MDF Form and Function (Text Version)
This is a text version of the Manufacturing Demonstration Facilities (MDF) Form and Function video, originally presented on March 12, 2012 at the MDF Workshop held in Chicago, Illinois.
Dr. Leo Christodoulou, Program Manager, Advanced Manufacturing Office (AMO)
DR. LEO CHRISTODOULOU: Regarding the Manufacturing Demonstration Facilities, to remind you this is, we think, a proposal is that this facility constitutes an integral part of the institutes but they don't have to. Certainly, it is something that we think about. And I will go through some of the ideas that we've had and we will give you the opportunity to ask lots of questions because we think that is a very good way of getting the message out. And I would invite the people on the Web to submit their questions as we go along. Kelly....
KELLY VISCONTI: Good morning, I think we're still in the morning time. Leo talked fairly well to this slide and I may come back to it but I'm just going to go through a little bit more and some examples. And the gentleman asked the question why would private companies be interested in investing in this type of facility or putting their resources on the ground. And so, there are a couple of different scenarios that could possibly be motivation or reason why you would. And actually I just heard from another gentleman at the break about this is sort of an idea about what they'd like to do.
So, there's again the flow through the MDF diagram left to right, if you look at it as more of a product based flow. If you look at it from top to bottom, it's more of a process innovation flow. So there's sort of two ways and they're both interlinked, you know, very tightly.
So, there's sort of two things, two ways you can look at it and four possible scenarios why a private sector company would possibly be interested in this. So, let's imagine we have a new manufacturing process. So this company enters into an agreement with a MDF and establishes a presence for a prototype and they utilize the resources at the MDF to enhance and develop this prototype. Maybe get advice on how to better improve it, what new technologies or techniques or analysis tools they could use. And so they would end up coming out with the end, a nice solid process. And so this company realizes they can make money doing this at other facilities on a larger scale. Goes on its merry way. And then the facility, the contracted equipment for the MDF would stay in place and then be available for other companies to utilize as part of the MDF options. Right? So, it's an options suite.
So, speaking to that, then we have C, Option C, is an existing manufacturing process. So, this isn't, maybe you have a well established equipment that you want to provide as a way for people to utilize and understand how your technology works and could benefit new products and ideas being made through this existing manufacturing process. And maybe you will end up with some benefit in terms of enhanced analysis or new techniques that are being developed that you are not aware of. So, it's connecting you, again, as a process manufacturer to the resources, knowledge and skills around that. So, that's in that top to bottom flow through the chart.
So, then let's look from left to right. You have a need for some specific part. You're stuck in your own manufacturing of some 'thing' and you need something very unique made in a unique way and you're struggling with how to do that in your own facility. So, you could come to a MDF and you have Option A, you have Option B, you have Option C, you have all these different ways you can make it, that you don't have access to in your own home facility. So, that's sort of a need for something very specific. And then it's sort of the idea of you have this great innovative idea and you have no idea how to do it, necessarily, but the MDF would enable you to have access to the resources, the people, the facilities, the actual physical equipment and capabilities to do that, whether they are virtual in terms of design or modeling tools or physical, the actual testing equipment that you can use.
So, that's sort of a very, very high level view of how the four options could possible work out and I'm sure there's many more.
So, I call this Functional Aspects but it's really much more around structural kind of, what do you need to think about if you were going to set up an MDF? So, what are the aspects, what are the things that sort of rather the reality, the nuts and bolts of how you are going to actually do this? All right, so there are a few things within this that you would need to probably think about, right?
The Technical Plan. What are you going to do in this technical area that you're focusing on? So, what are the goals and objectives in the focus area? Are there specific targets in terms of cost that you need to reach to make this more applicable in a market? Is it a cost target? Is it a quality target? What are the things that are limiting this technology from really being widely adapted in a market and having impact that it can have? So, what are those goals and objectives? What are the facilities and resources you would need to execute? Who are the companies you need to partner with? Who are the people you need to be working with? What research labs and facilities do you need to have access to in order to have the full suite of capabilities that would make the MDF fully successful? And then the equipment. What sort of physical equipment? What is that full enabling suite of technologies that would allow the MDF and users that are coming to the MDF to really benefit from it? So, on the technical side, what, this is the what, what are you going to do in the facility? What are those goals?
The second piece is more around the how, the management side. So, what's the goals of, so we talked about the technical goals, but in terms of the organization, is this one lead institution that is running it? Is it a consortia, a new consortia, is this an existing consortia of groups, non-profits, private companies, universities etc.? How are you going to make decisions? I know it's pretty hard to get a group of people to decide on a lot of things, so how are you, as a group, decide? What are we going to do in three years? So, how are we going to decide what equipment gets maintained and stays in place? What new equipment we need? How are you going to manage the decision making process as you go forward in the MDF existence? How are you going to manage the different types of organizations that are participating in the MDF at those different levels? So, how are you going to add new partners? How are you going to decide to expand sort of that 'whose equipment gets to go into the facility? What universities you are going to work with? How are you going to decide who the members are going to be and look like and how are they going to pay for and access the resources as well as, if they can't pay for it, how can you enable them to access the resources, if they are small companies that can't afford the three week rental fee or whatever it happens to be. There are other methods you can use, other tools and resources that are available for that. So, that's the how, the management. Thinking through that, what things do you need to do in order to run the MDF well and make it successful?
