Innovation and Efficiency – No Contradiction

In our discussions with managers we often learn that efficiency is not their highest priority; innovation and new product development are. Therefore, the focus is shifting from improving the cost position and increasing the company performance to succeeding with new products and innovations.
However, innovation and efficiency are often perceived as contradictions: either a firm wants to be efficient or it wants to be creative. It can not be both at the same time, or can it?

Even more so, there is academic research that recommends to top executives to make up their minds: you should pursue cost leadership, customer intimacy or innovation (e.g. Treacy& Wiersma (1997)). 

In fact, our experience in the field teaches us a more differentiated understanding. Innovation and efficiency are very compatible concepts and need to be pursued in tandem. There are specifically these cases, where this is useful:

  1. Innovation itself is a process that should be efficient. Not only the amount of money that is poured into innovation is decisive. It is the effect per invested dollar or euro that counts. For example, Apple is investing a lot less than other much less innovative market players, but is extremely successful with its new products. Therefore, companies need to focus on efficient innovation.
  2. Innovation and efficiency are based on the same disciplines of effective organizations. These success factors start with a strong leadership team, and goes on with highly motivated employees, strong results-orientation, high quality awareness and other virtues. That leads to the plausible conclusion that highly professional organizations do excel in efficiency and in innovation at the same time.
  3. Process innovation is not just a slogan. It means the application of new ideas on processes and activities. With thousands of small ideas a lot of efficiency is generated. These continuous improvement efforts can make the difference between a highly creative, but bankrupt operation, and a successful innovative company, which earns money with its new products.
  4. In today´s dynamic business world innovation is an ongoing requirement, not the occasional project. Only by continuous learning companies will deliver enough competitive innovations, solutions and servcies that satisfy ever increasing customer expectations.

These cases show that innovation and efficiency are two sides of the same medal. However, there ARE big differences between both. Managers and executives just need to be clear on how these two concepts are understood and implemented in their organizations. 

For questions and comments, post here or write an e-mail to sattlberger@procon.at

The revision of the AS9100 has landed

How to prepare for the revised 9100 standard

The 9100 series of standards regulates the requirements of quality management systems (QMS) of organisations in the aviation, aerospace and defence sector. The AS 9100 revision was guided by the international Aerospace Quality Group (IAQG) and the standard was published in October 2016.

The new AS 9100 is based upon the revision of the ISO 9001:2015 and that standard publication in September 2015 triggered the revision-process of the AS 9100. The goals of the AS9100 revision is to specify QMS-requirements further and to ease the implementation with consideration of the needs of stakeholders of the organisations.

The most important reasons for a planned and timed implementation of the AS9100:2016 are:

  • international business opportunities through demonstrating an effective QMS
  • necessary for being listed in the „Online Supplier Information System (OASIS)“ database
  • minimizing risks regarding products, processes and services, while meeting stakeholder needs
  • securing continuous improvement and strong focus on process-management

The transition period for the AS9100:2016 is based upon the ISO 9001:2015 as well, where a transition deadline is set on the September 15, 2018. The combined transition period shall help organisation to plan, coordinate and manage the internal standard transfer.

The new, respectively, revised topics of the AS9100:2016 are listed in the table below:

Context of the Organisation Evaluation of external and internal influencing factors and needs and expectations of interested parties to meet the organisational strategic planning process.
Risks The “risk-based thinking”-approach from the ISO 9001 standard is integrated into the AS9100 and requirements were adapted.
Process Management Higher requirements concerning systematic controlling and performance evaluation of internal and external processes and the process environment.
Configuration
Management
The process-requirements include physical and functional attributes during the whole product-life-cycle.
Product Safety Planning, implementation and controlling of the necessary processes to guarantee product safety during the whole product-life-cycle.
Counterfeit Parts Requirement to establish prevention-processes for counterfeit and suspected counterfeit parts.
Awareness Higher requirements concerning awareness of the individual and his or her contribution to conformity of products and services, to product safety and ethical standards.
Human Factors The organisation shall consider human factors, which can influence the performance of the QMS and the processes. A consideration of human factors while performing cause analysis of nonconformities is mentioned.
Documented Information No explicit demand concerning a handbook

How Can You Efficiently Manage the Standard Transition in Your Company?

The basis for a profound project management for the standard transition in your company is to know the gaps, which should be evaluated in form of a Critical Delta Audit. The next step is to develop a Project Plan to coordinate the necessary adaptions of the QMS. After the approval of the Project Plan you can address the gaps and the tasks to the affected team-members.

