Global Engineering: Advanced Engineering Archives

Fast Company's 50 most innovative companies

Innovation seems to have replaced "leverage" as the most overused word in the business lexicon. No article can be published without a liberal sprinking of the word as a modifier in every other paragraph. All is not lost, though, and innovation just might make it through the frenzy of hype, for in the definition of the word itself is the promise of something better. While innovation might be seen simply as something new, economists tend to focus on the process, from the origination of an idea to its transformation into something useful, to its implementation. In other words, innovation is as innovation does -- no value, no innovation.

The recent list of Fast Company's 50 most innovative companies bears out this idea of practical innovation. Apple is once more deified as #1, but not just for all the usual reasons. The Cupertino company was showcased for the long list of innovative companies and artists it has enabled through the iPad ecosystem. Over 100 of the major ones were listed by name (my personal favorite was #89, getting the Beatles back together again, on iTunes).

Lest anyone thinks that innovation today is only for new, social media companies need look no further than Kosaka Smelting and Mining, the Japanese firm that harvests gold and other valuable metals from old electronics. This has literally been a gold mine for Japan, as China (largest exporter of rare-earth minerals) has recently slashed exports by over 80%.

The other thing I found cool in the list was ESPN (company #16). Our consulting practice cares a lot about innovation delivering value for both customers and the company -- otherwise, the whole thing eventually gets out of balance and some stakeholder group suffers. ESPN has taken this dual value concept a step further -- they have integrated new technology like a startup and provided something for fans, players, teams/leagues, television manufacturers, and of course advertisers (ESPN 8 - The Ocho cannot be far behind).

It is good to review the list of innovative companies, but it provides a rear-view (or at best a current state view) of what firms are establishing and exploiting new business models and enabling capabilities. Looking to the rest of 2011 and beyond, can't help but wonder which companies will be on the list next, and (more importantly) why? Will data visualization move from a neat offering from companies like Stamen Design (#48) to become a mainstream business intelligence competency? Will product compliance and sustainability simply become part of operational excellence? And finally, will another killer app emerge that creates a wave of productivity and demand that lifts the spirits and the coffers of an industry on a global basis?

Whatever happens, the pace of technology and social change continues at a rate that requires a few well-placed bets and loads of execution. Going back to a statement above, a good strategy is simultaneous focus on value for customer and value for company.

For more details, check out the complete article:

http://www.fastcompany.com/most-innovative-companies/2011/

Posted by Jeff Kavanaugh at 9:37 PM | Permalink | Comments (2) | TrackBacks (0)

Jump-Starting the Innovation Engine

As US companies emerge from what is now acknowledged as the longest economic downturn of the post-World War II era, they are beginning to prioritize innovation as a primary engine for long-term growth.

Managing the innovation process from concept to implementation is a challenge for any large company. Understanding the core challenges and implementing appropriate measures are central to ensuring a streamlined innovation process that delivers a consistent competitive advantage in a global economy.

Below are some of the key ingredients to successful innovation in a large corporate environment:

· Clear direction and vision by senior management - Management must clearly articulate strategic priorities and areas of innovation focus - at the corporate level, at the business unit level, and at the department level. This clarity can help channel innovation in the right direction.

· An environment conducive to innovation - Freedom and flexibility for experimentation along with incentives for carrying products from ideation to commercialization provide a strong foundation for an innovative culture.

· Clear definition of solution and value proposition - Innovation can take place on several fronts - product, process, or business model. Inventors must clearly articulate the problem statement, the target solution, and the potential value of the proposed solution. A systematic framework leveraging value realization methodology (e.g. Infosys's VRM) in conjunction with business case analysis and lean principles can help articulate the value of the solution and the resulting benefits to the company.

· Prioritization of target initiatives - The proposed ideas and initiatives should generally address the direction and strategic priorities set forth by senior management. Organizations are usually resource constrained. A 'funnel' process can help prioritize initiatives so they are well-funded and well-supported for success. However, we must not resort to excessive formal structures as micromanagement will only stifle innovation.

· Buy-in / sponsorship from senior management - Disruptive ideas can be weighed down by resistance from individuals and middle managers who are impatient for tangible benefits and who would prefer the trodden path. Sponsorship from senior management is essential to preserve the freedom and flexibility of the innovating team to explore the full potential of the innovation.

