualizing Uncertainty

17 Framework for Visualizing Uncertainty Process development is an experience based competency: You learn through doing Failures are great learning opportunities With experience comes the wisdom to know what you don t know

18 Effective Use of Process Modeling Model Types: Reaction kinetics, thermodynamics, mass transfer, Process flowsheets (e.g. HYSYS) Process flow models (e.g. CFD) Structural models (e.g. Finite Element) Economic models (e.g. Capital Investment & Operating Cost) Model Uses: Process flowsheet optimization Input to costing calculations Detailed equipment design Support to piloting & start-up Operator training

19 Effective Use of Process Modeling Key Issue: All models are wrong, but some are useful. George Box Best Practices: Develop good quality data for input (e.g. for reaction kinetics) Challenge assumptions (e.g. reactor mixing) Understand the limits of your model (e.g. interpolation vs. extrapolation) Validate model predictions at each scale

20 Alignment of Commercialization Activities New Product Development Discovery Business Analysis Development and Testing Launch Technology Delivery Lab-Scale Technology Definition Bench-Scale Demonstration Pilot-Scale Demonstration Process Modeling Product Development Samples Data for Model / Cost Validation Product Testing Samples Equipment Design Data Start-Up Support Performance Validation Product Supply/Asset Creation Evaluate Business Opportunity Develop Best Scope Define How to Implement Implement Project Operate Reproduced from Reduce Piloting Time and Cost, D.A. Berg and M.T. Cleary, Chemical Engineering Progress, July 2011

21 Example: Innovation Stage Gate Process DuPont s Stage Gate Management Process for R&D

22 Stage Gate Process (continued) Key Elements Stages: Covers discovery to commercialization launch Defines all activities and deliverables that must be achieved Cross-functional: technical, business, marketing, Includes integrated analysis of all parallel activities Gates: Articulates deliverables that must be achieved to advance to next stage Reviewed by business leadership (Decision Board) Possible outcomes: go, kill, hold, recycle Benefits Accelerates speed-to-market Increases likelihood of business success Coordinates cross-functional parallel activities Brings discipline to the decision making process ensures the poor projects get killed Achieves efficient and effective allocation of scarce resources Common playbook everyone speaks the same language

23 Discussion Exercise You are a Technology Director with a company that is working to commercialize a new polymer that is derived from sugar. You are part of the Decision Board for a Gate Review to decide whether to approve spending $125 million CAD to build a commercial manufacturing facility for this polymer. What are some of the questions you would be expecting the project team to answer before making a GO decision?

24 Discussion Exercise (continued) Financial Confirm attractive economics? Capital cost estimate Cost of manufacturing estimate Sales forecast: pricing and volume Have lower cost options been considered? Retrofit vs. new build Contract manufacturing

25 Discussion Exercise (continued) Financial Confirm attractive economics? Capital cost estimate Cost of manufacturing estimate Sales forecast: pricing and volume Have lower cost options been considered? Retrofit vs. new build Contract manufacturing Market What is our product value proposition? How have the product CTQs been established? Can we reliably meet them? What are our customers plans for commercialization? What are our competitors doing?

26 Discussion Exercise (continued) Financial Confirm attractive economics? Capital cost estimate Cost of manufacturing estimate Sales forecast: pricing and volume Have lower cost options been considered? Retrofit vs. new build Contract manufacturing Market What is our product value proposition? How have the product CTQs been established? Can we reliably meet them? What are our customers plans for commercialization? What are our competitors doing? Safety, Health, Environment What are the Process Hazards and risk mitigation plans? Consideration for Results from Product Stewardship, Life Cycle, and Regulatory assessments?

27 Discussion Exercise (continued) Financial Confirm attractive economics? Capital cost estimate Cost of manufacturing estimate Sales forecast: pricing and volume Have lower cost options been considered? Retrofit vs. new build Contract manufacturing Market What is our product value proposition? How have the product CTQs been established? Can we reliably meet them? What are our customers plans for commercialization? What are our competitors doing? Process Technology Do we have a clear competitive advantage? What are the scale-up risks and our plans to mitigate them? What is our IP strategy? Do we have Freedom to Operate? Safety, Health, Environment What are the Process Hazards and risk mitigation plans? Consideration for Results from Product Stewardship, Life Cycle, and Regulatory assessments?

