In Real Estate its “Location, Location, Location”. In manufacturing its “Innovation, Innovation, Innovation”.
There has been a lot of focus in the last few years around innovation taking place in manufacturing. On the negative side there is the theme that in Canada we are behind other countries and that we are not spending enough dollars on product and process innovation.
As I have mentioned before I have trouble with the concept that Canadian Manufacturers are not being innovative. There is not an EMC Member that I have had the opportunity to visit and tour the facilities that I have not seen multiple examples of both product and process innovation.
Can there be more, SURE, the more the better!! Without it, products become stale and processes don’t keep up with the necessary improvements in terms of quality, cost, throughput, safety, etc., etc.
So the following questions come to mind.
- Why do we need manufacturing innovation?
- How do we make innovation happen?
- Who do we expect to innovate within our business?
- And, what tools do we use to identify, develop, test and implement new ideas and solutions?
All important questions and all need to be answered but being a numbers guy, my first question always is: What are we trying to accomplish and how will we know if we have been successful?
Yes, I am talking about the old adage; If you don’t measure it, it won’t get managed and if it’s not managed it won’t get better. So before getting into the above 4 questions, to me, it makes sense to identify those metrics that are going to be your indicators of success.
As with most Key Metrics, there will be those that are high level ie Business performance, and those at a team and individual level. Also, some maybe leading indicators and others lagging. Depending on your type of business, products, or services these metrics maybe very different. Picking the right ones obviously is critical.
Many reports seem to talk in terms of R&D as a % of sales, etc. Back in my Black and Decker days the business had a very high goal of New Products as a % of total sales, year over year.
At the operations level, teams or individuals, the metrics might be focused on reducing quality issues, improving yields, reducing costs, etc.
Once you have established “what is important” and set up the measureables to capture and report the numbers, then you can establish your current performance as a baseline and then for each, set your future goals.
Now you can go back to the above questions, find the answers and start to drive actions to achieve your goals. Oh and YES, tracking your SR&ED $$$ returns year over year is a great way to measure your level of innovation; just saying.
So, how do you measure your level of Innovation?? Please share your comments and suggestions.