Which Business Score Counts???

at Martin's Tesla Founders Blog
there is a very lively debate
on how to keep score of a business.

Most of the businesses are automakers
and the products are usually cars.

The majority camp believes that products are what matter
and the minority camp (that myself and Martin subscribe to)
value business systems as more important than business products.

In Built to Last by two Stanford Professors,
the argument is deepened further,
akin to "clock building" vs "time telling."

Clock building is focusing on things in your company's DNA,
like for Toyota, kaizen, or values like frugality that help
employees on business trips order ramen instead of sushi.

Telling time is like making a MP3 player because everyone else is.

The hybrid and electric vehicle is much like the iPod for the world'
largest business and companies are all over the place in searching
for strategies: some are product based and few are systems based.

IF I WAS TO STARTUP AN AUTOMAKER SYSTEM...
I WOULD START WITH ? ENTITIES...
but let's save that for another blog, sorry...

BACK TO TESLA FOUNDERS BLOG AND MY RESPONSE TO A BLOGGER KINDLY ANSWERING MY QUESTIONS ABOUT PATENTS AND MARTIN'S RESPONSE

One of the most lively debates appears under Martin's posts on Kaizen.

In response to my question," How many patents does the Tesla Roadster have compared to the Prius?"

TEG wrote:
"Here are some examples:" and proceeded to list some important details that obviously costs his voluntary time!

FIRST OF ALL TEG, I would really like to say THANK YOU for going out of your way to do some research and answer my question. That is very kind of you!

You have taught some of the value of a blog (as I'm new to this system, although I've been scribbling for decades)...

Back to the question about patents related to the topic of kaizen.

COMPANY OR CAR???
As Martin and I try to hit home over and over, it's about the business system and much less about the product.

Kaizen is simply one example, and it DOES NOT mean that anything Toyota touches is golden. Anyway, that system had roots in Deming's work, who had also worked with Ford. So, yes you need a team AND a system, but I argue, system first, most argue team first...

Martin said:

"A lot of you seem to miss my point. Kaizen applies to the way you run a factory, work with suppliers, negotiate contracts, structure the company, etc. The whole point is to encourage evolution so that your business gets better over time and learns from its mistakes.

I am talking about evolution of business processes."

THIS IS PROFOUND AND PROVED IN BUILT TO LAST!!!

SO IF WE ARE COMPARING companies and technologies under the system approach, how do we keep score???

Traditionally, we measure sales, or consumer acceptance. That to me only measures the products, half the battle. After all, a company is a collection of resources working in a unique system.

What about measuring the system???

PATENT SCOREBOARD
I would argue that the patent trade war is a good place to start.

What is a patent anyway???

Well, is it not the result of several failures???

Trial and error inside of a business system.

If so, than the number of patents is a great metric for evaluating business systems (companies), especially startups that don't have customers yet.

BACK TO TEG's hard work on Tesla vs. Toyota patents. FIRST OF ALL, it's unfair to compare these two business systems, Toyota is a collection of hundreds of businesses and thousands of suppliers and tens of thousands of employees, while Tesla is a startup.

BUT, I was very curious to see if anyone out there knew that the G21 project that failed through 80 car designs to accidentally land on the Prius and filed 650 PATENTS ALONG THE WAY!!!

The bottleneck for the most successful digital automobile every produced was the high voltage controller. Even Silicon Valley knows little (has far fewer patents on than lo voltages) about high voltage.

Toyota plowed $1 billion into a secret factory head up by an engineer that started his career scrubbing catalytic converters 30 years prior, churning through the system of Kaizen, where failure in R&D is acceptable. Up in Northern Nagoya, the guy built the brains that became the Hybrid Snergy Drive. The product WAS NOT the goal, it was a system to run the first Prius because no supplier could come up with enough high quality controllers.