So, this is a good one....Financial Sustainability. How are you going to make any money doing this, or, enough money to maintain yourself at least as a non-profit institution? So the intention is for cost share from the federal government for a certain number of years, three to five, depending on what the number is, I don't know exactly what the final one will be, but something in that range. To enable you to start. Right? That's the hardest is those first dollars are the hardest ones to get. So, the idea of the federal funding is to, again, give that kickstart, and get it going. But then after that, what? What are you going to do for that other 50%? How's that going to get covered? So, that's something that really needs to be thought out well. And, again, I kind of touched on this a bit before, but the accessibility. So, the Financial Aspect, how are you going to run it? How are you going to maintain it? How are you going to pay your workers? How are you going to allow people to access the facility as well as maintain, I said maintain the equipment.
Two other key areas and this one is probably a big one, too. The Intellectual Property Strategy. So clearly, we are all very sensitive around IP for two different reasons, right? So, in the private sector, you have ideas, you want to maintain those ideas because that's what makes you competitive, that's what makes you/ gives you that edge. So, how can you, as the MDF center, and the participants in the center have a high level of confidence that your ideas are going to be protected and not stolen or distributed or used in appropriately? So there have to be some sort of strategies and agreements in place. Again, as Leo spoke, you don't want to have to, with every single company, rewrite an IP document, that seems a bit redundant and wasteful. Legal documents are not fun to write, either. So how do you do that in that realm? How do you create that protection and that security? At the same time, how do you create an environment that is collaborative? Because the benefit of the MDF is that the sum of the whole is greater than its parts. So, how do you create that collaborative environment that you enable people that they feel comfortable enough to at least share enough that you're going to benefit and other participants and other users are going to benefit from being in the MDF and not just doing in on their own?
So the last piece in this speaks more to the impact of the MDF and its relevance in the broader manufacturing, ecosystem communities etc. So there are two sort of pieces of that. One is around the training and workforce development. What sort of programs would you put in place in terms of internships or fellowships or apprenticeships to give people hands on experience in working with the process and learning about the materials? So they can then go work at the companies that actually participate in the MDF. Taking those MDF workers that are trained there and then taking them to the companies that are actually going to run these full scale lines. Who better to do that than the people who worked on the pilot, right?
And then the last piece around STEM education and outreach and getting people excited to be in manufacturing. I mean, when I was a little kid, I wasn't thinking 'Oh gee, gonna go work on the manufacturing line'. I grew up in New Jersey and it wasn't quite suburbia. It wasn't quite that exciting of an opportunity. However, I did go into chemical engineering, so not too far off. But how do we make it exciting and there's some really, like really interesting and fascinating technologies that exist. And so, if you can generate that interest and that spark, get that next generation of kids and do it, it's really great. I mean, the stuff that Craig and those guys did with the MDF, it's really awesome. I really have to talk to them at lunch at get more about that.
So, those are the five, I'll just go back...those are the five pieces I would think when proposing an MDF, when thinking about an MDF, what would you need to do, to think about, and put into place.
So, again, just a bit more on the IP 'cause again I think this is important. This has been addressed before. I mean we have the Department of Energy and the Office of Science has user facilities and they have structured agreements on how they've done this before. There are other public, private partnerships that exist in the world. Clearly this isn't rocket science but it does have to be addressed in a good way.
So, some proposed objectives of the MDF. So, just a generic MDF not the technical focus area but...they're a little bit small so I might actually read at least some of them. The key thing around is being an impartial center of expertise in a certain area. We'll talk more about what those areas could be and what they might look like, that's this afternoon's show. So providing capability for handling open, possibly proprietary activities, depending on what you're talking about and it's really about facilitating users in those four scenarios we talked about, those two pathways through the product versus process. Having that full suite of capabilities, in terms of new process as well as existing process, maybe the old way works just fine with what you're trying to do. Having the capabilities and resources to assist in the selection, optimization and modeling, so using computer simulation in a way to reduce cost in your development cycle. Again, around developing testing protocols and standards across all stages of manufacturing, the analysis, in situ monitoring and controls, huge opportunities there in so many different industries. And then around establishing these networks, the benefit of being in the MDF is having access to that network. And, again, around IP aspects there.
Though we talked about it a couple of times there it is, Craig, looking pretty, the Oakridge National Lab, we have two sort of aspects to it, Additive Manufacturing as well as the Carbon Fiber facility, which is in the works. Really great what they're doing, great example, but it's not the only example. I think there's other ways you can be inventive and innovative in how the MDF is structured. So, it's a great model, it's a great way. We could have several like it or the next ones could be different. All depends on what the needs are of the technology as well as the ecosystem in the area in which it's located in.
So, that was really short but that was all I had in prepared remarks. I think given the level of interesting questions we started in the morning there, we can probably take a few more and that will get to more of the details around the MDF's themselves.
DR. LEO CHRISTODOULOU: Is there any other....is there any other questions with the audience? We would like to take some from Web as well, actually. Let me take some.
Q: Where does this fit with current commercialization approval for products? Is this another way to get commercialization approval?
A: I don't know what approval means. The objective here for me, at least, would be that this activity will accelerate commercialization, will reduce cost to commercialization and, hopefully, provide better quality products. That's the best way I can answer this now. The person who sends this can possibly clarify with a follow-up question, if they need to.
Q: From the Web we have, how will this program be different from other programs previous efforts that promised to focus on small and medium sized businesses but ended up serving Fortune 500 companies who already have deep pockets for R&D?
A: Well, that's a loaded question. So I think one way that we can insure or focus it is in the planning stages and making sure that access and user access and focus how, that's part of it, outreach. How are you going to get small, medium sized companies involved and that's one of, sort of the criteria that we are going to be looking for in the proposals.
