China's Plan to Innovate

China's Plan to Innovate
China is making a move to be a leader in science, medicine, technology, R&D, and energy -- and the government is leading the charge to innovate

At Leanovations, we teach and coach Lean and Innovations, which is imperative to compete globally and it is not about secret formulas; it is about strong leadership developing new business models and play-to-win strategies that encourages a true value creation. In January, China’s President Hu Jintao set the tone with his call for China to make the transition from a manufacturing-based economy to an innovation-based one.

How far will China go in its attempt to build a more modern flexible economy? In Beijing, innovation is the buzzword. Innovation was a major theme at the recently concluded National People's Congress, with the government unveiling its latest five-year plan calling for big increases in spending to nurture innovation.China is targeting a broad range of sectors, including some controversial areas such as stem cells, gene therapy, and genetically modified crops; and some areas that the U.S. has long dominated, including software, semiconductors, and space exploration. China aims to become a leader in emerging technologies such as renewable energy sources ranging from solar, hydro, and wind power to fuel cells. By 2050, China intends to surpass the U.S. and become the biggest player in the world of science.There are many reasons that Beijing wants to push the innovation agenda. One is national pride: China believes it should be a leader, not a follower. Another reason is national security. The Communist regime, does not like being at the mercy of foreigners for key technologies.There are solid economic reasons for China to reduce its reliance on smokestack industries that have devastated the environment and dramatically increased China's consumption of oil. The leadership has been searching for a new, more sustainable model for growth and with innovation the hope is that the environmental cost will be much lower."As a result, the government is aggressively boosting the profile of China's scientists and engineers. Top government officials routinely exhort scientists and business leaders to get with the program and become more innovative. The government has unveiled an ambitious long-term plan to build its innovation economy. A big part of the strategy is money: Today, China devotes only 1.2% of its GDP to R&D spending, and the government has announced its intention to boost that figure to 2% by the end of the decade and 2.5% by 2020, with the government pitching in about 40% of the total, and the private sector contributing the rest. By then, China will be spending $110 billion annually on R&D, putting the country in the same league as the U.S. and Japan.

Lean Can Insulate Manufacturers From Economic Shock – as Growth Slows in U.S. During 2008

Lean Can Insulate Manufacturers From Economic Shock – as Growth Slows in U.S. During 2008

Repeatedly, Lean demonstrates it works, as many companies that embrace Lean can gain 15% year after year, while the US GDP increases at a rate of 3-5% year after year. Lean is about changing principles and attacking waste in your value streams. It means totally changing the way you look at things, but once you learn how to see waste, you can eliminate it and become competitive.

Economic cycles will always mean there will be difficulties, and we will always be at the mercy of economic forces. An economic shock will send U.S. manufacturing into a mild recession in 2008, according to a new report from an industrial trade group. During 2008, only 10 of 24 industries expect to show growth, the report from Manufacturers Alliance/MAPI noted. However, those companies that are running Lean have an extra insurance policy. In a rough economy or recession, companies that are Lean will fare better then those companies who are not.

Manufacturing has been one of the brighter lights in the overall U.S. economy, especially as a weak dollar has fueled rapid increases in overseas sales. With a significantly worse outlook for new housing starts; negative effects of lower home values on consumer spending; high gasoline and fuel oil prices; slower job growth; and high natural gas, prices will all contribute to a halt in industrial growth in 2008.Manufacturing production will slow significantly from 4.7 percent in 2006 to an estimated 1.9 percent in 2007 and to no growth in 2008, according to Manufacturers Alliance.
Four industries had growth in 2007: aerospace products; electrical equipment; communications equipment; and private, non-residential construction. The forecast for the aerospace industry is a continued growth, so downstream industries like machine shops, fasteners and heat-treating should continue to do well. If you are a Connecticut company who has obtained $500,000 or more of defense or aerospace manufacturing contracts over the past two years, and are interested in implementing Lean Manufacturing, you may be eligible to receive up to 50% reimbursement of the costs for Lean consulting by a qualified service provider such as Leanovations though ADI.

There is a compelling case of how Lean initiatives can really pay off and insulate companies from economic troubles. Lean helps to bring products to market faster which allows companies to capture more of a market share and it results in better asset velocity, which drives cash cycle conversion, and we know that in all business cycles, "cash is king." If you are interested in learning how Leanovations can assist your company, please go to www.leanovations.com.

Increasing Oil Prices Require Breakthrough Innovations for American Manufacturers

Increasing Oil Prices Require Breakthrough Innovations for American Manufacturers

Soaring oil and energy costs affect Americans at home and at work. It has become obvious that high oil costs are hurting manufacturing companies who must pay more for heating and electricity. Although oil prices may dip and spike short-term, it appears oil will never be cheap again. A forecast for the next 25 years, predicts oil consumption will double in developing Asian nations to over 32 millions barrels per day creating even more demand and higher prices. U.S. manufacturing must continue to use innovations to keep a competitive edge.

