Tuesday, January 26, 2010

INSSAN Convention: sources & types of innovations and a good practice

I wrote about the INSSAN Convention I attended last week where shop-floor innovators were the heroes. What were the sources and types of these innovations? What kind of analysis was involved in coming up with solutions considering? What kind of cost was involved? And finally, what did I not see in the convention? Let me articulate what I observed.

Sources of innovations: Most innovations involved observing a problem area or an improvement opportunity in the plant set-up. These included high frequency of wear-and-tear or failure of critical components (e.g. bearing), oil or gas leakage, inability to manage sudden surge in demand (e.g. sudden demand for 20-pack cigarettes in Godfrey-Philips), human fatigue in certain process steps (e.g. actuator mounting at a BHEL plant), hazard exposure, delay and/or high cost in distribution channel (e.g. forex cost for transfer from oil refinery to retail outlets of BPCL), saving of carbon emission, sourcing new machines locally instead of importing the expensive ones (e.g. at Godfrey-Philips the design change involved 195 spares and sourcing it locally and assembling together). If we look at “Pain-wave-waste” as three main sources of innovation, then these innovations were related primarily to “waste”, some to “pain of employees” and a few to a wave especially “Go green”. I didn’t see any innovations which were linked to consumer research data or consumer complaints (customer pain). Similarly, I didn’t see any “competitor analysis” (why don’t we do this?) or “macro-trend analysis” (social, technology, regulatory waves/trends).

Analysis techniques: The most common analysis technique used by the innovators was “why-why” analysis. It is a technique where you start with a problem and repeated ask “why?” until a root-cause is discovered. I feel it is a simple and yet very powerful technique. Note that many of the innovators were not graduates and some presented their innovations in Hindi. However, their slides were far better than what I have seen in high profile conferences. Second most popular technique was “Pareto analysis” (80-20 rule) to figure out which 20% things are responsible for 80% of the problems. I didn’t see much collaboration outside the department (let alone the organization) in coming up with a solution. That is far cry from companies like P&G (For example, see here the players that collaborate in P&G’s idea funnel).

Types of innovations: If we use the BusinessWeek classification of 4-types of innovations, then most of the innovations were of type “process improvement” (no surprise here). Some of the process improvement resulted in improving product quality (“product axis”) and occasionally improved the customer experience. Only once I saw the innovation involved optimizing the delivery channel.

My favorite practice: I found Mahindra & Mahindra’s process different and interesting. For example, Mr. Desai from press-shop said that he is part of Everest team which met 12 times a year, came up with 1265 ideas out of which 1020 ideas were implemented. This meant a run-rate of 11 ideas per person per year. The team would identify a challenge such as “reducing input material cost” and work as a cross-functional team to address the challenge. The team demonstrated that input material cost can be reduced significantly by re-using scrap material.

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