28 Discussion Exercise (continued) Most of these questions should have been addressed during different Project Reviews (Stage Gate Deliverables) Financial Product Pricing and Strategy Review Capital Project Reviews and Benchmarking Supply Chain Review Operations Review Market Market Assessment Review of Customer Evaluations & Launch Plans Marketing Plan Review Process Technology Technology Readiness and Risk Assessment Intellectual Property Review Competitive Technology Assessment Basic Data Review Safety, Health, Environment Process Hazards Assessment Product Stewardship Review Life Cycle Assessment Regulatory Assessment?

29 Example: Stage 1 Gate Deliverables DuPont s Stage Gate Management Process for R&D

30 Discussion Exercise (continued) Most of these questions should have been addressed during different Project Reviews (Stage Gate Deliverables) Financial Product Pricing and Strategy Review Capital Project Reviews and Benchmarking Supply Chain Review Operations Review Market Market Assessment Review of Customer Evaluations & Launch Plans Marketing Plan Review Process Technology Technology Readiness and Risk Assessment Intellectual Property Review Competitive Technology Assessment Basic Data Review Safety, Health, Environment Process Hazards Assessment Product Stewardship Review Life Cycle Assessment Regulatory Assessment?

31 Technology Risk Assessment Commonly used tool to evaluate risks associated with the scale-up and commercialization of new technology Conducted by multi-disciplinary group of subject-matter experts + senior leadership Uses a similar template as PHAs: Identify risk Assess Probability of Occurrence (e.g. H, M, L) Assess Impact of Risk (e.g. H, M, L) Develop mitigation plans for H H items Key is to ensure mitigation plans are implemented: Assign responsibilities Review status regularly

32 Technology Readiness Levels Systematic, metric-based process to assesses the maturity of technologies Pioneered by NASA (and adopted by many) Provides a common language for evaluations U.S. DOE Technology Readiness Levels (TRL)

33 Technology Readiness Levels Technology Readiness Level Technology Readiness Levels in the Oil & Gas Industry (API 17N) Description TRL 0 TRL 1 TRL 2 TRL 3 TRL 4 TRL 5 TRL 6 TRL 7 Unproven idea/proposal Paper concept. No analysis or testing has been performed Concept demonstrated. Basic functionality demonstrated by analysis, reference to features shared with existing technology or through testing on individual subcomponents/subsystems. Shall show that the technology is likely to meet specified objectives with additional testing. Concept validated. Concept design or novel features of design validated through model or small scale testing in laboratory environment. Shall show that the technology can meet specified acceptance criteria with additional testing New technology tested. Prototype built and functionality demonstrated through testing over a limited range of operating conditions. These tests can be done on a scaled version if scalable Technology qualified for first use. Full-scale prototype built and technology qualified through testing in intended environment, simulated or actual. The new hardware is now ready for first use Technology integration tested. Full-scale prototype built and integrated into intended operating system with full interface and functionality tests Technology installed. Full-scale prototype built and integrated into intended operating system with full interface and functionality test program in intended environment. The technology has shown acceptable performance and reliability over a period of time Proven technology integrated into intended operating system. The technology has successfully operated with acceptable performance and reliability within the predefined criteria

34 Techno-Economic Assessments Framework for evaluating alternative process technologies: Combines technical process modeling with cost modeling Many possible uses: Assessing options in technology development Evaluating alternative technologies for possible acquisition or licensing Comparing competitive position of own technologies Significant undertaking Nexant provides unbiased third party assessments of new and emerging technologies (PERP Reports): Industry standard Could be useful framework to use for TEAM Projects involving assessments of new technologies Reports are proprietary, but Abstract and Table of Contents are available on Nexant s web site

35 Contents of PERP Reports Strategic Business Overview Process Technology: Chemistry Process Flow Diagrams + Process Descriptions + Material/Energy Balances Includes both Commercial + Developing Technologies Process Economics Facility Cost Cost of Manufacture Process Comparison Global Market: Commercial Projects Applications

36 Example: Cost of Production Table ctus.pdf

37 Example: Process Comparison ctus.pdf

38 Wrap Up Questions?