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  • 1 Page
  • Sustainability driving Innovation in Products, Processes and ServicesAnurag Jain – Consultant, TATA Consultancy Services LimitedEdzil Gonsalves – Consultant, TATA Consultancy Services LimitedJimish Shah – Consultant, TATA Consultancy Services Limited
  • Contents 1. Abstract ........................................................................................................................................... 4 2. Introduction...................................................................................................................................... 4 3. Key Challenges ............................................................................................................................... 5 4. Framework ...................................................................................................................................... 6 5. Expected Benefits ......................................................................................................................... 11 6. Examples and Case Studies ......................................................................................................... 11 7. Conclusion..................................................................................................................................... 13 8. References .................................................................................................................................... 13 9. Author‟s Profile .............................................................................................................................. 143 Page
  • 1. AbstractInnovation has been known to transform not just products and organizations, but even nations. So weoften talk about innovation as a culture, not just a concept or a mere framework. Be it innovation inproduct, process or service, it brings along Change Management challenges.On the other hand, issues of Sustainability for environment and social responsibility both fromregulatory compliance and customer awareness point of view have become key „Value‟ drivers,especially for manufacturing organizations. Sustainability is finding the right balance of Social,Financial & Environmental aspects of product & business as a whole. For both Sustainability andInnovation, one has to deal with the difficult twins - Risk and Opportunity.Project Managers often deliver projects on time and on budget. The question to be asked is, Is thisenough? It is not only about maximizing returns, but maximizing value. Managers have a knack ofidentifying opportunities and managing risks. They will have to play the crucial role of Change Agents.This will mean moving away from the organizational mindset and taking the larger perspective, settingtough goals and achieving them.This paper demonstrates a structured framework that can be leveraged by teams across industries toachieve the parallel goals of Sustainability and Innovation. It also presents the possibility of finebalance of long term Sustainability while achieving financial viability and vital positive societal impact.Sustainability is a journey and can only be achieved through involved responsibilities across the valuechain.2. IntroductionAll along, man has incessantly challenged himself and in this endeavour man, communities, nations,corporations and societies have emerged with path breaking solutions to transform the way of life. Inthe process, they have taken decisions and built products that tend to endanger our very planet andthe ecosystem. Blame it on the undying spirit of wanting to outdo the competition and improveprofitability, enterprises have very often taken shortcuts that are not conducive to the longevity of theplanet. There are arguments and counter arguments on determining the genesis of all this mess andhow do we fix it going forward for our future generations. Across the globe, governments,corporations and activists are involved in pitched battles to fix responsibility and restore sanity.Regulations are being proposed to create deterrents as also incentives for influencing behaviorstowards the environment and sustainability.The quest for sustainability is already influencing the industry landscape. To most, it meansconstrained resources and constantly rising prices. It is forcing a transformation and compellingorganizations globally to approach business models, processes, technologies, products, services verydifferently. Today companies are realizing that it is neither easy nor cost effective to change to asustainability approach in the short term. It will need a sustained mission and ruthless awarenessacross all stakeholders to create an appreciation and alignment for environment.Innovation is the engine of evolution. It is the key to making sustainability a reality using ideas andmethods that revolutionize the way we handle resources, especially natural resources. Let us take an4 Page
  • example. Internal Combustion engines have not changed much over the last 100 years except thatthe efficiencies have gone up to a certain extent. However, in the recent past, innovation inautomotive powertrain has taken some quantum leaps. What is actually driving all this? Rising gasprices due to monopolistic behaviors, political crises, economic downturns and so on. Alongside, youhave the governments stepping in to implement stringent regulations, incentives for high efficiencyvehicles and penalties on fuel guzzlers.Hybrid cars are now a reality, both technically and commercially viable. But are these cars reallydriving sustainability? You still need to charge them using electricity that has been generated fromcoal or nuclear energy. The coal stock is fast depleting, there is pollution from the power plants,nuclear waste disposal, threat of catastrophic disasters and then there are transmission losses. Ineffect, does it imply a sustainable solution or simply means shifting part of the problem. We are takingrapid strides and there are many such questions that are emerging. Honestly, it needs a holistic,objective evaluation and approach.3. Key