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WP1. D 1.2

Business Cases Specification

Project Acronym: ExtremeFactories

Full Title:

Internet based environment implementing agile management meth-

ods for enabling the set-up, monitoring and follow-up of business

innovation processes in industrial SMEs

Project no.: 285164

File Ref: EFF_D1.2_Business Cases Specification_v1.0.docx

Version: 1.0

Status: Final

Due date of deliverable: 29.02.2011 Duration: 30 months

Start date of the project: 01.09.2011

Dissemination Level: CO Confidential, only for members of the consortium (including the

Commission Services)

FP7-2011-NMP-ICT-FoF.

Project #: 285164

D1.2. Business Cases Specification

EFF_D1.2_Business Cases Specification_v1.0.docx Page 2 of 101

LIST OF EXTREMEFACTORIES BENEFICIARIES

No Participant Organisation Name Participant Short Name Country

1 INNOPOLE S.L. INNO ES

2 Institut für angewandte Systemtechnik ATB DE

3 Centre for Factories of the Future, Ltd. C4FF UK

4 Vaibmu Ltd. VAI FI

5 Safeview, S.L. SFV ES

6 FAMMSA, S.A. FAM ES

7 OAS A.G. OAS DE

8 Armbruster Engineering AE DE

9 MB Air Systems Ltd. MBAS UK

10 Charles Robinson (Cutting Tools), Ltd. CTOOLS UK

11 Nikari, Oy. NIK FI


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Index of Contents

1 Summary ........................................................................................................................ 8

2 Introduction ................................................................................................................... 9

2.1 Document Purpose ............................................................................................................ 9

2.2 Approach Applied .............................................................................................................. 9

3 Business Case 1 – FAMMSA........................................................................................... 11

3.1 Description of the Company ............................................................................................. 11

3.1.1 History and Activity of the Company .................................................................................... 11

3.1.2 Company Organisation .......................................................................................................... 12

3.1.3 Technological Resources ....................................................................................................... 12

3.1.4 Network of the Company ...................................................................................................... 13

3.2 Main Process of the Company .......................................................................................... 13

3.3 Innovation Context .......................................................................................................... 17

3.3.1 Innovation Process at FAMMSA ............................................................................................ 17

3.3.2 ExtremeFactories Mapping ................................................................................................... 18

3.3.3 Key Factors for Innovation .................................................................................................... 19

3.4 Conclusions ..................................................................................................................... 21

4 Business Case 2 – SAFEVIEW ......................................................................................... 22








4.3.1 Innovation Process at SAFEVIEW .......................................................................................... 28



4.4 Conclusions ..................................................................................................................... 32

5 Business Case 3 – OAS .................................................................................................. 33








5.3.1 Innovation Process at OAS .................................................................................................... 38



5.4 Conclusions ..................................................................................................................... 43

6 Business Case 4 – ARMBRUSTER Engineering ................................................................ 45






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6.3.1 Innovation Process at AE ....................................................................................................... 50



6.4 Conclusions ..................................................................................................................... 55

7 Business Case 5 – MBAS ................................................................................................ 57








7.3.1 Innovation Process at MBAS ................................................................................................. 64



7.4 Conclusions ..................................................................................................................... 69

8 Business Case 6 – CTOOLS ............................................................................................. 70








8.3.1 Innovation Process at CTOOLS .............................................................................................. 77



8.4 Conclusions ..................................................................................................................... 83

9 Business Case 7 – Nikari Oy ........................................................................................... 84







9.2.1 Research & Development (Product Development) Process ................................................. 89

9.2.2 Project Sales Process ............................................................................................................. 91

9.2.3 Production Process ................................................................................................................ 93


9.3.1 Innovation Process at Nikari Oy ............................................................................................ 94



9.4 Conclusions ..................................................................................................................... 99

10 General Conclusions ................................................................................................... 101


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Index of Tables

Table 1: FAMMSA product families ...................................................................................................................... 11 Table 2: Description of the main process at FAMMSA .......................................................................................... 16 Table 3: Mapping of the innovation steps to the ExtremeFactories stages at FAMMSA...................................... 18 Table 4: Innovation effectiveness assessment ...................................................................................................... 19 Table 5: Description of the main process at SAFEVIEW ........................................................................................ 27 Table 6: Mapping of the innovation steps to the ExtremeFactories stages at SAFEVIEW .................................... 28 Table 7: Innovation effectiveness assessment ...................................................................................................... 30 Table 8: Description of main process at OAS ........................................................................................................ 37 Table 9: Mapping of the innovation steps to the ExtremeFactories stages at OAS .............................................. 40 Table 10: Innovation effectiveness assessment .................................................................................................. 41 Table 11: Description of main process at AE ....................................................................................................... 49 Table 12: Mapping of the innovation steps to the ExtremeFactories stages at AE ............................................ 52 Table 13: Innovation effectiveness assessment .................................................................................................. 53 Table 14: Description of Product Finishing process at MBAS .............................................................................. 62 Table 15: Description of System Design & Specification process at MBAS ......................................................... 63 Table 16: Mapping of the innovation steps to the ExtremeFactories stages at MBAS ....................................... 65 Table 17: Innovation effectiveness assessment .................................................................................................. 67 Table 18: Technological resources in CTOOLS ..................................................................................................... 71 Table 19: Description of main process at CTOOLS .............................................................................................. 77 Table 20: Mapping of the innovation steps to the ExtremeFactories stages at CTOOLS .................................... 78 Table 21: Innovation effectiveness assessment .................................................................................................. 80 Table 22: Nikari Products .................................................................................................................................... 84 Table 23: Description of Research & Development (Product Development) Process at Nikari ........................... 90 Table 24: Description of Project Sales process at Nikari ..................................................................................... 92 Table 25: Description of Production process at Nikari ........................................................................................ 93 Table 26: Mapping of the innovation steps to the ExtremeFactories stages at Nikari Oy .................................. 94 Table 27: Innovation effectiveness assessment .................................................................................................. 96


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Index of Figures

Figure 1: FAMMSA organisational structure........................................................................................................... 12 Figure 2 - FAMMSA Network ...................................................................................................................................... 13 Figure 3: Flow diagram of main process at FAMMSA ............................................................................................. 15 Figure 4: Graphical presentation of the current situation vs. the targeted situation at FAMMSA ......................... 21 Figure 5: SAFEVIEW organisational structure ......................................................................................................... 23 Figure 6 - Safeview's Network ..................................................................................................................................... 24 Figure 7: Flow diagram of main process at SAFEVIEW ........................................................................................... 26 Figure 8: Graphical presentation of the current situation vs. the targeted situation at SAFEVIEW ....................... 32 Figure 9: OAS organisational structure ................................................................................................................... 34 Figure 10: OAS partners network ......................................................................................................................... 35 Figure 11: Flow diagram of main process at OAS indicating steps with possible innovation .............................. 36 Figure 12: Innovation process at OAS .................................................................................................................. 39 Figure 13: Graphical presentation of the current situation vs. the targeted situation at OAS ............................ 43 Figure 14: AE organisational structure................................................................................................................. 45 Figure 15: AE network .......................................................................................................................................... 46 Figure 16: Flow diagram of main process at AE indicating steps with possible innovation ................................. 48 Figure 17: Innovation process at AE ..................................................................................................................... 51 Figure 18: Graphical presentation of the current situation vs. the targeted situation at AE ............................... 55 Figure 19: MBAS organisational structure ........................................................................................................... 58 Figure 20: MBAS Network ........................................................................................................................................... 59 Figure 21: Flow diagram of Product Finishing process at MBAS .......................................................................... 61 Figure 22: Flow diagram of System Design & Specification process at MBAS ..................................................... 63 Figure 23: Graphical presentation of the current situation vs. the targeted situation at MBAS ......................... 69 Figure 24: CTOOLS organisational structure ........................................................................................................ 71 Figure 25: CTOOLS Network ........................................................................................................................................ 72 Figure 26: Flow diagram of main process at CTOOLS .......................................................................................... 73 Figure 27: CTOOLS Main Process ................................................................................................................................ 76 Figure 28: Graphical presentation of the current situation vs. the targeted situation at CTOOLS ...................... 83 Figure 29: Nikari Oy organisational structure ...................................................................................................... 86 Figure 30: Nikari Network ........................................................................................................................................... 87 Figure 31: Flow diagram of Research & Development (Product Development) process at Nikari ....................... 89 Figure 32: Flow diagram of Project Sales process at Nikari ................................................................................. 91 Figure 33: Flow diagram of Production process at Nikari .................................................................................... 93 Figure 34: Graphical presentation of the current situation vs. the targeted situation at Nikari Oy .................... 99


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Abbreviations

AE Armbruster Engineering

B2B Business To Business

B2C Business To Consumer

BC Business Case

C2C Customer To Customer

CAD Computer Assisted Design

CAM Computer Assisted Manufacturing

CAS Conditional Access

CRM Customer Relationship Management

CRM Customer Relationship Management

DRM Digital Rights Management

DTT Digital Terrestrial Television

EFF EXTREMEFACTORIES

EPCM

Engineering, Procurement and Con-

struction Management

FSC Forest Stewardship Council

i.e. That’s to say

ICT

Information and Communication

Technologies

IDE

Integrated Development Environ-

ment

InFoS Innovation Follow-Up Service

InImS Innovation Implementation Service

InInS Innovation Inception Service

InPrS Innovation Prioritization Service

IPTV IP Television

IT Information Technology

MES Manufacturing Execution System

PEFC

Programme for the Endorsement of

Forest Certification

PTB Physikalisch-Technische Bundesan-

stalt (German national metrology

institute)

QM Quality Management

RTD

Research and Technological Devel-

opment

S&T Scientific & Technological

SME Small and medium-sized enterprises

STB Set Top Boxes

Telco Telecommunications Company

VoIP Voice over IP

VPN Virtual Private Network


Project #: 285164



1 Summary

This document presents the deliverable D1.2 Business Cases specification of the ExtremeFacto-

ries Project, which compiles the work performed under the task T1.2. Specification of Business

Cases.

The objective of this document is to describe the 7 Business Cases of the industrial SMEs partic-

ipating in the project and use them as the base for the future specification of requirements,

design, development and validation of the ExtremeFactories methodology and platform.

Each business case describes the activity and processes of the company, including the actors

involved in them. Specific processes of the company are described, focusing on those where

innovation is more prone to be carried out and where different objectives are targeted: gaining

reusability and maintainability in the manufacturing process, digitalization of resources or im-

proving reliability in production.

The business case also describes how the industrial partners perform the innovation activities

and in which context. The document includes the evaluation performed by the RTD partners

about the ideal contexts of the industrial partners for innovation. This evaluation establishes a

baseline for further measurement of the improvements achieved in the innovation process.

This measurement will be carried out once ExtremeFactories methodology and platform have

been implemented in the industrial partners.

The document presents one Business Case per SME in separate chapters. For each business

case the following information is compiled: Description of the Company (activity, products,

staff, IT resources available, network of the company); Description of the main processes; De-

scription and Evaluation of the innovation context. Finally a set of conclusions are presented for

each of the industrial partners, highlighting the most relevant issues that might influence the

success or failure of the innovation process within the companies.


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2 Introduction

ExtremeFactories project objectives are to create an effective framework for supporting SMEs

in innovation processes. The project assets, methodology and supporting ICT system, are in-

tended to enable innovation management along its whole life cycle from inception over innova-

tive ideas prioritisation and implementation to follow-up of implemented innovations.

The ExtremeFactories consortium comprises seven typical manufacturing companies as seven

business cases for deriving requirements and for testing of the project prototypes. These busi-

ness cases are presented in this deliverable.

2.1 Document Purpose

This document represents deliverable D1.2 – “ExtremeFactories Business Cases Specification”

which describes in detail seven business cases as a starting point for identification of require-

ments from different industrial areas.

Description of each business case comprises:

1. Description of the company, including:

• History & activity of the company

• Company organisation

• Technological resources

• Network of the companies’ partners, sub-suppliers and customers

2. Description of the main processes

3. Description of the innovation concept

These business cases descriptions will be used for identifying specific business cases’ require-

ments and for creating the ExtremeFactories solution concept, where an advanced vision of the

innovation management methodology and system will be provided.

2.2 Approach Applied

In order to be able to create a high resolution image of the current “as-is” situation related to

the innovation processes in the seven consortium SMEs, the production processes have been

analysed in detail by RTD performers, by carrying out interviews and by creating awareness on

the spot in the partner companies. As a result the textual descriptions of the Business Cases

(BC) were created as a basis for identifying needs and requirements – BC requirements – of

these partners, regarding innovation process management.

In addition the “as is” innovation management process was compared to the “to be” ideas, tak-

ing into account profiles of the companies and corresponding production processes. Mapping

of the “as is” situation to the ExtremeFactories innovation management steps and evaluating

numerically the current situation versus key innovation factors in each participant company


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gave the results analysed as input data for further project activities i.e. for identification of re-

quirements for the envisaged solution.

The requirements will be complemented with in-depth analysis of the state-of-the-art in rele-

vant areas, including the methodological approaches and ICT support tools for innovation pro-

cess management, which was already completed and presented in deliverable D1.1 – State of

the Art Analysis.


