Innovation: The large and small of it

Editor's note: This is Part 2 of a two-part series. Production costs must be driven down to finance big innovation. The most effective approach is through what's called little innovation at the plant and shop floor level: improving your processes so that the costs are not incurred, and eliminating the defects that cause the failures in your equipment and processes.


Production costs must be driven down to finance big innovation. The most effective approach is through what's called little innovation at the plant and shop floor level: improving your processes so that the costs are not incurred, and eliminating the defects that cause the failures in your equipment and processes. Innovation here is about everyone constantly seeking to do the work a little better, every day. Put the right processes in place, get your people engaged with a sense of ownership and creativity, and create an environment for pride, enjoyment, and trust. Costs will come down as a consequence.

Operating your assets in an optimal way will provide for minimum costs. This also creates an environment wherein the company is innovative from the CEO to the shop floor level, in all its key functions, and constantly seeks to improve its performance in all areas.

There are many tools, methods, and strategies for achieving little innovation, so that you can effectively finance big innovation, and as importantly, so that you can create an environment for innovation. Some of these include: lean manufacturing, value stream mapping, Six Sigma, statistical process control, supply chain principles, reliability centered maintenance, total productive maintenance, root cause analysis, Kaizen, and so on. Each of these tools provides a method or approach for process improvement and cost reduction. The important point is that costs are reduced as a consequence of improving our processes and eliminating those defects that resulted in higher costs in the first place.

Tools for supporting little innovation

As noted, there are many tools, methods, and strategies for supporting little innovation in pursuit of manufacturing excellence, thus financing big innovation. Some of the more common ones are discussed briefly below.

Lean manufacturing

Lean manufacturing is more a philosophy than it is a process. When you're lean, you minimize waste in all its forms, and have the following characteristics:

  • Minimal inventory, work in process, and raw material

  • High ontime delivery performance

  • Operate in a "pull" mode — you only make enough to fill near-term demand

  • Make more small batches and have fewer long runs (a bit counterintuitive)

  • Minimize delay times and system cycle times.

    • To achieve this condition, you use tools and methods such as:

      • Value stream mapping to understand waste in your process flows (nonvalue adding)

      • One piece flow, quick changeover, and mistake proofing

      • Measuring system cycle times and delay times and managing them

      • Using Six Sigma to minimize the variability of your processes

      • Using total productive maintenance to assure reliable equipment.

        • Six Sigma

          Six Sigma is a statistical term which characterizes your quality having less than 3.4 defects per million for a given product or process specification. However, Six Sigma has become a methodology for reducing the variability of processes such that the result is greater quality and consistency. It stresses simultaneously achieving seemingly contrary objectives:

          • Being stable and innovative

          • Seeing the big picture and the details

          • Being creative and rational.

            • Key to its application are a focus on customer satisfaction/success and feedback and fact-driven decision making. Principal tools/methods include continuous improvement, understanding your business processes (including value stream mapping), statistical process control, balanced scorecards, and the use of improvement projects to capture the value identified in the analyses.

              Total productive maintenance

              Total productive maintenance, or TPM, is a method for improving productivity through improved maintenance and related practices. In applying TPM, maintenance is about maintaining plant/equipment function, and is not about repairing equipment. This represents a huge psychological difference in a plant environment. Perhaps a better name for TPM would be total productive manufacturing.

              In the TPM model, when equipment is new, it is as bad as it will ever be — "we're going to constantly improve it." This contrasts to traditional maintenance cultures where, when equipment is new, it is as good as it will ever be. TPM calls for measuring all losses from ideal production capability using overall equipment effectiveness (OEE), where OEE = availability x rate x quality. Knowing all losses from ideal and their prospective causes helps prioritize resources for application of the appropriate tools in problem resolution.

              TPM calls for:

              • Restoring equipment to a like-new condition or better, not simply "patching" to get it back on line

              • Operator care and involvement in maintaining the equipment's function

              • Training people to improve their job skills, and constantly maintaining and upgrading their ability to perform (and innovate)

              • Maintenance prevention (by eliminating the defects that cause the need for maintenance), and the effective use of preventive and predictive maintenance technology to manage maintenance requirements.

                • Reliability centered maintenance

                  The primary objective of RCM is to preserve system function. The methodology can be summarized as follows, and is similar to the engineering approach for failure modes and effects analysis:

                  • Identify the functions expected of your system

                  • Identify the failure modes which can result in loss of system function

                  • Prioritize the functional needs using a criticality analysis of consequences and effects

                  • Select the applicable tasks or actions that preserve system function.

                    • It's a very powerful tool to help understand system level requirements and the means by which we can effectively preserve that function in a cost-effective way.

                      Supply chain principles

                      A supply chain is a supplier, a manufacturer, and a customer working as a team in to optimize "chain" performance. The goal of the supply chain members is to minimize business system cycle time, inventories, and costs, while assuring timely delivery to improve the profitability of all its members.

                      This technique requires that you review the entire chain, and use process mapping techniques to predict the chain's performance in areas such as business system cycle times, inventories, distribution requirements, costs, risks/delays, and so on, and then work to optimize the chain. In doing so, teams typically address issues such as producibility, afford-ability, etc.

                      Manufacturing Game

                      The Manufacturing Game is designed to be a catalyst for cultural change by engaging frontline workers in bottom-up defect elimination activities. After initial training using a game-play methodology that fosters teamwork and defect elimination, cross-functional action teams of between two to four people choose small defects they want to eliminate and create action plans for that purpose. A key aspect of this approach is that the teams are "action teams," not "recommendation teams." They have total ownership for implementing their plan and eliminating the defects. Considering the typical manufacturing plant has some 20,000 or more defects, eliminating the defects requires hundreds of small teams. The ultimate result is an empowered workforce supporting manufacturing excellence, a major cultural shift in most organizations.

                      Many other techniques are also available, and there's good reason to believe that when properly applied, all of them work. These include root cause analysis (RCA), predictive maintenance (PdM), planning and scheduling, high-performance work teams, and many others.

                      The point of these tools is that they provide the basis for improving your processes so that costs are not incurred. They provide the tools that facilitate innovation — the introduction of a new idea, method, or device that will improve your processes and business. Defects that result in failures are removed or better managed. Nonvalue-adding activity (that costs money) is removed, or minimized. Systems are optimized throughout the production or supply chain. These tools facilitate the little innovations that, in turn, finance the big innovation, so your business is more innovative throughout, from the CEO to the shop floor, and is more successful as a consequence.

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                      Ron Moore is Managing Partner of The RM Group, Inc. in Knoxville, TN. He can be reached at 865-675-7647 or by e-mail at