Book Review: Crossing the Chasm, Marketing and Selling Disruptive Products to Mainstream Customers

The author's emphasis is on distinguishing between the selling and marketing tactics for the early innovators versus the mainstream customers. There is a chasm between the innovators and mainstream market and the author dedicates the book outlining the various steps a high tech company should perform to successfully navigate through the chasm.

Some key points and lessons learned:

- It is important to maintain momentum in order to create a bandwagon effect that makes it natural for the next group to want to buy in.

- Early adopters want a change agent while the early majority looks for productivity improvement for existing  operations - they want an evolution not revolution.

- Vapor vare should be avoided during chasm crossing - Vapor vare is pre-announcing and pre-marketing a product which still requires significant development.

- Resistance is a function of inertia growing out of the commitment to the status quo, fear of risk or lack of compelling reason to buy.

- Crossing the chasm requires moving from an environment of support among visionaries back into one of skepticism among pragmatists. It means that moving from product related issues to unfamiliar ground of  market oriented issues AND moving from the familiar audience of like minded specialist to uninterested generalist.

-It is the market centric value system - supplemented ( but not superseded ) by the product centric  - One that must be the basis for the value profile of the target customers when crossing the chasm. 

-Elevator Speech Template
1. For (target customers - beachhead segment only)
2. Who are dissatisfied with (the current market alternative)
3. Our product is a (new product category)
4. Unlike (the product alternative)
5. We have assembled  (key whole product features for your specific applications)

- Why is elevator speech important ?
1. Your claim cannot be transmitted by word of mouth consistently.
2. Marketing communications will be all over the map.
3. R&D will be all over the map.
4. You are not likely to get financing from anybody with experience.   

- The product alternative in your elevator speech helps customers understand your technology leverage (what you have in common) and your  niche commitment (where you differentiate). Market alternative helps people identify your target customers (what you have in common) and your compelling reason to buy (where  you differentiate).

- Positioning: Goal should be to make products easier to buy not easier to sell. The four stages in positioning:
1. Name it and frame it -  Positioning needed to make a product easy to buy for a technology enthusiast.
2. Who for and what for - Positioning needed to make the product easy to buy from the visionary.
3. Competition and differentiation - Positioning needed to make the product easy to buy for the pragmatist.  
4. Financials and future plans - Positioning needed to make the product easy to buy for the conservative.

- During the chasm period, the number one concern of pricing is not to satisfy the customer or the investor, but to motivate the channel.

- When crossing the chasm we are looking to attract customer oriented distribution by using distribution oriented pricing. There are two types of pricing strategies: value based and cost based. The value based strategy is based on the final big value the client will realize using the product while the cost based is dependent upon the cost incurred to deliver the product.

Statistical Process Control Using On-Machine Probing Data

Product quality plays a major role in the success of every manufacturing organization. The popular way to study and analyze the quality is through the use of a set of Statistical Process Control (SPC) tools. The correct application of these tools in a manufacturing scenario is fundamental to good process management and reduces process variation.Coordinate Measuring Machines (CMM) and on-machine probing are being extensively used in the inspection of mechanical components for statistical process and quality control in manufacturing processes. SPC uses certain process performance indicators and statistical methods to monitor for changes that might affect the quality of the product.  It is important that we need to understand the true reason behind process variability; and simply not whether a process is in control or parts being manufactured have been accepted or rejected. A preliminary step towards understanding inherent process variation present in cutting process is to dwell into an SPC monitoring system that deals with raw probing data. The MTConnect standard has facilitated extensions to its XML tags to integrate sensory data from the on-machine probes along with control data, which is readily available across the shop floor network. MTConnect adapters are developed with customized XML tags that successfully collect raw data from the on-machine probes. This is accomplished by indirectly establishing communication between the probe sensor and the MTConnect Agent via the machine controller. An SPC monitoring application based upon the data collected through such an MTConnect implementation is presented. The application is used to collect real machining data under multiple cutting process conditions, thereby demonstrating how certain SPC performance indicators (trending, shifting) are related to avoidable and inherent variations in the cutting process (tool wear, tool macro-geometry disparities). Improved SPC monitoring methods that incorporate knowledge of variations in estimating performance indicators are discussed.

