Gandhian Innovation

In this must-read article Innovation’s Holy Grail by Prahalad and Mashelkar, the authors state that the next generation innovation will be driven by affordability and sustainability, not premium pricing and abundance. The authors call the new innovation model as Gandhian Innovation because at the core of it lies the two Mahatma Gandhi’s tenets:
- “I would prize every invention of science made for the benefit of all”
- “Earth provides enough to satisfy every man’s need, but not every man’s greed”

Fig: Innovation in India using Gandhian Model (Reference: Innovation’s Holy Grail)

Three kinds on Gandhian innovations
1. Disruptive business models using the low cost labor
2. Synthesizing several existing technologies and modifying organizational capabilities to offer new value added products
3. Developing and/or acquiring new capabilities to solve technical hurdles which require technology development or a collaborative approach

Rules for Gandhian Innovation
1. Deep commitment to serving the unserved
2. Unambiguous vision
3. Ambitious goals to foster an entrepreneurial spirit
4. Accept that constraints will always exist, and creatively operate within them
5. Focus on people, not just shareholder wealth and profits

Reference: For more information read “Innovation’s Holy Grail”, C.K. Prahalad and R.A. Mashelkar, Harvard Business Review, July-August 2010.

Traditional Manufacturing Consulting Firms should explore the Blue Ocean Healthcare Services Market

Recent advances in technology is revolutionizing industrial productivity, lowering cost structure and presenting new opportunities to provide the world market with innovative products. Traditional trade barriers between nations are vanishing; with the proliferation of internet and subsequent communication technologies, market information is available world-wide in real-time. Although these wonderful features of the world economy have been harnessed by corporations around the globe, there are hidden detriments as well. These rapid changes have commoditized traditional marketplaces faster than ever before, forcing companies to become entangled in price wars to stay competitive, resulting in ever-shrinking profit margins [6]. In order to succeed in the future, companies should focus on BLUE OCEAN strategies by creating and competing in “uncontested market space” and “making competition irrelevant” instead of fighting for market share in highly competitive RED OCEANS [6]. One critical element in a BLUE OCEAN is to align corporate functions and activities in order to achieve differentiation and low cost simultaneously [6]. Technology innovation, although advantageous, is not the defining characteristics of a BLUE OCEAN firm; nor is the myth that incumbents are at a disadvantage in creating blue markets. A large research and development (R&D) budget is not the prerequisite for creating blue markets: the key is proper managerial action and strategy, which can create long lasting brand value [6]. BLUE OCEAN strategy adopters benefit from economies of scale and have “first to market” advantage which makes would-be competitors entry difficult [6]. In summary, to be successful and profitable, corporations competing in traditional RED OCEAN markets should shift their focus on identifying strategies for creating, capturing and protecting BLUE OCEAN products and/or services.

In the mid-1970’s, the Japanese automaker Toyota created a BLUE OCEAN in America with its small and reliable line of automobiles. Toyota introduced and successfully implemented the tenants of Lean Manufacturing (often simply stated as: "Lean") which resulted in its affordable and reliable line of vehicles [4]. Lean Manufacturing is a production practice which considers the expenditure of resources for anything other than the creation of customer value to be wasteful; thus, a target for elimination [3]. The main objectives are to design out overburden (muri), inconsistency (mura) and eliminate waste (muda) [3]. These concepts, which were successfully implemented in the manufacturing industry, can also be applied to the service sector. The healthcare (service) industry differs in many ways from the manufacturing (product) industry; however, if thinking simply from a process perspective, many similarities exist. Similar to building a car, the task of providing healthcare to patients requires workers to execute multiple simple and complex processes in a defined sequence to provide value to the customer (i.e. patient). Waste, in terms of money, time, supplies and inventory, should be eliminated in these value additive healthcare services. Traditional manufacturing consulting firms should exploit the BLUE OCEAN opportunities within the service industry and expanded their product offerings in the form of healthcare. Firms should collaborate with healthcare organizations to implement business improvement, productivity and downtime reduction solutions. These solutions can minimize process variation and eliminate wasteful activities which lead to increased capacity, throughput and result in improved patient care and satisfaction. And most importantly, reduce the ballooning healthcare costs.

Application to healthcare has been limited and focused mainly on operational aspects using original Lean concepts. A more integrative approach would be to pay more attention to socio-technical (interaction between people and technology) dynamics of Lean implementation efforts. Every car produced on an assembly line has the same specifications, so standardized time (or “takt”) and resources for production of a car can be determined [3]. Unlike vehicle manufacturing, each patient is different in terms of needs and condition; a patient with nominal fever is not the same as the patient requiring an urgent surgery. Another industry difference is in demand and inventory storage. The demand for vehicles can be estimated based upon production capability, seasonally adjusted annual rate (SAAR) and dealer demand forecast [5]. Unlike vehicle manufacturing, it is difficult to estimate the number of people who will become ill or have accidents and require hospitalization. If vehicles are overproduced they can be stored for future sales; in healthcare, it is impossible to use up excess capacity if no patient demand exists.

