BOOK REVIEW -  24/7 Innovation

CONFERENCES OF INTEREST - BDI Forum on DFMA; SCPD 8th Annual Conference; PDMA

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GGI's 2002 Product Development Metrics Survey has just been published.  Each month GGI will share selected results with RapidNews readers.  The 2002 Survey focused on resource and capacity management practices and metrics.  One aspect of this is how companies load their RD&E capacity pipeline. Results are summarized below.

- A significant majority of respondent companies are now following a rigorous project/product selection process.  80% of the firms used a 2-Step or 2.5-Step methodology.

- The firms are applying their selection process with much more discipline.  Only 29% of the projects make it all the way through the second step as compared to 59% in the 2000 survey.

- With the increase in process rigor comes more formality.  79% of the firms that followed a multi-step selection process had formal meetings for Step 2 (Development) approval.

The original survey questionnaire can be found at http://www.goldensegroupinc.com/biennial/surveys/2002MetricsSurvey.pdf. Complete survey results are available for purchase at http://www.goldensegroupinc.com/cgi/catalog.cgi?display_p355.

GGI's next Product Development Metrics Survey will be conducted in 2004. Please contact me at ars@goldensegroupinc.com if you wish to participate.

Corporate Profile:  We are pleased to announce that we have just updated our company profile on our web site. Because this is the most frequently visited page on our site, we actually are a bit embarrassed also, because we have not updated this since 1993.  You will find the most current information about GGI here: http://www.goldensegroupinc.com/copro.shtml.

Press Release:  We will shortly be issuing a press release to formally announce the results of our 2002 Product Development Metrics Survey. This press release will be featured on all major national news services including Associated Press, Reuters, Wall Street Journal, and USA Today, as well as a large number of industry-specific publications.

24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Change, by Steven M. Shapiro.  McGraw-Hill Companies. 2002, 1st edition. 256 pages.

 

One of the key sources of competitive advantage is continuous innovation, argues author Steven Shapiro in 24/7 Innovation.  Reaching this level of innovation can only be accomplished by creating a culture of innovation which permeates the everyday activities of all employees.  This goes far beyond focusing on process improvement. It means developing your innovation capability. Shapiro explains the concept of a capability as "a combination of people, processes, and technology that enables a company to perform activities.  Capabilities derive from an explicit business strategy, and they deliver measurable results."  All capabilities are composed of the following five components:

 

1.  Process

2.  People

3.  Strategy and Customers

4.  Technology, and

5.  Measures and Performance.

 

For a company to be truly innovative, all aspects of the innovation capability must be developed. We will explore each here in some detail.

 

Innovation in a company should not be random or reactive. Innovation should be enabled by managing the "interaction of processes."  The author defines a process in this context as "a way of organizing a company's resources that establishes cross-functional coordination throughout the firm."  When business processes are properly coordinated, they work smoothly together to accomplish the company's goals while encouraging innovation.  Process innovation focuses on generating, evaluating, and implementing creative solutions, prompted by asking the following questions:

 

a. Rethink:  challenge the reasons and assumptions behind current processes - "Why...?"

b. Reconfigure:  investigate the activities involved in the process for potential redesign or elimination - "What...?"

c. Resequence:  evaluate timing and order of activities - "When...?"

d. Relocate:  minimize distance and maximize communication - "Where...?"

e. Reduce:  focus on the frequency of activities - "How much...?"

f. Reassign:  look at the people performing the work for outsourcing or other opportunities - "Who...?"

g. Retool:  investigate how technology and competencies function together to get the job done - "How...?"

 

The process of innovation itself can be a tool to shift the company's culture.  Effective culture change must be led from the top, in all aspects from the practical to the symbolic.  Leaders must create a sense of urgency to motivate change and communicate a clear vision to drive it.  Leaders must also be able to overcome resistance from those reluctant to change. In order to effect culture change, leaders must be able to identify the best resources for the job (people, processes, technology) and have the clout to reassign them where needed.