Reference: Statistical Process Control Using MTConnect; Atluru S. Deshpande A.; Proceedings of the ASME 2012 International Manufacturing Science and Engineering Conference (MSEC2012); June 4-8, 2012, Notre Dame, Indiana, USA.

A Study of Machining Process Power Monitoring and Product Quality Prediction

The adoption of power sensor and power data analysis techniques has been expanding in the area of machine condition monitoring. Besides typical power usage analytics, machine health status and component degradation are the emerging merits of power data to provide more insights in the machine and process performance. This paper presents a methodology to monitor power consumption of a milling process and predict part quality based on a correlation model developed. A power sensor is instrumented at the main power supply of a three-axis horizontal milling center to manufacture a batch of typical aerospace components having a circular boss and bore features. A batch of 48 components is produced and the tool wear, product quality, power consumption and real-time machining parameters are monitored. The tool change is performed based on quality requirements and tolerance information. The boss and bore diameter is measured for each part using on-machine probing and compared with its nominal value, wherein the difference is used as the part quality metric. Effective power data in kilowatt from all cycles is analyzed and meaningful features are extracted from the power signal. The feature deviations from the baseline are used to interpret the performance degradation of each tool over cycles. The deviation trend is successfully correlated with the change in the part quality, verifying that the power data can be used to infer the part quality using the correlation model developed. In the future, the presented work can be validated with further testing and improved to be adaptive with multiple manufacturing process regimes. To conclude, the framework of using power data to predict machine performance in terms of health condition and part quality is highly beneficial to manage maintenance, information and product quality.

Reference: A Study of Machining Process Power Monitoring and Product Quality Prediction, Zhao W., Deshpande A., Lee J.,  The Prognostics and Health Management Solutions Conference MFPT 2012, 24-26 April 2012.

What's New in Advanced Machining Technology?

Join the Society of Manufacturing Engineers’ Chapter 21 as they feature TechSolve and Mr. Amit Deshpande on October 25, 2011. Mr. Deshpande will showcase the latest research and development in advanced machining technology. His presentation will highlight:
• Advance Machining R&D (SMPI, IMAP )
• Machining Services
• Machining and Technology Development Center

Tours will include a 5-axis demonstration, and live test beds. MSC Company will also demonstrate their tool vending system. Tours will be held in parallel with the dinner and networking session, but will be conducted in two small groups to allow for plenty of questions and interaction between attendees and manufacturing experts.

More information available at:

Contact me if you have any questions.

Power Sensing’s Power

Excellent article by Mark Albert (Editor-in-chief MMS), describing the benefits of energy monitoring in manufacturing.  According to Mark "Linking power usage data to machine activities is a critical first step toward sustainable manufacturing". Click here to access the article. 

For a PDF copy of the technical paper describing the feature based power monitoring methodology click here.

The Need to Know Is Basic

Excellent article from Modern Machine Shop explaining the use of SaaS based applications for asset management and utilization monitoring to improve your shop performance.

The full MMS article can be accessed here. For PDF file click here

If you have more questions regarding the Shop-Talk product (described in the article), feel free to contact me.

Chief Strategy Officer

Traditionally, the Chief Executive Officer (CEO) is responsible for strategy development and execution. In today’s complex organizations, the CEO is responsible for many business issues including strategy, which is the most important. Rapid globalization and constant need to innovate has enforced strategy development to be a continuous process than a static one-time activity. Companies are becoming larger and more complex, making it more difficult for one person alone to have total oversight over the whole organization. The CEO will traditionally delegate the responsibility to the Chief Operation Officer (COO) or Chief Financial Officer (CFO). Such delegation presents a dilemma. The COO is more concerned with getting things implemented, not necessarily getting the strategically right things implemented. Similar argument can be made for the CFO. According to the Bizmanuals, CFO is a corporate officer primarily responsible for managing the financial risks of the corporation. CFO is also responsible for financial planning and record-keeping, as well as financial reporting to the management team. Proper financial planning and reporting is the primary responsibility of the CFO and not necessarily whether the decisions are made according to company’s overall strategy.
In the past few years, the number of Chief Strategy Officer (CSO) appointments has surged. The CSO is an executive who is responsible for assisting the CEO with creating, communicating, executing, and sustaining strategic initiatives within the company. The January (2008) issue of Outlook Journal states that a typical CSO is not a pure strategist that creates long-term planning which is isolated from the company's current initiatives. Many CSOs are considered "doers" first and have the past experience in execution. CSO’s are often executives who have played variety of roles at different organizations before taking on the responsibilities and tasks of the title. Most CSO’s enter the organization in roles of planning or mid-management, and go on to become the CSO’s later in their career. CSOs have prior experience in an average of four different business functions, with the most years in management, operations and technology. Fig. 1 depicts the average work experience in different business functions before taking the responsibilities of a CSO.

