lean innovation for iqpc_handout
TRANSCRIPT
Lean Innovation A Framework to Improve Efficiency and Effectiveness of the Innovation Process
Praveen Gupta Director,
Center for Innovation Science and Applications President, Accelper Consulting
[email protected], [email protected]
An IQPC Workshop February 21, 2012, 4:30 PM 6:30 PM
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Lean Six Sigma Benefits Key Six Sigma Tools Key Lean Tools Benefits of Integrating
Lean Six Sigma
D Kano Analysis, Pareto analysis, Process Mapping, SIPOC Model
Value Stream Mapping (VSM)
Problem clarity and improved customer perspective
M Data normality test, COPQ, MSA, Cp, Cpk, DPU, DPMO
Cycle time, Muda, Yield
Sources of non-value activity
A Root Cause Analysis, MVA, FMEA, Hypothesis, ANOVA
Constraints, takt time, cycle time
Better cause and effect relationships in process and product characteristics
I Triz, component search, factorial designs, RSM
VSM future state, Continuous Flow, Kaizen, 5-S
Efficient process flow design with capable processes
C Control Charts, Pre-control Charts, Process Model
5-S, TPM, Visual Controls, Kanban
Highly efficient and effective workplace. Sustained customer focus
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Accountability
Results
Incentives
IMPROVEMENT
C O S T
I M P A C T
INNOVATION
Lean Six Sigma Scorecard (LSC)
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Measurements Score (%) (A)
Significance (B)
Net Score = A x B/ 100
Incentives 90 15 13.5
Savings 95 15 14.25
Management Accountability 95 20 19
Improvement Results 80 10 8
Teamwork 80 5 4
Cost 80 5 4
Lean (Responsiveness) 70 5 3.5
Six Sigma (Quality) 80 5 4
New applications 90 10 9
Employee Perception 70 10 7
CI Index Sum = 86.25
Corporate DPU (use BPIn to DPU table)
.1479
Corporate DPMO = (Corporate DPU/ # of CI Champions) x 1000,000
Corporate Sigma (Refer to Corporate DPMO to Sigma Table)
Lean Six Sigma Scorecard
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Measurements Score (%) (A)
Significance (B)
Net Score = A x B/ 100
Incentives (Recognition/ Compensation)
15
Savings 15
Management Accountability 20
Improvement Results 10
Teamwork 5
Cost 5
Lean (Responsiveness) 5
Six Sigma (Quality) 5
New applications 10
Employee Perception 10
CI Index Sum =
Corporate DPU (use BPIn to DPU table)
Corporate DPMO = (Corporate DPU/ # of CI Champions) x 1000,000
Corporate Sigma (Refer to Corporate DPMO to Sigma Table)
Excercise 1. Your Lean Six Sigma Scorecard
Sales andDistribution
Purchasing andSupplier
Management
Service andGrowth
OperationalExecution
Employees andInnovation
Management andImprovement
Leadership andProfitability
COST
REVENUE
IMPROVEMENT
INNOVATION
Six Sigma Business Scorecard Framework
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Figure: An Example of Business Performance Index
Measurements Category Abbreviation
Category Significance
Performance Against Plans
Index Contribution
1. # Employees Recognized for Excellence
LNP 15 50 7.5
2. Profitability LNP 15 75 11.253. Rate of Improvement (All departments)
MAI 20 60 12
4. Recommendations per Employee EAI 10 60 65. Total Spend / Sales PSM 5 80 46. Suppliers Defect Rate (Sigma) PSM 5 60 3
8. Process Defect Rate (Sigma) OPE 5 80 49. New Business ($)/Total Sales($) SND 10 90 910. Customer Satisfaction SAG 10 80 8
Corporate Wellness (BPIn) 67.75%Corporate DPU 0.3893Corporate DPMO (15 executives) 25,956Corporate Sigma 3.44
37. Operational Cycle Time Variance from Planned
OPE 5 60
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Example: Six Sigma Business Scorecard
70
20
5 5
Design Material Labor Overhead
Design is the most influential and the least managed process., thus need for Lean Innovation
Design Performance
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Need Lean Innovation!