· A matrixed, multi-disciplinary team - Disruptive innovation usually begins at the fringes of disciplines. A multi-disciplinary team can bring together ideas from disparate disciplines to 'break the mold' and work around a new paradigm. An ability to put together small, highly-qualified cross-functional teams quickly in a matrixed environment that transcends organizational boundaries is vital to bringing innovative and disruptive ideas to rapid prototyping and field test. Further, team dynamics and involvement are critical to harmonious creativity.

· Early customer integration - Involving a lead customer in early prototyping can help refine product features and quality and accelerate its evolution to mass production.

· Ecosystem leverage - Collaborating closely with key strategic ecosystem partners to leverage their assets during new product development can greatly reduce overall development costs, accelerate time-to-market, mitigate risks, provide access to new markets, and simplify the out-of-the-box customer experience. Continuous re-investment by ecosystem partners can help ensure new product longevity via a common platform strategy and a shared investment-risk-success model.

· Clear assessment metrics - Performance metrics and milestones must be put in place that clearly define success criteria at a project level and hold the team accountable. Periodic check-point reviews ensure continuous progress and improvement by various milestones.

· Rewards - Timely and visible recognition of inventors is integral in fueling the innovation engine. Rewards must be commensurate with impact/value to the organization. Managers are generally mired in execution challenges and pressured to deliver results over the short-term, and thus do not feel incentivized to sponsor innovation that has a long-term roadmap to fruition. It is therefore equally important to recognize the managers who 'stick their neck out' to sponsor innovative initiatives.

Innovation is an ongoing process that needs continuous refinement based on shifting market dynamics, technology progression, and ecosystem/value-chain evolution. Lean processes and a sound infrastructure that nurture the innovation process are fundamental to maintaining the growth engine in a competitive global economy.

Posted by Sunil Hattangady at 3:58 PM | Permalink | Comments (1) | TrackBacks (0)

The Importance of Customer Experience in Product Strategy

Customer Experience is a vital element of product development strategy that is often over-looked or under-appreciated. Traditionally, product strategy begins with capturing customer requirements usually in terms of product features or attributes. This is then translated into functional requirements or capabilities that the product must deliver. Customer experience is only captured as an after-thought, and when a product is put through the customer journey, it reveals many deficiencies that call for a product re-design and, consequently, a delay in time-to-market.

A product development strategy must be designed to deliver a compelling set of customer/user experiences rather than a collection of product features and attributes. Customer experience must therefore be factored in at the very outset of product design.

Customer experiences do not occur in product or functional silos. An end-to-end approach comprehending machine and human interactions is key to understanding customer experience. Delivering a "superior experience" begins with

· Designing the right offers and experiences for the right customers

· Developing, measuring, and delivering a total customer experience that enhances customer satisfaction

· Understanding the needs that drive customers to create interactions

It's the journey, not the destination! A customer journey maps the experience through the lens of the customer. It helps us identify:

· Customer lifecycle stages

· Customer needs within each lifecycle stage

· Key touch points where a company brand/product 'touches' and serves its customers

· Usecases which determine how the customer will use the product

· Challenges and hurdles for creating a satisfying customer experience

· Opportunities to 'engage' with the customer, and innovate & improve the customer experience

A customer journey must be addressed as a process map that examines concatenated processes. In the early stages, a product strategy must be designed to deliver a set of target customer experiences. The product design must be iterated and validated by examining how the processes that constitute the customer journey actually work at each step. We must walk through the journey and understand what's working and not working from a customer perspective.

Continuous improvement in customer experience can be enabled via

· a disciplined & pragmatic approach that correlates user experience to customer needs, usecases, product functionality, and brand strategy

· a systematic framework leveraging value realization methodology (e.g. Infosys's VRM) in conjunction with lean six-sigma principles to improve and optimize speed & efficiency, remove root causes of customer experience 'defects', and minimize variability in processes

· designing for target customer experiences and monitoring via quantifiable metrics to manage the customer journey and continuously improve the total customer experience across multiple channels and touch-points throughout the customer lifecycle.

It is thus important to weave a clear customer experience strategy into the fabric of the organization's product development strategy, especially in the B2C domain. This can be a significant enabler to improving a product's competitive positioning and lifecycle, the company brand, and customer loyalty.

