5. Tools & Techniques

1. Creativity & innovation2. BPR3. QFD4. Eliminating NVA

Tools & Techniques

1. Creativity &

Innovation

Innovation

A business enterprise has two - and only two basic functions: Marketing & innovation. Marketing and innovation produce results ,

all the rest are costsPeter Drucker

Creativity & Innovation

Creativity is the ability to produce new and original ideas and things. Innovation makes the idea practical and usable.

The innovative activity in any business enterprise depends upon the creative contributions of its members. It also depends upon how the organization taps the creativity of its talented members.

Creativity Screening Innovation

INPUTS

•Ideas•Daydreaming

•Observing•Brainstorming

OUTPUTS

Results•Better•Faster

•Cheaper•Aesthetic

Criteriaof evaluation

Relationship between creativity and innovation

Elements of the creative process

The overall creative process has the following elements : I. Incubation

II. Illumination

III. Verification

I. Incubation

Incubation requires partially turning off the process of conventional thinking. This involves holding of or keeping in check the normal tendency to criticize and judge the value of what is taking place in the flow of thought. A lot of free thinking without any constraints should be encouraged in the stage.

II. Illumination

If incubation is successful, there follows the moment of illumination, which often is like a flash of lightening.

The sudden insight of people is linked to a mystical experience. People who have experienced illumination have generally expressed as “Ah-ha” effect.

III. Verification

The final stage of creative process is verification. Here the mind returns to the pursuit of more conventional patterns and works out the creative solution in detail, polishes it in a more final form, and chooses some test or method of proof so that the idea becomes creditable and accepted.

Challenge the impossible

It is not unusual to find the birth of a great idea in the minds and words of someone ignorant of the specialized field. Perhaps they don’t know enough to know that it can’t be done.

Out of the box thinking...

• The bell was invented by an astronomer - Edmund Halley

• The pneumatic tyre was invented by veterinarian - John Dunlop

• The safety razor was invented by a sales man - K.C. Gillette .

• The vaccum cleaner was invented by a bridge builder - Hubert Booth .

Barriers to creativity

• Be as practical as you can

• Follow all the rules

• That is not logical

• I am not paid to think

• Someone else may already be doing it

• To make a mistake is wrong

• If I share my ideas someone else may steal

2. Business Process Reengineering

BPR

Business process reengineering is the concentration on the improvement of key business processes to ensure that outputs are delivered with speed, service and quality.

3 Dimensions of BPR

1. Speed 2. Service 3. Quality

BPR - Radical improvement

Reengineering is all about reinventing the entire organization - including its people, structures - rather than just processes. Organizations looking for radical improvement need BPR.

Why Reengineer ?

People are limited and simple. The organizations had to design very simple tasks and jobs for them to do . This in turn led to complex organizational systems , because when the work that is being done is simple and fragmented we need a lot of overhead to tie it all together. Result - high cost , poor quality and bad service.

5 steps in Reengineering

Develop business vision and process objectives

Identify processes to be redesigned

Understand and measure existing processes

Identify information technology levels

Design and build a prototype of the process

BPR : Where to start.

Forget what your competitor is doing . Take , instead , a clean sheet of paper and design your process the way you would have done it had you started from scratch.

BPR - Key Business Processes

Starting afresh enables an organization to identify the Key Business Processes and ordinary business processes. KBP’s offer maximum value propositions to the customer .Ordinary business processes offer little or no value propositions to customers.

3. Quality Function Deployment ( QFD )

Quality Function Deployment ( QFD )

Business is usually started because their founders recognize a customer need and believe that they can satisfy it better than other companies. At the time of fresh start, the product may be unique to the industry and have competitive advantages.

QFD

No matter how effectively a company meets the initial needs of the customers, it must remain constantly alert and responsive to the changing needs of the customers. Because if the company is not responsive to these changing needs, the passage of time will erode the early competitive advantages.

QFD

QFD is a scientific technique for translating the voice of the customer into development of products and services. It is a complete product planning process as opposed to problem solving and analysis. The technique was invented by Akashi Fukuhara of Japan and first applied with very good results at Toyota.

Technicalrequirements

Technicalrequirements

Customerrequirements

Customerrequirements

Relating customerrequirements to

technical requirements

Relating customerrequirements to

technical requirements

Customercompetitiveassessment

Customercompetitiveassessment

Competitive technical assessmentCompetitive technical assessment

Operational goalsOperational goals

Key Components of QFD Matrix

Customer RequirementsImportanceon 10 pointscale

Step 1 List customer requirements and rank

Very Important

Moderately Important

Slightly important

Tec

hn

ical

R

equ

irem

ents

Step 2 List technical requirements to meet customer requirements

1 2 3 4 5

Customer competitiveevaluation on 5 point scale( 5 high , 1 low )

ActionRan

k

Com

pla

ints

Competitor product Our product

Customer Requirements

Step 3 : Comparing product with the nearest competitor

Customer RequirementsRank

Tec

hnic

al

Req

uire

men

ts

Step 4 : Establish relationship between customer requirementand technical requirements