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3 Business Case 1 – FAMMSA

3.1 Description of the Company

3.1.1 History and Activity of the Company

FAMMSA is a family owned company founded in 1.977 in Los Yébenes (Toledo), manufacturing

different lines of products for the electrical power industry, mainly:

1. metallic supports for power lines up to 400Kw,

2. metallic structures for electrical substations,

3. bases for distribution and power transformers and

4. solar trackers.

More specifically, the families of products manufactured by FAMMSA are:

Table 1: FAMMSA product families

Towers for mid tension

lines

Towers for high ten-

sion power lines

Communications and

lighting towers

Metallic structures for

electrical substations

Tanks, covers and conservators

for distribution transformers

Tanks, covers and conservators

for power transformers

Corrugated walls

FAMMSA has a floor plant of ca. 20.000 m2 divided in different functional sections for each of

the product lines: material input, laboratory, cutting, yielding, welding, painting and storage.


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FAMMSA is ISO 9001:2008 and ISO14001 Certified and also has supplying certificates from the

main Electrical Companies such as IBERDROLA, Unión Fenosa or ENEL.

3.1.2 Company Organisation

The structure of FAMMSA as a department hierarchy as represented in Figure 1 below:

Figure 1: FAMMSA organisational structure

FAMMSA employs over 80 people. The Administration & Financial Department, including the

Commercial Area employs 5 people, the Technical Office & Quality Departments employs 9

people and the rest of employees belong to the manufacturing area.

The Technical Office & Quality Departments work very closely in order to manufacture high

quality products. These 2 departments are integrated by 9 professionals, including Engineers,

from different disciplines, Draughts people and Industrial Masters.

3.1.3 Technological Resources

During the last 5 years FAMMSA has made a huge investment in leading-edge technologies for

manufacturing purposes, which has led FAMMSA to manufacture high quality products as rec-

ognized by many customers world-wide. The main equipment for the manufacturing process is:

• 2 laser-cutting robots

• 4 welding robots

• 1 yielding + welding station.

• Automatic paint and coating machine with 2 immersion stations, which is the last step

of the manufacturing process of tanks, covers and conservators. This equipment allows

FAMMSA to finish over 80 tanks per day.

The workload of the Laser and Welding Robots is directly ordered from the design applications

used by the Technical Office, whilst the orders of the yielding station are manually programmed

in the Control.

The IT equipment in FAMMSA is:

• Application Server with BAAN, ERP used mainly in order management,

General Manager

ManufacturingTechnical

OfficeQuality

Administration & Finance

Commercial


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• Data Server used as a repository of AutoCAD files and other information such as regula-

tions, standards, certifications, customer requirements, commercial information, etc.

3.1.4 Network of the Company

Figure 2 - FAMMSA Network

Usually the orders dispatched by FAMMSA are part of big tenders for electrical equipment ac-

quisition in the maintenance of electrical sub-stations, electrical power lines or in the recon-

struction of countries. Due to this fact FAMMSA usually needs to be a certified supplier by the

main contractors, having obtained certificates by the main electrical companies in Spain, other

countries in Europe such as Italy, Brazil and other countries in South America or the USA.

FAMMSA has a strong link to its customers since they provide the main specifications of the

product they must manufacture. They collaborate in the design of the end product and regular-

ly FAMMSA is inspected by its customers to ensure the compliance of the regulations and

standards the customer must fulfil.

Suppliers of FAMMSA are also part of this chain of strong links. During the last 30 years

FAMMSA has established an alliance with its main suppliers understanding that both FAMMSA

and its suppliers must keep the objective of manufacturing products of a very high quality.

3.2 Main Process of the Company


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FAMMSA’s main process is the manufacturing of metal-works for electrical distribution (as pre-

sented below). There’re many important sub-processes such as the Management of Requests

from Customers, Management and Presentation of Tenders, Logistics and Inspections of mate-

rial and finished product.

The company does not have any formal process to carry out Innovation. Identification of oppor-

tunities for innovation and development of innovation projects mainly rely on the Quality and

Engineering department.

The process drawn below identifies a number of sub-process where carrying out an Innovation

Process is more probable. These sub-processes are

1. Management of Customers’ Requests.

2. Design.

3. Manufacturing process.


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Figure 3: Flow diagram of main

process at FAMMSA

Legend:

= Innovation


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Table 2: Description of the main process at FAMMSA

P1 – General Manufacturing Process

Description The diagram above describes the generic manufacturing process for any type of

product in FAMMSA. The “manufacturing process” block in the diagram will be differ-

ent depending on the type of product to produce, since each product goes through

different manufacturing sub-processes (yielding, welding, coating, etc.). These sub-

processes have not been identified in this diagram though it’s worth knowing that

each sub-process has its own quality control.

Starts Every time a customer makes a request

Team Every department is involved every time a request is made: customer, supplier, com-

mercial, engineering, quality, manufacturing & store. Location The activity occurs in several locations inside the plant: technical and administration

office and several parts of the manufacturing plant (depending on the type of prod-

uct). Sometimes the Quality department may perform inspections at the customer’s

site. Duration &

Frequency

The process represents the daily activity of the company

Inputs 1. Customer specifications.

2. International or National Regulations.

Outputs 1. The products

2. Several reports about the manufacturing process and quality control

3. Inspection reports

Communication

Devices & Sys-

tems

1. In general terms, communication is carried out through email or phone.

2. Commercial, Engineering and Quality departments manage most of the oper-

ations they carried out with the company’s ERP

3. Some of the sub-processes receive orders remotely, with ad-hoc built solu-

tions.

Ends The process ends when the customer accepts the products. The final product includes

an inspection report which verifies that the resulting products fulfil with the request-

ed specifications. Anyhow a customer might trigger a non-conformity sub-process

(which is not present in this diagram).


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3.3 Innovation Context

3.3.1 Innovation Process at FAMMSA

As already mentioned, FAMMSA manufactures a type of product with high restrictions imposed

by the customer but also by the national, European and International regulations. In this sense

FAMMSA does not innovate in product or design since the specifications of the product are

always closed. Anyhow FAMMSA believes that there’re many areas of the company where they

can innovate in order to increase the quality of the products or to improve the efficiency of the

company’s processes (e.g. reduction of the time to deliver a specific order, reduction of paper-

work in QM, reduction of response time of a maintenance or support request, etc.).

FAMMSA does not identify Innovation as a process of the company, since it’s not present in its

quality manual and there’s not a methodological or procedural way to tackle it. Anyhow

FAMMSA is constantly launching innovation projects related to the improvement of their man-

ufacturing, maintenance and quality processes as part of their weekly routine. FAMMSA sched-

ules a weekly Brain-Storming session involving the main departments of the company: Com-

mercial, Administration & Finance, Manufacturing and Quality. Manufacturing staff, suppliers

or customers are not directly involved in this session, but their requests recommendations have

been previously gathered by the participants in stand-up meetings or phone conversations.

The objectives of this session are:

• To identify current problems and bottlenecks in the processes.

• To propose potential solutions to the previously identified problems.

• To propose strategies for the new projects.

The problems of not systematizing these activities are:

• Part of the information generated during these sessions is lost, since the sessions are

oriented to solve short term problems, nobody in the team is responsible for wrapping

up the findings made in the sessions and there’s not a formal follow-up stage to verify

the effectiveness of the proposed ideas.

• Ideas generated in the Brain Storming process are not “collectivized”, which can gener-

ate unfruitful and undesired discussions in the team. For example, introducing voting

techniques would help creating collective solutions.

Anyhow, as a result of these sessions the company has managed to introduce very meaningful

improvements and innovations in their processes:

• Reduction of the time in tanks painting by mixing the coating and painting processes.

The operators working in this area proposed this improvement after observation and

application of the process in several projects.

• Improvement of the behaviour of the finished product and reduction of complaints by

introducing laparoscopy technologies to perform the cleaning of metallic shavings in

parts of the equipment that hard to find. Metallic shavings are often the cause of mal-

functioning of transformers.


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3.3.2 ExtremeFactories Mapping

Mapping of the above presented innovation practices at FAMMSA into the specific stages of the

ExtremeFactories methodology is presented in Table 3.

Table 3: Mapping of the innovation steps to the ExtremeFactories stages at FAMMSA

EFF Stage Innovation practices at FAMMSA

Inception • Any time a new request enters the manufacturing pipeline, the Quality

Manager, the Technical Office Engineer and Manufacturing staff hold

Stand-up meetings in order to propose actions to improve the process.

• Weekly non-systematized Brain Storming activity, involving Quality, Engi-

neering, Manufacturing, Administration and Finance departments.

• Studies of patents and technology trends by engineering departments in

the areas of yielding, welding and coating.

Prioritization • FAMMSA does not record the outcomes of the Brain Storming sessions,

missing relevant information for future projects. Normally during this ses-

sion decisions to solve immediate problems are taken

Implementation • Normally innovation projects are carried out with the company’s staff, not

requiring external expertise, just training activities for the operation of

new equipment.

• FAMMSA management has identified a set of regional and national fund-

ing schemes that match with the type of innovation carried out in the

company. This repository of funding opportunities is regularly updated

(and could be improved with international initiatives).

• Traditional project management for the implementation of the innovation

projects.

Follow-Up • FAMMSA is focused on process innovation. Follow-up activities are carried

out in the framework of the Quality Plan, gathering and analysing the an-

nually defined indicators.


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3.3.3 Key Factors for Innovation

This section includes an assessment that will be based on the six key factors for the implementation success identified in D1.1 – State of the Art.

Table 4: Innovation effectiveness assessment

Key Factors Questions for the assessment Score (1 to 5) Comments

Organizational policies

and practices

1. The quality and quantity of an organiza-

tion’s efforts to train organization’s mem-

bers to use new technology

2,5 +: FAMMSA has made a huge effort in the last year to train its

staff: for operating new equipment, to obtain personal certif-

icates for materials and process evaluation and foreign lan-

guages.

-: No training in Innovation methods and tools.

2. User support – the provision of technical

assistance to technology users

2,5 +: Technical assistance provided at the working place by

Quality department.

-: No additional support to users.

3. Rewards, such as promotions, praise from

supervisors

2 -: Rewards or promotions are not a common practice

4. Effective communication regarding the

reasons for the implementation of the new

technology

2 -: No tools for effective communication rather than periodical

meetings

5. The provision of time for users to experi-

ment with the new technology

2 -: Experimentation with new technology is not a common

practice

Implementation climate 1. Employee’s shared perceptions of the im-

portance of innovation implementation

within the organization

2,5 +: sound perception of the necessity for innovation in man-

agement, quality and engineering staff.

-: not a uniform perception of this necessity.


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Management Support 1. Does management support and promote

innovation activities?

2,5 +: Management is really committed to support innovation.

-: No promotion campaigns to stimulate the staff in proposing

innovative ideas.

Financial Resource Availa-

bility / Accessibility

1. Does the company have financial resources

available for innovation projects?

5 +: A high percentage of the incomes is invested in innovation

projects

2. Does the company know about the exist-

ence of regional, national, European or in-

ternational initiatives to promote and fund


2,5 +: Management keeps an updated list of regional and nation-

al initiatives.

-: Knowledge about international opportunities can be im-

proved.

Learning Orientation 1. Do the teams perceive the risk of innova-

tion projects?

1 -: No perception of risk in innovation projects.

2. Learning attitude? 3,5 +: Proactive staff with a good learning attitude.

-: Unbalanced learning attitude. Part of the staff is not keen

on changes.

Managerial Patience 1. Are managers committed to the long-term

results of the innovation and understand a

short-term decline of the productivity dur-

ing its implementation?

4 +/-: Management is expecting to obtain mid-term results,

though this depends on the type of investment.

TOTAL: 17,2


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The following diagram reflects the assessment performed above:

Figure 4: Graphical presentation of the current situation vs. the targeted situation at FAMMSA

3.4 Conclusions

• FAMMSA’s Business Case will be focused on PROCESS INNOVATION. Process to be taken

into account during the pilot phase of ExtremeFactories will be the Quality, Manufactur-

ing and Design Processes.

• ExtremeFactories methodology and platform will support FAMMSA in SYSTEMATIZING

its innovation process, keeping records and tracks of all the events occurred in the com-

pany during this process.

• In order to increase the innovation potential of the company and to improve the effi-

ciency of the current innovation process, ExtremeFactories will support FAMMSA in re-

inforcing two key aspects for success:

o Adapt the organizational practices and policies to embrace innovation processes

o Improve communication with the whole staff, suppliers and customers.

00,5

11,5

22,5

33,5

44,5

5

Organizational

policies and

practices

Implementation

climate

Management

support

Financial Resource

Availability

Learning

Orientation

Managerial

Patience

Ideal state

Current state


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4 Business Case 2 – SAFEVIEW



SAFEVIEW is a global provider of business solutions for digital TV with more than 80 customers

in Europe, Asia and Latin America. SAFEVIEW develops and integrates its own and third party

products in solutions that cover the complete digital TV value-chain. The main products offered

by the company are:

• CAS & DRM (SAFEVIEW®): SAFEVIEW CAS integrates the functionalities of CA (Condi-

tional Access) and DRM (Digital Rights Manager) in a single system. It offers a high level

of content protection to any type of operator disregard of its size and type of platform

(IPTV, cable, satellite, terrestrial…).