ChallengesLet us start with defining „Sustainability‟. What does it really mean and what is the scope? Whileinteracting with business managers from major corporations we found that globally multiple definitionsand interpretations exist. Majority of the definitions provide a narrow myopic perspective with limiteddepartmental or organizational scope and more importantly short term focus. This led to uncoveringthe major challenges faced in embracing sustainability.Lack of Awareness:There is a lack of awareness about sustainability. Individuals and organizations do not understand thefull implications of their business activities, production processes and product‟s usage on theenvironment and society. Small and medium scale business, especially in developing andunderdeveloped nations lack awareness about sustainability. How their products, processes and theirway of conducting business impact the environment and organizations?Limited Focus:The focus of organizations‟ is limited in terms of space and time. There is immense pressure onmanagers to produce financial results quarter after quarter. This leads to creating local optima atdepartment level. Some mature organizations have been able to extend this to the organizationallevel. So when a problem arises it is just shifted to a different location or pushed back to a later dateinstead of taking effort and time to resolve it. Following this tradition, an organization‟s sustainabilityinitiatives have a limited departmental or organizational focus. Small and medium scale business,corporations in developing and underdeveloped nations have their primary focus on growing theirbusiness and are financially oriented. In such a setting sustainability initiatives have limited impactand at times lead to shifting the problem to another person‟s plate.Managing Cultural Change:Sustainability today is treated as a compliance mandate to meet specific standards. Though this canbe treated as a stepping stone, most companies treat it as the final destination. Organizations‟ should5 Page
  • treat sustainability as an evolution process. Sustainability should be imbibed in the core values of theorganization and integrated in the vision and mission of the organization.Tracking and Tracing Sustainability:Organizations across the world have matured their business performance measurement systems by TMadopting frameworks like Balanced Scorecard , etc. There are no frameworks or measurementsystems which tightly integrate sustainability goals with other organizational goals. Some matureorganizations have set sustainability goals at organizational level but translating these goals todepartment and employee level is one of the biggest challenges. There is a clear void of adequatetools to manage environmental compliance, impact on society, traceability and reporting.New Product Development:Portfolio management is a key management activity which decides the allocation of scarceorganizational resources to maximize results. Business cases are the basis for decision making in theselection process. Business cases do not include impact on environment and society as decisioncriteria. Huge investments and long development cycles weaken the prospects of sustainable productdevelopment to emerge a winner. Hence, sustainability gets a secondary priority and is brought in latein the product development process.Lack of Adequate Incentives:There are very few incentive programs initiated by governments to encourage organizations to adoptsustainable practices and develop sustainability programs.4. Framework“Problems cannot be solved at the same level of awareness that created them." ~ Albert Einstein.Let us start with understanding the scope of Sustainability. In a nutshell, it can be stated as„Sustainable Environment, Sustainable Society, and Sustainable Business‟. A structured approachand framework is required to manage the social, economic and environmental impact of theorganization‟s activities. Policies are being laid down by nations and industries. Industry standardssuch as BS 8900, ISO 14000 have been created to enable a framework for organizations to managesustainable development. There are also private standards such as GRI, AA1000 and so on. Thesestandards and their compliance will act as a starting point and get society and organizations thinkingabout sustainability. To have a deep impact and uncover the true potential, we will have to go downthe transformation path to sustainability. Such a paradigm shift will require a broad based approachwhich is deployable for organizations, institutions, civil societies and so on.Figure 1 shows an interesting interplay between social progress, economic growth and environmentalstewardship. As can be seen, there is a common ground for sustainability. However, for this sweetspot to be significant, the innovation engine and culture change will have to kick in, as mundane ideaswill not yield the desired harvest.6 Page
  • Figure 1: Sustainability [www.envplanning.com/.../sustainability.html]Managers will have to conduct their business activities and introduce products and services in themarket which will ensure profitable growth of the organization, upliftment of the society and positiveimpact on the environment. Such a transformation requires a long term planning, business analysis,cultural change management, risk management, tracking & monitoring. Program Managers with theirsphere of influence are best suited to act as owners and catalyst for the sustainability transformation.Figure 2 shows the Sphere of Influence for Program Management.7 Page
