Bill Gaw's Triple-Step, World Class, Lean Manufacturing Training Program
World Class Manufacturing

Increase the effectiveness of your
Lean Manufacturing Training Program
Lean Manufacturing Simulation Game 

Innovation

1. Reduction in new product introduction lead time
The measurement indicates your ability to achieve and maintain a competitive advantage by introducing more new products, faster, at lower cost and more reliably than your competitors. It is calculated as the total elapsed time in weeks from concept to release for volume production. It should be measured by product in total as well as by individual phases of the process (Concept, Design, Proto­type, Pilot, Release to Volume Production).

2. New product sales revenue as a percent of total sales revenue
Determine optimum levels of new product sales revenue required for your products and markets. Incorporate this information into your strategic plans and annual business plans and record performance utilizing trend charts.

3. Number of new patents granted
This measurement is a key indicator of the level of creativ­ity and innovation in the entire company. It pertains to older products, existing products (extending their life cycles through such things as addition of new features and options), and processes used to develop, produce, adminis­ter, market and sell your products and services. It is measured quarterly and/or annually and depicted on trend charts.

4. Customer perception of the company as a leader in innovation
The focus must be both internal (your employees are your customers as well as customers and suppliers to each other) and external.

5. Percent of management time spent on leading or fostering innovation
This is measured individually from personal calendars and estimates; summarized weekly and reported monthly. It is depicted on trend charts. Sometimes a more formal tour, called work sampling, can be used where individuals record their activity based on a random signal and on these samples estimating the percentage.

Conclusion

Traditionally, financial performance has been the primary measure of success in most manufacturing companies. Manufacturing companies have developed financial plan­ning systems for measuring their performance on a regular monthly, quarterly and annual basis.

Today companies need to establish operating performance measurements to enable them to effectively manage busi­ness operations and meet business and financial objec­tives.

Defining current performance in the elements of quality, cost, flexibility, reliability and innovation will enable you not only to evaluate current performance, but also identify performance problem areas and prioritize for initiating the improvement process.

It is important to remember how much and what kinds of improvements are being made by World-Class companies. Conventional wisdom says 5-10 percent improvement in a process is certainly possible. But when we talk about a 5-10 percent improvement, how much change is required?

Our experience has been that a 5-10 percent change means fine-tuning what a company is already doing.

The World-Class companies are not settling for 5-10 per­cent improvement. The companies that we have seen are making 30-75 percent improvement in their processes.

How much change is required to get 30-75 percent improve­ment? Certainly not fine-tuning what is already done. This level of improvement means fundamentally changing the way we do the work. Challenging the conventional wisdom and the way we do the' work is management's job in those companies that want to be World-Class!.