It is time for America to act on our strong entrepreneur spirit to change the course of history, and put us on a path away from our addiction to oil. A massive investment in new breakthrough technology and innovations to grow our economy is required to help manufacturing companies develop a greener future.

In December 2007, due to the high oil prices, new legislation passed requiring breakthrough innovations, to produce more fuel-efficient vehicles. The legislation requires automakers to develop new technologies, materials and alternative power sources, to increase fuel efficiency by 40 percent to an industry average 35 miles per gallon by 2020. This sweeping energy legislation package mandates the first substantial change in the nation's vehicle fuel-efficiency law since 1975, despite opposition from U.S. auto companies. It is time for America to take on this challenge, which if mastered, could provide a new industrial revolution for America. If we do not take on this challenge, be assured the rest of that the world will, and the technology leadership the U.S. enjoys today will expire.

The United States, with current efficiency standards of 27.5 miles per gallon for cars and 22.2 per gallon for SUVs and small trucks, has lagged far behind the rest of the developed world. In the European Union, automakers have agreed to voluntary increases in fuel-economy standards that next year will lift the average to 44.2 miles per gallon, according to the Pew Center on Global Climate Change. For the vehicles in Japan, the average fuel economy tops 45 miles per gallon. China's level is in the mid-30s and is projected to rise, propelled by China’s government policy.

In addition to vehicles, new breakthrough innovations and technology will be required, to meet the new efficiency standards in lighting, commercial and government buildings, and appliances such as refrigerators, dishwashers and freezers, which the bill put into effect. For an example, light bulb efficiency will have to increase 70 percent by 2020.

Japan has "Deming Prize", While U.S. has "Shingo Prize"

Japan Has “Deming Prize”, While North America Has “Shingo Prize”

In Japan, the Deming Prize is a highly regarded industrial quality award named in honor of the American quality pioneer W. Edwards Deming. In the United States, we have the Shingo Prize for Excellence in Manufacturing, named for Dr. Shigeo Shingo, who helped Toyota develop its renowned production system and JIT controls. The Shingo Prize is open to North American companies and to researchers and students who further the knowledge of quality manufacturing techniques. Applying for one of these quality awards can spur an organization to achieve higher quality levels; even when an organization does not win, its managers can learn how to improve by measuring their performance against the rigorous award requirements.

The acclaimed Shingo Prize, established in 1988, awarded annually to companies that exhibit outstanding achievements in manufacturing practices, which translate into strong customer satisfaction and business results. Dubbed the “Nobel prize of Manufacturing” by Business Week in 2000, the Shingo Prize is the premiere manufacturing award in North America.

The Shingo Prize was established to promote the awareness of Lean manufacturing concepts, and is awarded to companies in the United States, Canada, and Mexico that achieve world-class manufacturing status. The Shingo Prize philosophy is that world-class business performance may be achieved through focused improvements in core manufacturing and business processes.

The College of Business, Utah State University administers The Shingo Prize for Excellence in Manufacturing. For more information about the Shingo Prize, go to www.shingoprize.org or www.leanovations.com.

LEAN and GREEN Manufacturing

Lean manufacturing is about companies embracing change to reduce waste in producing a product or service. It engages and empowers employees to come up with and implement ideas requiring continuous improvement. Making this change in culture, while necessary for any company to survive the next 50 years is incredibly difficult. Companies who adopt “Lean and Green Manufacturing” are embracing the environment at the same time embracing change itself, and starting down a path towards more efficient processes, less waste of all kinds, empowered employees, continual innovation, etc. Going Green can be a tremendous motivator for change. Going Lean can become much easier if you connect it to going Green too.

Many large, multinational companies are aware of impending overseas environmental regulations and growing consumer demand for a new generation of environmentally friendly products. The Europeans have implemented take-back laws for autos, electronics and appliances. "Take-back" laws or “Producer Responsibility" require companies who make or import items to be involved in the "end-of-life" phase of their products’ life cycles. In almost all cases, there is a requirement to meet minimal recycling or re-use rates. Some companies have embraced the notion that GREEN products and production techniques are a competitive weapon, and will become one of industry’s greatest strategic challenges, not only from an engineering perspective, but from a business and marketing perspective as well. Other companies continue to complain about environmental regulations and their inability to meet the more stringent requirements.

Most U.S. automobile companies are complaining about meeting new clean air emissions limits, yet Honda and Toyota, have developed and produce new engines to exceed requirements. For these companies, it is part of their business strategy.

The world’s population is projected to increase by a factor of two over the next 50 years. Looking at it from a global perspective with the population growth, total emissions, and rate of rainforest depletion, U.S. manufacturers must drop their skepticism of the green movement and begin to address the deleterious impact their products and manufacturing processes have on the environment. No other sector of the economy comes close to the manufacturing in generating vast volumes of waste.

