Lean Innovation Framework for Improved Efficiency

Lean Innovation
A Framework to Improve Efficiency and
Effectiveness of the Innovation Process
Praveen Gupta
Director,
Center for Innovation Science and Applications
President, Accelper Consulting
praveen@accelper.com, gupta@iit.edu
An IQPC WorkshopFebruary 21, 2012, 4:30 PM 6:30 PM

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

(C) Accelper Consulting 2011
3
Analysis of Lean Six Sigma

4
Lean Six Sigma Benefits
Key Six Sigma Tools Key Lean Tools Benefits of Integrating
Lean Six Sigma
D Kano Analysis, Pareto analysis,
Process Mapping, SIPOC Model
Value Stream Mapping
(VSM)
Problem clarity and
improved customer
perspective
M Data normality test, COPQ, MSA,
Cp, Cpk, DPU, DPMO
Cycle time, Muda,
Yield
Sources of non-value
activity
A Root Cause Analysis, MVA, FMEA,
Hypothesis, ANOVA
Constraints, takt time,
cycle time
Better cause and effect
relationships in process and
product characteristics
I Triz, component search, factorial
designs, RSM
VSM future state,
Continuous Flow,
Kaizen, 5-S
Efficient process flow design
with capable processes
C Control Charts, Pre-control Charts,
Process Model
5-S, TPM, Visual
Controls, Kanban
Highly efficient and effective
workplace. Sustained
customer focus

5
Performance vs. improvement

6 6
Accountability
Results
Incentives
IMPROVEMENT
C
O
S
T
I
M
P
A
C
T
INNOVATION
Lean Six Sigma Scorecard (LSC)

7
Measurements Score (%)
(A)
Significance
(B)
Net Score =
A x B/ 100
Incentives 90 15 13.5
Savings 95 15 14.25
Management Accountability 95 20 19
Improvement Results 80 10 8
Teamwork 80 5 4
Cost 80 5 4
Lean (Responsiveness) 70 5 3.5
Six Sigma (Quality) 80 5 4
New applications 90 10 9
Employee Perception 70 10 7
CI Index Sum = 86.25
Corporate DPU (use BPIn to DPU
table)
.1479
Corporate DPMO = (Corporate DPU/
# of CI Champions) x 1000,000
Corporate Sigma (Refer to Corporate
DPMO to Sigma Table)
Lean Six Sigma Scorecard

8
Measurements Score (%)
(A)
Significance
(B)
Net Score =
A x B/ 100
Incentives (Recognition/
Compensation)
15
Savings 15
Management Accountability 20
Improvement Results 10
Teamwork 5
Cost 5
Lean (Responsiveness) 5
Six Sigma (Quality) 5
New applications 10
Employee Perception 10
CI Index Sum =
Corporate DPU (use BPIn to DPU
table)
Corporate DPMO = (Corporate DPU/
# of CI Champions) x 1000,000
Corporate Sigma (Refer to Corporate
DPMO to Sigma Table)
Excercise 1. Your Lean Six Sigma Scorecard

Sales and
Distribution
Purchasing and
Supplier
Management
Service and
Growth
Operational
Execution
Employees and
Innovation
Management and
Improvement
Leadership and
Profitability
C
O
S
T
R
E
V
E
N
U
E
IMPROVEMENT
INNOVATION
Six Sigma Business Scorecard Framework
9

Figure: An Example of Business Performance Index
Measurements Category
Abbreviation
Category
Significance
Performance
Against Plans
Index
Contribution
1. # Employees Recognized for
Excellence
LNP 15 50 7.5
2. Profitability LNP 15 75 11.25
3. Rate of Improvement (All
departments)
MAI 20 60 12
4. Recommendations per Employee EAI 10 60 6
5. Total Spend / Sales PSM 5 80 4
6. Suppliers Defect Rate (Sigma) PSM 5 60 3
8. Process Defect Rate (Sigma) OPE 5 80 4
9. New Business ($)/Total Sales($) SND 10 90 9
10. Customer Satisfaction SAG 10 80 8
Corporate Wellness (BPIn) 67.75%
Corporate DPU 0.3893
Corporate DPMO (15 executives) 25,956
Corporate Sigma 3.44
37. Operational Cycle Time Variance
from Planned
OPE 5 60
10
Example: Six Sigma Business Scorecard

70
20
5 5
Design Material Labor Overhead
Design is the most influential and the least managed process.,
thus need for Lean Innovation
Design Performance
11
Need Lean Innovation!