Figure 1: CSO Experience in Various Business Activities [2]

It is necessary that the CSO must understand the company’s business and culture to implement and sustain strategic changes. The CSO must be a veteran when it comes to change management. In short, the CSO must have the ability to act as “mini” CEO of the company. CSO’s have considerable responsibility with an average of 10 business functions and activities as shown in Fig. 2.

Figure 2: CSO Work Responsibility in Different Business Functions [2]

There are three primary tasks for the role of a CSO. The first and most important is to ensure that the strategic plans are converted into action. The CSO is responsible to clearly explain a company’s strategy at all levels in the organization. In addition, CSO must be able to explain the role each individual plays and how it is related to the company’s overall strategy. The second task is to drive results. Strategies are discussed in boardrooms and formulated in strategic plans. However, it is important to put the strategies to work in order to achieve results. The third task is to sustain the change and make sure that the decisions made are aligned to the overall strategy. Sometimes, as business requirements change, strategy can become fuzzy. CSO task is to ensure that management does not revert back to their old practices based on prior experience and accomplishments.  CSO’s must be pragmatic and analytical, but should also have a vision for the organizational growth and success. The CSO should leverage their deep understanding of the business and connections within organization.

The potential CSO candidate should have the following qualities/characteristics:
1.Should have a good working relationship and trust of the CEO.
2.Should have a reputation of achieving excellent results in his earlier roles.
3.Should have a working knowledge of various functions in the company e.g. operations, technology, marketing, sales and human resources.
4.Successful management requires taking decision under uncertainty. The CSO should be able to work under ambiguity and embrace the uncertain future.
5.Should have the ability to influence the incumbent management and communicate effectively at all levels of the organization.
6.Should have good multi-tasking abilities as they play a major role in various activities like planning, sales, mergers and acquisitions, new product development, market research and sales strategy.
7.Should be able to split the time between strategy development and actual strategy execution. The emphasis should be on achieving results by strategy execution.

The complex strategy development and implementation justifies the overhead cost associated with the appointment of CSO. Many organizations including Motorola, Marsh & McLennan, Nations Health, Universal Pictures and Yahoo, along with the other have appointed CSOs. It not only ensures quick and compliant action but can also serve as the succession plan. However, there are some challenges when it comes to hiring a CSO. The search for the right candidate can be long and expensive. The CEO needs to alter the organization chart which can face stiff resistance from the existing employees and stakeholders.
[1] Chief Strategy Officer, R. Timothy S. Breene, Paul F. Nunes, Walter E. Shill, Publication date: Oct 01, 2007. Prod. #: R0710D-PDF-ENG.
[2] Rise of the chief strategy officer. R. Timothy S. Breene, Paul F. Nunes, Walter E. Shill. Accenture, Journal of High Performance Business, Jan 2008.

MTConnect Technology - It's Not Just for OEMs

I will be presenting (and demonstrating) at the upcoming AMTS 2011 conference in Dayton, OH.

When: Wednesday, October 19, 2011 at 12 noon
Where: Advanced Manufacturing Technology Show
              Dayton Expo Center
              3900 McCauley Drive
              Vandalia, OH 45377

Learn about MT Connect Technology and how you can improve manufacturing processes by 20-60%. Find out what’s new for small to mid-sized companies: new applications, new uses, how it can save you money and how you can be better informed about what’s happening on your shop floor.

More information about AMTS- 

Completing Your Authorized iPhone Unlock

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We have reviewed your request and confirmed that you are eligible to have the requested iPhone unlocked.

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2. Connect your iPhone using the dock connector to USB cable that came with your iPhone.
3. Backup and restore your iPhone using iTunes .
For information on backup and restore, please visit
4. After restoring, your iPhone will be unlocked.
Additional information on unlocking can be found at

For questions regarding AT&T’s wireless service and iPhone, please visit the Phone/Device Learning Center.