 

The innovation process should be a systematic approach to identify opportunities, to generate ideas and to refine them into valuable solutions.  Many tools and techniques exist within various innovation processes, all of which must balance the tasks of divergence and convergence. Divergence means broadening to generate many ideas, while convergence means narrowing to evaluate ideas for viability.  Other aspects of creating a culture of innovation include getting everyone to practice macro thinking, having everyone develop an entrepreneurial mindset, removing fear of failure, and helping employees to feel like owners.

 

True innovation must also force the company to look outward toward the customer.  The following four strategies are offered:

 

a. Add more value for your customers through more convenience, making your customers feel good about your products and decommoditizing (customizing) your products

b. Listen to your customers through collaboration to fully understand their needs

c. Serve your customers by delivering solutions to fulfill their broader goals

d. Hire your customers by partnering with them and involving them in part of the process.

 

Use technology as a transformational element to enable innovation in the following ways:

a. Create a virtual enterprise through outsourcing with strategic partners

b. Change the rules of the game by creating entirely new business rather than automating existing ways of doing business

c. Collaborate across the value chain through seamless sharing of information. Example: ClickCommerce service (an information clearinghouse) was used by Caterpillar in its redesign of the engine production process, saving $1 million a year by reducing outsourcing costs by 67%.

d. Increase the knowledge of your employees through use of technologies such as distance learning

e. Launch new businesses as a means toward innovation.

The author also cautions against letting technology take over or get too far away from the goal, rather than helping to drive innovation.

Measurement is essential, especially during a period of change.  It's important to find the right things to measure in the right ways. The author recommends the following ways to use measures effectively:

a. to communicate a range of performance targets

b. to compete successfully by making strategic decisions based on data

c. to compare the company's performance with that of others

d. to compel corrective actions by identifying variances that exceed acceptable limits

e. to comply with regulatory standards

f. to complete projects on target

g. to commit employees to the company's priorities through recognition and reward mechanisms

Measures drive innovation by focusing on outcomes, shooting for stretch performance and measuring the right things. To find the right measures for your company involves understanding and measuring the key stakeholders; the strategies, processes and capabilities required to satisfy stakeholder needs; and stakeholder contributions needed.

Also covered are the technique of targeting to expand innovation, and the stages a company must experience to achieve pervasive innovation.  A commitment to 24/7 innovation means a new way of looking at the world that can sustain your company in the face of stiff competition.

Summarized from "CAD/CAM Interoperability: State of the Practice," by Gary K. Conkol; CASA/SME Blue Book Series, 2002. Presented as a workshop at the CASA/SME Technical Forum, "CAD Interoperability," on October 5, 2001.

The proliferation of CAD/CAM systems over the past 4 decades has produced a complex and challenging problem: interoperability.  A company with one chosen CAD/CAM system, or several different ones, must exchange data and files internally between groups, with different suppliers, and possibly with customers, all of whom might have different CAD/CAM systems. This article summarizes the aspects of interoperability and the major issues of concern.

Since the release in 1960 of the first commercial CAD/CAM system, Unigraphics, hundreds of new systems have appeared. A survey conducted in 2000 documented over 330 CAD/CAM systems just in the mechanical field.  Standards and specification have been developed to manage the interoperability problem, such as the Initial Graphics Exchange Specification (IGES) and Data Exchange Format (DXF).  The interoperability problem became more significant because of both the number of systems and an increase in complexity.  Early systems defined products with points, lines and arcs, which have now expanded into using surfaces, solids and objects.

Levels of interoperability:

Level I - Physical/Logical Transfer:  file transfer on floppy disks, CDs or over the Web.  Issue 1: file size limits - choose best method for transfer (floppy disks, CDs or email for small files, FTP across the Internet for large files). Issue 2:  security - make information accessible to recipient in a controlled manner.