Posted by Sunil Hattangady at 11:25 PM | Permalink | Comments (0) | TrackBacks (0)

Product Strategy: Back to Basics for a Strong Start

Product strategy plays a critical role linking corporate strategy to product development, guiding the innovation engine for product effectiveness. Despite this importance, there is often a disconnect between corporate strategy and product development. We believe that product strategy needs to be based on a thorough understanding of the market and company capabilities - both current and desired.

Where to compete. To gain proper context, start with a business value scan to determine competitive conditions. Observe potential shifts in market dynamics, including market and competitor analysis, and how to act accordingly. If inorganic growth is a possibility, then initial acquisition targets should be identified.

Industry and competitor analysis. Industry analysis involves an in-depth analysis of current state of the industry and the upcoming trends. Industry analysis should include geographical regions, product segments and customer industries to determine opportunity areas for the firm. Historical performances of competing firms can provide insights into the strategy of each competitor. Many customer interviews should be conducted to capture Voice of Customer (VOC), spanning all regions and representing each customer industry or consumer, depending on the customer type. VOC analysis is conducted to validate and refine the industry and competitor analysis, plus to hear more specific customer concerns.

Product portfolio analysis. The current portfolio should be reviewed and benchmarked against peer group companies and those with similar strategies to identify differences in R&D investments and find potential gaps. The current portfolio should also be analyzed to determine degree of fit with corporate strategy. This will show how the product and solutions portfolio matches with competitive offerings. Often portfolios are shown to be product-centric (i.e. hardware, software, services), without regard to product maturity. A product life cycle view emphasizes products that cater to particular customer needs based on current stage of the life cycle. With the appropriate portfolio perspective in place, field surveys can be done to ascertain relative competitive position in the market for each offering category, based on product life cycle stage. This combined internal-external analysis can provide a more well-rounded perspective on the optimal portfolio.

Internal capability analysis. The best plans won't matter if internal capabilities cannot match the aspirations. Current operational capabilities need to be mapped for supply chain and cost competitiveness, as well as sales and marketing, to determine the operational obstacles to move the current sales model into a product life cycle view.

Organic and inorganic strategy. Even for companies committed to organic growth, it is useful to consider a two-pronged approach of acquisition strategy and operations improvement. This ensures that a fresh, market-oriented view is part of the strategy, and it also allows a secondary plan if the internal growth and portfolio strategy fall short. If the internal cost structure is noncompetitive, then operational improvements need to put in place also. Identify priority areas for R&D investments by using the analysis results. Then determine alternatives for new offerings, products and services supporting the strategy, including potential obsolescence risks.

Product strategy is not a one-time event, only for times of crisis or major decisions. It is helpful to embed the above steps into the annual planning process, with each step in just as much detail as needed. That will keep the product portfolio better aligned with corporate strategy and avoid needing a major makeover at an inopportune time.

For related observations, see http://jeffkavanaugh.net.

Posted by Jeff Kavanaugh at 2:53 PM | Permalink | Comments (3) | TrackBacks (0)

Accelerating product value realization with Product Effectiveness

Rapid introduction of reliable, compelling products is the lifeblood of product companies. Also, successful new product launches are highly rewarding in terms of higher margins they promise. However, the reality of product innovation is that the failure rate of new products is high. This is not affordable or sustainable, given the pressure on scarce resources. Imagine the impact if the new product success rate were to increase only a few percentage points – benefits would flow straight to the bottom line.

PLM solutions have been offered by technology vendors as a panacea for all product development ills. However, these solutions have seen limited adoption compared to enterprise applications for a variety of reasons:

While there are many systems available today, organizations still lack a direction on what solution to choose and how to implement across global extended enterprise to address their specific needs, accelerate value realization and provide sustainable governance
Implementation is done at a departmental level, typically at engineering design centers, rather than managing the product information at an enterprise level
Solutions until recently have not contained portfolio management and product intelligence capabilities, with linkage to financials and dynamic resourcing functionality
Product development process maturity is not as mainstream as areas like supply chain, and correspondingly has not received appropriate management attention
While individually the process may be well defined for each product function, there are significant areas of ambiguity across groups that are not effectively addressed under the conventional stage-gate process

Part of the problem with traditional approaches has been an emphasis on process, without considering other dimensions of change. There needs to also be robustness, collaboration, repeatability, and synchronization of effort by all product functions. Companies need a broader, perhaps transformation view to the product development process. The term Product Effectiveness has been coined to describe this multi-dimensional framework and approach. Business leaders seek to go beyond conventional product development to create better product value through multiple dimensions – new product introduction capabilities, dynamic management of products to generate profitable portfolio, ironing out post-sales product performance issues, and most importantly, Voice of the Customer. Some refer to this as Extended PLM, since it can be implemented in organizations with or without a PLM implementation in place.