A: (L.C.) Yeah, let me emphasize that some more. It will be part of the evaluation criteria for a selection for any MDF or institute, pilot institute, to see a plan for how this will benefit the broader ecosystem. This is not something that we just talk about, this will be an evaluation criteria right up front. That says if you don't have a good plan for doing this, then you will be marked accordingly.
Q: (L.C.) I have a question here then I will get back to you, one more question, then I will get back to you...What is the time frame to realize your objectives?
A: Okay, so let's talk a little bit about the time frame. Our anticipation, you heard the President mention initiative on Friday, here we are on Monday, as close to it as we could be. We will move as fast as possible within the system. We intend to make at least one investment decision in FY12, which ends September 30 and we anticipate that we will make an award, at least a conditional award, by September 30. Of course, that does depend on lots of things that might happen. As for the future MDF's, and institutes, for the future, the broadest category that Mike talked about earlier today, to some degree that will depend on our ability to have the resources to do that. It's all subject to the availability of funds, as you know, and, but our intention is soon thereafter, in the end of calendar year of 12 into 13, there will be opportunities for the rest of the institutes. So we are talking about months, and not years.
In terms of the outcome of the MDF's and the institutes, we think that some of these will have pretty much immediate payoff. For example, we've already heard earlier today there are already some established centers that we can piggyback on and, if that were the case, I would expect that we would get the outcomes pretty quickly, particularly in the training area. But in terms of the broader area, probably 3 to 5 years is sort of the big picture wing. The sooner the better. For my part, (inaudible) of progress is really important. We have, we cannot wait. We have to move on forward as soon as possible, before we lose this race that we are in with the rest of the world.
So, those are sort of the time frames. Realistically, we will get an announcement out within, certainly within the next couple of months for the first competition. Selection by September for the pilot. Then a few months after that for the rest of them. That's the anticipation.
I'll take the question.
Q: This is an excellent program, timing is perfect and what you laid out is very good. But, the execution and implementation, how do you do that? I'll give you an example. When Sematech was formed by Bob Nice, he was the driver and there was one product in mind which was micro processing. And industry was the stakeholder, they drove it, but I am going to allude to this wide band gap semi-conductor, which you have, which is the strategic critical technology for all of the agencies listed here. And, unfortunately, Japan and China and Europe are investing heavily, the US is not. So, how do you make that, and the stakeholders, if you look at this, it's not just, crystal is important but then you need to make divisors, you need to make circuits, thermal issues, (inaudible), so the stakeholders are up six chains in industries. So how do you make such a thing happen? Do you have any suggestion?
A: Okay, so execution is what keeps me up at night. I agree. I think it's going to be difficult. But as I said before we're doing this not because it's easy, we're going to do it because it's difficult because it's hard to do. I think we do have international competition, not just in wide band gap materials but in a lot of other domains. I think we are up to it. I think there's enough innovation in the country, enough willingness to move forward that we can do it. So, I do not think the way forward here is to be dictated necessarily by us in Washington. That's why we're out here today. That's why we're having these Outreach meetings. I think the innovations are out there with you. We need your best ideas. We want you to get in front of this. We want you to come to us with a robust proposal. Not to be self centered, to sort of look really, what is the best way forward and 'all hands on deck', I think the President said. So I want everybody to work together to win those races. I mean it is a race between us and the rest of the world. It is a race between different areas. But I think we have a good chance. We wouldn't be doing this if we didn't think there was an opportunity to do it. The Sematech model did bring people together that were strong competitors. If you look at them right now, they compete fiercely in other domains. But in that domain they do. And I think there are multiple industries; whether it's the paper industry, the casting industry, the chemical industry, the composite...I think we can do the same. I don't think it's exclusive to the semiconductor industry or the semiconductor industry for that matter, I don't think it's exclusive to that and I think we can do it. All I need is for everybody, I would like to see, is to put their best food forward and pull together. We are not going to do everything. We cannot do everything. We're going to have to be selective. You're going to have to make the case why a particular technology is going to be done. And in some cases we may not be able to reach it. But in the wide band gap materials I'm at least hopeful that we will be able to do something.
Q: First, just a quick clarifying question. If you would, the relationship between the IMI and the MDF and then also how much are the technology focus areas predefined by the NSF, DOD, or is it truly open? If you can comment on that, thanks.
A: So, for those of you that don't know, IMI was a call that we put out, out of the Department of Energy, my office; it was called the Innovative Manufacturing Initiative. This was sort of a broadly based announcement, opportunity for, funding opportunity announcement, FOA, as it's called. We received multiple responses to that and we've gone through an evaluation process. (inaudible)These are individual projects that we are going to cofund with industry and consortia. This is specific projects that we're hoping to fund many more than we are going to be able to because of funding constraints, unfortunately. But we will do our best to fund as many as we can. Although they could be collaborative, there is no requirement for IMI to have a center facility or anything like that. They were strictly based on good innovative idea on innovative manufacturing with energy efficiency. The MDF's are parallel to that, they are adjacent, they are complementary, they're different, they're centers. We don't expect to fund as many, as many MDF's as we expect to fund IMI's, IMI projects. In round numbers, we are hoping to fund anything between 30 and 35 IMI projects, maybe as many as 75, depending on how far our money goes. With the MDF's, within the Department of Energy, probably not more than 6. They're going to be larger. You know, we're thinking that the MDF's, our investment, will be around the 10 million dollar per year, sort of investment from us. We would expect at least that from co-share, they may be out of money from other departments on top of that. So, these are much larger programs, generally, the MDF's would be much larger programs and will be under the conditions that Kelly mentioned.
KV: Do you want me to answer the second question?
LC: What was the second one?