Lean Innovation Framework
Praveen Gupta Accelper Consulting Tel: (847) 884-1900
An IQPC Workshop
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Accenture Report 2009
Most companies have established a formal system in place for innovation, supported by defined processes for bringing ideas to market.
from new products or services. Top three innovation Challenges include predicting future
trends, reducing time to market for an innovation, and leveraging new technology.
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BCG Report Innovation 2010
72% executives in 2010 say innovation is their top three priority
82% believe minor improvements to existing products or
services are very important. Businesses are tampering their innovation investments. Executives consider a risk-averse corporate culture,
lengthy product-development times, and inadequate measurement practices to be key areas of weakness.
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IBM - The Global CEO Study
Surveyed 1500+ CEOs in from 60 countries and 33 industries to learn:
1. CEOs now realize that creativity trumps other
leadership characteristics.
2. Reinvent customer relationships to better predict and provide what they want.
3. CEOs embed complexity that creates value in elegantly simple products and services.
www.ibm.com
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Executives say innovation is very important, but their
confidence in their innovation decisions. Companies discourage talented staff from pursuing
innovation by offering limited incentives, being risk averse, and having no plans for dealing with failures.
Recommendations: 1. Innovation on leadership agenda 2. Inspire innovation 3. Improve tools and processes
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GE Global Innovation Barometer
88% respondents believe innovation is the best way to create jobs in their country.
Innovation is a trusted driver for improvement in most
Innovating in the 21st Century: New players, new rules. SMEs and individuals can be as innovative as large
corporation.
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Why Lean Innovation
New economy / competitors
Intense price and cost pressure
Ever-shrinking product life
Interconnected world economies
Business Challenges
Ensure profit with Lean and Six Sigma
Accelerate growth with new products
Maintain an innovation portfolio
Innovate lean and profitably
Business Needs
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Brinnovation - A Lean Innovation Framework
Need a framework that is logical, easily understandable, teachable and profitable.
System that builds on other innovation methods such as Open
Innovation, TRIZ and Crowd Sourcing. Framework was developed based on work of great innovators
including Einstein, Newton, Galileo, Edison and Ford, i.e., best practices.
The framework has been taught at multiple institutions including UIC
and IIT, and shared with community leaders.
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The Building Block
Innovation
Idea Intelligence
Creativity
Invention
Internet Customers
Suppliers Rest of the world Free Lancers
Universities
Labs Networked Individual
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Excellence is Mandatory
Process Excellence
(Sustained Economic Growth) Few Breakthroughs (Short-term Growth)
Improvements (Profit)
Inno
vatio
n
Market Leadership
I II
III IV
High Low
Hig
h Lo
w
Me Too Products Lost opportunities
Process Leadership
Thought Leadership
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LSL USL We build to limits, and check for acceptability through inspection within limits
Acceptable Marginal Output
Marginal Output
Understanding Excellence
Shoot and Aim
Just Do IT!
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3.4 DPMO
LSL
USL Target
Excellence
No Marginal Output
No Marginal Output
Understanding Excellence
Aim and Shoot
Do IT Well!
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Understanding Excellence
LSL USL We build to limits, and check for acceptability through inspection within limits
3.4 DPMO
LSL
USL Target
Acceptable
Excellence
Marginal Output
Marginal Output
No Marginal Output
No Marginal Output
Shoot and Aim
Aim and Shoot
Just Do IT!
Do IT Well!
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Brinnovation stands for Breakthrough Innovation that builds on a
Brinnovation empowers people intellectually. The framework includes the following: 1. Fundamental Strategy 2. Theory of Innovation 3. Rule of 2 4. Rules of Creativity 5. Innovative Thinking Process 6. TEDOC Methodology 7. Innovation Room 8. Measures of Innovation 9. Types of Innovation 10. Management of Innovation 11. Business Innovation Maturity Model (BIMM)
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The Innovation Eco-System
The innovation eco-system goes beyond the innovation framework. It addresses aspects of making innovation deployment easier and systematic. The eco-system includes the following: 1. Business Innovation in the 21st Century book 2. Training and Certification programs for developing in-house innovation
competency 3. Business Innovation Conference 4. International Journal of Innovation Science 5. Business Innovation Networks 6. Business Innovation support or consulting model 7. Education in innovation (college level curriculum) 8. Center for Innovation Science and Applications BIMM Assessment, and
Training and Certification 9. Community Innovation Model 10. iPad Applications
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Breakthrough
Breakthrough is the extent of innovation required for a business to sustain profitable growth.