The Product Effectiveness framework is made up of 12 components Product Effectiveness incorporating industry operations references models from the Supply Chain Council, PDMA, and leading academic institutions. The framework address a matrix of process (product management, product development and product sustenance) and domain (customer needs management, NPDI program management, product portfolio, and product performance). The following 12 components comprise the framework:

Product strategy
Product value management
Portfolio decisions
Product intelligence
Product requirements
Lifecycle management architecture
Product innovation management
R&D testing and laboratory management
NPD knowledge management
Process harmonization
Diagnosis and root cause analysis
Compliance

These 12 components are not meant to be all inclusive – rather, they are the areas to ‘get right’ when describing the product lifecycle and offer a starting point when defining and planning improvement initiatives.

Beyond the components, it is also useful to consider tools and aids for performance improvement. Tools can provide the rigor and consistency to drive change throughout the enterprise, and tools are needed to make the change permanent by enabling maintenance as things change over time. Following are standard tools that leaders should consider for performance improvement:

Capability maturity profiles
Data models
Product roadmaps
Process reference models
Metrics libraries
Workflows
Business intelligence and reporting

To bring these ideas together, companies should take a holistic approach. Many failed improvement initiatives have been caused by a piecemeal approach and lack of the bigger picture. Here are some leading practices for improvement initiatives in the area of product development and management:

-    Assessment to determine NPDI maturity level to develop an initiatives roadmap
-    Adhere to industry standard process models, product data models and KPI
-    Reduce decision making time by enabling quick go-kill-hold decisions
-    Improve enhance productivity through accelerators embedded as part of the new process model
-    Determine product value and track portfolio profitability over periods of time
-    Provide executive window into broader dynamics of cross-functional product development cycle

The ideas above may not be the total story. However, they should provide leaders in product companies a starting point to refine their existing approach or perhaps shape planned improvement initiatives. One thing is for sure: with the intense pressure to simultaneously increase innovation and reduce cost, anything that can improve product effectiveness will help companies compete more effectively and reward their stakeholders.

Posted by D.R. Sudarshan at 3:26 PM | Permalink | Comments (0) | TrackBacks (0)

Knowledge Based Solutions can keep the Aviation industry afloat…

At an average the net profit margin of the airline industry stands at around 2-3%. How can this profitability be enhanced further for long term sustenance of the industry? The key lies in the current cost structure of airlines. According to various statistics, the cost contribution for the airlines is projected as fuel cost 49%, aircraft cost 18%, crew cost 14%, maintenance cost 14% and others 5%. Costs like fuel and aircraft are beyond the control of airlines and are driven by many external factors. The next biggest cost is maintenance and airline industry can directly control this cost by improving its effectiveness and efficiency. Typically maintenance of air fleet consists of both scheduled and unscheduled maintenance activities. Scheduled maintenance involves daily checks, A, B, C, D checks. There is about 60% chance of having damages found in these checks which require repair. The unscheduled maintenance include repair of unforeseen damages caused by events like bird hit, hail storm, lightening strike etc. It is essential to shorten the repair cycle time and increase the availability of aircrafts for operations. This is evident from the fact that each aircraft on the ground cost is estimated to be about $100k per day.

Further introspection and analysis would help to address this problem. The cost of maintenance includes both material and labor cost. In this labor cost can be reduced to sizable extent by using advanced technologies like knowledge based engineering (KBE). Let us look at more carefully the entire repair and maintenance cycle of airframe. Through knowledge based solutions, costs involved in activities given below can be reduced drastically
–        Managing manuals like Structural repair manuals (SRM), Component Maintenance Manuals (CMM), Aircraft Maintenance Manuals (AMM) etc
–        Finding and following the instructions given in manuals
–        Diagnosing and assessing the damage
–        Identifying repair solution from manuals
–        Preparation of repair procedure and documentation
These activities consist of about 22% of the total labor costs of airframe maintenance. A conservative estimate shows that this can be reduced to about 5% by using knowledge based solutions. Hence, about 17% savings can be realized.