Lean Innovation
Framework
Praveen Gupta
Accelper Consulting
Tel: (847) 884-1900
praveen@accelper.com
An IQPC Workshop

13
Accenture Report 2009
Most companies have established a formal system in
place for innovation, supported by defined processes
for bringing ideas to market.
from new products or services.
Top three innovation Challenges include predicting future
trends, reducing time to market for an innovation, and
leveraging new technology.

14
BCG Report Innovation 2010
72% executives in 2010 say innovation is their top three
priority
82% believe minor improvements to existing products or
services are very important.
Businesses are tampering their innovation investments.
Executives consider a risk-averse corporate culture,
lengthy product-development times, and inadequate
measurement practices to be key areas of weakness.

15
IBM - The Global CEO Study
Surveyed 1500+ CEOs in from 60 countries and 33
industries to learn:
1. CEOs now realize that creativity trumps other
leadership characteristics.
2. Reinvent customer relationships to better predict and
provide what they want.
3. CEOs embed complexity that creates value in
elegantly simple products and services.
www.ibm.com

16
Executives say innovation is very important, but their
confidence in their innovation decisions.
Companies discourage talented staff from pursuing
innovation by offering limited incentives, being risk
averse, and having no plans for dealing with failures.
Recommendations:
1. Innovation on leadership agenda
2. Inspire innovation
3. Improve tools and processes

17
GE Global Innovation Barometer
88% respondents believe innovation is the best way to
create jobs in their country.
Innovation is a trusted driver for improvement in most
Innovating in the 21st Century: New players, new rules.
SMEs and individuals can be as innovative as large
corporation.

18
Why Lean Innovation
New economy / competitors
Intense price and cost
pressure
Ever-shrinking product life
Interconnected world
economies
Business Challenges
Ensure profit with Lean and
Six Sigma
Accelerate growth with new
products
Maintain an innovation
portfolio
Innovate lean and profitably
Business Needs

How many straight lines to
connect the points below?
19

20

21

22
Brinnovation -
A Lean Innovation Framework
Need a framework that is logical, easily understandable, teachable
and profitable.
System that builds on other innovation methods such as Open
Innovation, TRIZ and Crowd Sourcing.
Framework was developed based on work of great innovators
including Einstein, Newton, Galileo, Edison and Ford, i.e., best
practices.
The framework has been taught at multiple institutions including UIC
and IIT, and shared with community leaders.

2323
The Building Block
Innovation
Idea
Intelligence
Creativity
Invention
Internet Customers
Suppliers Rest of the
world Free Lancers
Universities
Labs
Networked Individual

24
Excellence is Mandatory
Process Excellence
(Sustained Economic Growth)
Few Breakthroughs
(Short-term Growth)
Improvements
(Profit)
Innovation
Market Leadership
I II
III IV
HighLow
HighLow
Me Too Products
Lost opportunities
Process Leadership
Thought Leadership

25
LSL USL
We build to limits, and check for acceptability through inspection within limits

Acceptable
Marginal
Output
Marginal
Output
Understanding Excellence
Shoot and Aim
Just Do IT!

26
3.4 DPMO

LSL USLTarget
Excellence
No Marginal
Output
No Marginal
Output
Aim and Shoot
Do IT Well!

27
LSL USL
We build to limits, and check for acceptability through inspection within limits
3.4 DPMO
LSL USLTarget
Acceptable
Excellence
Marginal
Output
Marginal
Output
No Marginal
Output
No Marginal
Output
Shoot and Aim
Aim and Shoot
Just Do IT!
Do IT Well!

28
Brinnovation stands for Breakthrough Innovation that builds on a
Brinnovation empowers people intellectually. The framework
includes the following:
1. Fundamental Strategy
2. Theory of Innovation
3. Rule of 2
4. Rules of Creativity
5. Innovative Thinking Process
6. TEDOC Methodology
7. Innovation Room
8. Measures of Innovation
9. Types of Innovation
10. Management of Innovation
11. Business Innovation Maturity Model (BIMM)

29
The Innovation Eco-System
The innovation eco-system goes beyond the innovation framework.
It addresses aspects of making innovation deployment easier and
systematic. The eco-system includes the following:
1. Business Innovation in the 21st Century book
2. Training and Certification programs for developing in-house innovation
competency
3. Business Innovation Conference
4. International Journal of Innovation Science
5. Business Innovation Networks
6. Business Innovation support or consulting model
7. Education in innovation (college level curriculum)
8. Center for Innovation Science and Applications BIMM Assessment, and
Training and Certification
9. Community Innovation Model
10. iPad Applications

30
Breakthrough
Breakthrough is the extent of innovation
required for a business to sustain profitable
growth.

31
Breakthrough Innovations

32

33
Breakthrough Rule of 2
If innovation means change,
reduce it by at least 50% or
divide by 2, or increase it by at
least 100% or multiply by 2.
Breakthrough Innovation means to make
innovations look different, do different and
feel different.