Level II - Functional Transfer:  identifying the application and the objective of the transfer so that the two systems can understand each others' features mathematically.

System Features:

A study of mechanical CAD systems by the National Institute of Standards (NIST) - Manufacturing Extension Partnership (MEP) found 211 identifiable features among 260 systems.  These were tested to determine which features were operational on which systems and for what applications.  Another effort to identify features was through the international standard STEP (ISO 10303). STEP defined application protocols (APs), which identify the data and the context in which it is used.  The features you use and how you apply them will lead to determining an interoperability strategy for your company, i.e., what system, methods, and standards are best for your application.

Classes of Complexity and Acceptable Modes of Transfer:

1. Concept visualization - fax, JPEG or native formats (DXF, DWG, etc.)

2. Dimensional (2D or 3D) verification - fax, DXF, native formats or IGES

3. Packaging or fit (3D) - IGES or native formats

4. Review, modification and return - native formats, IGES, or STEP AP203

5. Surfacing - native formats, IGES version 5.0 or above, or STEP AP203

6. Machining - native formats, IGES version 5.0 or above, or STEP AP203

7. Weight analysis - native formats, IGES version 5.3 or above, or STEP AP203

8. Stress or thermal analysis - native formats for CAD plus native formats for FEM files

9. Additional analysis, NVH, thermo, aero, EMA, etc. - native formats or STEP with appropriate AP

10. Design optimization - STEP protocols

Demands on Suppliers:  Using the same CAD system is best, but not always possible.  Use a common gateway to define a standard format for transferring data to and from the supplier.  Many companies standardize on CATIA because "it is one of the most extensive systems able to incorporate most of the commonly used data elements."

Data Standards:  There is a choice between dejure standards and proprietary formats. Dejure standards are openly developed and publicly defined (such as IGES). The drawback is that the time it takes to develop the dejure standards often causes a lag in implementation of the latest features offered by major CAD systems.  Dejure standards are still considered advantageous over proprietary formats, for two reasons.  First, interpretations can vary, and direct translators used to interpret proprietary formats can introduce small errors.  Second, proprietary formats are version dependent, which can be expensive to keep up to date.

Keeping Pace with Business:  As the design evolves, all exchanges with suppliers must be coordinated to avoid conflicting requirements.  The exchanges include business systems that communicate forecasts and orders, and design systems that communicate detailed product definitions.  Version control and clear decision points for key actions (like tooling) are critical to avoid rework and out of control design and manufacturing processes.

Regulatory/Security:  Security procedures must address governmental regulations, intellectual property and protection from malicious attacks.  Companies must address inconsistencies between regulations and policy to insure proof of meeting required regulations.  Protecting intellectual property becomes an issue as a design is created or modified; agreements must be in place to define property rights, especially when the data that is shared represents competitive advantage.  Data transfer over the Internet must be protected from viruses and other attacks by protecting the sending and receiving operations and by allowing access only to authorized users.

Interoperability continues to evolve, from simple file transfer to Web-enabled tools and dynamic databases.  "The entire concept of transfer is breaking down as Web-enabled technologies blur the definition of data location. ...Design and manufacturing companies need to embrace [Java, object-oriented routines and grid computing] and use them to their advantage to product customer satisfaction while optimizing their business."  Companies should simplify their data transfers to only what is necessary, and design a strategy that meets the needs.  Also, review the STEP protocols for applicability to your business; these standards will help structure and integrate the data into the business model and will allow use of Web-enabled technologies.  Companies must evaluate their current and future needs with an eye on anticipated developments in technology, in order to make the best decisions on an interoperability strategy.

2002 RD&E Survey - Resource & Capacity Management: Complete results from our 2002 Product Development Metrics Survey are now available, including our most detailed "RESULTS" report.

