Lean Innovation for IQPC_Handout

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

1. Lean Six Sigma Scorecard 2. Role of Innovation 3. Lean Innovation Framework

Key Topics

(C) Accelper Consulting 2011 3

Analysis of Lean Six Sigma


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


Performance vs. improvement

(C) Accelper Consulting 2011 6 6

Accountability

Results

Incentives

IMPROVEMENT

C O S T

I M P A C T

INNOVATION

Lean Six Sigma Scorecard (LSC)


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


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

9 (C) Accelper Consulting 2011

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


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


Need Lean Innovation!

Lean Innovation Framework

Praveen Gupta Accelper Consulting Tel: (847) 884-1900

[email protected]

An IQPC Workshop


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.


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.


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


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


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.


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

How many straight lines to connect the points below?







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.

(C) Accelper Consulting 2011 23 23

The Building Block

Innovation

Idea Intelligence

Creativity

Invention

Internet Customers

Suppliers Rest of the world Free Lancers

Universities

Labs Networked Individual


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


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!


3.4 DPMO

LSL

USL Target

Excellence

No Marginal Output

No Marginal Output


Aim and Shoot

Do IT Well!



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!


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)


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


Breakthrough

Breakthrough is the extent of innovation required for a business to sustain profitable growth.


Breakthrough Innovations




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.




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


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!


Organization for Innovation

Executive Officer

Innovation Leadership

Idea Management

Financial Officer Operating Officer Growth Officer

Creativity Culture


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


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!



Words of Wisdom

- Jeffrey Immelt

- Bill Gates

- Larry Ellison


Launching Lean Innovation Initiative

Start before you need to

Train the troops

Designate a team of experts

Appoint a senior leader



Any thoughts?


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

mailto:[email protected]

http://www.accelperiberia.com/

http://www.ibusinessinnovation.com/

http://www.ibusinessinnovation.com/index.aspx


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!


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].

mailto:[email protected]

Documents

Lean Innovation for IQPC_Handout