Q: We've talked a lot about specific technology examples, I am wondering how much of those are already set by the agencies involved? Or is it completely open?
A: Well, there are clearly some areas where there is critical national interest in some technologies and we will, you will hear some of those, we're actually going to put a list out this afternoon for discussion. However, this list is not prescriptive. We will allow you to the opportunity to come up with, to make the case for any other one you believe is important. We've used our network, both the PCAST report and the various workshops that we've had over the last year or so to narrow them down to about a handful but they are not prescriptive. Good innovative ideas, I cannot say we would turn down a really good innovative idea, providing a compelling case can be made.
Q: One of the things I wanted to ask is most of the emphasis this morning has been on physical MDF's and we have a built in bias, in a respect, but would argue that there's quite a bit of manufacturing process and understanding has to do with the measurement sciences, the data, the modeling and simulation, performance metrics and so forth. I want to just kind of get your thoughts on virtual MDF's or do they exist separately or do you expect them to exist in combination with physical? How do you mix and match those in terms of the thinking going forward?
A: We have nothing against virtual MDF's. I guess we, in the manufacturing domain, there are issues both on the shop floor and above the shop floor, sort of issues that need to be addressed. We're drafting our solicitations such that we are not going to bias it towards one or the other. I think we are going to leave it up to you to make the case that the most efficient way forward, let's say, is to go virtual rather than physical and you'll have the opportunity to do that. And assuming you do that, you know, that will be looked at in (inaudible). So we are not precluding virtual MDF's. We're not precluding virtual MDF's.
Q: What if a company that has a technology doesn't really want to make a proposal for an MDF but wants to be involved with a company that is doing that? And a lot of these proposals you wouldn't know about who's doing what, in my company's case, so is there a venue or a way that we can be involved or let others know that we want to be involved with our technology?
A: This is a good question and this is going to be strictly voluntary. But my thought on this, and I will welcome comments, but, our initial thought for this is to have a virtual, I mean a teaming website that we will host the website where you can put up something about your, that you want to see. I mean we're not going to tell you what to put up...and it has to be non-proprietary information, because the whole world will see it. But you can just say, these are our capabilities and we want to collaborate with anybody who wants to collaborate with us, we're open to this. So this would be a collaboration website where you can post your information. We have to be careful about what we can put up on the web, of course, and we'll make sure that it is appropriate for putting up on the web and our website. That's something I have used in the past. And then you can go to the website and see the various companies or institutions, they don't have to be just companies. So, that's one way we're doing it.
Mike, I think you can say....
Can you go to a mic, Mike?
Just so we can have your voice recorded for all of posterity.
A: Yes, I just wanted to add that idea has come up a bit and we will be announcing shortly on the manufacturing.gov there is a website for the AMP, Advanced Manufacturing National Program Office, but with this idea it will be an advanced manufacturing wiki and you are representing yourself. We are going ahead with a launch of a wiki so any of those ideas can be put up and we encourage the exchange of ideas and debates and such. That is a different, very open environment, of course, that doesn't have to go through a website review or approval by USG.
LC: Before you do that, can I take one of these questions from the web?
Q: Does the scope of the MDF program include continuous processes, smokestack industries, as well as discrete parts manufacturers?
A: The answer is yes. Yes, of course, we're not, we were speaking to discrete parts but that's by no means exclusive.
Q: I pulled you aside after the last time to ask my question, but I think it's important for the whole group to sort of hear the answer which is, you know, you talk about performance metrics. One is employment, talking about the time frame, the short term is workforce development and training and getting folks into jobs. What is the relationship with DOL, community colleges and apprenticeship programs and how that should tie in? Had a good talk about technology today but where does this, boots on the ground, get people into jobs?
A: So, we think that the Department of Labor, SBA, and other government agencies have a lot to contribute here. We're not being exclusive and, in fact, within my office we are launching a program within the Department of Commerce and Department of Labor on what we call accelerator initiatives and that announcement should be coming out soon. So we expect, I have had discussions with industry associations, some of them are represented here, and others, many of them, the manufacturers, and I have offered any number of venues for collaborating with other departments and labor, including the unions. I mean, I've had discussions with some of the biggest unions within the country and some of the unions have actually retraining (inaudible) themselves. To the degree that it makes sense and we can strike up a partnership, we are open to those collaborations as well. This is truly an all hands on deck effort for us. We intend to work with everybody who has an interest in manufacturing. Manufacturing in the United States.
Q: We talked about the aspect of cost-sharing. Existing structures such that may be consortia, that are already existing, can they bring value or bring that value, I remember, an example we had (inaudible) at the University of Alabama, on a DOE project, we put a consortia together, and I can think of some others....that they can utilize that structure or maybe the monetary aspects they get from that towards their cost share?
A: Yes, we feel that cost share comes in many, many ways. In some cases, it could be infrastructure. In some cases, it could be buildings. We will evaluate cost share in a broad sense, in a broad sense. Particularly in the early years, we understand that people, it's going to be hard to state budgets, for example, our constrained as well. So, we expect that people will have lots of innovations as to how to sort of meet the cost share requirement and we will interpret it broadly.
Q: One of the things you mentioned earlier is really related to, how you all quantify all the performance criteria, where to put the investment. I come from the solid state lighting community and when we look, for instance, at the energy savings there, it's been tremendous per dollar compared to say, even solar or other industries. I think it's about 40 to 1. So I wonder if you can say more about what the criteria you will use in terms of selections of which technology areas and how those will be made? Thank you.