34

35
Feel their Pain
Complaints
Nagging problems
Indecisions
Repeat problems
Upset employees
Technical
challenges
Stagnation
Circumstances
Unmet needs
Insights
EFFORT TO MEET
CUSTOMER
REQUIREMENTS
CUSTOMER
SATISFACTION
2. SPOKEN
CUSTOMER
EXPECTATIONS
1. UNSPOKEN
ASSUMED
REQUIREMENTS
3. UNSPOKEN
OBJECTIVE REQUIREMENTS
TRENDS OVER
TIME
What to Innovate?
Love to
have

36
How to Innovate?
Target (T)
Opportunity
Develop (D)
Alternatives
Explore (E)
ideas
Optimize (O)
Solution
Commercialize (C)
Innovatio
n
Listen to
customer for
specific
needs
Making
life easier,
better, and
richer
Research
customers for
their value
proposition
Create
innovative
options for
the
customer,
and
customers
Optimize
the
solution
for the
customer
giving the
best value
Close the
deal
What
When
Value
Fun
Make innovations affordable and profitable!

37
Organization for Innovation
Executive Officer
Innovation
Leadership
Idea Management
Financial OfficerOperating OfficerGrowth Officer
Creativity Culture

38
Exercise 2. Opportunities for Revenue
Growth
1. List potential ideas for revenue growth
2. Categorize ideas into types of innovation Fundamental, Platform,
Derivative, and Variation (See the Types of Innovation slide)
3. Categorize customers into their purchasing schedule
4. Select ideas that are variation and short term for innovation
5. Plan for others according to business strategy for revenue
growth
6. If you are concerned about competitive situations in the
classroom, please describe your approach rather than the
solution to protect your intellectual property

39
Identifying Opportunities
Potential ideas for
growth using TIP
Classify ideas
(Desired innovation)
buying needs (Schedule
for innovation)
Ideas to innovation now
(What to innovate)
Fundamental Platform Derivative Variation
>5 yrs. 3-5 yrs. 2-3 yrs. Now 1 yr.

How to think of a BIG idea?
Use your diverse experience, prior
knowledge, and the opportunity or
challenge
Combine them to make something
useful and new. Try as many
combinations as you can.
Suddenly you will say BINGO!
Big Idea N GO!
40

41
Words of Wisdom
- Jeffrey Immelt
- Bill Gates
- Larry Ellison

42
Launching Lean Innovation Initiative
Start before you
need to
Train the troops
Designate a team
of experts
Appoint a senior
leader

43

(C) Accelper Consulting 2011 44
Any thoughts?

45
For more information, please contact
praveen@accelper.com
Toll Free: (800) 680-0700
Tel: (847) 884-1900
www.accelper.com
www.ibusinessinnovation.com
www.businessinnovationconference.com
- Dipak Jain, Dean, Kellogg School of Management

46
Summary
1. Need for innovation for success with Lean
initiative
2. New rules for innovation today
3. Understand the Rule of 2 for breakthrough
solutions
4. Make innovations profitable using T.E.D.O.C.
5. Streamline innovation processes
6. Enjoy innovating lean!

47
Praveen Gupta
Praveen Gupta, a management consultant, has authored several
books including Business Innovation in the 21st Century, Stat Free Six
Sigma, Six Sigma Performance Handbook, and Service Scorecard.
Praveen is Editor-in-Chief of International Journal of Innovation
Science, and writes a monthly column Manufacturing Excellence in the
Quality magazine. Praveen frequently speaks at conferences
internationally.
Praveen has been recognized as a thought leader in areas of excellence and innovation.
He has developed Six Sigma Business Scorecard, the 4P model of excellence,
Breakthrough innovation, and Stat Free Six Sigma methods that have been translated and
used worldwide.
Praveen, the founding president of Accelper Consulting (www.accelper.com), has worked
at Motorola, and AT&T Bell Laboratories, and consulted with about 100 small to large size
companies including CNA, Abbott Labs, Superior Essex, Dentsply, Hexel, Experian, Sloan
Valves, Weber Markings, Wayne State (Ford), and Telular. Praveen taught Operations
Management at DePaul University, and Business Innovation at Illinois Institute of
Technology, Chicago. He has conducted seminars worldwide for over 20 years.
Accelper Consulting provides training and consulting services in the area of innovation, Six
Sigma and business performance for achieving sustained profitable growth. Praveen can
be contacted at praveen@accelper.com.

Lean Innovation Framework for Improved Efficiency

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