“Yield higher buyer satisfaction by developing products that actually solves a problem, is easy to use/set up, is convenient, fun and environmentally friendly.”
“An over-designed product causes waste and increases overhead. It is best that you gather insightful insights from customers to ensure you truly comprehend what they really want in a product instead of over-designing a product that no one wants to buy or understands how to use.”
I hope you’ve had a great week.
Today, I would like to touch upon R&D spend. Research has shown that highly successful innovative businesses have a lower R&D spend to sales ratio compared to their competitors. For example, Microsoft has one of the highest R&D spend to sales ratio but poor innovative value-creation; however, Apple with one of the lowest R&D spend to sales ratio has continuously acquired market space with iPods, iPads and iPhones. Another great example is 3M’s post its, which were developed with resources that were already available at the company.
Spending less on R&D is not the only factor to consider when you are looking to create innovative products. You must also understand all your potential customers, their pain points and preferences. This information will help you identify and solve a problem that your competitors are not targeting.
I hope you’ve enjoyed this E.O.W!
As always, “Success is continuous improvement!”
Whenever there is a new product or service being offered to customers, there is a new process and value stream. Value Streams include both non-value-added and value-added activities and are the actions required to create a product or service from raw material until it reaches the customer. Value Stream Maps are more detailed than process maps as they include details, such as, cycle time, changeover time, uptime, process activities, operator self-inspection notes and customer specifications.
To successfully integrate value stream mapping into product development you must first accurately gather, understand, and specify the value desired by the customer. Collect real time data of the actual pathways of material and information flow. You may have to conduct several walkthroughs, first to assess the entire value stream and then to gather more detailed information. The best course of action is to work backwards as this reduces the probability of missing an activity because it takes place more slowly, without jumps to conclusions of assuming you know what happens next.
It is wise to utilize a pencil, paper and stopwatch when creating a process map. Once you have completed the map, remove the waste. Let the requirements of the customer guide you in making value flow from the beginning to the end of the process. The three most critical KPIs in a value stream map are: cycle time, value creation time, and lead time.
Cycle time refers to the time it takes to complete the overall process. Value creation time is rarely equal to cycle time. It is the time it takes to complete those work activities that actually transform the product into what the customer wants. Lead time is the time it takes to move one piece, part, product or service all the way through the process. All this information should be captured on the value stream map. When the value stream is complete, it will help you identify wasteful activities and realize opportunities for improvement. After you have identified the areas that need improvement, create an improvement plan that clearly states what needs to be done and when, has clear and visual measurable goals and objectives, complete with checkpoints, deadlines, and clear responsibilities.