KV: So that's a little bit more of what I'm going to talk about in the afternoon but the idea to establish basically a framework for what those, we call them keystone technologies, really what are the criteria and characteristics of them? And then this is how you will frame and propose a specific area in technology. And we'll walk through a couple of examples. So, if you can hold off we'll get some more. I'm sure Leo has something to say about this, too.
LC: You know, the evaluation criteria by the nature of the solicitations have to be broadly applicable so it's hard to be very specific. But we are going to look for energy efficiency, you know this is one of our particular goals, to look for energy efficiency. This is going to be an important metric for us. So, there is no question.
Q: Leo, can you provide you vision on how you see the MDF's differing from current and future information hubs?
A: Very similar. The innovation hubs, I think, are a little more basic science, perhaps. I mean in the past they have been, at least. Our secretary, Secretary Chu, feels very strongly about the role of, as you know, the innovation hubs and how people need to be together in this cluster, in the hubs. To reevaluate from the physics up, if you wish, the whole notion of that and within the MDF, sort of domain, we certainly buy into that, of course, and encourage it. But we are really looking at more of applied research. We are more, as I tried to indicate in my discussions is, the outcome is really a business plan. So that somebody can make a decision to invest or maybe not to invest. But it's a decision to invest. So, you know, you know, a hub may come up with, perhaps, a new way to transmit information or whatever it might be, a new optical communication device, I don't know. But the MDF really ought to result in the (inaudible) manufacturing decision, you know, you're going to go make something. And it could be not necessarily making new products, it could be the very products we know and love today. It could be forgings, castings, it could be, you know I don't want to put existing industry under any sort of lesser level here. I just want to make sure people understand. Thank you.
LC: We have a couple here. Do you want to read the next one? Oh, those are repeats?
Q: Can the private sector co-funding of 50% of five years consist of in kind co-funding as opposed to cash?
A: And the answer is probably yes. We look at everything. Cash is always better but, you know, we will take a broad view of co-funding. It is important as you all know in the political system, it's not just how much money you put in, it's sort of your ability to foster the whole ecosystem. And in some cases facilities and access to facilities.
Q: Given the emphasis on SME's, small and medium enterprises, how do you intend to attract large companies to contribute cost share funds to the MDF's?
A: So, it is not our intention to exclude large companies. In fact, we do want large companies. I mean in some ways my vision here is sort of like the shopping mall vision where you have two anchor big department stores on either side and all the small companies, small people in between. I want an ecosystem whereby there is a win-win situation for everybody. So that, if the large company participates they not only create products for themselves but they create the infrastructure in the supply web, which is better than the supply chain, as Mike indicated, the supply web that goes with them. Because a lot of our larger companies do, in fact, rely on the small companies. And the health of the small companies and medium enterprises really does reflect the well being of the large company. So, if there is no win-win situation for everybody, I don't want it. We don't want to do something if it isn't win-win. I mean that's why there is so much cash involved here. If you don't mean it, don't participate. If it's not in your mainstream, this is not something you want to do; you shouldn't just do it because the federal government is going to put money. Because it's just not worth it. The large companies, I say, well what are the big problems you are dealing with? If you believe collaborating with smaller companies and the federal government and academia and the (inaudible) is going to help you, then please participate. If it doesn't make sense, don't. We don't want you just to be there. I mean only do it if it makes sense for you. As a business plan to make sense. Otherwise, we are all wasting our time and our money and I don't think any of us wants to do that.
Q: We've been in support of the solid state lighting program run by DOE for some time, but my question is colored by my experiences in that program and we do have a manufacturing segment to it. And it's related to the question you just heard from the web. It seems though, from what I'm hearing, that there are actually three groups that are relevant to your vision. One is the investors in the manufacturing facility and these are the ones that have to come up with that 50% cost share, which is rather daunting for small investors, and as you point out now, also for localities and states, at the present time. The second group is the entity itself and its management which could be completely different and I think maybe making that distinction would help in achieving success. The third group is the one you frequently refer to as your objective is to have access to small businesses who probably can't put up the large cost share money. And so, therefore, would be limited to usage fees or something like that. I guess my question is could you, perhaps, tell a little more about how you envision this coming together? I think it would help in getting proposals. Kelly mentioned a non-profit structure, in passing. If that's the concept that you have in mine I think that's important to make that clear. So, just some questions as to how this might actually pull together.
A: Okay, let me try to answer that as best as I can. Yes, we think a non-profit system might be a very good model. In a sense that that can take care of, perhaps, some of the intellectual property and pre-competitive issues. The national labs can do that as well as establishing entities. With respect to the small companies participating and large companies participating and so on, let me give you some scenarios. It is possible, for example, that states could provide us facilities, infrastructure, some buildings. You know that would be counted towards cost share. Potentially, you know, they could have economic development funds maybe down the road, that's a possibility. They could bring to bear other credits, perhaps, in some way like that. So that will make it easier for them. We might be able to frontload the federal investment so the cost share comes in a little later; it gives people time to evolve. For the small companies that want to participate but they can't really fund the MDF themselves, perhaps they can use it on a (inaudible) basis or in some cases, I'm actually thinking we could give the MDF's some money to give to small companies, small amounts of money, to start participating with them. So there would be some money available that the small companies could use, for example, for travel, if they had to go to this facility, and have some measure of money, some measure of resources, that would enable them to communicate, to collaborate. So, my answer to this is there is never enough money for everybody to do everything that we want. I mean that is the reality of life. And I will look for you to try to be as innovative as possible. You know to the degree that the costs can be shared over multiple people then the pain is less for everybody. Does that answer your question sufficiently?