Strong relation

Moderate relation

Weak relation

Customer RequirementsRank

Tec

hnic

al

Req

uire

men

ts

Competitive evaluation

QFD Matrix overview after step 4

Customer RequirementsRank

Tec

hnic

al

Req

uire

men

tsCompetitive evaluation

CompetitiveTechnicalAssessment

54321

Step 5 : Do competitive technical Assessment

Competitor assessment

Our assessment

Customer Requirements Rank

Tec

hnic

al

Req

u ire

men

ts

Competitive evaluation

CompetitiveTechnicalAssessment

OperationalTargets

Step 6 : Mention operational targets or action points

New Product

QFD - Customers Voice

The whole process of the QFD can be linked to GIGO ( Garbage in garbage out ). This is because, if the voice of the customer has not been captured properly, the final product will also not be the one actually desired by the market place. It is therefore extremely important to capture the correct voice of the customer before taking any other step in the QFD planning process. We will explain this by the forthcoming example of new car development.

New car development

A product development team wants to determine what the customers want in a new car. After interviewing about 120 car drivers, the team came out with the following chart of the customer requirements :

Customer findings

Desired product attributes in a new car

• Easy to drive• Quiet riding , • Excellently finished• Smooth riding • Excellent gas mileage• Aerodynamic design• Hugs the road• Free from breakdowns• Fast acceleration• Virtually maintenance free• Durable - will last 150000 miles• Protects the driver • Classic styling• Has instruments to read critical functions• Has many electronic devises• Has convertible roof

5

4.8

4.6

4.5

3.9

3.8

3.7

3.6

3.5

3.4

3.3

3.2

3

2.2

2

1.4

Requirement Rank

The product development team is all set to translate the requirements of the customer into technical requirements as per the QFD matrix.

Fallacy : The survey is based on aggregate data management and its basic assumption is that there is one best answer for every one.

Fallacy

Classification of needs

The product development team is asked by the CEO to classify the needs of various drivers and then give it a rating instead of proceeding simply with the aggregate data management. After the market survey the product development team divided the customer into two broad categories :-

1. The performance driver and 2. The practical driver The team then came with the following findings -

Two different profiles of desired product attributes

•Fast acceleration•Aerodynamic design•Hugs the road

•Easy to drive•Excellently finished•Quiet riding •Classic styling•Smooth riding

•Free from breakdowns•Excellent gas mileage•Protects drivers•Durable•Many electronic devices•Convertible roof•Virtually maintenance free

Performance driver Practical driver•Excellent gas mileage•Virtually maintenance free•Free from breakdowns

•Easy to drive•Durable•Quiet riding•Smooth ride•Protects driver •Excellently finished

•Many electronic devises•Aerodynamic design•Hugs the road•Instruments to read functions•Classic styling•Convertible roof•Fast acceleration

5

4

3

2

1

New Car

The classification of the customer requirements clearly reveals that the attribute which is most important for the performance driver, is least important for the practical driver and vice versa. A simple listing of the customer requirements would have definitely ended up in the development of incorrect product for the market. Reading the voice of the customer is therefore the most critical and challenging aspect of the whole QFD process.

4. Eliminating non value adding activities

An important method of doing continuous improvement is to eliminate Waste and non value adding activities from the organization.

Mismanagement of time constitutes one of the most important reasons of failure of improvement initiatives in any organization.

Eliminating non value adding activities

The key to continuous improvement is not about driving people and machines faster, but about the elimination of waste.

Waste is often confused with materials ruined or discarded or time which could obviously have been better spent. However this view is only partial.

Waste is any operation which does not add value.

Sources of unproductive Time.

Waiting time. Set - up times. Time spent on over production . Avoidable Transportation. Ineffective communication. Inopportune timing of activity.

Time spent on non value adding activities

The organization must therefore eliminate non value adding activities from the system and the time saved from these activities must be utilized in improvement activities.

A typical matrix of how the organization spends time is given on the next slide.

Matrix of organizational activities

Ineffective activities

Time spent: 20%

Negative activities

Time spent: 10%

Positive activities

Time spent : 60%

Improvement activities

Time spent: 10%

Ineffective activities

• Chasing information• Misdirected queries• Unproductive meetings• Seeking authority to act• Bureaucracy• Ineffective procedures

Positive activities

Dealing effectively with:-• Customer queries• Rush orders• Surge of demand• Staffing shortages• Resource shortages

Negative activities

• Avoiding quality problems• Interdepartmental rivalry• Secrecy• Putting self needs before team needs• Defensiveness

Improvement activities

• Commitment to quality• Customer driven approach• Willingness to improve• Effective problem solving• Improvement targets• Information sharing• Company wide approach

Matrix of organizational activities

Time spent on non value adding activities

Thus if an organization is able to eliminate its ineffective and negative activities from the matrix, it is able to save 30% time which can straight away be utilized in its improvement activities as depicted on the next slide.

Matrix of organizational activities

Ineffective activities

Time spent: nil

Negative activities

Time spent: nil

Positive activities

Time spent : 60%

Improvement activities

Time spent: 40%