The survey focused this year on the following 5 areas of resource and capacity management:

- Loading the RD&E capacity pipeline,

- Providing capacity for RD&E activities,

- Balancing cross-functional resources (staffing ratios),

- Using systems, tools, & metrics to manage capacity, and

- RD&E metrics used in industry.

The 3 versions of the survey results reports that we offer for sale to the public are

1. 2002 SURVEY HIGHLIGHTS: A text-only report (65 pages),including the full text of all the results and analysis of the survey population analyzed as a whole,

2. 2002 SURVEY SUMMARY: A report of composite results, where the survey respondents are analyzed as a whole (116 pages, including a full set of graphics), and

3. 2002 SURVEY RESULTS: The most detailed report, complete with the composite results and "special cuts," where the survey population is segmented and analyzed in the following groups: Public vs. Private, Smaller vs. Larger, Process vs. Repetitive/Discrete vs. Job Shop, Higher Technology vs. Lower Technology, and More vs. Fewer Employees (223 pages).

These reports are available in the Market Research section of GGI's iStore (http://www.goldensegroupinc.com/iStore/store.html).  The original survey questionnaire as well as a description of the survey (including survey focus and demographics, tables of contents for the 3 reports, and examples of key findings) can be found at the Market Research Reading Room at http://www.goldensegroupinc.com/readmarket.shtml.

GTK-Gateways To Knowledge: Your resource for industry and product development related information and contacts offers thousands of links to providers of technologies and services for line management functions. The main entrance to GTK can be found at:

 

Product Registration:  This NEW Gateway offers links to companies that provide product and business practice registration services. The URL is located at:

Featured Item: GGI's iStore features one deeply discounted offering, which changes periodically. The current Featured Item is the "2000 Product Development Metrics Research Summary" (MR12).

This 96-page report presents the detailed results of GGI's 2000 Product Development Metrics Survey, which focused on metrics systems in use in industry as well as portfolio management. The report is organized in 5 sections, each of which contains factual observations, management analysis and a full set of graphics. This report, which analyzes the survey population of 122 respondents as a whole, will provide you with detailed information on

1.  R&D linkages to corporate strategy,

2.  Portfolio management metrics,

3.  Product selection metrics,

4.  Product success metrics, and

5.  Actual metrics in use in industry.

This research is still valid, given the fact that the economy has not been in a state of high growth for the past few years. We have found consistency between the 2000 and 2002 surveys in areas where we could compare.

The price for the report has been dropped from $1920.00 to $1152.00, a deep discount of 40%. For more information or to purchase this valuable report, go to

http://www.goldensegroupinc.com/cgi/catalog.cgi?display_promo.

Registration Seminar:  GGI, in partnership with Management Roundtable of Waltham, MA is presenting the Product Development Metrics Portfolios (PDMP) seminar on May 14 and 15 at Batterymarch Conference Center in downtown Boston.  This is the second public offering of this brand new seminar created by GGI, based on the positive response from the first run at MRT's Metrics Conference in October, 2002 in Chicago.  The purpose of this day and a half seminar is to create a set of metrics to manage R&D as a whole. Participants will walk out with a metrics portfolio suitable for implementation upon return to their company.  The course is beginning to fill up, so register soon.  More detailed information is available on GGI's web site: http://www.goldensegroupinc.com/, or on the Management Roundtable site: http://www.roundtable.com/Event_Center/PDMP/pdmp.asp?co=GGI.

In-House Seminar:  Bring the PDMP seminar on-site to your company for a focused and productive day-and-a-half workshop to develop your R&D metrics portfolio.  The in-house seminar is tailored to your company's individual needs and allows your whole team to collaborate on a metrics strategy and implement it right away.  For more information, including a detailed brochure, go to

http://www.goldensegroupinc.com/pdmp_onsite.shtml.