• Punto Azul middleware: Value Added Services platform that opens new lines of revenue

for Pay TV operators and broadcasters by enabling services like targeted and interactive

advertising, fidelity programs, games synchronized with broadcasted video, betting, etc.

• SAFEVIEW Set Top Boxes (IPOXX) are designed for the ultimate home theatre experi-

ence. Our STB are designed to support highest quality HD videos on the largest HDTV.

The STBs come with full support for HD videos and digital multichannel sound. The STB

also allows users to view HDTV and DVD videos right from their IP network. SAFEVIEW

develops STB for IPTV, Cable, Satellite and DTT.

• SAFEVIEW CRM (Customer Relationship Manager): this solution has been designed to

cover the needs of pay TV operators in horizontal or vertical markets.

The main customers of SAFEVIEW are:

• Pay TV and Internet operators.

• Broadcasters.

• Content providers.

• Advertisement service providers.

The company has commercial delegations in Argentina, India and USA.

SAFEVIEW is an ISO 9001 certified company in software design and development, provision of

consultancy services for the telecommunications and military sectors, as well as its commercial-

ization, representation and distribution.

History of the company:

March/2003: The Company is founded by a group of engineers on the forefront of digi-

tal television development in Spain.

January/2006: First CAS customer in Africa.

October/2006: Setup TDM, a company to broadcast local DTT channels in Madrid region.

May/2009: CAS chosen by Abertis Telecom for Spain Pay TV DTT


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March/2009: Projects in Latin America & Asia

August/2009: CAS chosen by AOTEC as its reference supplier

January/2010: Safeview used by more than 600.000 pay TV customers

September/2010: Development centers in Spain, India and Argentina, Safeview introduces

3rd generation CAS solution to serve more than 60 customers worldwide.


The structure of SAFEVIEW as a department hierarchy is represented in Figure 5 below:

Figure 5: SAFEVIEW organisational structure

SAFEVIEW employs over 40 people, majorly in the Operations, SW Development and RTD De-

partments. The company employs 6 people performing RTD activities in the fields of Digital TV

Services, Security of Data, etc.


During the last 5 years SAFEVIEW has made a huge investment in leading-edge technologies for

digital TV, which has led the company to research on new technologies that have been de-

ployed successfully worldwide.

The main equipment present at SAFEVIEW is:

• Modules DVB-C,DVB-T,DVB-S.

• DVB Multiplexer.

• MHP application Injector.

• Digital Receptor.

• Several development environments for applications.

• IPTV distribution system and laboratory.

• FTTH distribution system and laboratory.

• Benchmarking Tools for STBs.

• Cable Internet connection.

• Coffer-room for securing data.

• Several Server Racks for data and applications.

General Manager

OperationsSW

DevelopmentRTD

Administration & Finance

Commercial


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Figure 6 - Safeview's Network

SAFEVIEW is a SME that is used to work in a networked manner, actively participating in Inter-

national clusters for the Audio-Visual and IT Health sectors. Moreover they are members of

Madrid Network (Network of Innovators in the region of Madrid) and AMETIC (Association of

ICT and Digital Contents enterprises).

SAFEVIEW has several distribution agreements with organisations all over Latin America and

Asia and has an off-shore production of STBs in 2 manufacturing plants in China.

Internally they also have collaboration processes with other small companies for the design of

specific equipment or development of software.


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SAFEVIEW’s main process is the off-shore manufacturing of equipment as presented below.

Other important processes are Software Design and Development and Quality Assurance. The

company does not have any formal process to carry Innovation. Identification of opportunities

for innovation and development of innovation projects mainly rely on the role of the RTD and

Innovation Manager.

The process drawn below identifies a number of sub-process where carrying out an Innovation

Process is more probable since they are all carried out manually and in a traditional way. These

sub-processes are

4. Specifications for a new product

5. Analysis of Market trends

6. Assignation of Technical Operation

7. Prototype Testing


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Figure 7: Flow diagram of main process at SAFEVIEW


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Table 5: Description of the main process at SAFEVIEW

P1 – Manufacturing of new product

Description The process describes the way SAFEVIEW manages the manufacturing of new prod-

ucts: the events that trigger a new manufacturing process, the teams responsible for

designing, manufacturing and testing and how the product is finally deployed.

Starts 1. Analysis of Market Trends

2. Request from the customer

Team The process involves most of the staff of the company: sales, operations, RTD, quality

and even the financial department for invoicing (if required). The process involve

external, off-shore organisations and eventually it could involve other actors, e.g. for

software development purposes.

Location All this activity takes place in SAFEVIEW headquarters, though eventually the quality

control may be performed in the external factories.

Duration &

Frequency

This process may comprise 1 to 6 months, depending on the specifications of the

product, and it may occur twice a year.

Inputs 1. Customer needs

2. Analysis of market trends

Outputs 1. Technical requirements

2. Design documents

3. Intermediate prototypes

4. Definitive product

5. Deployment plan

6. Completion report

Communication

Devices & Sys-

tems

Communication with off-shore facilities is often carried out by email, web conference

or telephone. SAFEVIEW provides technological infrastructure for the exchange and

control of deliverables.

Ends When the RTD department validates the equipment and the customer provides posi-

tive feedback about the installation


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4.3.1 Innovation Process at SAFEVIEW

In general terms SAFEVIEW designs a type of product that can be highly customised by the cus-

tomer. It’s also affected by the international trends of the market as well as national, European

and International regulations.

SAFEVIEW innovates both in product and services, being triggered by the customers or by

SAFEVIEW’s staff.

SAFEVIEW does not identify Innovation as a process of the company, since it’s not present in its

quality manual and there’s not a methodological or procedural way to tackle it. Anyhow SAFE-

VIEW is constantly launching RTD and innovation projects for the creation of new products and

services for their customers, and also to open new target markets and sectors.

The innovation process is very much dependent on the RTD manager, who proposes the most

part of the innovation and RTD projects in the company. From time to time the company holds

weekly Brain-Storming sessions involving the main departments of the company, though this

activity is not performed in a regular basis.

Anyhow, as a result of the innovation activities the company has managed to create high tech-

nology products offering very meaningful added value functions. The products of its catalogue

are an example of the outcomes of the innovation activities carried out in SAFEVIEW.


Mapping of the above presented innovation practices at SAFEVIEW into the specific stages of

the ExtremeFactories methodology is presented in Table 6.

Table 6: Mapping of the innovation steps to the ExtremeFactories stages at SAFEVIEW

EFF Stage Innovation practices at SAFEVIEW

Inception • Stand-up meetings with different departments of the company and cus-

tomers.

• Studies of patents, market and technology trends by the Sales and RTD

departments.

Prioritization • No method applied for prioritizing innovation projects.

Implementation • Normally innovation projects are carried out with the company’s staff, not

requiring external expertise.

• SAFEVIEW management has identified a set of regional, national and Eu-

ropean funding schemes that match with the type of innovation carried

out in the company. This repository of funding opportunities is regularly

updated.

• Traditional project management for the implementation of the innovation

projects.

Follow-Up • Follow-up activities are carried out in the framework of the Quality Plan,


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EFF Stage Innovation practices at SAFEVIEW

gathering and analysing the annually defined indicators.


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and practices




3 +: Training to obtain personal certificates on existing technol-

ogies, foreign languages…

-: No specific training on innovation



4 +/-:Self-learning attitude.


supervisors

2 -: Rewards or promotions are not a common practice



technology

2 -: No tools for effective communication rather than periodical

meetings




practice




2,5 +: sound perception of the necessity for innovation in man-

agement, quality and engineering staff.

-: not a uniform perception of this necessity.



2,5 +: Management is really committed to support innovation.

-: No promotion campaigns to stimulate the staff in proposing

innovative ideas.

Financial Resource Availa- 1. Does the company have financial resources 4 +: A high percentage of the incomes is invested in innovation


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bility / Accessibility available for innovation projects? projects.

+/-: Mostly regional funds.





3 +: SAFEVIEW has participated and participates in several re-

gional and national projects. Nowadays they are participating

in one EU project.

+/-: Management knows about EU initiatives but this

knowledge could be improved.

-: Knowledge about funding initiatives is centered in one per-

son of the company. This information is not updated in a

repository accessible by the whole company.


tion projects?


2. Learning attitude? 3,5 +: Proactive staff with a good learning attitude.

-: Unbalanced learning attitude. Part of the staff is not keen

on changes.





4 +/-: Management is expecting to obtain mid-term results,

though this depends on the type of investment.

TOTAL: 17,35


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Figure 8: Graphical presentation of the current situation vs. the targeted situation at SAFEVIEW

4.4 Conclusions

• SAFEVIEW’s Business Case might be focused on PROCESS, PRODUCT and SERVICES IN-

NOVATION. Process that can be taken into account during the pilot phase of Ex-

tremeFactories may be the Quality, Manufacturing and Design Processes.

• ExtremeFactories methodology and platform will support SAFEVIEW in SYSTEMATIZING

its innovation process, keeping records and tracks of all the events occurred in the com-

pany during this process, and also to extend the responsibility for innovation to other

actors in the company.


ciency of the current innovation process, ExtremeFactories will support SAFEVIEW in re-

inforcing two key aspects for success:

o Adapt the organizational practices and policies to embrace innovation processes

o Improve communication with the whole staff, suppliers and customers.

00,5

11,5

22,5

33,5

44,5

5

Organizational

policies and

practices

Implementation

climate

Management

support

Financial Resource

Availability

Learning Orientation

Managerial Patience

Ideal state

Current state


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5 Business Case 3 – OAS



OAS is an innovative middle-sized company with a rich experience in weighing technology and

industrial plant construction all over Europe. OAS AG has been founded as a small engineering

office in 1982 and ever since it expands steadily. From the beginning, the young company dis-

tinguishes itself by striving for innovation. Within the framework of a research project, the OAS

founder Otto A. Schwimmbeck developed the first ever world-wide computerised self-

calibrating weighing system certified for application Europe-wide by the federal certification

office in Braunschweig, Germany. In the 1990’s, the OAS AG grew stronger involved in foreign

markets. Today, the OAS AG successfully acts world-wide and has offices and cooperation in

China, Bulgaria and India.

The field of OAS activities spans planning and realisation of complete manufacturing plants of

branch-specific batch-oriented manufacturing. It includes supply of measuring and automatic

control systems and development of innovative software solutions for these systems. By the

foundation of the OAS Automation GmbH in 2011, the division of the OAS AG which especially

works in the process automation of the automotive industry, OAS entered a new market area.

The portfolio of OAS comprises a wide range of products:

• Process control technology with the process control system PRONTO

• Process engineering from single aggregates to delivery of turn-key plants

• Process automation, electrical engineering and system integration

• Weighing and dosing technology: truck scales, hopper scales, weighing terminals, etc.

• Logistic process management: self-service terminals, special software application LOGIS

OAS is certified for Quality Management System according to DIN EN ISO 9001:2000.


OAS is an SME with about 200 employees working in five locations covering whole Germany.

The company structure is presented in Figure 9.


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Figure 9: OAS organisational structure


OAS technological resources comprise a number of devices and equipment necessary for manu-

facturing of the a.m. systems as well as equipment for testing of the products.

Software components used during development processes are:

• Integrated development environment Microsoft Visual Studio

• Microsoft Team Foundation Server for:

o Source code version control

o Bug/Issue tracking

o Automated build server

o General project management

• Microsoft SharePoint Services for document management

• Wiki as knowledge base


OAS is a typical networked SME (several subsidiaries) with a high number of partners in Germa-

ny and EU countries. The OAS network is set up between the two offices in Bremen (Main office

and regiodata) and the branch offices in Germany. In most cases on-site maintenance personal

have remote access to the OAS-Network via VPN or direct connections. In addition there are

several VPN-connections to important customers for remote maintenance and service.


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Suppliers, who mainly provide OAS with hardware components and necessary firmware pro-

grams, are, among others, engineering company DS-Ing1 as well as Beck IPC2, which is offering

components for industrial control technology.

Figure 10: OAS partners network


The main processes in OAS are related to development and manufacturing of weighing systems.

A typical example is described below, the development of WeighCon-2, OAS’ next generation

weighing system. The system consists of several modules, which are listed below:

• WeighCon-I (indicator) – a weighing sensor, which is being developed for OAS by sub-

supplier DS-Ing (hard- and software)

• WeighCon-C (controller) – an embedded micro-controller for WeighCon-I, which is being

provided by sub-supplier Beck-IPC. The controller software is developed by OAS

• WeighCon-S (software) – a PC-based software tool to control the WeighCon-I, devel-

oped by OAS

• WeighCon-F (Fernanzeige [remote indication]) – a display meant to be deployed out-

doors next to a weighing system to visualize weighing data. It is also being developed by

sub-supplier DS-Ing

• WeighCon-.NET (reporting and analysis software) – a PC-based software solution to vis-

ualize and analyse weighing data developed by OAS

A flow diagram of the main process is depicted in Figure 11 below.

