lean innovation

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© WZL/Fraunhofer IPT Lean Innovation Implications of Lean Management for Automotive Innovation Virtual Powertrain Creation Munich, 23 October 2008

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Page 1: Lean Innovation

© WZL/Fraunhofer IPT

Lean InnovationImplications of Lean Management for Automotive Innovation

Virtual Powertrain Creation Munich, 23 October 2008

Page 2: Lean Innovation

Seite 2© WZL/Fraunhofer IPT

Lean Thinking and innovation management – a fundamental contradiction?

11 Profit

17 +/ -

24 Loss

Ideas Projects Products Market Profits

€11

Source: Prof. Gassmann, HSG

1.919 176 52369

Page 3: Lean Innovation

Seite 3© WZL/Fraunhofer IPT

“More input = more output” – is increasing innovativeness that easy?

n=86 producing companiesSource: Annual reports and publications of companies from time period 2003-2007

0

2

4

6

8

10

12

14

16

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-10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28

Average growth in sales p.a. 2003-2006 [%]

Ave

rage

R&

D s

pend

ing

p.a.

2003

-200

6 [%

from

sal

es]

Page 4: Lean Innovation

Seite 4© WZL/Fraunhofer IPT

“Champions” generate much more sales growth per ‘R&D-dollar’ than the average of their competitors

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-10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28

Average growth in sales p.a. 2003-2006 [%]n=86 producing companiesSource: Annual reports and publications of companies from time period 2003-2007

Ave

rage

R&

D s

pend

ing

p.a.

2003

-200

6 [%

from

sal

es]

Page 5: Lean Innovation

Seite 5© WZL/Fraunhofer IPT

10 Lean Innovation Principles

StrukturierenSynchronisieren

Adap

tiere

n

Lean Innovation

Structure EarlySynchronise Easily

Adap

t Sec

urel

y

Product ArchitectureTechnology- and Function Model

Product Line OptimisationFeature Clusters

Value SystemTarget Hierarchy

Design SetsDesign Space Management

Capacity PlanningBalancing Model

SynchronizationRhythm

PerfectionRobustness Model

Process OptimizationValue Stream Mapping

DerivationRelease Management

MotivationProduct Identity

Page 6: Lean Innovation

Seite 6© WZL/Fraunhofer IPT

10 Lean Innovation Principles

Product ArchitectureTechnology- and Function Model

Product Line OptimisationFeature Clusters

Value SystemTarget Hierarchy

Design SetsDesign Space Management

Capacity PlanningBalancing Model

SynchronizationRhythm

PerfectionRobustness Model

Process OptimizationValue Stream Mapping

DerivationRelease Management Strukturieren

Synchronisieren

Adap

tiere

n

MotivationProduct Identity

Structure EarlySynchronise Easily

Adap

t Sec

urel

y

Lean Innovation

Page 7: Lean Innovation

Seite 7© WZL/Fraunhofer IPT

Vague objectives and unclear product specifications hold the largest efficiency improvement potential in innovation management

Challenges of operative and strategic innovation management

Technical problems

Employee- and resource-related problems

Interface problems

n = 253

Ø14,8

Ø21,5

Vague project objectives

Motivational problems and deficits

Missing resources (skills and manpower)

Unexpected technological challenges

Collaborational difficultiesDeficits in project management

Open legal questions

Problems with external partners

Difficulties in market access

Late definition of services to accompany the product

Difficulties with new technologies

Intransparent and changing specifications

Deficits in merging existing competencies and know-how

Source: Fokus Innovation, Prof. Bullinger, 2006

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0 2 4 6 8 10 12 14 16 18 20 22 24 26

Average improvement potential of development lead time [%]

Shar

e of

com

pani

es[%

]

Page 8: Lean Innovation

Seite 8© WZL/Fraunhofer IPT

Value system at Apple: Operating and handling comfort are priority #1 and rank as top objectives!

Source pictures: Apple, 2008

How effective prioritize your requirement specifications product values from customer perspective?

Page 9: Lean Innovation

Seite 9© WZL/Fraunhofer IPT

Transparent value system and consistent target hierarchy = Basis for exploiting the market potential

Easy transparency of target hierarchy

Transparency of customer values

“Translation” of values for all project team members

Consistent prioritization of project objectives

Exploitation of market potential

Over fulfilment

Under fulfilment

Value System

Target Hierarchy

Underengineering:Poor market chances,

imitations, market withdrawal

Overengineering:Too high costs Legend

Expectation

Offer

Page 10: Lean Innovation

Seite 10© WZL/Fraunhofer IPT

The Apple iPod “skimmed the market potential” fully!

