Monday, January 26, 2015

How to Monetize Innovation in an Expedient Manner

By Mike K Williams, MESA Americas Board Member, Dow Chemical retired

Many companies today are challenged with improving the return on their existing capital investments.  Providing more sellable output from manufacturing facilities is the desire of all corporate executives.  One way to improve sales is to expedite the monetization of innovation through increasing the velocity of new products introduced into our factories.  One of the significant challenges to accomplishing this task is what is called “product fit”.   This involves matching the machine capability with the new product manufacturing requirements to successfully convert raw materials into finished goods in a profitable manner.

So why this is an impediment today?  If you evaluate the New Product Development and Implementation (NPDI) work process you will see that cross functional collaboration is required to invent, qualify, plan, schedule and manufacture a new recipe in the factory. This collaboration takes time.  As the proposed new product recipe is created and evaluated one must define both the general composition of the product as well as the equipment parameters required to successfully convert into quality finished goods. Furthermore, one must know what machines are available with the appropriate capabilities to produce the new product safely with high quality and at an economical cost.  This means the new product introduction team must know not only what materials are required but also what type of machinery and infrastructure is available before it can commit to a customer order.

Now put yourself in the position of the customer.  He/ She has a limited time window to decide whether to procure your new product and must have answers to quality, regulatory, capacity and logistics before they will commit to buy.   Now imagine that the decision time horizon is shrinking from 6 months to 30 days to 72 hours.  This is the type of challenge which is facing today’s new manufacturing facilities.  Customers, more and more, are asking for their manufacturing suppliers to be more nimble to provide tailored or make to specification products with shorter and shorter lead times.

If you are in the innovation business, typically resources to create new products is not the limiting factor.  In many, if not most cases, the limitation is the availability of material and /or machine capacity to fulfill the customer order.  Access to materials may be the critical path based on regulatory requirements and local supply.  Machine availability requires a full understanding of equipment capability relative to material of construction, heat, mass and momentum transport limitations. This detailed engineering information must be near real-time available to make quick and accurate sourcing decisions.   To accomplish the above one must support vertical integration of enterprise systems with shop floor information systems.   Integration involves common communications protocols and information formats to transform general recipes to site then master and finally control recipes to execute a production order at the shop floor.

Enterprise Recipe Management solutions are proposed as the mechanism to facilitate cross domain integration of combined product and process recipes thus expediting the weak link in the NPDI process.  The result of a more efficient and timely NPDI process generates increased speed of innovation and return on investment to meet both customer and corporate expectation.
To find out more information please attend the upcoming session at the ARC Forum in Orlando or see the MESA whitepaper.

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