1 http://www.ds-ing.de/

2 http://www.beck-ipc.com/


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Figure 11: Flow diagram of

main process at OAS indicating

steps with possible innovation


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Table 8: Description of main process at OAS

P1 – Development and manufacturing of new Weighing System

Description The process is triggered by new market trends, new developments in technology or

new requirements from the official authorities. After developing an initial system

concept, the process continues with the OAS internal decision to implement a new

system. Based on the collected requirements, a complete system concept is devel-

oped for hardware and software components. In terms of hardware OAS always

check for availability of components at sub-suppliers or on the market. If available

on the market components are procured and programmed/integrated by OAS. If

hardware components cannot be procured they are developed by OAS. Software

components are mainly developed by OAS but depending on available resources

programming of hardware components may also be outsourced to sub-suppliers.

The finished software and hardware are then integrated into the final product. In

case of a weighing system this has to pass a number of tests by a certification au-

thority to obtain permission to be sold on the market. If the system passes the

tests the process ends with selling the product to OAS customers. If it does not

pass the tests rework is required, by fixing the detected problems or starting the

development cycle again by re-defining the concept.

Starts Development process is triggered by OAS internal decision. These decisions are

provoked by either new market trends or new developments in technology requir-

ing OAS to update their portfolio, or new requirements from the weighing system

certification authorities (e.g. PTB).

Team Typically 8 – 10 people work at a development project, not including sub-

contractors and this number is stable during the whole activity.

Hardware development including necessary controller firmware might be provided

by sub-contractors and partner organisations. Different software components

might also be provided by sub-suppliers.

Location Development activities occur mainly inside OAS, but when needed, also at sub-

contractors. Certification process takes place at certification authority.

Development teams can be at different OAS subsidiaries (i.e. Bremen & Augsburg),

at sub-contractors, at certification authority and are mainly fixed. Travel to other

OAS subsidiaries and sub-contractors and to certification authority may be required

Duration & Fre-

quency

Varying amount of time per day is spent as there is no dedicated development de-

partment but development work is done alongside everyday work, during the

week, mainly irregularly.

Inputs The main inputs are Concept, requirements, specification in form of MS Word doc-

uments, Wiki entries and Bug tracker entries

Outputs Within the scope of this process the following outputs are produced:

• Product documentation in form of MS Word documents

• Source code in Source Code Management System

• Hardware

• Product documentation on intranet network drive

• Management receives information about success or failure of project and


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status intermittent project stages

Communication

Devices & Sys-

tems

Different software and hardware development tools (see section 5.1.3) are used in

the development process and for communication within the team are used E-Mail,

Telephone, VoIP

Ends Process ends with a weighing system product that can be commercialised. For that

to happen it has to be certified by a certification authority such as the PTB


5.3.1 Innovation Process at OAS

Innovation process at OAS is usually triggered from observing new technology and market

trends as well as monitoring competitors’ products and in some cases by requirements from

the federal authorities which issue the certificates for devices’ application.

The steps of the innovation process are presented in Figure 12 below.


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Figure 12: Innovation process at

OAS


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Mapping of the above presented innovation practices at OAS into the specific stages of the Ex-

tremeFactories methodology is presented in Table 9.

Table 9: Mapping of the innovation steps to the ExtremeFactories stages at OAS

EFF Stage Innovation practices at OAS

Inception Suggestions for innovations are communicated orally in the company and custom-

ers and providers seldom give suggestions. Benchmarking of products, processes

or services is being done partly and occasionally. Studies of technology trends by

the RTD or engineering departments are produced regularly as well as identifica-

tion of problems & Problem solving techniques. Studies of requirements for certi-

fication are performed regularly too.

Prioritization Prioritisation is carried out within the project repository, in form of a directory on

network drive. Classification and prioritization of projects is also regular.

Implementation There is no formal process and not supported by software in identification of re-

quired Knowledge Areas and Skills and composition of teams but identification of

funding opportunities is performed regularly. General business model remains the

same with minor variations depending on customers.

The implementation management comprises identification and control of imple-

mentation milestones

Follow-Up The Results of the commercial exploitation of a product and Metrics gathering of

new processes and comparative studies with previously running processes is not

carried out, i.e. there is no systematic follow-up of the innovations.


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Table 10 below shows the assessment of the current situation at OAS in terms of its complying with the six key factors for the implementation suc-

cess identified in D1.1.




and practices




2 -: OAS approach regarding organised training is rather un-

systematic. Using new technology is mainly learned ad-hoc.



4 +: Technical support to the users is at a high level.


supervisors

1 -: Innovation in the company is seen as an everyday task. No

incentives policy exists.



technology

3 +: During the inception process reasons to implement new

technology are communicated to the relevant staff members.

It should be extended to a larger community



2 + -: The users themselves have not enough time to experi-

ment. OAS development team goes through several proto-

types phases, what can be seen as experimenting.




3,5 +: The shared perceptions of importance of innovation im-

plementation within the organization are mainly kept within

the project development team



3,5 +: Management to a great extent starts the innovation activi-

ties

Financial Resource Availa- 1. Does the company have financial resources 3 +: Company has certain funds to finance innovations, but


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bility / Accessibility available for innovation projects? some additional extra-company funding sources would be

welcome





4 +: OAS participated and participates in several EU and na-

tional projects


tion projects?

3 +: Both management and development teams are aware of

the risk of innovation processes.

2. Learning attitude? 4 +: Learning attitude in OAs can be evaluated positively





3,5 +: OAS mainly tries to achieve innovations in the short term.

There is however full awareness of the benefits of long term

innovations as well.

+: Risk of short term declines in productivity with innovation

projects is regularly considered and taken into account.

TOTAL: 23,5


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Figure 13: Graphical presentation of the current situation vs. the targeted situation at OAS

5.4 Conclusions

Although rather successful and innovative OAS shows still a large potential for improvement of

innovation processes. From the analysis above and the diagram in Figure 13 it is obvious that

the weak point in the innovation process is in the organisational policies and practices. In addi-

tion, the other key factors for innovation leave space for improvements. Therefore the primary

objective of OAS, to be supported by the EFF platform, will be to systemise the innovation pro-

cess in terms of structured keeping of records and tracks of all events occurred in the company

along the innovation process, specifically targeting the gathering and management of ideas,

with emphasis on the requirements analysis phase.

OAS Business Case will be focused on PROCESS INNOVATION and the process to be taken into

account during the pilot phase of ExtremeFactories will be the development of new / improve-

ment of existing weighing systems.

It is expected that the focus on process innovation, instantiated in the specific process and sup-

ported by the ExtremeFactories platform, will result in:

o Improved methodological approach and ICT infrastructure for collecting and storing

innovative ideas, currently communicated orally during project meetings and are not

or are incompletely documented because of lack of time (the documentation process

is perceived to be too cumbersome and too time-consuming), which can also lead to

a loss of innovation ideas

o Structured documentation and tracking of innovative ideas in OAS, which is currently

not at a satisfactory level and can lead to a loss of ideas that are not sufficiently doc-

umented

00,5

11,5

22,5

33,5

44,5

5

Organizationalpolicies and

practices

ImplementationClimate

ManagementSupport

FinancialResourceAvailability

LearningOrientation

ManagerialPatience

Ideal State

Current State


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ExtremeFactories solution is expected to increase the innovation potential of the company and

to improve the efficiency of the current innovation process.

Adaptation of organisational practices and policies to enhance innovation processes should be

oriented to improving communication with the whole staff and in the network of suppliers and

customer what is seen in OAS as a key aspect for success.


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6 Business Case 4 – ARMBRUSTER Engineering



Armbruster Engineering GmbH & Co. KG, Bremen (AE) was founded in 1994 with working area

in Automation Solutions and Manufacturing Factories design. The working area was extended

to PC-based control systems, process optimisation, and ramp-up and maintenance support sys-

tems. In 2002 the ELAM system for Monitoring and Control of Assembling Processes was intro-

duced, as a step in the company’s orientation to ICT systems for manufacturing. Recently AE

extended their portfolio with ICT solutions for Quality management, mobile assembly control

for railway products and process visualisation.

Company activities are mainly organised around the production of the Manufacturing Execution

System (MES) for manual assembly processes, which is delivered fully equipped in hardware

installation and with the own developed above mentioned software ELAM. A full range of after

sale services is offered to customers as well.


AE is a small company with very flat hierarchy presented in Figure 14.

Figure 14: AE organisational structure


AE technological resources comprise devices and equipment necessary for manufacturing the

a.m. MES as well as equipment for testing of the products that allow testing the developed

software in combination with the desired hardware and attached devices, measuring tools, etc.

Testing is performed by AE staff within the Integration & Testing platform (for hard- and soft-

ware) located at AE headquarters.


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The hardware used and sold as products is coming from suppliers, and/or designed and built by

AE. Special Mechanical shop floor allows creating and manufacturing new devices and equip-

ment, not available on the market. This may be for instance a photo station that allows captur-

ing images of barcodes and receipts or a fully electric Bitcube socket selection system.

In most cases maintenance personal has remote access to the installations of hardware and

software (E3 System) of the customers via remote access (internet, etc.). This is realised

through a remote maintenance and service system in an extra office with special equipment.

Software components are developed applying

• .NET Framework (VB.NET)

• Integrated development environment Microsoft Visual Studio

• Microsoft Source Safe for Source Code control

• MS SQL Server


Figure 15: AE network

AE is a typical networked SME with a high number of partners in Germany and several in Euro-

pean countries. The headquarters and manufacturing plant is located in Bremen and there is

one branch office in Kassel, Germany. Figure 15 shows the main partners, providing services

such as Upfront-Service, suppliers of different hardware parts and devices, as well as sales and

distribution offices. AE has a broad range of customers coming from different industrial sectors.

Some of them are e.g.: Daimler AG, Volkswagen AG, Deutsche Bahn AG, Irsinghausen, Maga Car

Top Systems and Rittal RSC.


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The main processes in AE, as mentioned above, are related to development and manufacturing

of the Manufacturing Execution System (MES) for manual assembly processes. A typical exam-

ple is described below, in the case of the development of the ELAM E3 System (including the

STAMA hardware).

The ELAM E3 system consists of several modules, which are listed below:

• E3 – Verwaltung (management) – Management of master data such as users, operators,

equipment, list of parts, etc.

• E3 – Sequenzer (sequencer) – Management of jobs such as creating new jobs, moving

jobs, pausing jobs, changing job sequence, etc.

• E3 – Monitoring – Monitoring component that observes the system itself, technological

components and attached hardware devices

• E3 – Webserver – Web interface for observed information such as overview of products,

number of units, quality inspection of all products, output, etc.

All these modules are offered with basic and extended functionality. Configurable extended

functionality is realised as plugins, which provide different graphical interfaces. Depending on

the module to be extended there are numerous plugins that can be purchased separately.


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Figure 16: Flow

diagram of main pro-

cess at AE indicating

steps with possible

innovation


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Table 11: Description of main process at AE

P1 – Development and manufacturing of the systems for Monitoring and Control of the Assembling

Processes

Description The diagram above describes the generic development and manufacturing of the

system for monitoring and control of assembling processes as well as its components.

The following will detail the further development of the MES Systems for assembly

processes.

The process is triggered by customer requests. This can either be a request from an

existing customer for a complete new functionality / module or the enhancement of

an existing module or a request from a newly acquired customer. If the request aims

for complete new functionality first a proposal is made to the customer who then

decides whether to order or not. Upon order the initial requirements will be collected

and a complete system concept is developed for both hardware and software com-

ponents. In terms of hardware AE always checks for availability of components at

sub-suppliers or on the market. If required components are available on the market

they are used. In case hardware components cannot be procured elsewhere they are

developed by AE. The software components are always developed by AE. The first

finished software and hardware are then integrated and assembled into a product.

This product is tested internally at the testing and integration platform at AE plant

and adjusted and corrected as necessary. When the product passes the test processes

it is sold to the customer and installed on-site. If the customer detects any more

problems or requires some adjustments or changes, the development cycle starts

over again.

Starts Development and manufacturing process can have several triggers. These triggers are

provoked by either new market trends or new developments in technology requiring

AE to update their portfolio, or new requirements from the new or even existing cus-

tomers.

Team Depending of the type of development, the process involves most of the staff of the

company: sales, service and hardware department, software department and of

course the financial department. A usual team for such development and manufac-

turing processes consist of 10 to 12 people, being software engineers, project engi-

neers, service technicians and directors.

If certain hardware is available on the market and does not have to be built by AE,

subcontractors and suppliers are involved in the process as well. Besides the above

mentioned key personnel this process as a matter of course includes the customers.

Location The process activity usually occurs at several locations inside the AE plant and at dif-

ferent customer places. This includes the mechanical workshop floor (concerning

hardware developments), several other office at AE plant for the software develop-

ment, the installation and testing platform at AE plant and finally the installation at

the customer’s site. Process supervision/monitoring is performed at AEs plant

through the service and remote maintenance office as well as at the customer’s site.

Duration &

Frequency

The process represents the daily activity of the company, it therefore occurs on

weekdays for 8-10 hours a day. Sometimes testing is done during the night time or on

the weekend. The same applies for the installation work at the customer’s site.

Inputs Regarding the general development and manufacturing cycle (not software error


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correction and enhancements) there are usually only:

• Customer needs and requirements

• Different customer proposals

• Analysis of Market Trends

The internally triggered process of updating and enhancing the software as well as

the hardware has various other inputs (extending the ones coming from the custom-

ers and the market):

• Central Software ToDo List (Bug Tracking)

• On-Going Software ToDo List (Bug Tracking)

• A list of general requirements

• A list of concepts

Outputs • Source code (and software) stored inside a Repository

• Software module documentation

• Test protocols

• Assembled Hardware (if there was no appropriate hardware existing on the

market)

Communication

Devices & Sys-

tems

General communication with the customer is carried out by phone, e-Mail and gen-

eral mail contact. Gathering of feedback of the customer (i.e. process supervision) is

realised through direct data linking, diverse hardware connections, remote transmis-

sion devices or simply over the internet.