AGAIN THAT WAS A POTENTIAL $1,000,000,000.00 FAILURE (IRONICALLY THE SAME PRICE AS THE EV-1) WITH MANY SMALL FAILURES ALONG THE WAY THAT BECAME PATENTS (IRONICALLY HOW MANY GM EV-1 PATENTS ARE ON THE SCOREBOARD?).

So the reason I keep bringing the Prius into the picture is that VERY FEW people understand how many failures occured and how the Toyota system worked through those with a rush deadline for the Kyoto Protocol. The managers and engineers hated each other on the project.

The other misunderstanding is that people calculate the $1 billion dollar factory into just the Prius and don't realize it's a system that will probably last until Toyota's last day.

SO WHAT IS THE SCORE???

Toyota ($1 billion high voltage controller secret factory and 650 patents that became the Hybrid Synergy Drive)
GM's how many patents on E-Flex
Tesla's how many patents on energy management
Mitsubishi's how many patents on in-wheel electrics
Ford's (300+ related to the Escape hybrid) how many plug-in controller patents

Where we can get a scoreboard of patents on the high voltage race to the digital automobile???


PS I'm not asking for patent search help, as this is not an engineering scoreboard, think ESPN that reports the score on each of the sports systems running. Just the area of patents and number by company.

Supply and Demand for Automotive Talent

Here is a quick Literature review for a project I'm working on that will survey the landscape for doctoral students in America studying advanced automotive technologies. This is to test a hypothesis that exacerbated demand by consumer behavior, energy, environment and other macro-forces will NOT be met by the pace of researchers coming out of schools qualified to work on systems engineering to design tomorrow's digital vehicles. Geography will play a major role, including nationalism. In the war between Detroit and imports, Japan is pursuing an in-house strategy while the Big 3 follow an out-sourcing strategy. If the automobile industry moves towards a built to order direct model, such as Dell assembling computers after they are sold, the R&D strategies for the world's largest business may become the most influential key success factors.

Automotive Education at the Doctoral Level

Running Head: DOCTORAL AUTOMOTIVE

A Survey of Automotive Education at the Doctoral Level in American Universities

John E. Acheson

Community College of Southern Nevada

A Survey of Automotive Education at the Doctoral Level in American Universities

Automotive research is the world’s largest Research and Development (R&D) effort. In Natural Capitalism, Hawken and Lovins (1999) emphasized that automotive transportation is the world’s largest industry. In a Washington D.C. speech at a National Press Club Luncheon, Jim Press (2006), the highest ranking non-Japanese executive to ever earn a seat on Toyota’s Board of Directors, added

It’s the largest manufacturing industry in the nation…responsible for one out of every 10 American jobs and generates nearly 4% of the nation’s GDP. The U.S. auto industry spends more than $15 billion ($22.7 million per day) on Research & Development, more than any other manufacturing industry. We buy more metals, plastics, rubber and textiles than any other business including more computer chips than even the computer industry!

American doctoral students researching automotive technologies are studied in this paper. It is hypothesized that the supply of this primary R&D input, human resources, will be strained in coming decades. As macro-forces including consumer behaviors, governmental policies, energy economics and environmental issues exacerbate demand for automotive R&D, the author investigates if the number of graduates will keep up. The following literature review reveals geography as a key variable in the location, direction and careers of RnD doctoral graduates.

Where does the manpower come from? It’s widely known that college graduates supply the majority of human resources for R&D efforts. According to Landis & Svestka (1983), engineers are an important national resource in which the supply and demand of manpower ensures economic growth: demand is driven by economics, supply is simply linked to an appropriate number of graduates.

In an article that researched American higher education, Folger (1972) studied the relationship between the supply of college graduates and manpower. He concluded that shortages and surpluses occur frequently in America and found weak links between the number of graduates and job openings. In other words, supply rarely responds to demand. Folger’s work supports the hypothesis that there could be a growing shortage of automotive engineering graduates because demand is increasing while supply grows slowly.

