Strategic Engineering

Motivation

“Pacemakers, an essential medical device, have significantly evolved over the years, offering innovative solutions for cardiac rhythm disorders. The demand for pacemakers is on the rise due to various reasons including the advancements in pacemaker technology and are becoming more accessible and effective. While current pacemaker technology has significantly improved patient outcomes, limitations related to lead complications, battery life, and invasiveness remain. The evolving nature of medical technology landscape combined with shifts in patient needs introduce uncertainties in long-term device performance and market demand. This project outlines the development program of a next-generation pacemaker, that incorporates a new state of the art energy harvesting technology that increases the overall longevity of the device that allow this product to compete favorably in a relatively mature market.” (Executive Summary, p. 3)

Methodologies

• Net Present Value (NPV): “A baseline model was developed to simulate the entire development cycle, from initial R&D to commercialization. Five uncertainties were incorporated into the model to assess potential outcomes and risks.” (Executive Summary, p. 3)
• Monte Carlo Simulation: “A Monte Carlo simulation was used to generate a distribution of potential outcomes based on the identified uncertainties.” (Uncertainty Parameters, p. 11)
• Sensitivity Analysis: “A sensitivity analysis was conducted on the model, varying uncertain parameters to assess their impact on overall outcomes.” (Executive Summary, p. 3)
• Life Cycle Assessment: The different components of the pacemaker are analyzed according to their expected reliability and impact on the overall lifecycle of the product.

Insights

• Leverage Multiple Flexibilities: “Scenario 4, which incorporates multiple forms of flexibility, is the recommended approach. This scenario minimizes the overall value at risk by 135% and significantly improves the value at gain by 35% and increases the overall NPV average by 46%. Overall, this scenario confirms the viability of this investment as it demonstrates a significantly positive NPV across a wide range of probable outcomes which can be translated as long-term viability and success of this new pacemaker technology in a dynamic and uncertain future.” (Executive Summary, p. 3)
• Medical Device Risks: “Since this application involves a high risk to human health, the regulatory hurdles are very high and it’s quite common for approval to be held up for more data to review” (Uncertainty Parameters, p. 8). Supply chain volatility, demand volatility, and clinical trial delays were modeled as key uncertainties to be considered within the complexities of embedded medical devices.

Training

Relevant lectures:

• Paradigm change in engineering systems and planning
• How to optimise design and decision-making under uncertainty
• How to manage the design process

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