In summary, Lean concepts have the potential to greatly improve healthcare and present a huge BLUE OCEAN market for consulting businesses. At the same time, methodological and practical considerations exist which need to be factored into any decision. If all aspects of implementation are not considered or understood, Lean can and will fail, adding to current costs and making it difficult to improve upon existing healthcare services.

References
1. Lean Manufacturing, Wikipedia, Accessed: 3-Oct-2010. URL: http://en.wikipedia.org/wiki/Lean_manufacturing
2. Toyota Production System, 3-Oct-2010,URL: http://en.wikipedia.org/wiki/Toyota_Production_System
3. Toyota Production System: Beyond Large-Scale Production, Taiichi Ohono, Diamond Inc. Tokyo Press, Japan
4. The Toyota Way, Jeffrey K. Liker, McGraw-Hill Press, 1998
5. How Toyota Became #1, David Magee, Penguin Group, 2007
6. Blue Ocean Strategy, W. Chan Kim & Renee Mauborgne, Harvard Business Review, 2004

Original Source: “Blue Ocean Strategy Concept Paper”, Deshpande A., Evans A. & Roberts M.

CNC Integrated Manufacturing Data Management

Traditionally, manufacturing data management at the shop-floor level consists of machine controller data being transported, stored, and then analyzed on a central server for various key performance indicators. The raw data is transported using standard networking technologies like Profibus, Ethernet, Modbus, or RS-232. The method involves external data acquisition and analysis system, internal communication networks, appropriate network bandwidth, cables, and software resources. Today, machine tool controllers are getting more open and have separate systems for real-time motion control and human-machine interface. The data storage capability, computation power, and ability to exchange information in a standardized format between the motion control unit and PC are becoming robust in machine tool controller technology. In this paper, we examine a computer numeric control (CNC) integrated data collection methodology that effectively manages manufacturing data, process violations, alarm management, and quality control within the controller itself. The proposed methodology eliminates the need for an external device for data collection and has a potential to provide a platform for implementing user-defined alarms and customizable process violation alerts. The system architecture, implementation, benefits, limitations, and future work needed for the controller-integrated smart manufacturing control and information system is explained.

Reference: Deshpande A., Neidhart J. "Machine Controller Integrated Manufacturing Data Management." The Applied Systems Health Management Conference 2011, 10-12 May 2011, Virginia Beach, VA.

SaaS for Manufacturing: I/Link

Efficient manufacturing data management has become important in today’s globalized manufacturing environment having long supply chain and distributed facilities extending across political boundaries. Numerous manufacturers have begun searching for ways to improve system and equipment availability, traceability, and real-time production monitoring while reducing the cost of operations. A major contributor to increased cost, inferior quality, and reduced system utilization is unplanned outages, non-integrated processes, and redundant capital/infrastructure cost. There is a need for a real-time manufacturing data management system which is not only cost effective, but also flexible enough to accommodate various technical requirements and changing business processes. The manufacturing world is significantly lagging behind with respect to real-time manufacturing data management.

I/Link is a cloud computing based machine controller integrated data management system for manufacturing. It is implemented on an open architecture constant velocity Revolution MTI controller. I/Link enables efficient production monitoring and real time decision support system for process optimization and scrap reduction. All the data collection and cloud communication is accomplished by the Data Transportation Utility integrated within the Revolution controller. The I/Gear Data Transportation Utility (DTU) is a middleware software product that is designed to make integration easier by moving data between dissimilar devices and systems. The data is compressed & encrypted before sending it to the cloud. I/Link can be accessed from any internet browser with proper login credential. The software as a service (SaaS) paradigm decreases the cost exponentially.

Benefits to the Machine Tool vendor:
The development of an integrated production monitoring system, as a service, provides a huge after-sales market for the machine tool builder in addition to extended business opportunities and improved customer satisfaction. Machine tool builders will be able to monitor their machine performance, type of machining activity, alarms, and failures to make changes to improve the machine performance and reduce warranty cost. The after-sales market would include maintenance contracts and production monitoring offered as a service. By monitoring critical data parameters, the machine tool builder can inform the customer of impending service/maintenance requirements that minimize the machine downtime. Additionally, the data collected can drive business intelligence, create a competitive advantage, and provide leads to marketing and sales. For example, if a manufacturer has all of his machines running at full capacity, then the facility is positioned to add a new machine to balance the load.

Benefits to the end-user include:
• Calculation of utility consumption of machines
• Maintenance cost closely related to cause and effect
• Process compliance assurance
• Improved operator productivity
• Integrated approach to security that covers networks, machine, wireless and wired sensors, and data to protect critical operations
• Improved quality and higher factory throughput
• Flexible and hierarchy-customized alert management system
• Reduced cycle time and downtime
• Demand-driven manufacturing
• Better scheduling and resource management
• Faster problem resolution
• Support of Six Sigma, lean, and green initiatives with dependable information.