One of the gaps in supply and demand is geography. Cassola (2007) believes that graduates choose to stay in the same states as their schools even though the advanced manufacturing degrees he studied were “hot commodities.” M.E. (2007) described geographical ties at Clemson: the proximity of industry and academia is an important part of Clemson University’s International Center for Automotive Research’s vision to be “the premier automotive and motorsports research and educational facility in the world”. It’s no surprise that the center is located 45 minutes away from campus, centered in one of America’s leading automotive industry research clusters. Michelin’s donation of tire machinery is a concrete example of the importance of geography (M.E., 2007). In a study testing the hypothesis of American workplace attitudes at a Ford’s River Rouge Plant, Southworth & Stepan-Norris (2003) found that “geographic separation shaped class-based identity.”

In the auto industry, national identity appears to be an instrumental R&D variable. The national origin of the R&D armies in the trade war between Detroit and Japan could play a very significant role in business survival. According to author Hughes (2006), automaker supply chains are highly nationalistic. The majority of American automakers rely on thousands of supply chains linked to R&D centers based in the United States. In other words, R&D efforts are often outsourced to suppliers.

Acheson’s (2006) research shows that leading Japanese automakers maintain advanced R&D facilities in their home countries. Unlike American rivals, Toyota performs R&D in-house usually in Japan. To help build the electronic brain that controls electricity for the one million Toyota hybrids on the road like the iconic Prius, Toyota invested $1 billion a secret factory tucked into the hills North of Nagoya. Takeshi Yaegashi known as the “father of the hybrid” stayed with a single automaker from college grad to industry changing technology. His work cleaning up smog devices started decades before his ground-breaking hybrid R&D (Fairley, 2004). 30 year careers at the same company, may give Japanese automakers a competitive advantage in advanced automotive technologies. At Honda, Sato (2006) made clear that all Honda employees were hired for life: forbidden to work for any other automaker, even after retirement.

The literature review reveals that geography could be one of the most important variables in studying the supply and demand of human resources for the world’s largest R&D effort. These findings suggest that the study could evolve into a model that predicts a gap in the supply of doctoral graduates vs. demand for automotive R&D manpower.

References

Acheson, J. (2006). The Hybrid Phenomenon. Copyrighted masters thesis, San Francisco State University, San Francisco.

Cassola, J. (2007). More than spinning their wheels. Techniques: Connecting education and careers. 66, 16-18.

Southworth, C. & Stepan-Norris, J. (2003), The geography of class in an industrial American city: Connections between workplace and neighborhood politics. Social Problems, 50, 319-348.

Folger, J.K. (1972). The job market for college graduates. The Journal of Higher Education, 43, 203-222.

Hawken, P. & Lovins A. & Lovins, L.H. (1999), Natural Capitalism (Boston, New York, London: Little Brown and Company), 22.

Hughes, K.H. (2006), Are the wheels coming off the American auto industry? Chronicle of Higher Education. 52.

Landis, F. & Svestka, J.A. (1983). The demand for engineers –- projections through 1987. Management Science Quarterly, 29, 455-464.

M.E. (2007). Parking garage at Clemson’s University’s automotive research center. University Business. 10, 20.

Press, J. (2006). Toyota North American Press Room: Speeches, July 18, 2006, retrieved from http://pressroom.toyota.com/Releases/View?id=TYT2006071879732, accessed August 15, 2006.

Sato, M. (2006). The Honda Myth, New York: Vertical, Inc.

Who will win the Lithium race?

Automakers spend more on R&D than any other industry. For example, Toyota spends 10 times more dollars than Apple. Getting to the Prius cost $1 billion and getting to the next digital transportation breakthrough is costing more.

The race to marry Lithium with automobiles is attracting top talent, global money powering new technologies with promising futures.

Just as entrepreneurs and corporate American filled the analogue to digital wake that Napster left in the music industry, venture capitalist and the largest organizations in the world are racing to R&D the iPod for the auto industry.

I wonder who will sell me the automobile that can drive across the digital divide and set the standard to accelerate away from the competition...