„There‘s no chance that the iPhone is going to get any significant market share.No chance.“Steve BallmerCEO Microsoft

30 April 200730 April 2007Steve Ballmer in

USA Today

29 29 JuneJune 20072007 Market launch Apple iPhone

JulyJuly –– September 2007September 2007Smartphone market

shares USA for Q III 2007

Page 11: Lean Innovation

Seite 11© WZL/Fraunhofer IPT

Similar trend in 2009: For the new Golf VI, Volkswagen promotes its „Wertigkeit“ above all else!

Page 12: Lean Innovation

Seite 12© WZL/Fraunhofer IPT

10 Lean Innovation Principles

Product ArchitectureTechnology- and Function Model

Product Line OptimisationFeature Clusters

Value SystemTarget Hierarchy

Design SetsDesign Space Management

Capacity PlanningBalancing Model

SynchronizationRhythm

PerfectionRobustness Model

Process OptimizationValue Stream Mapping

DerivationRelease Management Strukturieren

Synchronisieren

Adap

tiere

n

Lean Innovation

MotivationProduct Identity

Structure EarlySynchronise Easily

Adap

t Sec

urel

y

Page 13: Lean Innovation

Seite 13© WZL/Fraunhofer IPT

real

wor

ld

SolutionTarget hierarchy

!

The key task in product development is the development and successful assessment of alternative solutions

Problem space

abst

ract

wor

ld

Different requirements

define the “problem space”

Alternativesolutions within design space

Design space

Page 14: Lean Innovation

Seite 14© WZL/Fraunhofer IPT

Selection solutions too early in the process often leads to late iterations and extended project milestones

No systematic exploitation of degrees of freedom

1

Late expansion of design space =significant shift of milestones

3

Too early selection of solution alternatives

2

Qua

ntity

of a

ltern

ativ

e so

lutio

ns

t

Legend

Design space

Page 15: Lean Innovation

Seite 15© WZL/Fraunhofer IPT

The pro-active management of the design space helps to plan creative tasks

Early planning of the design space1

Integration of design space management in milestone reviews

2

Capturing of knowledge aboutde-selected solutions

3

t

Legend

Design space

Qua

ntity

of a

ltern

ativ

e so

lutio

ns

Page 16: Lean Innovation

Seite 16© WZL/Fraunhofer IPT

Suspension of Mercedes-Benz W201: Example for intuitive design space management

1) Source: AutoBild, August 2007Source pictures: Mercedes-Benz, 2008

Strategic access of new market segment

Clear positioning: Differentiation through unique driving comfort for this vehicle class

Assessment of 8 rear axle baseline concepts with 77 physical variants between 1978 and 1980

Result: New five-link rear suspension (“Raumlenker- Hinterachse”)

Breakthrough innovation used up to today

Five-link rear suspension today

“More comfort combined with an almost perfect handling performance were not available in this vehicle class!”1)

Mercedes-Benz W201 (“190”): Introduction of five-link rear suspension (“Raumlenker- Hinterachse”)

Page 17: Lean Innovation

Seite 17© WZL/Fraunhofer IPT

10 Lean Innovation Principles

Product ArchitectureTechnology- and Function Model

Product Line OptimisationFeature Clusters

Value SystemTarget Hierarchy

Design SetsDesign Space Management

Capacity PlanningBalancing Model

SynchronizationRhythm

PerfectionRobustness Model

Process OptimizationValue Stream Mapping

DerivationRelease Management Strukturieren

Synchronisieren

Adap

tiere

n

Lean Innovation

MotivationProduct Identity

Structure EarlySynchronise Easily

Adap

t Sec

urel

y

Page 18: Lean Innovation

Seite 18© WZL/Fraunhofer IPT

Find out more about >>Lean Innovation<< at…

Page 19: Lean Innovation

© WZL/Fraunhofer IPT

Thank youMichael Lenders

Department Manager Innovation Management

Laboratory for Machine Tools and Production Engineering WZL

RWTH Aachen University

Tel +49 – (0) 241 – 80 27436

Email [email protected]