We thank you for your continued business and look forward to providing you with the best customer service.

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Book Review- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

In this easy to read book the author outlines the differences in the financial decisions taken by the poor, middle class and the rich people. The rich people become richer by investing in assets. An asset is an investment which “puts money in your pocket”. That means that an asset is something which generates a positive cash flow. A liability is an investment which drains money out of your pocket and creates a negative cash flow. Against the contemporary belief, the author argues that the investment in the house you live is a liability and not an investment.  Individuals should strive to build assets so that the cash flowing in your pocket is equal to your expenses – that is to be financial independent. One can pay their bills by a steady income but cannot create wealth.  The author advices young couples to not invest all their money in a big expensive house, instead, concentrate on purchasing assets which will make them financially independent. The second point author emphasizes is to start your own business (work for yourself) and create a career ladder than climb a career ladder. Small businesses and corporations have enormous tax benefits. A short history of income taxes in United States is very interesting. The corporations spend first and then pay taxes, while the individuals must pay taxes beforehand. To conclude, the book provides commonsense financial and accounting advice for making sound decisions. A person not familiar with personal finance or just starting his/her career can find the book immensely useful. The author repeats many times that “make money work for you” instead of “work for money”.  

“App” Development Platform for Next Generation Manufacturing

The smart phone and information technology industry has stirred tremendous innovation by providing a platform (e.g. iPhone, Droid) to develop value added personal and business applications (“apps”). However, such a technology innovation was not possible in manufacturing, primarily, due to lack of universally accepted standard and closed architecture systems. However, the newly developed XML-based open MTConnect standard has been a game changing innovation for manufacturing. MTConnect can enable plug-and-play functionality and real time data from various assets in a production shop. In this presentation, we explain the development of a cloud-based MTConnect powered Shop-Talk application which provides a platform to develop value added productivity applications to achieve operation efficiency. The current apps include power monitoring, alarm management, enterprise content management, utilization monitoring and downtime analysis. The power monitoring app provides bottom-up methodology for autonomous energy consumption analytics with correlation of machining parameters and energy consumption from the lowest component features and up. The alarm management app provides customizable alarm notification with ability for user to add comments and classify the alarm according to its root cause. The enterprise content management is used to capture and organize all of the manufacturing documents including maintenance log, part programs and manuals into easy-to-find searchable electronic documents. The utilization monitor and downtime analysis enables machine, cell and shop performance monitoring with user selectable time scale for particular shift, day, week or month. Shop-Talk implementation will enable enterprises to further increase their efficiency leading to better overall performance and increased productivity essential for next generation manufacturing. The future work is concentrated on developing live value stream maps, supplier visibility, intelligent maintenance, and statistical process control apps. 

Reference:  “App” Development Platform for Next Generation Manufacturing; Amit Deshpande, Ron Pieper; Defense Manufacturing Conference 2011 (Accepted).

Integrating Flow Meter Data to Monitor Usage of Compressed Air

The generation and usage of compressed air requires enormous amounts of energy within a manufacturing facility. It is estimated in various literature that 10% to 30% of the total energy consumed in a typical manufacturing plant is for air compression. This translates to air compression requirements consuming a total of 3-9% of the total energy being consumed in the United States. With the growing relevance of energy management, it thus becomes imperative that process solutions be designed to render energy efficient compressed air systems that would produce ongoing savings for the US manufacturing base.
A preliminary step towards developing an effective process solution in this regard is to advocate an effective monitoring system for compressed air. The MTConnect standard has facilitated extensions to its XML tags to integrate sensory data along with other machine data. Hence, MTConnect adapters are developed with customized XML tags that will successfully collect flow meter data from the CNC shop floor. The MTConnect adapters will also offer the provision for integrating multiple flow meters at individual points on the shop floor with various monitoring applications and systems across the managerial hierarchy of the organization through the company network. The flow meter data thus obtained through MTConnect provides specific insights into the amount of compressed air being utilized during various stages of machining. By successfully integrating flow meter data from various points on the shop floor, an audit can be presented with specific emphasis on compressed air losses due to insulation as well as compressed air wastage during CNC downtime.
A case study is presented wherein the usage of compressed air across the shop floor is analyzed. Flow meter data is obtained through MTConnect integration from real locations on the TechSolve shop floor defined at the main air compressor reservoir source, at the actual CNC machine during various machining states (idle, tool change, active machining) and at the end of compressed air line. This data is analyzed to estimate losses due to piping as well as air consumption associated with various machining states.