Coursebook:  The companion Coursebook is also available for purchase at the GGI iStore. The product number is S4 "Product Development Metrics Portfolios (PDMP) Coursebook" [279 pages].  The Coursebook outlines techniques and tools to help you size, assemble and implement a comprehensive collection of product development metrics.  The book includes descriptions of infrastructures for corporate vs. project metrics and for proactive vs. predictive metrics. A superstructure of metrics in 10-12 areas is also described.

For more information on ordering this coursebook, go to GGI's iStore:

2003 International Forum on DFMA (BDI):  Boothroyd Dewhurst's 2003 International Forum on Design for Manufacture and Assembly will be held June 17-18 in Newport, RI.  The goal of this conference is to provide expert opinion on DFMA and other early design technologies. Manufacturing leaders and research leaders will be on hand to answer your questions on such topics as cost management and reduction, lean manufacturing, shrinking time to market, concurrent engineering, and design for environment.

At the conference, Brad Goldense will present "Resource & Capacity Management:  Best Practices for Cross-Functional Product Development."

For more information and to register, go to BDI's web site: http://www.dfma.com/forum/index.html.

SCPD 8th Annual Conference: The Society of Concurrent Product Development's 8th Annual Conference will be held June 11-12 in Tyngsboro, MA. The theme of the conference is Achieving Concurrent Product Development.  The conference will feature hands-on sessions as well as tracks on CPD Lessons Learned and Engaging Top Management in CPD.

More detailed information will be available soon at SCPD's web site: http://www.scpdnet.org/boston/index.htm

PDMA International Conference:  Advance notice for PDMA's Annual International Conference, to be held October 4-8, 2003 at the Boston Marriot Copley. The conference theme is The Business of Product Development:  People, Process and Technology Across the Life Cycle.  The conference will focus on successful product development and product life cycle management, with an emphasis on how-to's and new techniques to apply immediately to your competitive advantage.  Three conference tracks are featured: People, Process and Technology.

Brad Goldense is part of the conference planning team, and he will be a track chair for the Process Track.

More information is available at PDMA's web site: http://www.pdma.org/2003/.

Winning Practices for Product Development: This free, online seminar series is co-sponsored by Sopheon and SCPD.  These one-hour, online events feature experts and leading practitioners who will share process knowledge and practical advice about ways to improve your product development performance and results.

The currently-scheduled webinars are:

29 April - Metrics: Key Principles for Measuring Product Development Effort, presented by Jerry Groen, Senior Program Manager in the Hospital Products Division of Abbott Laboratories

15 May - Raise Your Returns on Innovation, presented by Greg Stevens, President of WinOvations, Inc.

5 June - Taking Time to Market Beyond the Hype, presented by Preston Smith, founder of New Product Dynamics

Alexander Haig's World Business Review: Brad Goldense has made several appearances on Alexander Haig's World Business Review last year. Streaming video is available for all shows, which aired on August 4, September 29 and December 15, 2002. See below for details.

One final broadcast of the September 29 In-Studio interview, a 22.5 minute program, will be shown on the PBS Business and Technology Network (a subscription service) and on Tech TV (for digital cable subscribers) sometime soon. We will let you know the specifics when they are available.

December 15 In-Studio with Alexander Haig (7.5 minutes) on CNBC paid programming: Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr3

September 29th In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment (as well as the entire 30-minute show) is available at:  http://www.goldensegroupinc.com/ggiontv.shtml#wbr2

August 4th On-Location at GGI (3.5 minutes): This On-Location field report is available in streaming video on GGI's website. To see the program, go to:  http://www.goldensegroupinc.com/ggiontv.shtml#wbr1

The web page includes links to download a streaming video player, if you do not currently have one installed on your computer.

For more information on any of Brad's appearances on television, go to:

http://www.goldensegroupinc.com/ggiontv.shtml.

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GGI RapidNews is an e-mail publication from Goldense Group, Inc (GGI). Its subject matter includes survey findings, company news, book reviews, key industry conferences and R&D information of interest to clients and associates. Please send communications to rn(at)goldensegroupinc.com. Thank you.