Regarding the development of software and hardware, several tools are used (see

section 6.1.3).

Ends The process ends as soon as the Hardware and Software have been installed and are

running according to the customer’s specification and satisfaction. Of course the pro-

cess may start over if there is a request for changes or new functionality.


6.3.1 Innovation Process at AE

The causes which trigger the innovation process at AE can be classified into the groups of cus-

tomers’ requirements – innovation pull and technology/market trigger – innovation push. The

third group of innovation causes at AE is so-called continuous innovation i.e. causes coming

from the bugs fixing and “weak points” removing.

The steps of the innovation process are presented in Figure 17 below


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Figure 17: Innovation process at AE


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Mapping of the above presented innovation practices at AE into the specific stages of the Ex-

tremeFactories methodology is presented in Table 12.

Table 12: Mapping of the innovation steps to the ExtremeFactories stages at AE

EFF Stage Innovation practices at AE

Inception • Weekly Meetings with different departments of the company

• Studies (to some extend) of patents, market and technology trends

• Creative writing processes at a none-regular basis

• Upon new requests by customers meetings are organised within several

departments in order to identify possible realisations & implementations

Prioritization • The outcome of creative writing processes as well as weekly meetings is

recorded in several documents

• List of Concepts

• General Requirements List

• Central Software To-Do List

• Prioritization of the lists is done according to the type of list and whether

the initial request behind the entry in the list originates from a customer

Implementation • Usually the implementations of the innovation projects are carried out

with the company’s stuff, not requiring external expertise.

• AE management has identified that there are regional and European fund-

ing schemes that match with the type of innovations carried out in the

company. Nevertheless there exists no repository of funding schemes and

every innovation project causes the management to identify appropriate

funding schemes again.

• Innovation project management is handled in a well-proven way, meaning

that there are milestones defined for the project and there is a sort of

control of the implementation of these milestones.

Follow-Up • AE is focused on process innovation and follow-up activities only take into

account indirect indicators of the success of the previous innovation. This

happens through gathering and analysing success of the product itself in

terms of raised errors, number of maintenance activities required, number

of reorders or orders by other customers etc.


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Table 13 below shows the assessment of the current situation at AE in terms of its complying with the 6 key factors for the implementation success

identified in D1.1.




and practices

1. The quality and quantity of an organization’s

efforts to train organization’s members to use

new technology

2 -: AE has not put much effort (lack of time and lack of money) to

train its stuff. This is usually done by the stuff members them-

selves

2. User support – the provision of technical assis-

tance to technology users

4 +: Technical assistance is provided whenever required

3. Rewards, such as promotions, praise from su-

pervisors

3 -: Rewards or promotions are not a common practice. Praising is

applied by colleagues and supervisors

4. Effective communication regarding the reasons

for the implementation of the new technology

3 +: Meetings for populating software and general requirement

lists are used as a form of communicating the reasons for the

new technology

5. The provision of time for users to experiment

with the new technology

2 +: Generally much time is dedicated to develop and create new

software parts using new technologies. This also includes testing

Implementation cli-

mate

1. Employee’s shared perceptions of the im-

portance of innovation implementation within

the organization

3,5 +: There is a perception of the necessity for innovation in man-

agement and to some extent in the staff

-: Perception of the necessity is not uniform

Management Support 1. Does management support and promote inno-

vation activities?

3,5 +: Management is really committed to support innovation and

sees it as absolutely mandatory

-: No special undertaking for making staff members more inno-


Project #: 285164




vative

: Management is often lacking time for direct support of innova-

tion

Financial Resource

Availability / Accessi-

bility



2 -: The company has very limited resources regarding the invest-

ments of innovation projects which are not directly connected

to customer needs and requirements

2. Does the company know about the existence of

regional, national, European or international in-

itiatives to promote and fund innovation activi-

ties?

1 -: Management has no profound awareness of funding schemes

for different kinds of innovations

-: Knowledge about international opportunities can be im-

proved, funding scheme repository should be installed

+: AE has been involved in a national project

Learning Orientation 1. Do the teams perceive the risk of innovation

projects?

2 +: Management as well as other team members are well aware

that innovation for productive and manufacturing equipment is

highly risky

2. Learning attitude? 3 +: Most team members have good learning attitude and are

willing to learn

+: As sometimes training for new technologies misses staff

members try to train themselves

Managerial Patience 1. Are managers committed to the long-term re-

sults of the innovation and understand a short-

term decline of the productivity during its im-

plementation?

4 +: Management is expecting to obtain long-term results (as it is

an owner driven company) and are well aware of the decline of

productivity during innovation implementations

TOTAL:

17,8


Project #: 285164




Figure 18: Graphical presentation of the current situation vs. the targeted situation at AE

6.4 Conclusions

Armbruster Engineering is very successful in keeping and extending their market position and

has done several important steps in portfolio adaptation to market requirements (see section

6.1 above). However, due to time and cost constraints, the innovation process management

was not given a due importance. The analysis of key factors for innovation presented above

allows for conclusion that the expectations from the ExtremeFactories project i.e. from the

platform to be developed are rather high in AE.

The factors which require higher improvements are Financial Resources Availability and Learn-

ing Orientation. Taking care of the rather good current Managerial Patience, Management Sup-

port and Implementation Climate for the innovation process, the ExtremeFactories platform is

expected to significantly support enhancement of organisational policies and practices and

learning orientation regarding the innovation process.

AE Business Case will be focused on PROCESS INNOVATION in the process of assembly line

manufacturing during the pilot phase of ExtremeFactories project. Main benefits from the Ex-

tremeFactories methodology and platform are expected in an increased systematics in innova-

tion process management, and support in learning orientation development. Better documen-

tation structuring along the innovation process is expected to provide a good basis for future

learning practices.

Specific improvements in efficiency of the current innovation process are expected in reinforc-

ing the key aspects for success by:

00,5

11,5

22,5

33,5

44,5

5

Organizationalpolicies and

practices

ImplementationClimate

ManagementSupport

Financial ResourceAvailability

LearningOrientation

ManagerialPatience

Ideal State

Current State


Project #: 285164



o Adapting the organizational practices and policies to enhance innovation pro-

cesses in terms of introduction of regular brain storming and similar sessions in

the company.

o Improve communication with the whole staff and in the network of suppliers

and customers, in order to introduce concepts of the Open Innovation approach.


Project #: 285164



7 Business Case 5 – MBAS



Mb Air Systems limited was born following the management buyout of the business and assets

of Motherwell Bridge Air Systems Limited, which was originally established in 1973, from the

Motherwell Bridge Group in December 2002. Its operations, with about 40 years of expertise

and service to a wide range of clients, specialises in the fields of compressed air, material han-

dling (industrial lifting), power tools, pneumatics and product finishing systems.

MBAS internationally provides a wide range of products and services, such as:

• Maintenance Solutions

• Winches & Hoists

• Air Compressors

• Filter Receiver

• Compressed Air Treatment: Air Dryers, Filters

• Product Finishing

• Pneumatics

• Power Tools, Motors & Starters

MBAS is centred on providing complex engineering services to indus-

try, mainly dealing with air compressor solutions, but also supplies cap-

ital equipment taking advantage of its international network of suppli-

ers, being ISO9001 certified for these subjects.

MBAS operates from 4 locations in the UK (Wishaw, Aberdeen,

Seaham, and Fareham).


MBAS is a small to medium-sized company, with 70 employees:

• 3 executive directors,

• 7 managers,

• 11 sales engineers,

• 27 service engineers, and

• 22 administrative staff.


Project #: 285164



Figure 19: MBAS organisational structure


The following software tools are used at MBAS:

• MS Office Suites – Word / Excel / Access / Outlook – all standard uses

• More complex excel spread sheets are used for the financial reporting that we have de-

veloped in house

• Ledgers2 – Financial reporting

• Adobe Master Suite – for all web design / animations / drawings & In-house artwork and

marketing material

• AutoCAD & Inventor for CAD and 3d Modelling

• Aessop – all stock control / sales & service function & CRM

o Aessop has facilities for exporting to Excel and word.

• Access to some key supplier online platforms – IR / Norgren.

Kommie Yousef-Nejad

Regional Board Director(Operation Responsibility for Wishaw)

Steve Harkin

Regional Board Director(Operation Responsibility for Dyce)

Andrew PatrickCommercial Director

(Management Representative)

Business Process Manager

(Quality Manager)

Sales Director

Seaham

Operations Manager

Fareham

QualityAdministrator

Seaham

Quality

AdministratorFareham

Quality

AdministratorDyce

Quality

AdministratorWishaw

Kommie Yousef-Nejad

Regional Board Director(Operation Responsibility for Wishaw)

Steve Harkin

Regional Board Director(Operation Responsibility for Dyce)

Andrew PatrickCommercial Director

(Management Representative)

Business Process Manager

(Quality Manager)

Sales Director

Seaham

Operations Manager

Fareham

QualityAdministrator

Seaham

Quality

AdministratorFareham

Quality

AdministratorDyce

Quality

AdministratorWishaw


Project #: 285164




Figure 20: MBAS Network

Main Principal Partner Suppliers are:

• Ingersoll Rand: supplying Air Compressors, Winches, Hoists, Power Tools, and Motors &

Starters.

• Dominick Hunter: supplying Air Dryers & Filters.

• Norgren: supplying Pneumatics.

• ITW: supplying Product Finishing.

Key Markets are:

• Oil & Gas

• Energy & Utilities

• Automotive

• Aerospace

• Food & Drink

• Local Authorities


Project #: 285164



• Construction


There are several processes within MBAS. Two processes have been selected for this project as

they are best matched with the objectives of the project.

The main process includes 3 sub-processes that will be potential candidates to be improved by

means of EXTREMEFACTORIES:

1. Identification of specifications for new products.

2. Identification of technical requirements.

3. Design Process, which is detailed due to its relevance within the business of MBAS.


Project #: 285164



Figure 21: Flow diagram of Product Finishing process at MBAS


Project #: 285164



Table 14: Description of Product Finishing process at MBAS

P1 – Product Finishing Process

Description Purpose: To ensure customers’ needs are analysed individually with the proposed

solution being customised to suit their unique requirements including end-use, health

& safety legislation and industry specific issues.

Scope: All enquiries for individual items of operational machinery or an assembly of

operational machinery, e.g. spray-booth, conveyor, oven, extraction system or com-

binations of these individual items up to a complete turnkey product finishing facility.

Starts Customer Enquiry

Team System Design and Specification of product finishing equipment can only be carried

out by employees with sufficient training, experience and product knowledge. Per-

sons in the following roles are deemed to be competent:

• Regional Board Director, Sales Director, Sales Manager Product Finishing Sys-

tems, Product Finishing Specialist, Operations Manager.

Dependant on the size and complexity of the enquiry, a Contract Team (including any

of the above persons and Business Support functions) may be established to design,

specify, quote, out-source, manage and review the potential contract.

The team normally stays the same throughout the project.

In addition some person(s) from the subcontractor will also be part of the team.

Location The activities of the project takes place in several places and finalised by commission-

ing at the customer site.

Members of the team are not in one place, but the most of members from MBAS are

in one place.

During the project several travelling takes place.

Duration &

Frequency

The length of time and frequency of this process varies, as this activity occurs on cus-

tomer request and each project is different from another and the final solutions are

all different.

In general the projects could take 3 to 12 months.

Inputs • Client specification

• Any identified unspecified needs

• End-use requirements

• Safety and regulatory requirements

• Any essential calculations

• Potential Approved Supplier technical assistance

Outputs • Order Confirmation

• Project Management System Plan

• Installation / Assembly plans and / or instructions

• Purchasing specifications and / or instructions

• Cash flow projection

• Contract / client specific documentation


Project #: 285164




• Technical File (if required for CE Certification purposes)

Communication

Devices & Sys-

tems

The main communication tools are phone, email, and SKYPE

Ends The process comes to and end when the validation of the solution is completed suc-

cessfully and the documents are recorded. Some of the documents are retained in

the AESSOP system.

Table 15: Description of System Design & Specification process at MBAS

P1 – System Design & Specification Process

Figure 22: Flow diagram of System Design & Specification process at MBAS

Description Purpose: To ensure customers’ needs are analysed individually with the proposed

solution being customised to suit their unique requirements including end-use,

health & safety legislation and industry specific issues

Scope: All enquiries for complete operational machinery or an assembly of opera-

tional machinery, examples being – a compressor, dryer, winch, breathing air pack-

age, container or skid mounted package.

Starts Customer Enquiry

Team Dependant on the size and complexity of the project, a Contract Team (any of the

persons below) may be established to manage and review a contract:

• Regional Board Director, Sales Director, Operations Manager, Project and

Engineering Manager, Service Manager, Sales Manager, Sales Engineer,

Application / Project Engineer

The team normally stays the same throughout the project.

Even though, there could be some sub-contract, the involvement of sub-contractor

as part of the team is negligible, as the innovation comes from within MBAS.