Start your Lithium teams and then engines (ranked in random order)!!!

• Team Toyota: 2006 $7.7B Toyota R&D incl. 300 engineers studying Lithium chemistry vs $6.6B GM R&D's 0 in-house engineers

• Team Volt: Sequoia, GM, A123

• Team VW: 360 million euros to develop Li-ion batteries by Bosch, Evonic Degssa, Li-Tec, STEAG Saar Egnergie including 60 million euros from the German govt. (Automotive Engineer, Dec 2007, Vol. 32 Issue 11, p 47)

• Team Nissan: NEC Lamilion Energy, A123, SAP AG

• Venrock Associates, Granite Global Ventures and Gabriel Venture Partners led by Oak Investment Partners/$68MT-$40MR3 Boston-Power

• New Enterprise Associates, BlueRun Ventures, Draper Fisher Jurvetson and DFJ

• Element/$7.5mR1-$15MR2 Deeya Energy

• Team Ford: GE, $30 million R1, $40 million R2 for A123, Sanyo

• Team Phoenix: Al Yousaf, Altair

• Team GM: Cobasts, Johnson

• Vincent Bollore/EDF/$52.8M BatScap/Continental AG/BMW/Pininfarina/BlueCar

• Team Mitsubishi: GS Yuasu, Lithium Energy Japan, MiEV

• Team Tesla: $37M Musk/VantagePoint Venture Partners, Technology Partners, and Draper Fisher Jurvetson/$105M Tesla

• Team Fisker: $10M Kleiner Perkins Caufield & Byers/Quantum

• Team Zenn: Kleiner Perkins Caufield & Byers/EEEstor/$25M Zenn/Lockheed
  

• Israel Corp., Morgan Stanley, VantagePoint Venture Partners/Renault Nissan/Israel's Ofer Shipping Holdings/$200 million R1 for Project Better Place

Who's making Lithium batteries?

This is probably the next biggest question out there. There are basically two tactics: research and develop in house or play suppliers against each other. Toyota has assembled hundreds of engineers to work on Lithium in house while GM has pit two battery-makers against each other to race the 2010 deadline.

This list will change often so feel free to suggest any additions or changes!!!

Li Batterymakers
A123
Advanced Battery Tech
Altair
Autotech
BASF
Bolloré
Bosch
Boston-Power
BYD
Concorde
Contental AG
Cobasys
Danionics (iPod)
Deeya Energy
EEStor ($2.5M Zenn + Kleiner etc.)
EnerDel
Johnson Controls
KW Energy
Li-Tec
Lithium Energy Japan
Lithium Technology Corp.
Maxwell Technologies
Odyne
Panasonic
Phostech Lithium
Nissan-NEC Lamilion Energy
Quantum
Sanyo Energy
Tesla Energy Group
Toshiba
Valence
ZAP

Who's making Lithium autos?

I've been putting together this list of automakers for quite awhile now. When possible I like to link directly to an automaker's Lithium technology that's on or closest to the road, but if not available, I provide a link to some news about the technology.

Also, there's a possibility of having to go to an overseas website, like Toyota for example, that has been selling small Lithium light hybrids in Tokyo for quite awhile now. Those are called Vitz aka Yaris hatchbacks with options called the Intelligent Package. These are marketed at urban women and Toyota has quietly been selling about 10 Lithium autos per month to be the first automaker on the road.

Li Automakers

AC Propulsion
Azure Dynamics
Aptera
BYD Auto
Chrylser
Commuter Cars
Daimler
Electrovaya
Falcon
Fisker
Ford
Fuji
GM
Honda
Hybrid Technolgies
JR East
Lightening Car
Loremo AG
Miles
Mitsubishi
Phoenix
Pininfarina
Nissan
Renault
Roth Motors
Saturn
Segway
Subaru
Think
Toyota
Universal
Velozzi
Venturi
Venture Vehicles
Visionary Vehicles
Volvo
VW
Wrightspeed
Zenn
ZAP

How to study Lithium?

