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NEW PRODUCT DEVELOPMENT & OPEN INNOVATION

GROUP PROJECT

PIRELLI INNOVATION PROCESS

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THE COMPANY VISION

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Work purpose

Analyse the innovation process, through allthe new product development steps.

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Work structure

Source of Innovation

Product EvaluationProduct Development - Production: MIRS(domotics), TSM (chemical mix)

Test: Pirelli LAB, Test drive (ex. VizzolaTicino)

Launch - Distribution

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R&D: sources of innovation

Internal sources (inside the company):oPirelli Lab

oPirelli Turkey (Turk Pirelli)

External sources:oUniversities

oResearch Labs

oF1

oPremium car manufacturers

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Pirelli Lab

Headquarter of Pirelli R&D It is focused ononew-generation optical components and

chips based on nanotechnologies;

onew materials and processes for tyres;

osensors and tele-monitoring;

o fuel cells.

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Pirelli Turkey

The largest Pirelli Group manufacturing site.

Located in Izmit-Kocaeli.

R&D unit consisting of a team of Italian andTurkish specialists

Headquarter of racing tyres production forFormula 1

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External sources F1 experience

Pirelli is the official tyre provider for all the F1teams.

Formula 1 as a challenging field to showexpertise and competence

Formula 1 as a communication andmarketing operation (brand equity)

Formula 1 as a rich R&D field

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The real winner of the world championship is Pirelli.

Bernie Ecclestone, F1 CEO

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Opportunity evaluation: Strategy

Focus on Premiumproduction (50% of 2011Carmarket revenues)

Goal: Premium Leadership in 2015 (allaround the world)

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Risk management

Provides important tools to anticipate andmanage all the effects associated to therisks.

Top-down approach: analysis anddecomposition of an issue

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Product development - Production

Pirelli MIRS and Next MIRS

CSM

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MIRS and Next MIRS

Modular integrated robotic system for makingtyres.

Radical innovation introduced in 2001 withhuge investments

Complete automation of work in a total laboursaving prospective

The Next MIRS is the eco-compatibleextension of the previous MIRS

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CSM

CSM: computer controlled distribution systemthat allows the transportation of all theingredients from the storage silos to the twin-

screw extruder

Minimize inefficiencies and material wastes

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Test

In-Lab test, in Pirelli Lab

On-road driving test, on a racetrack

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In-Lab test

Complete analysis of all the most relevantcharacteristics and feature of tyres.

Quantitative approach

Sophisticated tools for measurements

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On-road & driving test

Tyres are tested on the road with a drivingtest

The test driveris in charge of the evaluationof:

o Tyre performance (e.g. road adhesion)

oOverall driving experience on differentweather conditions

Pirelli usually runs its driving test on private

race tracks

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Launch - Distribution

Supported by Pirelli communication throughmany channels (websites/retailers)

(B2C through B2B) approach in distributionoCompany push the product

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Thank you for your attention