Project #: 285164



Location The activities of the project take place at both MBAS and customer site.

Members of the team are mainly in one place, as most of team members are from

MBAS

During the project some travelling takes place.

Duration & Fre-

quency

The length of time and frequency of this process varies, as this activity occurs on

customer request and each project is different from another and the final solutions

are all different.

In general the projects could take 3 to 12 months.

Inputs • Client specification

• Any identified unspecified needs


• Knowledge / experience of similar applications

• Safety and regulatory requirements

• Any essential calculation

Outputs • Installation / Assembly plans and / or instructions

• Purchasing specifications and / or instructions

• Contract / client specific documentation


• Technical File (if required for CE Certification purposes)

Communication

Devices & Sys-

tems

The main communication tools are phone, email, and SKYPE

Ends The process comes to and end when the validation of the solution is completed

successfully and the documents are recorded. Some of the documents are retained

in the AESSOP system.


7.3.1 Innovation Process at MBAS

MBAS Innovation practices are various in nature, but broadly fall into the following categories:

1. New innovative products that are offered by MBAS; for example the FiltAir Receiver

which has recently been granted a patent.

2. New solutions involving the creation, design and installation of capital plant equipment

to perform the desired customer function based on the customer requirements; for ex-

ample a paint spraying system for commercial vehicles.

3. Introducing new energy efficiency measures for customers to reduce the energy con-

sumption of capital plant at customers’ sites.

4. Developing new customer services, constantly striving to improve our business offering

to customers. This will increasingly involve cloud services.


Project #: 285164




Mapping of the above presented innovation practices at MBAS into the specific stages of the


Table 16: Mapping of the innovation steps to the ExtremeFactories stages at MBAS

EFF Stage Innovation practices at MBAS

Inception • It is not clear how the ideas are generated in the company but the compa-

ny has very clear and detailed processes to identify that its customer

needs matches its resources through a comprehensive system design and

specification process response to a given customer request.

• The company poses a series of questions to develop a work flow diagram

for a given task. These questions could easily be transformed into a set of

criteria for developing a work plan for given customer request.

• There are no visible benchmarking practices but considering the company

practices in identifying customer needs and mapping these against its

available resources together with the fact that the company has been in-

volved with state of art research and development projects. It is clear that

the company has the means to benchmark its products to develop and op-

timize process or services for developing these products.

• As stated earlier in previous paragraph, although not explicitly stated, by

being involved in many high level research and development projects the

company is aware if technology trends in relations to its existing products.

• The company is well aware of patent and IPR issues.

• Review of the system design and specification process and practice for de-

veloping work follow diagrams is indicative of the companies capability in

identifying problems and offering solutions to this problems based on

companies previous experiences and current developments.

• All previous jobs/projects are carefully stored for future reference and

through existing practices in identifying customers’ needs, mapping exist-

ing resources, system design and specification processes and work flow

diagrams. The company has the capability to store previous challenges

and prioritize actions needed for given product development plans or a

given customer requests. However, it should be noted that there is no

formal prioritisation practice in the company.

Prioritization • MBAS does not record the outcomes of the Brainstorming sessions, miss-

ing relevant information for future projects. Normally during this stage,

decisions to solve immediate problems are taken.

Implementation • Innovation projects are carried out with the clients’ staff, including train-

ing activities for the operation of new equipment.

• The company has specific knowledge and skills for its current products.

Considering the product range and previous success, although not stated

explicitly, the innovation teams are created when a new demand is pre-

sented to the company.

• MBAS is aware of funding opportunities in the UK as well as in the EU and


Project #: 285164



EFF Stage Innovation practices at MBAS

has been involved in several UK and EU funded research proposals and

projects. This repository of funding opportunities is regularly updated.

• MBAS has a pro-active business model based on a comprehensive series of

processes to identify customer needs and map against existing resources

followed by the development of comprehensive application of novel sys-

tem design and specification process leading to a work flow diagram for a

given job.

• Considering the detailed approach in understanding the customers and

their needs and using a detailed process for system design and specifica-

tion leading to development of work flow diagram clearly highlights that

the management is able to identified implementation milestones and con-

trol them appropriately.

Follow-Up • MBAS follow up its customers and record their feedback to improve quali-

ty and services. This is done on a continuous improvement basis.

• There is not enough information on the results of the commercial exploi-

tation of company's products but considering the company success, this

clearly indicates that the company is aware of exploitation practices and

how to market their products and services. Although system design and

work planning processes are well described there are no indications of

how matrices for each process in the system are develop for a given prod-

uct and how they are optimized.

• The company make appropriate attempts in improving process metrics

based on previous experience and customers’ feedback.


Project #: 285164







Organizational policies and

practices

1. The quality and quantity of an organisa-



3.5 +: MBAS has spent reasonable amount of resources for train-

ing staff recently. It was mainly for using new systems.



2 +: Technical assistance is mainly provided by top and middle

managers. Some external assistance is also provided by the

suppliers. This on ad-hoc basis.


supervisors

2.5 +: There are some informal personnel praises in place to re-

ward staff.



technology

3 +: Management always provides comprehensive rationale for

the implementation of new technology/system.




practice




3 +: Sound perception of the necessity for innovation in man-

agement and design staff.

-: Not a uniform perception of this necessity.



3 +: Management is really committed to support innovation.

-: No promotion campaigns to stimulate the staff in propos-

ing innovative ideas.


Project #: 285164




Financial Resource

Availability / Accessibility

1. Does the company have financial re-

sources available for innovation projects?

3 +: The company has reasonable resources to invest on inno-

vation projects. Patent of FiltAir receiver is a typical example

of investment of the company.





3 +: Management is well aware of international and national

initiative. MBAS has been involved in several EU and regional

funded research projects.


tion projects?


2. Learning attitude? 3 +: Proactive staff with a good learning attitude.





2.5 +: Proactive staff with a good learning attitude.

-: No perception of risk in innovation projects and some drop

in short term productivity.

TOTAL: 15.9


Project #: 285164




Figure 23: Graphical presentation of the current situation vs. the targeted situation at MBAS

7.4 Conclusions

• MBAS Business Case will be focused on PROCESS and PRODUCT INNOVATION. Process

to be taken into account during the pilot phase of ExtremeFactories will be the Quality,

Manufacturing and Design Processes.

• ExtremeFactories methodology and platform will support MBAS in formalising innova-

tion process, recording and tracking of all the events occurred in the company during

this process.

• To increase the innovation potential and improving the efficiency of the current innova-

tion process, ExtremeFactories will support MBAS in strengthening two important fea-

tures for success:

o Adapting the organizational practices and policies to embrace innovation pro-

cesses

o Improve communication throughout the value chain; company’s own employ-

ees, suppliers, and customers.

00,5

11,5

22,5

33,5

44,5

5

Organizational

policies and

practices

Implementation

climate

Management

Support

Financial Resource

Availability /

Accessibility

Learning

Orientation

Managerial

Patience

Ideal state

Current state


Project #: 285164



8 Business Case 6 – CTOOLS



Cutting Tools was established in 1980 to manufacture precision cutting machines and tools for

cutting shapes out of all kinds of flexible materials. These machines and tools are produced for

customers who then use them to perform precision cutting tasks. Customers come from a

whole range of industries from automotive, medical, pharmaceutical, printing, to shoe making

and packaging industries.

Cutting Tools (CTOOLS) is a manufacturing SME and is a tool maker for industry, and provides

cutting services for customers. Cutting Tools use the best cutting systems and tools to develop

cutting equipment for customers. The company has expertise in the use of state-of-the-art cut-

ting blades that stay sharp, precision dies and punches, and make use of the best carbide tools

in the manufacture of cutting equipment. Cutting Tools have also invested heavily in the latest

design (CAD) and computer assisted manufacturing (CAM) equipment. The company is looking

to modernise their operations and expand. To survive, and remain competitive, Cutting Tools

have made significant innovations in the cutting industry, providing a diverse range of products

and services to a niche market for accurate and complex cutting requirements. Cutting Tools is

an innovative company, which is constantly striving to produce novel cutting techniques and

products. The company has several patents for innovative cutting products, such as the rotary

cutting process, creasing process, plus a novel skin cutting process for making skin shapes for

skin grafts in the medical industry.


The organisation is comprised of 3 layers:

1. Board – Managing Director and Company Secretary (Finance)

2. Management – Production Manager, Sales Manager

3. Shop Floor – 8 workers


Project #: 285164



Figure 24: CTOOLS organisational structure

8.1.3 Technological Resources Table 18: Technological resources in CTOOLS

Hardware Function

4 * PC Computer Aided Design

3 * PC Computer Assisted Manufacturing

5 * PC Office – email and internet

1 * PC Job Management software – “Jobflow”

Managing Director (Dr. D. Robinson)

Production Manager (P. Widdal)

CAM Operators

Tool Makers

Sales Manager (D. Coates)

Design Team

Direction Secretary (A. Harvey)


Project #: 285164




Figure 25: CTOOLS Network

Partners: CTOOLS have several partners that work in close collaboration on joint ventures.

Partners are continually changing with the continuously changing nature of the jobs, as CTOOLS

does not do many repeat orders, the jobs are variable.

Suppliers: CTOOLS have many suppliers, the main ones are:

• Partwell Engineering – suppliers of cutting blades and other consumables

• Capree Engineering – suppliers of punches

• City Press Knives – suppliers of cutting blades

• Hanson Plywood – suppliers of wooden cutting bases

Customers: CTOOLS has well over 100 customers and these are changing constantly. Major

ones are Smith & Nephew (Medical), BTR, Collins and Aikman, Vitafoam.

The CTOOLS business is all about collaborative working. For example, many packaging products

require CTOOLS to source the material from one company, then to cut it for the printing (an-

other company) and ship (another company) to customer (another company). Another example

is a recent job making bullet-proof vests for Afghanistan. CTOOLS got the materials from many

suppliers, formed a multi-layered structure, assembled it, cut it, sent it to a company that heat-

ed it to form a composite, then CTOOLS cut out the final shape, and sent it to the customer.

CTOOLS operate in a volatile and ad hoc networked environment and do not have internet rela-

tionships with partners, suppliers or customers to develop collaborative networks. CTOOLS ur-


Project #: 285164



gently need to have more rapid responses to the market, need better collaborative working

environments with their partner companies.


The company makes flat bed and special rotary cutting tools for use on their rotary cutting ma-

chines as required by the customers. These tools are of various sizes and configurations. Many

of the cutting designs come electronically from customers and are transferred onto a CAD sys-

tem. The CAD system then draws out the required cutter shapes.

The company business process flow diagram is provided below:

Figure 26: Flow diagram of main process at CTOOLS

Customer

Customers provide the inputs in terms of drawings, specifications or just verbal messages or a

combination of these. Three CTOOLS persons are involved with customers, Company Secretary,

Factory Manager, and Sales Manager.

Sales

Sales works interactively with the customer to understand what the customer requires, provide

quotes, negotiate the price, and set the terms of the delivery. Sales are involved in product de-

velopment. Sales generate ideas to help to solve the customer problems or meet their needs.

Three CTOOLS persons are involved: Company Secretary, Factory Manager, and Sales Manager.

Product Development

At the moment, this function is not formalised, it is just informal development of new products

on an ad-hoc basis. However, for this project it is the key element and will be a formalised part

of the business line. This function will collect all ideas and be the conduit for the development

of the innovations. Product Development manages the innovation process. They ensure that

developments on innovations are managed on a project management basis, and that the inno-

vation process is well structured. Three CTOOLS persons are involved: Factory Manager, Sales

Manager, Design Engineer, plus other shop floor staff on an ad-hoc basis.

C ustom ers

C us tom er Serv ice

D elive ry+

Insta lla tion

T est C ut+

Adjustm ents

ManufactureProduc tion

P lann ing

D esign C .A.D .C .A.M.

Sales

Supp liersProduct

D evelopm ent


Project #: 285164



Design / C.A.D. / C.A.M.

The customer usually sends designs, drawings and requirements for the cutting by email. The

design department receives these and puts them onto the CAD system. The CAD system takes

the drawings and after the final drawing is produced, plots the shape of the cutter on the large

Cartesian plotter (CAM) or the routing machine is used to directly cut out the patterns. Then,

the plot is checked (by measuring the plotted dimensions on the base of the cutting board) be-

fore the cutter is produced. Sometimes, the customers also check the final plot.

Supplier

The supplier of cutting blades will provide some suggestions of how better to select the correct

blade material and dimensions for improved cutting and creasing the material.

Production Planning

Once an order is received, it is entered (by Sales) into the production control system (called

Jobflow). The order is given a job number. The design completed, the design and the job pa-

perwork (delivery note and job card) given to production planning. Here the job is planned out,

materials requisitioned, and components purchased where necessary. Production planning will

monitor the progress of the job throughout production (Formes and Inserting cutters).