RESPONSE: Thank you. I think one thing that will need some continuous thinking is how the major investors will recoup that investment. That's going to be at the front of their minds when they make these decisions. I think you've outlined something that might work but I, that's going to be evolving I'm sure. Thank you.
Q: I have a question, more again, about the sensitivities of intellectual property rights. Is the AMO going to issue a patent rights waivers for all the participants and investors in these hubs? Is there, we know some of the default positions, that rights are expected of the DOE but what is the sort of thinking in terms of claims to intellectual property that comes out of these centers?
A: Yes, I understand there is a patent waiver document on its way to my desk right now. So, the answer is yes. We are looking at all sorts of different options for that and that is certainly something we are considering.
Q: Just as a sharing piece, I have a small private manufacturing company that I have made an innovation center and I funded it entirely, we formed a cluster, we interact with the cluster, and we are funding ourselves on innovative new projects in wind, solar, fuel cells, proton exchange membrane fuel cells. So, for anybody who questions if private sector can do that, I already did it. And we are also interacting with the community colleges. We bring people in unemployed and displaced workers. And when I place orders in the market, I'm building zero emission ice resurfacing machines, for instance, I place an order in the market and I move those workers with the work. And then when the innovative products spawn out of the advanced technology innovation center, we move more employees. And we've got our first six students. We've got 100% placement. I can't train them fast enough. So, that was all funded on our own. So...
LC: Thank you, thank you. That was a wonderful case study.
Q: One of the challenges in new technologies is finding the tooling and materials required to build these newer products and sometimes they literally don't exist they have to be invented or they have to be adapted. I think a good example would be tooling from the semiconductor industry was adapted to the flat panel display industry but it had to scale in order to accommodate a shift in wafer size to a very large plate size. So, is there a way to address this conundrum, if you will, of money that will need to be used to acquire or to develop new tools and materials as you go forward? The tendency has always been to frown on capital equipment acquisition in these types of initiatives. But, in some cases, it will literally not move forward unless you can acquire the needed tools and materials.
A: Yes, and I think that's a good question, thank you. If it's on the critical path to the commercialization then I think it's in play. I should say that at least in the pilot initiative that the President announced on Friday, the Title III office of the Department of Defense has committed some money already to sort of buy some of the products that come out of some of these MDF's, for example. I mean on these ecosystems. So, we are all looking at innovative way to stimulate, to create the market pool, if you wish, for some of the technologies and capabilities that come out of some of this innovation institutes and MDF's. We're truly looking at the whole system with a new set of eyes. We're trying to understand the weaknesses and the shortcomings that have led us down this path or trajectory of reduced manufacturing in the United States, and we are trying to reverse that trend. So, the degree that we have to change our practice, that's applicable and allowed by law and regulation, we will change things around to make it happen. So, that's all I can tell you. I mean, I am not familiar with everything, clearly, but maybe some reasons we cannot do some things by law or regulation but, beyond that, we're truly trying to reverse the trend of decline in manufacturing and we will stop at nothing, really, to make that happen, nothing that's legal and proper and fair and equitable to do that. We will work hard to do it.
LC: Any more questions?
Q: I'd like to ask a second question. We talked earlier, I think it was a question about, you know, providing incentives for private industries to invest in the MDF. Do you envisage, perhaps I wasn't fully understanding, whether the MDF, for instance, could be a private industry itself? Could it be a business that is part of the collaboration written by other businesses or other academic institutions to invest? For instance, if it was a pilot line and there's other companies in the technology area, in the ecosystem that working on components etc., I'm just making this up for instance, but if they could be invited in so that they could test out their components in this pilot line but the pilot line is owned by a private company, is that something you envisage falling within this model?
A: Yes, it does and I think we heard a case point just earlier by, that was mentioned right here. We're not, you know, once again, I started this meeting by saying this is a request for ideas. A request for ideas and we are looking for these ideas to enable us to do these things. And if a private organization privately can do this or a non-profit, a lab we're open to all these ideas. What we ask you for is to think of the goal which is increasing manufacturing in the United States. Efficient manufacturing in the United States. In our case, energy efficient manufacturing, globally competitive manufacturing in the United States. That's what we really focus on. What is your best model for getting that?
Q: You cited the carbon fiber facility at Oak Ridge as an example. Could you give us a little more details? Maybe that would help us a little bit, in terms of, not necessarily who's involved in terms of proprietary things but in terms of, you know, what kind of time line it's on, what kind of investments are involved, what's its actual specific objective to produce, so we get some sense of that example?