To Patrick, Assistant Editor
The Futurist by the World Future Society

LITHIUM STUDIES
I have a hard time finding out anything about the back end of Lithium
and am pretty much following the breakthroughs in applications,
such as Stanford's Dr. Cui using silicon to 10x Lithium potential.

To me, I believe that driving is the most expensive,
dirtiest and dangerous choice we make everyday
and the potential to clean up our accelerating fleet
outweighs any mining issues.

BUT a holistic full-cycle article from mining
to electric car battery including dust to dust
well to wheel and environmental impact
is the only way to argue one over another.

I do support Lithium applications for making mobility more efficient,
but in the end, it will be up to the consumer to choose the iPod
for the automotive industry struggling with a digital future,
John

Dear Director of Stanford's Global Climate & Energy Project

John

Acheson, MBA

9353 W Twain Ave, Las Vegas, NV 89147 | (415) 290-7767 | (702) 476-3293

johnmba@sbcglobal.net | http://johnacheson.blogspot.com/ | http://www.linkedin.com/in/johnmba

February 9, 2008

Prof. Lynn Orr, Ph.D., Project Director

Global Climate & Energy Project (GCEP)

Jerry Yang & Akiko Yamazaki Environment & Energy Building — 4230
473 Via Ortega
Stanford, CA 94305

Dear Dr. Orr:

Thank you for the email announcing your Five-year Anniversary Special Event. Congratulations on such relevant and timely research. I am very interested in attending the event, but have relocated to Nevada from San Francisco and won’t be able to make it.

I’m writing to thank you for your publically available information, and ask a few questions. At your GCEP website under [Research], I am grateful for the reports “Advanced Transportation” and “Batteries for Electric Vehicles” as well as at the Presentations available at the Advanced Transportation Workshop summary under [Events].

It’s great to see interdisciplinary research bringing together energy and transportation. Are you integrating the ground-breaking research over at Terman? Have you considered Dr. Yi Cui’s recent breakthrough in Lithium? How will the new CarLab’s mission to “radically rethink the automobile” fit into your GCEP vision?

The reason I’m asking these questions, is because I cited your center (see Statement of Purpose) as a research example of the many projects that have taken place between automakers and Stanford over the years. Toyota’s massive contribution to GCEP intrigues me and I’m very curious about their expectations and research requests from GCEP.

I have been so impressed with the timely world-class automotive related research at Stanford’s that I recently applied to the Management Science & Engineering’s doctoral program to pursue the dream to continue my Master’s research.

I would like to thank you again for your team’s hard work and inspiration!

Sincerely,

John Acheson

Enclosure Stanford Statement of Purpose

Future Drive Nugget

This post starts a new series where I will
capture "nuggets" of information from books
that we can also use for our references
or to back up our arguments.

In Future Drive by Daniel Sperling
Copyright 1995 by Island Press, Washington DC
on pages 53, 54...

Professor Sperling of UC Davis,
advanced automotive transportation expert states,
"The most advanced batteries of the future will probably
never exceed 4 percent of the energy density of gasoline.
This does not mean that electric vehicles are inherently inferior, though."
"First, the 4 percent figure overstates the difference,
because electric vehicles are likely to be at least
four times as energy efficient as comparable ICE vehicles.
Thus future batteries will be closer to 16 percent
of the energy density of gasoline."

Dr. Sperling makes an excellent point in that
comparing technologies should be done holistically.
After all, a battery is more comparable to a gas tank,
and gasoline is more comparable to let's say the type
of battery, such as Lithium or Nickel.

So to compare apples to apples, we have to consider
at least tank to wheel, which measure energy loss
from filling up to turning the wheels.

From that perspective, Dr. Sperling's future prediction
just got outdated by Stanford's Dr. Cui's work on Lithium
at the nano-level. By looking at tiny fibers of Lithium
many times smaller than a human hair, Dr. Cui found that
as we charge and use our Lithium batteries, the Lithium
fiber starts cracking. Imagine your head of hair getting
more brittle by the day and finally unable to hold a charge.