Reference: Integrating Flow Meter Data to Monitor Usage of Compressed Air; Atluru S.; [MC]2 MTConnect: Connecting Manufacturing Conference.

NAMRC 2011 Presentation: Feature Level Energy Assessments for Discrete Part Manufacturing

Last week, I presented the paper titled "Feature Level Energy Assessments for Discrete Part Manufacturing" at the 39th North American Manufacturing Research Conference (NAMRC 2011) in Corvallis, OR. The presentation is available in PDF format. Click here to download the presentation.

MSEC 2011 Presentation: Legacy Machine Monitoring Using Power Signal Analysis

Last week, I presented the paper titled "Legacy Machine Monitoring Using Power Signal Analysis" at the Sixth Annual ASME International Manufacturing Science and Engineering Conference (MSEC 2011) in Corvallis, OR. The presentation is available in PDF format.Click here to download the presentation.

MFPT 2011 Presentation: CNC Integrated Manufacturing Data Management

Last month, I presented the paper titled "CNC Integrated Manufacturing Data Management" at the 2011 Applied Systems Health Management Conference in Virginia Beach, VA. The presentation is available in PDF format. Click here to download the presentation.

[MC]2 MTConnect: Connecting Manufacturing Conference

The first [MC]2 MTConnect: Connecting Manufacturing Conference will be held on November 8-10, 2011, at the Hyatt Regency Cincinnati, Ohio. The conference is aimed at promoting the technical research, hands-on workshops, off-the-shelf technologies and business implications of adopting MTConnect.

The deadline for submitting abstracts is June 15, 2011. For abstract submission information click here.

For more information on [MC]2 conference visit:

The Debt Limit Drama

The US Government debt reached the highest limit of $14.3 trillion on May 15, 2011. The government’s budget deficit this year alone is set to be a record breaking $1.5 trillion. It is estimated that two dollars of every three dollars it spends are borrowed. In relative terms, if an individual’s income is $100,000 per year, it means that he is spending $160,000 per year and adding $60,000 per year to credit card debt which already stands at $650,000 [1]. If the limit is not increased by August 2, 2011, there is a possibility that US will default and would be forced to stop paying its creditors – from bond investors and contractors to some government salaries. It is estimated that the social security and health care programs are in $43 trillion deficit. To cover this, the government would have to eliminate virtually all other spending or significantly increase the tax rates. However, raising taxes is a double edge sword. In addition to political issues, it can lead to reduced disposable income and consumer spending which will derail the economic recovery. After the 2008 financial meltdown, the unemployment rate climbed to10%, and even after 3 years is in the range of 8-9%. Even after keeping the key interest rate at a historical low (nearly zero), the economic recovery has been slow and sporadic.
Since 1962, the debt ceiling (the amount the government can borrow) has been increased 72 times. Repeating the same act for 72 times without proper long term strategic planning certainly indicates failure. There is a need to tackle the problem at the root cause. Factors affecting the deficit must be addressed instead of just raising the debt limit as and when money is required. One view of the situation is that the short term fixes gives Congress the reason to slash unnecessary spending programs. Another view is improper decision analysis. Decisions based upon the spending levels of previous years ignores the current situation: health care cost, the creation of the Part D drug benefit, increased homeland security spending post-9/11, wars, aging American population, increased social security and Medicare expenses and low tax revenue. On the other hand if the debt ceiling is not increased the consequences will be fatal. The government may default on its obligation to the creditors. The US might lose its highest credit rating. Standard & Poor forecasted a negative-outlook for U.S. debt and stated that there is a 33% chance of a credit downgrade within the next two years. The interest rates may rise which in turn will increase the cost of borrowing for the government.
It is predicted that the Congress will indeed increase the limit but will wait till the last moment. In my opinion, this is a better option than allowing the nation to default. However, there needs to be radical reforms and sustainable recovery plan. Four detailed outlines have already been discussed in the past five months, two by bipartisan commissions, one by the President and one by House Republicans. Focus should be on a long term strategy to reduce debt instead of the short term fixes and continued borrowing. The short term view will inevitably continue the vicious cycle of changing the legislation to increase the debt limit. Fundamental assumptions within the restructuring plan must be questioned. The plan should be based on current data and not the merry yester year economic indicators. A thorough restructuring plan will ensure that the nation is back on the road to financial security and prosperity.