Manufacture

This is in 2 stages:

• Formes

‘Formes’ is the manufacture of the bases for the cutters. A ‘Forme’ is the base on which the

cutting blades, rubbers, punches etc. are placed. Formes can be cylindrical (rotary cutting)

or flat (flatbed cutting). The drawing for the job is received from production planning. This

drawing contains the basic overall shape (as a full-scale template from the Cartesian plot-

ter), and the positions of all the blades, punches etc. The Forme is cut out to the right

shape (it is usually made from roller steel (rotary), or plywood (flatbed). The shape is then

checked. The drawing is then used for marking out the positions for the cutters and punch-

es on the forme. In the case of steel cylinders, fixtures for the blades and punches are

welded to the cylinder. In the case of plywood formes, locations for the blades and punch-

es are cut and drilled into the plywood. The formes are then checked against the drawing.

• Insert Blades

The technical term for this stage is ‘Ruling’, which is the process of placing blades (rules) in

a pattern on a platform. The blades are on long rolls of cutting blade, and are cut to the

correct length. The blades are then bent into the right shape. The punches are ground to

the right height. The blades are then located onto the formes, and the punches inserted.

Rubber ejection strips are then glued to the forms (these eject the material from the cut-

ters during the cutting process). These formes are now complete and are cutting tools.

Test Cutting and Adjustments

The cutting tools are located onto the cutting presses (machines provided by another manufac-

turer). The machines are set-up, and sample material is used to test the cutting performance of

the tools. The tools are adjusted as required to meet the customer requirements.

Delivery and Installation


Project #: 285164



The tools are packed and delivered to the customer. Support for this function is not required

for this scenario. The cutting tools are located onto the cutting presses. The location activity is

carried out carefully to accurately locate the cutters. The machine is set-up in terms of:

• Roller pressure

• Parallelism of the rollers (i.e. Distance between rollers along the width of cutting)

• Cutting speed

Test cuts are taken, and adjustments are made as required to meet the cutting performance

targets. The persons who perform installations are, works manager, sales manager, production

supervisor, 2 shop floor supervisors.

Customer Service

Customer service involves fixing problems at customers’ site, fixing problems over the phone

(always attempted first), and servicing of cutting tools (maintenance) done back at Cutting

Tools factory.

The persons who perform customer service in terms of fixing problems are, works manager,

sales manager, production supervisor, 2 shop floor supervisors. The customer service collect

improvement potential ideas based on the customer comments.

Team

• David Robinson – Managing Director

• Philip Widdall – Works Manager

• David Coates – Sales Manager

• CAD/CAM Team

• Shop Floor Tool Designers


Project #: 285164



Figure 27: CTOOLS Main Process


Project #: 285164



Table 19: Description of main process at CTOOLS

P1 – Innovation Process

Description Customer requests a new tool or a new way of cutting to solve their problem. They

could do this by providing a specification or a drawing. The innovation team is formed

consisting of CTOOLS design, sales and shop floor staff and often includes the cus-

tomer, and this team fully defines the boundaries and context of the problem. Then

the suppliers are involved in the innovation team as a solution to the customer’s cut-

ting problem is created and developed through brainstorming and ideas creation. The

solution is then tested, again involving the customer and suppliers to ensure the new

tool or cutting process provides the appropriate solution.

Starts Customer proposes a problem to be solved.

Team There are usually up to 5 people and 2 departments (sales and design) involved and

this is stable for each project. We involve customers and suppliers.

Location The activity occurs at the CTOOLS factory and only usually at the factory. The team is

usually in the same place, but some innovation solution work could be done at the

customers or suppliers sites. Some travel could be involved for visiting the suppliers

and customers.

Duration &

Frequency

The time taken for each project is different depending on the customer’s problem.

Typical timescales are from one day to a week. The projects are mainly carried out

during the working day, however sometimes overtime is required. The innovation

process occurs on a daily basis and can involve several projects arising in one day.

Inputs The inputs are typically an electronic drawing file or a Word file list of specifica-

tions/requirements. The file types for these inputs are quite varied, such as AutoCAD

drawings.

Outputs The output is a CAD drawing, a job card and a delivery note.

Communication

Devices & Sys-

tems

Communication is by phone and email.

Ends The innovation project ends when the customer has been satisfied with the testing of

the prototype, and that it provides the required cutting solution.


8.3.1 Innovation Process at CTOOLS

Innovation for CTOOLS is meeting the customer requirements by creating new tool designs or

creating new cutting processes or by creating new cutting machinery.

The development of new cutting processes and tools is the most important aspect of the busi-

ness. The company survives and competes by providing cutting tools and methods that are not

available from anywhere else.

So, innovation is extremely important. The innovation objectives in the company are:


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• To increase the number of innovative ideas on products from employees

• To increase the number of implemented innovation/new concepts of products

• To involve more employees in the development of new cutting products/processes –

this should lead to greater motivation amongst the workforce

• To increase the number of innovative suggestions on products from customers and sup-

pliers

• To have a managed way of developing new ideas

• To have a structure to record ideas

• To have a good method of developing innovative products


Mapping of the above presented innovation practices at CTOOLS into the specific stages of the


Table 20: Mapping of the innovation steps to the ExtremeFactories stages at CTOOLS

EFF Stage Innovation practices at CTOOLS

Inception • CTOOLS uses brainstorming primarily based on previous design experience

and review of stored design practices and solutions.

• Benchmarking is regularly carried out looking at competitors’ tools and

cutting solutions provided by competitors to CTOOLS customers. This is fa-

cilitated by CTOOLS having to copy or refurbish third-party cutting tools.

• A company is focus on its customers and indirectly benchmark itself

through brainstorming, interaction with customers and previously design

products apply appropriate practices to produce products as specified by

its customers.

• No information of studies concerning technology trends but the company

has been involved with previous high level R&D projects so aware of tech-

nology trends relating to its previous design and manufacturing practices.

• No mention of analysis of patents but probably involve with IPR as patent

issues when developing design solutions and manufacturing practices for

its customers.

• Regarding identification of problem and problem solving techniques,

company only concerns itself with design and manufacturing. The prob-

lems are presented to it by its customers and through previous experienc-

es, past RTD project involvements and brainstorming applies a variety of

problem solving techniques.

Prioritization • CTOOLS has a practice of storing previous designs and problems associat-

ed with the work carried out for its customers.

• The company uses third party software for custom made design and stor-

ing previous design practices.

• Prioritisation process is based on brainstorming.

• There is no formal classification of products but through brainstorming


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EFF Stage Innovation practices at CTOOLS

ideas for realizing design and manufacturing arrangements are prioritize

and planned accordingly.

• CTOOLS does not record the outcomes of the Brainstorming sessions,

missing relevant information for future projects. Normally during this ses-

sion decisions to solve immediate problems are taken.

Implementation • Company has a small team compose of people with a specific design and

manufacturing expertise. Knowledge areas and skills are identified by the

company and applied to each new project presented by its customers.

• Normally innovation projects are carried out with the company’s staff, not

requiring external expertise, just training activities for the operation of

new equipment.

• CTOOLS is aware of funding opportunity in the UK as well as in the Europe

and has been involved in several UK and EU funded research proposals

and projects. This repository of funding opportunities is regularly updated.

• The company business models based on supporting its customers to de-

velop and improve their products and/or services using previous experi-

ence and brainstorming practice.

• Company is capable of identifying and implementing milestones and con-

trol of the implements of milestone again based on previous experience

and through brainstorming practice.

Follow-Up • Follow up its customers and however no system in place to record their

feedback.


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and practices


tion’s efforts to train organization’s

members to use new technology

4 +: CTOOLS is training design staff (innovation team) on the

new design software system, and the staff have been in-

strumental in choosing this new technology, improving im-

plementation. The company management is now studying

the possibilities to upgrade the CRM system to a new sys-

tem, which will also involve training.

+: CTOOLS introducing new third party design software to

empower their design team.



4 +: Technical assistance is utilized by the design team from

internal and external experts.


supervisors

5 +: Bonuses are provided by the company to all staff for good

performance.


reasons for the implementation of the

new technology

4 +: New technology is introduced in collaboration with the

staff and they are aware of the reasons why the new tech-

nology is being introduced.



1 -: Not much time for users to experiment with the new

technology as it is used straight away, and training is mostly

on-the-job.


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3 +: Very good perception of the necessity for innovation by

both the management and also the design staff.

-: Not a uniform perception of this necessity.



4 +: Management is really committed to support innovation.

Management understand that as a niche provider of ad-

vanced accurate cutting tools, the company must continue

to provide new novel cutting solutions that other competi-

tors cannot.

-: No promotion campaigns to stimulate the staff in propos-

ing innovative ideas, and no official innovation record keep-

ing.



1. Does the company have financial re-

sources available for innovation projects?

4 +: The company annually commits over 10% of turnover for

research and development. The company has the financial

resources for innovation projects.



ternational initiatives to promote and

fund innovation activities?

4 +: The MD has worked on 26 national UK and EU RTD pro-

jects and is well aware of the funding available for innova-

tion activities.

-: Not aware of other funding opportunities.


tion projects?

5 +: CTOOLS staff have over 300 years of experience in the

cutting tool trade, and therefore any risks are mitigated by

this availability of a large pool of knowledge

2. Learning attitude? 3 -: Learning attitude varies amongst the staff. However those

involved in the innovation process generally have a good

learning attitude.

Managerial Patience 1. Are managers committed to the long-

term results of the innovation and under-

4 +: Most innovations tend to be short term. The 3 Managers

are fully committed to both the long term and short term


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stand a short-term decline of the produc-

tivity during its implementation?

innovations within the company.

-: No perception of risk short term declines in productivity

with innovation projects.

TOTAL: 22.6


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Figure 28: Graphical presentation of the current situation vs. the targeted situation at CTOOLS

8.4 Conclusions

• CTOOLS Business Case will be focused on PRODUCT INNOVATION. Processes to be taken

into account during the pilot phase of ExtremeFactories will be the innovation processes

supporting the design and development team including contributions from customers

and suppliers.

• ExtremeFactories methodology and platform will support CTOOLS in SYSTEMATIZING its

innovation process, keeping records and tracks of all the events occurred in the compa-

ny during this process.


ciency of the current innovation process, ExtremeFactories will support CTOOLS in rein-

forcing 2 key aspects for success:

o Adapt the organizational and design practices and policies to embrace innova-

tion processes;

o Improve communication with the staff, suppliers and customers.

00,5

11,5

22,5

33,5

44,5

5

Organizational

policies and

practices

Implementation

climate

Management

Support

Financial Resource

Availability /

Accessibility

Learning

Orientation

Managerial

Patience

Ideal state

Current state


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9 Business Case 7 – Nikari Oy



Nikari Oy, founded in 1967, is a manufacturer of sustainable wood design products of exquisite

quality. The founder - master cabinet maker, designer Kari Virtanen has worked with the great-

est Finnish architects and designers such as Alvar Aalto and Kaj Franck. Through decades his

determination to concentrate on wood and its ecological benefits has gained us great

knowledge about Finnish wood and surface treatment materials like oils, waxes and soaps.

Milestones of Nikari Oy:

• 1967 Nikari is founded in Osthrobothnia by cabinet maker Kari Virtanen

• 1987 Kari Virtanen receives the Scandinavian Bruno Mathsson Award

• 1993 Nikari moves to Fiskars village, centre for Finnish art and design

• 1993 Kari Virtanen receives the SIO (Finnish association of interior architects) Furniture

Designer of the Year award

• 1993 The Fruit Bowl designed by Kari Virtanen is chosen into the permanent collection

of the Museum of Modern Art New York

• 1996 The co-operation between Rudi Merz and Kari Virtanen begins

• 1998 Steven Holl chooses the KVT2 to be the visitors’ chair of Kiasma Museum of Con-

temporary Art Helsinki

• 2005 Kari Virtanen receives the State Prize for Design

• 2006 Rudi Merz receives the annual award of Finnish Association of Artists and Design-

ers

• 2007 Nikari celebrates its 40 years

• 2009 Kari Virtanen receives the Pro Finlandia medal from The President of Finland

• 2010 License manufacturing of Nikari products is begun in Kyoto, Japan

Nikari produces wooden furniture and custom-made furnishings of the local FSC certified wood

to public premises as well as private homes.

Table 22: Nikari Products

Chairs


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Tables

Lounge chairs

and couches

Stools and

benches

Other products


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Figure 29: Nikari Oy organisational structure


Nikari manufactures its furniture with handicraft tradition. The company does not utilize auto-

mated computer controlled manufacturing lines. However, the furniture design is computer

aided. Readiness to use any online and mobile communication tools exists.


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Figure 30: Nikari Network

9.1.4.1 Customers

Nikari directly serves both B2B and B2C customers, though its sales focus is in the B2B segment.

The B2B segment the customers are

• architecture companies and architects

• real estate developers and EPCM consults and

• the actual corporate customer.

There has been a change in the industry as architects used to decide on the furniture too. How-

ever, now the EPCM consults are in control of costs and often they make the decision from op-

tions provided by the architect. In some cases the final corporate customers want to make the

decision themselves, though this is still relatively rare.

The B2C customer groups are

• direct customers, who personally purchase their furniture directly from Nikari

• indirect customers, i.e. users of the furniture in the public spaces

Direct sales to private customers have been traditionally just a small part of Nikari’s revenue.

However, opportunity to use online sales channel makes it possible to serve much wider target

group than earlier. Nikari furniture is enjoyed by masses of indirect private customers, who use

the furniture in public spaces like schools, offices, churches and restaurants. Though they most

often don’t know or even care about the brand, they are brand marketing opportunity for the

company.