Environmental waste is just as bad as any other waste in manufacturing. Lean manufacturing activities are renowned for being focused on increasing production efficiency, but environmental wastes, such as excess energy and water use, and the costs involved with them need to become a big component of lean. If cost-reduction opportunities from environmental wastes become overlooked then the true costs of production is not correctly accounted, and that is not Lean.

Companies such as GE and Toyota are at the forefront with green manufacturing. GE will invest more than $1 billion on cleaner technology research and development for 2007, and plans to invest $1.5 billion annually on “ECOMAGINATION” R&D by 2010. Toyota plans to increase the sustainability and environment friendly production operations. This initiative will emphasize the role of nature in creating production sites. These “sustainable plant” activities implemented at the Toyota Tsutsumi Plant, makes the Prius hybrid vehicle factory well positioned as a “model sustainable plant.” LEAN and GREEN seems to be the new motto!!

Leanovations, a Connecticut based Lean Consulting Company with extensive international experience, emerged as a new innovative consultant company that goes beyond the traditional lean operational approach. Focusing on innovative Lean and Green Manufacturing approaches differentiates Leanovations from other lean consultant groups. To Learn more about Leanovations LLC, and Lean and Green Manufacturing please go to www.leanovations.com !

WHY LEAN FAILS

Leanovations has successfully worked with many manufacturing companies to implement a Lean transformation, after they have struggled or failed multiple times with their lean journey. Hiring the right coach is an important part of a successful journey.

Companies that fail usually do not understand what Lean really is. Lean focuses on eliminating waste in all the enterprise processes, thereby reducing costs and expanding capacity creating new profitable growth opportunities for the company. It is not about eliminating people, rather it is about involving all employees in improving processes, product quality and customer satisfaction (internally and externally) so you can profitably grow the business.

So why does Lean fail? The current company culture plays the biggest part in the successes or failures with a Lean Transformation. There is no one magic “step by step” cookbook for Lean. Although many consultants may want you to think there is. Each company has a specific culture, organizational structure and performance needs and at Leanovations, we tailor our approach to establish a transformation process that will work for each client, but be aware Leanovations mantra is to apply “Constant Gentle Pressure” for Lean Transformation success.

Leanovations has found 10 major reasons why many companies fail at Lean.

1. There is No Strategic Deployment Plan with Breakthrough objectives for the company to focus on (It is like taking a trip with no map or plan)
2. There is no formal Plan – Do – Check – Act process in place
3. Expectations, Accountability and Results (EAR) are rarely shared/known
4. People are not motivated because they do not understand the urgency for change (no vision of what “great looks like”)
5. Managers do not enforce a structured process to Lean, nor do they see their role as roadblock removers. Managers must start each day of a Lean journey by living “If it is meant to be, it is up to me”
6. Companies truly do not involve and empower their employees
7. A standard process (standard work) for “how to complete a task” is not established, therefore you cannot improve on a process that does not exist
8. There are no “Internal” supplier/customer measurements to see how one department’s actions/performance is affecting another department
9. Visuals are not used. Visuals will expose problems, or opportunities to improve (In the office as well as the factory) Office functions need to use visuals to indicate the health of a process rather than use computer systems.
10. At the first sign of trouble (and there will be some) the tendency is to revert to the old way, and then the blaming process begins. At this point it is most critical for managers to re-read #5 above.

If you are interested in learning more about how Leanovations may help your company with a Lean Transformation please contact us at: info@leanovations.com, or call (860) 479-0293. Please visit our website at http://www.leanovations.com/.

Connecticut's Lean Aerospace and Defense Initiative (ADI)

Leanovations, LLC is a Registered Lean Service Provider for Connecticut’s Aerospace and Defense Initiative (ADI).

If you are a Connecticut company who has obtained $500,000 or more of defense or aerospace manufacturing contracts over the past two years, and are interested in implementing Lean Manufacturing, you may be eligible to participate in Connecticut’s Aerospace and Defense Initiative (ADI), and receive up to 50% reimbursement of the costs for Lean consultant services from Leanovations.

In keeping with the State of Connecticut’s Next Generation Competitiveness Strategy to help Connecticut suppliers achieve world-class productivity, the Connecticut Aerospace and Defense Initiative was created. The State of Connecticut, through the Department of Economic and Community Development (DECD), made available $2,000,000 to assist companies in the introduction or continuation of Lean manufacturing techniques within their organizations. Companies can receive up to 50% reimbursement for the costs for Lean training and services supplied by a Registered Service Provider such as Leanovations.

Connecticut Center for Manufacturing Supply Chain Integration (CMSCI) administers the Aerospace and Defense Initiative (ADI) and qualified Leanovations, a consultant company with extensive international experience, as a Lean Service Provider for Connecticut companies in the aerospace and defense industry.

Leanovations focuses on lean and innovations, assisting businesses in developing solutions to create profitable growth, through lean operational excellence and to re-invent themselves through new products or process innovations.

If you are interested in finding out more about ADI please contact Leanovations at info@leanovations.com, or visit our website at http://www.leanovations.com/ or call the office at (860) 479-0293.