Wednesday, December 7, 2011

Benchmark data from INSSAN Excellence Contest in Suggestion Scheme – 2011

Idea management systems exist in the organizations at different levels – process improvements (kaizen), new product development (NPD), new business development (NBD), Intellectual property management (IPR) etc. Indian National Suggestion Scheme Association (INSSAN) has been benchmarking the suggestion schemes in primarily manufacturing sector for the past 20 years. The latest bulletin (Sept-Oct 2011) presents the benchmarking data from 27 organizations for financial year 2010-11 – Automotive (6), Engineering (6), Fertilizers (7), Associated (6) and Steel (2). Mr. Sudhir Date has presented the highlights in the bulletin (pg 14).

As discussed in an earlier article, I try to view the innovation metric from following three perspectives: (1) idea pipeline (number of ideas & participation of employees) (2) idea velocity (rate at which ideas move forward) (3) batting average (net potential impact in savings / revenue). Let's apply this lens to the INSSAN 2011 data.

Idea pipeline: Ideas per person per year is an excellent proxy for idea pipeline. For the past few years TVS Motor consistently stands out for ideas per person per year metric. On an average, a TVS employee gives a suggestion almost every week (46 in a year) as compared to India average of once in 2 months (6.5). India average has been hovering around 5-6 for the past 5 years. Participation percentage varies from 22% in Fertilizer sector to 90+% in Steel and Auto sectors (see figure below). Steel and Auto sectors were the first in India to embrace suggestion schemes. So this is not surprising. More the participation, more sustainable is your process.

Idea velocity: Unfortunately we don't have a good data on this. Lowest lead time for evaluation of suggestion is definitely an indicator and Maruti’s performance of 2 days is commendable. However, we don't have average data on this and we can guess why.

Batting average: Suggestion schemes measures the impact primarily through savings. Savings per accepted suggestion is a good indicator. India average of Rs.19,681 makes a good case for running the suggestion schemes.

On an average 70% of the suggested ideas are implemented and that looks pretty healthy.

Following table shows the data sector-wise.

Let’s hope we get similar data for other types of idea management systems in India as well.

Related articles:

Idea management systems in India: Benchmark data from INSSAN 2005-2008

INSSAN 20th Annual convention: where shop-floor innovators are heroes

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

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