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9.1.4.2 Suppliers

Nikari’s suppliers represent all parts of its value chain, from the raw material purchase to deliv-

ery and logistics.

Material, elements:

• Wood: Nikari uses FSC and PEFC certified wood and non-certified wood from sustaina-

ble local forests in its products and relies only a few validated sources. The company has

two regular suppliers and only in special cases it makes a tender for offers for broader

supplier base.

• Leather and fabric: Upholster materials used are ecological, organic or recycled.

• Cushion: Nikari uses ecological, organic or recycled cushioning material. Currently they

are using for example cushions made from recycled plastic bottles. The number of pro-

viders is limited and they may come outside of Finland.

• Cupboard and door handles, miscellaneous elements: Small elements like handles are

manufactured by small sub-contractors

Manufacturing:

• Large orders: If the order is a large one, Nikari outsources the manufacturing to another

Finnish sub-contractor. There are several options.

• Upholstering is outsourced

• Lacquering and painting is outsourced

• Door and window manufacturing subcontracted

Logistics:

• Inbound wood storage is handled by the suppliers. Occasionally done by Nikari. Main

source of wood material locates only less than 100m from the Nikari premises

• In case of large orders the outbound storage is handled by the subcontractors

• Inbound transport outsourced

• Outbound transport outsourced

9.1.4.3 Partners

Nikari Sweden (est. 2012) is a partner handling sales in Sweden

Nikari Japan operates with production license for the Japanese markets in particular and Asian

markets in general.


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9.2.1 Research & Development (Product Development)

Process

Figure 31: Flow diagram of Research & Development (Product Development) process at Nikari


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Table 23: Description of Research & Development (Product Development) Process at Nikari

P1 – Research & Development (Product Development) Process

Description Nikari has extremely agile RTD process. The initial idea will be first sketched and

based on that a prototype will be built within a day or two. This prototype will be

then shown to potential customers in order to get feedback.

Starts The RTD project can be provoked by a customer (architect, constructor, EPCM con-

sult) or anyone in the organization. Sub-contracts propose often incremental changes

to the plans in order to make the production more efficient.

Team The whole Nikari organization is design and development focused. However, out of

the whole organization Creative director and Product Development Director are

mainly focusing to new products. It is estimated that they use more than 50% of their

time to future products.

Every month a specially appointed Model group meats to review on-going projects,

change requests, new design ideas. The group includes the managing director, Crea-

tive director, Product development director, Production director, and Designer.

In addition to internal resources, Nikari receives business development suggestions

from the customers and from the manufacturing partners. The latter group proposes

often incremental changes in order to improve production efficiency.

Location The product development work is done mainly in the Nikari’s own premises and occa-

sionally in the external manufacturing plants.

Duration &

Frequency

Design and product development is in the core of the company, so in that sense one

can claim that the product development process is continuous.

Evaluation of ideas and improvement proposals are formally done once in a month,

though the approvals can be done in a very fast time.

Inputs The design ideas are normally sketches of a new product. Proposals from the subcon-

tractors are often in verbal format.

Outputs Real-size prototype, detailed product information, architectural dimension pictures

Communication

Devices & Sys-

tems

AutoCAD

Ends The process ends if the idea is discarded in any point of the process or it moves to

production. Nikari manufactures only after an order, thus there is no inventory of

new products waiting to be sold.


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9.2.2 Project Sales Process

Figure 32: Flow diagram of Project Sales process at Nikari


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Table 24: Description of Project Sales process at Nikari

P1 – Project Sales Process

Description Nikari markets the products and skills to the architects and to potential end cus-

tomers too. Sometimes architects make an early-phase non-binding request for the

furniture. Depending on the size and the schedule of the project, it might take from

6 to 24 months to get binding offer from the EPCM consultant of the project. To-

day, it is the EPCM Consult or in some cases the end customer that makes the final

decision.

Starts The project sales process starts normally when a project architect non-binding re-

quest for the furniture. This request may be done half or even couple years before

the actual tender for offer.

Team The sales visits are done by the managing director, sales manager, and creative

director.

Replies to the offers are done by a team formed by the managing director, creative

director, product development director, production director, designer and the sales

manager.

Location Active sales are done by making sales visits in to architecture companies and pro-

fessional fairs.

Offers and prototypes to support the offers are done in the Nikari facilities in

Fiskars, Finland.

Duration & Fre-

quency

The sales visits are a daily task for the organization.

Reflecting the nature of construction projects the project sales processes can be

relatively lengthy. After an architect company has received Nikari’s offer, the final

decision-making may take months or even years. However, the actual offer can be

made within a days if it is a question of existing designs. If the customer needs

unique pieces a design time of some weeks or maximum months is needed.

Inputs The binding offers include detailed tender, architectural drawings of the site, all

related plans, dimensions and information on the existing or coming fixed furni-

ture.

Outputs In the sales phase, Nikari provides marketing material, including product design

dimensions for architects’ usage.

A non-binding offer most often goes to architects and it includes dimension draw-

ings, product details, technical data, wood and fabric material samples and prelim-

inary pricing. In case of new product the input may include also a real size proto-

type for the customer’s review.

The binding offer includes the same items as above with detailed pricing, contract

terms, and production schedule.

Communication

Devices & Sys-

tems

Normal communication tools from snail mail to Telcos. Designs are made with Au-

toCAD and the drawings are delivered electronically and printed.

Ends The process ends to acceptance or refusal of the offer or to organizing the produc-

tion.


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9.2.3 Production Process

Figure 33: Flow diagram of Production process at Nikari

Table 25: Description of Production process at Nikari

P1 – Production Process

Description Nikari produces small quantities in their own facilities. However, larger orders are

fully or partially outsourced, e.g. an order of less than 20 tables can be manufac-

tured at their own premises. The sub-contractors are long-term partners and the

manufacturing capacity is available without any delays.

If the designs contain upholstery and cushioning, those parts are delivered

Starts The process starts from an order from a customer.


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Team The production director manages the production. His responsibility is organizing and

optimizing the whole process after the customer’s order until the delivery.

Nikari has five (5) own in-house carpenters that handle smaller orders. In larger

projects the sub-contractors, logistics and services add the number of participants

up to 40 persons.

Location This process happens either at Nikari’s own premises or at the sub-contractor’s

manufacturing plant. Finishing (lacquer, wax) and upholstering is done in sub-

contractors’ locations.

Duration & Fre-

quency

This manufacturing process is executed based on a customer request only.

Every Monday the Production director holds a production meeting, where all on-

going projects are reviewed.

Inputs The production process of each order is detailed in Production info card that in-

cludes all necessary information like work pictures, detailed material lists and

schedule.

Outputs Maintenance instructions, product info card, delivery lists for logistics.

Communication

Devices & Sys-

tems

Microsoft Office Excel for the manufacturing process management. The file contains

production schedules, production info cards, instructions, and delivery time.

The products Nikari manufacture are, after all, very simple and have rarely more

than few modules. Therefore, the company has not seen any need to invest to ERP

tool. This decision might be revised in case there are international satellite manu-

facturing facilities that might require more automated control over the material

logistics and available manufacturing capacity.

Ends The production process ends to customer delivery.


9.3.1 Innovation Process at Nikari Oy

Nikari embraces high quality handwork design innovation. Nikari’s Innovation process follows

the same track as its RTD process described earlier (See chapter 9.2.1).


Mapping of the above presented innovation practices at Nikari Oy into the specific stages of the


Table 26: Mapping of the innovation steps to the ExtremeFactories stages at Nikari Oy

EFF Stage Innovation practices at Nikari Oy

Inception Nikari has a very compact team fully dedicated to design business. The inception

normally happens through everyday conversation within the team.

Nikari is an active member of the furniture design community and participates


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EFF Stage Innovation practices at Nikari Oy

actively to industrial fairs and follows the design industry media.

Known from the creative skills, the company is often also asked to solve design

challenges by the end customers and architects.

Nikari receives high amount of proposals from young designers, who want to es-

tablish a relationship with the company. These proposals arrive through email and

or they are provided in the industrial fairs.

Prioritization Regardless the source, all ideas and proposals are analysed in the Model group

once in a month. The company tries to provide feedback to all proposals.

There is no official evaluation template, but the criteria are following: 1) Fits for

the values of Nikari, i.e. Wood, Unique Design, and Sustainability, 2) Commercial

potential, i.e. volume and price potential, 3) Suitability for (mass) manufacturing.

Only ideas that have led to drawing of blueprints and building a prototype are

archived for further use.

Implementation Nikari’s B2B project business model doesn’t require large inventories of pre-

manufactured furniture for show room purposes. This allows Nikari to run the

business with low capital expenditure and low inventory risk. That makes a rele-

vant difference to the C2C business model.

The quality requirements of Nikari are very high, which limits the number of po-

tential sub-contractors. Internationally, such high carpentry skills are available in

Japan and some parts of North America.

Follow-Up Nikari follows constantly the output quality and cost structure of the sub-

contractors.


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Organizational policies and

practices




2 Based on its values. Nikari relies on traditional manufacturing

technology and is not very active in introducing new technol-

ogies within the company. This is a deliberate decision and

the low score reflects merely to the level of technological

activity than lack of training. When something new is intro-

duced, the training is very thorough.



4 Benefit of being a small company, the user support is availa-

ble for all members of the organization without any delays.


supervisors

4 In this question, the weight is in the praise instead of a finan-

cial compensation. Ability to plan, build and commercialize a

result of a creative process is extremely important.



technology

4 Once again, the company is very small and the whole team is

easily available. Moreover, changes in the tools and introduc-

tion of new technologies and methods are discussed with all

employees.



2 As a creative company, Nikari is open for new ideas and pro-

cesses as well as new technologies if they support the com-

pany goals and are aligned with the company values. Howev-

er, time for technological experiments is limited as the size of

the workforce is really small, One person doing experiments


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equals 10 % of the organization. This is important to under-

stand in the EFF project, because small companies have to

get services that are easy to integrate to their daily routines.




5 The organization is fully aligned with the goals and values of

Nikari. There is no question whether implementation of inno-

vation is important or not. Creativity and innovation is in the

core of Nikari.



5 The management are also the owners. They are fully commit-

ted to innovation and they participate in the creativity meet-

ings.





2 Compared to bigger companies the absolute financial re-

sources are naturally limited. However, Nikari’s future as a

financially sustainable company is tightly linked to design

innovation. In that sense, they invest proportionally very big

share of the financial resources to the innovation process.





1 Very limited understanding of the opportunities.


tion projects?

3 The team evaluates all design innovation ideas also through

its commercial potential. This means that the commercial risk

is always taken in to account. The process is optimized for

project sales, i.e. no large-scale manufacturing without a cus-

tomer order, which means that the risk is always very limited.

2. Learning attitude? 5 The team consists mainly from creative professionals, whose


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ambition is to continuously improve their performance.





5 The founders and workers of the company are natural born

innovators

TOTAL: 23,7


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Figure 34: Graphical presentation of the current situation vs. the targeted situation at Nikari Oy

9.4 Conclusions

Nikari’s management states that the long-term success of their company is based on “design

innovation” and this reflects to the overall atmosphere within the company. This is clearly visi-

ble in the assessment too – Learning orientation, Managerial patience, Managerial support and

Implementation climate receive high score.

Nikari is eager to grow both in domestic and international markets. Global sales of furniture

require international manufacturing and logistics solutions. Therefore, the company will need

new technology-enhanced processes in marketing, manufacturing and logistics. Naturally, this

applies to the innovation process, which until now, has been done basically in one location. EFF

platform should be tested in Nikari not only in the current situation but also anticipating the

potential future operating model.

Nikari’s small size makes it a perfect testing ground for the EFF platform. For them, introducing

new technologies has not been high in the agenda because of the company values that empha-

size traditional craftsmanship and also because of the implementation costs. Taken these into

account, if the EFF platform is costly and time-consuming to implement in Nikari, it will face the

same difficulties in the other small companies too.

The EFF platform will be tested in the following processes:

• Creative furniture design and innovation process

00,5

11,5

22,5

33,5

44,5

5

Organizational

policies and practices

Implementation

climate

Management

support

Financial Resource

Availability

Learning Orientation

Managerial Patience

Ideal state

Current state


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• Outsourced manufacturing process


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10 General Conclusions

The industrial SME participants in the ExtremeFactories project, as it can be seen from the text

above, are rather different regarding the working areas and regarding the innovation manage-

ment practices. An attempt to enable a general analysis of current practices in innovation man-

agement in such a diversified SME community is described here.

The “as is” innovation management process was compared to the “to be” ideas, taking into

account profiles of the companies and corresponding production processes. Mapping of the “as

is” situation to the ExtremeFactories innovation management steps and evaluating numerically

the current situation versus key innovation factors in each participant company gave the results

analysed as input data for further project activities.

From the obtained results it can be seen that the lowest average note was identified for the

Organizational policies and practices and the highest in the Managerial Patience, what can be

considered as rather expectable result. In addition the results obtained for the Organizational

policies and practices justify the project necessity.

Individual scores in the Innovation effectiveness assessment should be analysed more carefully

what is also clear keeping in mind a.m. differences among the companies and different im-

portance of specific factors for each of them.

As a final conclusion it can be said that all the ExtremeFactories project participants see a very

good opportunity to enhance their innovation management process through the envisaged

project results.

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