Knowledge based solutions and Knowledge Based Engineering (KBE) in particular is based on capturing repair and maintenance knowledge and embedding this knowledge into a web based systems (KBE system) and utilize such system in the repair and maintenance of aircraft. For example, if we look at the SRM manuals alone, there are voluminous documents. It is also not easy to interpret them to identify a repair solution for a typical damage. The situation is even more complex for composite based aircrafts whose documents will be much more voluminous compared to metallic aircrafts. Think of an equivalent web enabled, knowledge based system which can provide repair solution based on certain queries from the users. This will replace static voluminous documents with an expert system. In earlier days technology was not matured enough to create such advanced systems. Now this is certainly possible. There are many such scenarios where we are collaborating with our customers to leverage technology and in particular knowledge based solutions for enhancing effectiveness and efficiency of engineering and maintenance activities towards driving up the profitability of the industry.

Do you see any such trends in the industry you operate?

Posted by Dr. G. V. V. Ravi Kumar at 8:14 AM | Permalink | Comments (3) | TrackBacks (0)

For lean implementations, Value Stream Mapping (VSM) is good… but Value Stream Simulation (VSS) is certainly better

Be it a shop floor or an engineering office or a call center or even a hospital or any other operations, the primary objective behind lean implementations is to identify and eliminate non-value added (waste) elements continuously. Making waste elements visible in a value stream is not so simple and straight forward. On the other hand, automating or replicating (for implementing at multiple locations) processes without improving (leaning out) it can accelerate the inherent waste creation that could lead to disastrous outcomes.

One of the prominent techniques adopted by lean experts to capture and analyze operations for improving is Value Stream Mapping (VSM). In brief, VSM is a process of mapping out the entire process flow, material and information flows along with details about value added and non-value added elements, with inputs from the stakeholders. VSM is a proven technique applied by many lean experts across the industry verticals. However, VSM evolved many decades ago when there were not many easy to use, computer assisted solutions existed. VSM works pretty well for simple processes. However, deeper understanding of the process dynamics and inter dependencies for more accurate insights and decision making through VSM can be cumbersome. Capturing a complex process in a static two dimensional VSM representation is too difficult to achieve. For example, a manufacturing process involving multiple product mix, multiple cycle times, process variability, infrequent operations (e.g loading the raw material every 500 cycles or setting a tool every 1000 cycles), shared resources, exception handling (like minor & major repairs, minor & major break downs, buffer run outs, dynamic prioritizing etc) can become too laborious and error prone to capture and analyze through VSM alone.

Value Stream Simulation (VSS) models built leveraging discrete event simulation tools provide closer to real-life representation of complex operations (and processes) enabling deeper insight into the process dynamics and interdependencies. This provides the lean implementation teams with more accurate representation of the physical system for better analysis and decision making. The ability to quickly run what-if scenarios with simulated stochastic variability as per real-life probability distributions provides close to real life mathematical model of the system for evaluating multiple scenario outcomes. Enhanced visualization capabilities of space and time (3D) help the users to quickly understand the behavior of the system. VSS helps in arriving at dynamically validated lean model of operations with very high confidence levels on proposed modifications and outcomes.

Hence, be it upfront planning of lean operations or lean implementation in existing operations, certainly Value Stream Simulation (VSS - dynamic VSM) approach provides deeper insights into the operations enabling better decision making than 2D, static VSM approach. We have recently applied the VSS approach for dynamic VSM and simulation of manufacturing shop floors; business processes (call center operations) of a fleet management company and the outcomes are very impressive. Of course, it involves additional tools and expertise for modeling through VSS. But, customers can leverage Global Engineering teams (like Infosys) for building the VSS model of their operations for their lean implementation initiatives, with minimum involvement during initial data collection and value stream understanding.

A picture (VSM) is worth thousand words but a Dynamic Value Stream Simulation (VSS) is worth thousand pictures…

Posted by Muthuvelan ST at 6:10 AM | Permalink | Comments (0) | TrackBacks (0)

Global Engineering and Product Operations – The Strategic Imperative

How can companies compete in an environment of excess supply while preparing for a market upturn? This is a strategic question facing companies today, and effective product operations and engineering are fundamental to address the challenge.

Continue reading "Global Engineering and Product Operations – The Strategic Imperative" »

Posted by Jeff Kavanaugh at 12:30 PM | Permalink | Comments (0) | TrackBacks (0)