A: Okay, I can do a little bit of that. So, over the last couple of years, the Department of Energy has made some investments in Oak Ridge regarding these pre-competitive facilities, and one of the areas that we have now pulled into the MDF, the carbon fiber prototype facility or manufacturing demonstration facility, and what this facility today, actually, it's pretty much an empty plant with some small pieces of equipment. But the idea is there will be equipment within this facility that basically takes a precursor and, at the other end, (inaudible) the carbon fiber. And in the meantime there are different modules of oxidation, carbonization, whatever the different processes are. And, a particular company that let's say has a precursor that they want to try out can come to the MDF facility, put it in and get out what they want to get out. Or somebody has a particular metrology device that's going to, in real time, interrogate the fibers that go through and determine its crystallinity, as you can see, I'm making this up. You know, they can go ahead an insert that technology in the pilot line and so on and so on. I can imagine companies (inaudible) from the very beginning to the very end. Somebody who wants to get into a business or somebody who wants to, I don't know, perhaps a bio-derived fiber instead of a petroleum based fiber, you know, sort of precursor. Any one of these facilities. Now the facility will be fully equipped sometime in May, I think, when the equipment will show up. We expect it to be operational around September time frame. At that time, there will be a process for people to come in and interact with the facility. We will be paying for the maintenance for the facility and the people that run the facility, and our expectation for the facilities that part of the MDF. The people that want to collaborate could come under their own nickel to collaborate or we could have (inaudible) or we could have any number of different things. Craig Blue who is here and runs that facility for me has a template with the right IP clauses, I believe, which will enable people to collaborate as appropriate depending on what they want to do. So, it is a model of one MDF that we have. It's actually part of the Oakridge MDF. The Oakridge MDF has two elements. Has the additive manufacturing and the carbon fiber. They are physically separated actually; they are not in the same building. That proves that it doesn't have to be in the same building. But, you know, we are trying to make it as easy as possible and the IP conditions, the IP procedures can fit all on one page. You can just look at it and decide which one is the right for you, when you choose that one, okay; I want to engage with you under this condition. And under some conditions you agree to share the information, under some conditions you agree not to share anything. And, something in between. It's up to you to decide that and we're hoping that we make it like a menu, you know, so people can easily know exactly the interaction they will have. So, does that answer your question sufficiently?
But this facility is there for people to do experimentation to figure out the best way to make things. They can change the different heating cycles, oxidation cycles, carbonization cycles, they can do it all in themselves in the facilities there. When they are done then the next set of people can come in and so forth, and so forth.
Q: How will the information silos that separate different industry segments be breeched to allow cross fertilization or practice and processes allowing creative synergies?
A: So this is, I think, an interesting thing that the MDF and the equipment and the technologies and the capabilities that would be in it would enable new things to happen in other industries. So you create a way to create a wide band gap material that could then be used to manufacture new magnet materials because they're based on a different, a similar, material property structure and way of making them. How you breech those, that's an interesting challenge but it would be around the MDF itself and having expertise in recognizing what you have in terms of capabilities and were it could be applicable to other areas and reaching out to those industries and those small businesses or large companies or universities and recognizing, heh, this makes sense over here....and it's that cross fertilization that really is the benefit in terms of making new innovative things happen.
A: (LC) I want to expand that a little bit. It's our intention and Mike Molnar mentioned this a little bit, it's our intention that the various institutes and MDF's will network between them. This is really important. This is really important for us to sort of make sure...it is our hope that, and our intention, to make happen. How will we make that happen? Well, last week or two weeks ago, if you were in Washington, you might have gone to the (inaudible) Summit. That was held at National Harbor where we had, I don't know, 2500 People, Dave, I don't remember, something like that, from across all disciplines working together. So, it's my hope, not maybe in the first year, but in the next few years, we will have this summits, where we will have people from an institute that's in critical materials and an institute that's in, I don't know, composites, wide band gap materials, metrology. We would have a summit where we would all be together and we would network together. To highlight both successes and failures in conference. I mean if you were at the (inaudible) Conference, you would have seen about 400 exhibitors there, essentially that had something to say about what they did and how they played in that infrastructure. Those of you that maybe know of the (inaudible) of a few years ago, we used to hold the same thing as well when I was at (inaudible). So that that type of collaboration between all of the departments, EPA, Labor, OMB, Office of Management and Budget, I mean, we were all in that room, every week, every two weeks, at least, working together. I have seen, it's an overt activity that certainly Mike, (inaudible), Steve McKnight and myself we all pushed very hard that we would try to break as many of these barriers. We do not underestimate the difficulty here. I mean I don't want you to think we have our heads in the clouds. I mean, I will say that. We do not underestimate the difficulty, and I will also tell you that I don't think we will get everything right. I don't know anybody on this earth who gets everything right. So, we will do the best we can and what we need is to learn to be adaptable and flexible. We need to promote best practices. That's why in both the MDF's and the institutes we're going to look for multiple models because we, over the time frame, that these entities exist, we look for best practices to permeate, the better concepts to move forward and the things that don't work to hopefully die away. So, in as much as anything, a plea to you to work with us in partnership to make the right decisions. I have no doubt that we are all on the same mission, which is to make the United States a competitive, the global leader in manufacturing. It's important for national security, for economic security, for health care, we can't afford any of this stuff if we are not making money. So, we've got to do that. So, since we're all agreed on that goal, I have no doubt that we all agree on that goal, then all we have to do is work how to get there. We're not going to get it all right the first time but we're going to try.
Q: Please explain the differences between the MDF model and the current IUCRC model? Mike, do you want to talk to that? No?
A: I will try to sort of answer this question in writing later on but I'll try to explain as best as I can, in my thought, at least, what an MDF is and how it's a little different than some of the other institutions around. Recall again, we are not suggesting that you break everything and you reinvent the wheel. We're suggesting that good things should be built upon and expanded. So, if the IUCRC model is a good starting point, then let it be so. Okay?
Q: Will there be outreach to current state manufacturing systems/development programs to be part of this MDF program?
A: If I understand the question right, this is about the technologies that we know about today not just the new ones, new manufacturing technologies and the answer is yes, of course. We are very interested in the fundamental technologies that make us the manufacturing country that we are, you know, the casting, the forging, whatever they may be. Yes, the current state, assembling, welding, joining, I don't know what it is, yes, absolutely. (inaudible discussion) Oh, yeah, sure ....you know one of our problems is that there is so many of these different activities within the states and regions and economic development, we may not be, part, we may be knowledgeable of all of them. Part of the reason of having this meeting today is to sort of put up the flag and have you come to us and help us understand it. So, for those of you states and localities that have some of these programs already and want to make us aware of what has worked and what hasn't worked, we're eager listeners.
