Viewpoints: Innovation: Still Possible in the Machine Tool Industry?
It's beyond debate that machine tools and their output in numerous manufacturing industries constitute one of the hallmarks of a modern society. Machine tools are levers that can lift entire industries and move them into rapid growth, profitability, and higher levels of technology. Think of cobalt-chrome replacement hips, laser-guided missile systems, powerful wind turbines, or the tiniest microchips, and there will be modern production facilities with state-of-the-art capital equipment producing them.
But consider innovation, the engine that drives competitiveness and growth in the machine tool arena. A definition that I use is "Innovation is the introduction of an invention into a use that has economic value." Inventors invent to be creative. Innovators innovate to make money.Where is the innovation that will continue advancing the pace of modern machining specifically and modern manufacturing in general? Where are these changes coming from? Put more directly, if you took VMCs from a dozen of the world's machine tool builders, removed the nameplates, and painted them all the same color, could you tell the difference?
Two serious problems that inhibit genuine innovation plague the machine tool industry.The first is Linear Product Development. By that I mean someone introduces a new machine, everyone gathers the specs, and then all the energy is directed at addressing niche advantages or stretching specifications, i.e., how fast we can increase spindle speed, or how far we can tilt a table? Linear Product Development will not grow our industry. Where are the out-of-the-box ideas that change the game? They can occur if companies will invest in what is called the Fuzzy Front End. Give your development teams the time and the tools to meet with customers, explore where the pain points are, and brainstorm around radical solutions. Don't give them three months, one mechanical engineer, and yell, "Invent"!
The second serious problem revolves around the new product development (NPD) process, and that problem takes two forms. Some companies have no process and fall into what I call the Mixed Model Trap. Many of our companies produce machines to customer specification—custom builds. They also attempt to perform NPD concurrently. Now, the machine tool business is subject to the same severe economic pressures as many other manufacturing businesses, and it often comes down to the same team of engineers, sales people, and other specialists to develop new custom applications for customers, or pursue new product development. Guess who wins? That incremental, barely-better-than-Brand X new product, or the $2 million order for Boeing that was due to ship a month ago?
The other form that poor NPD can take is to become too bureaucratic. Many companies instituted a method called stage gate, and have ended up spending too much time filling out forms and trying to get "gatekeepers" in the room at the same time. This approach delays projects and, worse, out-of-the-box projects get shot down because "failure is not an option."
New thinking about innovation reveals that lean advantages similar to those employed in production processes can be applied to NPD. And some surprising audiences, like local and state governments, are paying attention. In 2004, I was part of a consortium receiving a grant from the State of Ohio to come up with a pilot program to apply lean principles to the NPD process for small and medium-sized businesses. The Partnership for Lean Innovation program, as it came to be called, became a productive laboratory for establishing and quantifying the value of NPD for manufacturers.
We established that four pillars of the Toyota Production System—value-stream mapping, waste elimination, focus on flow, and continuous improvement, each a specialty in itself—also apply to NPD. Identifying wastes in production, such as product defects, unnecessary motion, and waiting for parts, all had their parallels in product development, including superfluous design features, chasing components, and waiting for approvals.
Ten companies remain active in the Partnership for Lean Innovation program. Goals were to cut time to market in half, double innovation levels, and improve the success rate of new products by 50%. To date, the economic impact of the $1.9 million grant has been more than $30 million in new product sales by these companies.
As an officer of the Product Development Management Association (PDMA) and an executive with a company known for innovative processes and equipment, I believe that lean principles and new product development cannot only co-exist, they herald significant and measurable returns for the companies willing to apply them.
This article was first published in the April 2009 edition of Manufacturing Engineering magazine.