1. Solving America’s Debt Problem, The One Cent Solution, Stewart Welch III, 4/25/2011.
2. For public, debt limit fight risks dangerous game of chicken, USA Today, 4/28/2011.

An Empirical Study to Evaluate Machine Tool Production Readiness and Performance

Purchasing the correct machine tool can have strategic implications for manufacturers, because incorrect selection will eventually lead to quality and productivity losses. Prior research has concentrated on developing an analytical decision support system to select and compare machine tools based on machine functionality – not capability. Machine tool selection decision analyses concentrate on machine specifications and characteristics, which disregard the actual machine accuracy and dynamic performance. In this paper, the need to include machine accuracy and performance in terms of cycle time, tool wear, and surface finish is described with a case study of manufacturing a typical aerospace component using three different production methodologies on three computer numeric controller (CNC) milling machines. Even though the three selected machine tools have similar technical specifications, which are adequate to manufacture the sample aerospace part, the machine accuracy and dynamic machining performance of the machines is significantly different. We conclude that it is necessary to include machine tool performance and production readiness attributes and not solely rely on the specifications when considering machine tool selection and purchasing.    

Reference: Deshpande A., An Empirical Study to Evaluate Machine Tool Production Readiness and Performance, The International Journal of Advanced Manufacturing Technology. DOI: 10.1007/s00170-012-4086-3.

Machine Tools Market to Hit $80.7B by 2015

A new research study predicts that the global machine tool industry is in the first stage of a rebound that will lift it to a market capitalization of $80.7 billion by 2015. Titled "Machine Tools: A Global Strategic Business Report," the report by Global Industry Analysts Inc. reviews market trends, drivers, product overview, competition, product introductions/innovations, and recent industry activity. The complete story available at American Machinist.

Machine Tools Market to Hit $80.7 Billion by 2015, Research Finds, American Machinist.

Feature Level Energy Assessments for Discrete Part Manufacturing

The next generation innovation will be driven by affordability and sustainability. Manufacturers are implementing energy efficiency and sustainable manufacturing practices not only from a cost reduction perspective but as a business strategy to succeed. This paper presents a bottom-up methodology for autonomous real-time energy consumption analytics at multiple level of abstraction from the lowest machining operation to enterprise level using MTConnect. The temporal aspect of data enables correlation of machining parameters and energy consumption at the most granular component feature and operation level. Decision support capability to drive part cost reduction and assessing the effect of adding or modifying a certain feature, operation or quality constraint is explained with help of a case study. Cost structure transparency and ability to justify improvement changes presents a significant opportunity for improved productivity and energy efficiency. Utilizing smart machine analysis tools, return-on-investment is quantified for production of an aerospace component on two machines.

Reference: Feature Level Energy Assessments for Discrete Part Manufacturing; Deshpande A., Snyder J., Scherrer D.; Proceedings of NAMRI/SME, Vol. 39, 2011, Corvallis, OR.

Legacy Machine Monitoring Using Power Signal Analysis

A typical manufacturing job shop comprises of legacy machine tools, new (modern) machine tools, material handling devices, and peripheral manufacturing equipments. Automated monitoring of legacy machine tools has been a long-standing issue for the manufacturing industry primarily because of the computer numeric controller (CNC) closed architecture and limited external communication functionality. This paper describes a non-invasive methodology and development of a software application to monitor real-time machine status, energy usage, and other machining parameters for a legacy machine tool using power signal analysis. State machine algorithm is implemented to detect tool changes and part count. The system architecture, implementation, benefits, limitations, and future work needed for the legacy machine tool monitoring application is explained in detail.

Reference: Legacy Machine Monitoring Using Power Signal Analysis; Deshpande A., Pieper R.; Proceedings of the ASME 2011 International Manufacturing Science and Engineering Conference, Corvallis, OR.