Q: How, very good question, how would the success of this program be measured? Are there any metrics to ensure that the program is making progress?
A: Absolutely, okay. So one of the things that I alluded to, what is the outcome? The outcome is contribution to GDP and so on, employment, new technology. So, let me give you an example. Before my arrival at energy efficiency and renewable energy at DOE, work was funded in combined heat and power. The work in combined heat and power, the research work, was (inaudible) with industry and it had some of the very largest companies, you know, GE, Caterpillar, Cummings and all the way to small companies, much smaller companies like Capstone in California. Pretty much everybody within the US industry was part of the program. The Department of Energy invested something in the order of a few million dollars, 15, I believe, and I may be wrong on that but I will give you a number....As a result of that work, jointly with industry in the team members, the CHP engines increased their efficiency, their electrical efficiency from 34% to 44% with a new generation of 47%. And we have specific data that indicates that those new engines, oh, there's electrical efficiency, the thermal efficiency for some of the engines is in the 80's and maybe even approaching 90's when you use excess heat for heating water and so on. Based on data provided by industry to us, we know that so many gigawatts of CHP has been sold of those high efficiency engines. We estimate something in the order of 2.84 billion dollars of sales have resulted from....now, the Department of Energy can absolutely not take all of the credit for that. However, it was the partnership with industry that created the new energy efficient, high performance engines which then sold in the global market place and created a kind of revenue for the country. Anyway you measure it, that's tremendous return on investment.
So, how will we measure? We look for that kind of thing. We look for investments that we will jointly make that will then spawn technology products, machines, tools, whatever they may be. They will then be sold both in the United States and overseas and create wealth. Create wealth for our companies, for our workers and for the researchers and engineers, like myself, that work on the periphery of it, hopefully.
So, the interim measures are to the degree, the MDF's or the institutes have created, have educated workers, welders, (excuse me) welders or professionals, draftsmen, tradesmen that have found jobs. You know, those are metrics that we're going to look for. We're going to look for sales for products or investment by private capital and companies. If we develop a new process for separating chemicals by some membrane technology, perhaps, and that company sells the membrane and makes a profit, that's what we will measure. You know, how many have you sold? That kind of thing. We're going to look for measure of that kind. Contributions to GDP. Okay, that's how we're going to measure. There will be interim measures and we will ask you in your proposal to tell us how you are going to measure yourself? That's going to be part of the evaluation criteria. How are you going to track your progress? If you recall, Kelly talked a little bit about ...How will you manage your program? How will you bring people in and so on? We're going to see the progress that you are going to put into place.
For those people that run this institutes and MDF's, I think it's going to be quite a lot of work to pull these proposals together. I want you to understand that we are sensitive to that and our objective is to give you some time to respond with your ideas in a sort of, something along the lines of 30 days. We'll put an announcement out, this is our current thinking. We'll put an announcement out to say, okay, we want this thing, this is our plan. Send us your idea in 30 days and then we will comment back, encourage or discourage you, but send a comment back and then give you another 60 days or something of that order to then put the full proposal together. We don't want you to write a proposal without some feedback from us. We understand the complexity of what it is. We may even pose the draft for our first, then a final form. We are considering all of these options. We don't want anybody to spend tremendous amount of money and effort, you know, and come to very little reward. That pains us greatly. It disenfranchises you and makes a lot of work for us as well and nobody wins with that. That's part of the reason of having discussion today. Today, as I said to you, is, earlier on, the idea of today is to critique, hopefully in a positive way, in a constructive way, some of our ideas. We don't pretend to know all the answers. Help us get the best product out there we can. Okay?
KV: Any other questions from the room?
LC: This is the last one.
Q: So obviously to make this work, there's going to have to be investment from outside industry and I think a lot of those investment will be in software technology or machine technology, physical machines. What is your view on whether or not those machines or software technology are from US based companies and how will that be weighed into the evaluation process, that the machines that will be actually working with, in the MDF's?
A: I'm sorry. Do you mean that the manufacturers of those machines are US based companies?
Q (additional response): C&C machines. I mean there are very few C&C machines that you mentioned before, that are made in the USA anymore. I mean, as far as technology, there are technologies that are made in France and there are technologies made in the US. Are we looking for something more all US based companies, as well?
A: No, no, I mean, look, we live in a global industry, manufacturing world and a global environment and if in our MDF we need to have, if state of the art is a machine that is made overseas, but it's critical to our mission within that MDF then I see no reason why it shouldn't be in there. Because we can use that machine to create products, remember the parallel part, the vert.., excuse me, the horizontal part, not the vertical part. If our ability to produce the right product depends on us having access to a machine from overseas, that's fine. We should have that. I mean, what comes to me is the idea that, you know, Henry Ford didn't invent the car, the automobile, he invented the assembly line, right? So, I mean we need to bring in (excuse me) we need to bring in what's going to make us successful and as I said before, if that turns out to be an external technology that is outside the United States, let's bring it in. Maybe we can improve it. Maybe we'll send it back to them. Why not? Maybe we can improve that robotic machine or whatever, and sell it back to them. To me that would be a win.
DR. LEO CHRISTODOULOU: We will take a break now. We are reconvening at what time? At 1:30, that would be central time, for those on the web. Thank you for being here. Thank you for your questions.
For those of you that are on the web please don't hesitate to send your questions, also.
This afternoon we will try and talk a little bit about the ecosystem, at least as we see it a little bit more and then talk a little bit more about what be the focus areas, or the focal areas, for some of these MDF's. These are examples of things the group has looked at before. Thank you for your participation.