After all tasks concerning the gaps are finished, it is recommended to perform an internal audit with the changed requirements of the AS9100:2016 to check upon the conformity of the companies processes. All found nonconformities and observations should be systematically handled in form of an Action Plan, so that the tasks are finished before the following project phases. The last step before beginning the certification process is to perform a Management Review, where the management has the opportunity to evaluate the QMS and to show commitment and leadership.

It is strongly recommended to coordinate your transition-project with the certification-organisation. Those companies want to manage their resources efficiently because of the short transition period.

For further information concerning the revised AS9100 or a first scan of your QMS, please contact Jürgen Birgfellner MSc., eMail aerospace@procon.at

 

 

How Lean Tools Lead to Waste and What Managers Need to Do About It

„For a man with a hammer everything seems to be a nail.“ This saying also applies frequently for the use of lean tools. With great enthusiasm plenty of lean tools are getting trained in order to achieve higher efficiency and profitability. However, in truth all this tool training is a huge waste.

Werkzeug, Werkbank, Kind
Lean Tools Add Waste

Typical lean tools that are trained with little benefit:

_ 5S
_ SMED
_ Kanban
_ Just in Time
_ Jidoka
_ Kaizen Workshops
_ Standardized Work
_ Visualization
_ Value stream
_ A3 Problem Solving
_ TPM, etc.

This type of training of lean tools is peddled to organizations with the promise of improvement. Unfortunately, the situation does not improve, but mostly it is deteriorating. Why? Because used in this way the tools are searching for the right problems.

In addition there is a psychological phenomenon. As we learned from nobel prize winner Daniel Kahneman, we tend to replace a difficult, complex problem, whose solution is hard for us, with a known problem, where we have smooth, easy solution. This may sound ignorant, but is probably practiced by all of us at times. Really dumb, however, seems to be the fact that we don´t like to admit our self-deception.

With lean management this means that we do have many difficult problems in our operations, where a lasting solution would greatly pay off. However, instead of trying to understand the problem thoroughly on site (gemba) and starting the hard path of step-wise improvement, we prefer instead to just “implement” the lean tools. Voilá, the problem seems solved! (Or not, as it is revealed shortly thereafter.)

Therefore the difficult problem (e.g. profit decline) is replaced with a simple problem (e.g. lacking lean skills), where the solution is an elementary training that can be provided quickly and simply.

Complex Problems Require Profound Solutions

The mistake with this kind of “solutions approach” consists of the fact that at our workplace we face problems with a complexity too high, than that they could be resolved with simple tools.

The true task requires us to eliminate all causes and obstacles that prevent us from fulfilling a customer order in one flow from receiving to delivery of the product, using the minimum of time, cost and effort.  As Taiichi Ohno said:

„All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”

Aim and Function of Lean Tools

The purpose and benefit of lean tools is to support employees and managers to clearly identify value and to immediately and urgently highlight waste. This waste then can be eliminated quickly and for good.

That means for example, not the introduction of just-in-time transforms the operation to become lean. Just-in-time only helps to see the problems that prevent us from a highly value added operation.

The reason is that only when the worker really depends on every supplied part, then it becomes paramount to develop and practice quality and reliability for the actual work and for the long term. Everything else is just pretty words.

Ultimately, lean cannot be established by implementing lean tools. Lean tools can only support people to solve their problems and overcome their challenges in order to deliver higher value.

Managers still need to step up to their responsibility, take an impartial look at their true problems and implement effective counter-measures on the basis of sound factual analysis. And yes, lean tools can be pretty helpful at this!

For questions and comments reply here or send an email to me at sattlberger@procon.at

 

 

A Little Better Every Day

Excellence in areospace has been with us from the start of the industry. From humble beginnings to the impressive record of the aerospace industry today, pushing the envelope to higher and higher performance is part of the DNA of all aerospace philosophy and practice.

Now the time has come for the aerospace industry to fully adopt and embrace the philosophy of Operational Excellence in manufacturing as well. Therefore, we have started this blog to put out some ideas, questions and statements about what it takes us in the aerospace industries to improve ever more. We want to start with the motto from Lean Management:

A little better every day.

Wish you all much fun and success in discussing new and exciting ideas and practices and hope for your active participation in the Aerospace Excellence blog.