So if Dr. Cui's work is the beginning of a quantum leap forward
in Lithium energy density, Dr. Sperling's prediction drastically
underestimated the energy density potential of batteries.

But his point in incorporating the efficiency of the electric motor
to the apples to apples comparison is VERY important. One cannot
compare gasoline to batteries or even the chemistry without considering
that a typical gasoline four-stroke engine can only produce power
with one stroke for a theoretical maximum of 25%. Electric motors
are far superior, and I interviewed the VP at Tesla who firmly
answered that his motor was at or near 90%.

So I absolutely support Dr. Sperling's metric above of "four times."
From a tank to wheel analysis, if the electric motor is four times
more efficient as the internal combustion engine, then to compare
apples to apples in terms of fuel, the electric fuel only needs
to be 1/4 as powerful as gasoline for the same performance.

Of course we are ignoring things like electric cars can be lighter
with high voltage safety equipment like repelling bumpers,
and that the current electric grid is terribly inefficient,
BUT FROM STRICTLY A TANK TO WHEEL analysis,
if we add Dr. Cui's work of 10x on the Lithium side
to the four times in Dr. Sperling's Future Drive,
we come up with 40% times four which is a SUPERIOR TECHNOLOGY!

In other words, from an apples to apples comparison,
only looking at two similar cars, one Nano-Lithium electric
and the other high-octane gasoline,
the electric actually has more energy.

This result goes against almost any article,
comment, analysis or comments you'll see
anywhere in media, on the internet and from the mouth.

If Dr. Cui's nano-Lithium is brought to market,
there is theoretically more muscle in his electric car
than almost any of the muscle cars built over all time!

Thank you again Dr. Cui and Dr. Sperling
for your world-changing work, after all,
I believe that owning and driving our
cars and trucks is the most expensive,
dangerous and dirtiest choice we make
everyday!

John Acheson
jacheson@gmail.com

Line Graph and Pie Chart

Figure 3.1 Auto Theft in America

Source: Department of Justice, 2000

Figure 3.2 Diversity in American Colleges

Source: Department of Education, National Center for Educational Statistics, 1997

Technical Communications 1

Hybrid Showers

In response to my father's passion for
lo technologies accomplishing high functions,
I responded to Jay Leno's article on the
last and most cleanest steam hybrids titled,
"Jay Leno's Garage: A Case For Steam"
at http://www.popularmechanics.com/automotive/jay_leno_garage/1302916.html?page=2


HOTTER SHOWERS

This brings to mind the small boilers that run Japan vs. the large water heaters that sit around America. There's billions of these hybrid devices powering every modern home providing hot water for showers, washing dishes, clothes, brushing your teeth, etc.

My Japanese wife complains every Winter night (we live in Las Vegas) because she takes showers late (in Japan most everyone bathes at night and washes their hair in the morning) and the incoming water into the heater is so cold, the equilibrium is lost within a minute or so. Very inefficient, but in America, natural gas has been relatively dirt cheap until recently...

In Japan, they run Doble designs everywhere, from showers to washing the dishes, the power plant is a small backpack sized steamer that can burn your hair off. It's either on the wall right above the sink, or right behind the bathroom pipes. Very different from the huge tanks that require a separate room in most American applications of this old world wasteful technology.

The downside for American usage of this more efficient technology, is that the company would get sued to many times from non-precise consumers and there's not enough volume to satisfy our big lifestyle.

On the other hand Jay, you might be right about the emissions and impact issue. With steam or even super steam (the technology that powered WWI and the industrial revolution) we might be able to digitize Doble's idea and run a car more efficiently AND cleaner.

I'm wondering how the efficiencies compare to the 20% ICE and 40% diesel or gasoline hybrid?

How efficient is the Doble? Is it cleaner than a Prius?