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Breakthrough Rule of 2
If innovation means change, reduce it by at least 50% or divide by 2, or increase it by at least 100% or multiply by 2.
Breakthrough Innovation means to make innovations look different, do different and feel different.
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Feel their Pain Complaints Nagging problems Indecisions Repeat problems Upset employees Technical challenges Stagnation Circumstances Unmet needs Insights
EFFORT TO MEET CUSTOMER REQUIREMENTS
CUSTOMER SATISFACTION
2. SPOKEN CUSTOMER EXPECTATIONS
1. UNSPOKEN ASSUMED REQUIREMENTS
3. UNSPOKEN
OBJECTIVE REQUIREMENTS
TRENDS OVER TIME
What to Innovate?
Love to have
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How to Innovate?
Target (T) Opportunity
Develop (D) Alternatives
Explore (E) ideas
Optimize (O) Solution
Commercialize (C) Innovation
Listen to customer for specific needs Making
life easier, better, and richer
Research
customers for their value proposition
Create innovative options for the customer, and
customers
Optimize the solution for the customer giving the best value
Close the deal
What When Value Fun
Make innovations affordable and profitable!
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Organization for Innovation
Executive Officer
Innovation Leadership
Idea Management
Financial Officer Operating Officer Growth Officer
Creativity Culture
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Exercise 2. Opportunities for Revenue Growth
1. List potential ideas for revenue growth
2. Categorize ideas into types of innovation Fundamental, Platform, Derivative, and Variation (See the Types of Innovation slide)
3. Categorize customers into their purchasing schedule
4. Select ideas that are variation and short term for innovation
5. Plan for others according to business strategy for revenue growth
6. If you are concerned about competitive situations in the classroom, please describe your approach rather than the solution to protect your intellectual property
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Identifying Opportunities
Potential ideas for growth using TIP
Classify ideas (Desired innovation)
buying needs (Schedule for innovation)
Ideas to innovation now (What to innovate)
Fundamental Platform Derivative Variation
>5 yrs. 3-5 yrs.
2-3 yrs. Now 1 yr.
How to think of a BIG idea?
Use your diverse experience, prior knowledge, and the opportunity or
challenge
Combine them to make something useful and new. Try as many
combinations as you can.
Suddenly you will say BINGO! Big Idea N GO!
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Launching Lean Innovation Initiative
Start before you need to
Train the troops
Designate a team of experts
Appoint a senior leader
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For more information, please contact [email protected] Toll Free: (800) 680-0700
Tel: (847) 884-1900 www.accelper.com
www.ibusinessinnovation.com www.businessinnovationconference.com
- Dipak Jain, Dean, Kellogg School of Management
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Summary
1. Need for innovation for success with Lean initiative
2. New rules for innovation today 3. Understand the Rule of 2 for breakthrough
solutions 4. Make innovations profitable using T.E.D.O.C. 5. Streamline innovation processes 6. Enjoy innovating lean!
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Praveen Gupta Praveen Gupta, a management consultant, has authored several books including Business Innovation in the 21st Century, Stat Free Six Sigma, Six Sigma Performance Handbook, and Service Scorecard. Praveen is Editor-in-Chief of International Journal of Innovation Science, and writes a monthly column Manufacturing Excellence in the Quality magazine. Praveen frequently speaks at conferences internationally. Praveen has been recognized as a thought leader in areas of excellence and innovation.
He has developed Six Sigma Business Scorecard, the 4P model of excellence, Breakthrough innovation, and Stat Free Six Sigma methods that have been translated and used worldwide. Praveen, the founding president of Accelper Consulting (www.accelper.com), has worked at Motorola, and AT&T Bell Laboratories, and consulted with about 100 small to large size companies including CNA, Abbott Labs, Superior Essex, Dentsply, Hexel, Experian, Sloan Valves, Weber Markings, Wayne State (Ford), and Telular. Praveen taught Operations Management at DePaul University, and Business Innovation at Illinois Institute of Technology, Chicago. He has conducted seminars worldwide for over 20 years. Accelper Consulting provides training and consulting services in the area of innovation, Six Sigma and business performance for achieving sustained profitable growth. Praveen can be contacted at [email protected].