  • Figure 2: Program Management - Sphere of InfluenceThe various perspectives to be considered are given below:Cultural Change:Going down the transformation path of sustainability will require a complete change in individual andorganizational mindset. The values of caring for the society, nurturing the environment will have to beimbibed in the value system of nations and organizations. Government leaders and seniormanagement officials should provide incentives to mould individual behavior. Ethics committee shouldhave stringent laws enforcing the sustainability policies.Goal Setting and Performance Management:Organizations should set goals and adopt performance management systems which integratesustainability goals with the traditional goals. These goals should then be translated down todepartment and employee level. Accountability at the lowest level will drive bottom-up innovation.When organizations adopt sustainability it will result into better branding, positive economic impactand lower consumption of natural resources. Hence, success of programs should be measured notonly in terms of cost efficiency, time and quality; but also in terms of brand value creation, impact onenvironment and value creation for society.Supply Chain Management:Today, organizations have launched initiatives to reduce the impact of their production processes onthe environment, reduce their carbon footprint, conserve natural resources, etc.. Companies shouldmove beyond the organizational boundaries and include the coverage to the entire supply chain.8 Page
  • Companies should check the impact created by the entire supply chain starting from suppliers to theend customer. Suppliers should be rated based on their adherence to sustainability standards.Sourcing management teams should make their decisions based on these ratings. Customer usagepattern should be analyzed and feedback should be provided to design teams to approve designswhich minimize usage of water, pollution, etc.. By extending the boundaries of coverage organizationswill be able to better collaborate and uncover new options to make their products environmentfriendly.Portfolio Management and Product Development:Figure 3 explains the approach that should be adopted by organizations for their PortfolioManagement decisions and Product Development principles. Figure 3: Portfolio ManagementImpact on the environment should be a vital deciding factor in the portfolio management process.Scope of the product lifecycle should span from concept till discard. From a Program Managementand Product Lifecycle Management (PLM) perspective, the orchestration between the key productand process aspects has been explained in Figure 4. The fine balance between social, economic andenvironmental factors can be achieved by conducting design analysis, environmental analysis &financial analysis during early stages of the new product development process.9 Page
  • Figure 4: PLM influence on SustainabilityProduct and process innovations can not only bring effectiveness and efficiencies on an exponentialbasis, but also support continuous improvement for sustainability on an on-going basis. These aresome of the enablers: 1. Tracking the material, substances & their weight management through the product lifecycle 2. Risk and hazard Impact analysis, thus reducing risk of legal litigations and related costs 3. Digital Manufacturing (digital simulation) to ensure a. The optimum use of energy, material & other resource during manufacturing process b. Optimized Plant layout with efficient material movements c. Minimal Impact on environment by improving disposal requirements, analyzing the use of Air, Water & energy requirements d. Use of the best possible technology e. Efficient automation thus reducing time, resource requirements of Processes 4. Support Virtual Collaboration, while reducing paper based information, travels & thus contributing to Greener EarthInformation Availability & Transparency:Organizations should focus on making the right information available to the right people at the right10 Page
  • time. Information availability and transparency are key aspects that will aid effective decision making.Each organization activity should be analyzed for its impact on the environment and metrics shouldbe devised. Systems should be implemented which measure these metrics and provide inputs whichcan be linked with performance management systems. If this information is transparent and sharedwith employees, this will generate awareness and motivate individuals to adopt alternate practices.Data Management should ensure: 1. The right information is available to make the “trade-offs” or to make the “course corrections” 2. Analyze the impact of change to give better insight into cause and effect. 3. Traceability/Audit of the data (Capture, analyze, release with authorization, report, compile and correlate the conformance data)New Generation Tools:New generation tools being pursued by leading organizations include: Integration between sustainability and innovation Open innovation or open sourced approach Ideation Platforms Industry-Academia-Government joint programs5. Expected BenefitsSo what do corporations have to gain in the process? Corporations are able to meet their Social Responsibility not just in spirit, but in reality As the real efficiencies go up due to innovation enabling sustainability, monetary savings come about. Such savings when invested generate more jobs and keep the economy healthy. Corporations save millions on what would have otherwise been spent on long, frustrating legal battles Elevates the brand image and creates Goodwill People involved with such corporations, their product and services, have a deep sense of fulfillment which leads to positive vibes Sustainability oriented products, processes and services command a premium • Creates a better planet for our future generations6. Examples and Case StudiesIn the recent years, we have seen a multitude of innovative solutions for sustainability. To name afew, we have the Public transportation systems, digitization, virtual meetings, waterless urinals,sanitizers, inverter based home appliances and programmable embedded systems. The sustainabilitymantra is driven by three key words; reduce, reuse, recycle.11 Page
  • Let us look at some real life examples-Unilever is introducing dry shampoo in various markets. It is an attempt to halve the water associatedwith the consumer use of its products by 2020. It is relying more on product innovation than on thecustomer behaviors to meet its sustainability agenda. So, giving consumers a dry shampoo thatdoesn‟t need water is a far easier way of reducing water consumption in the bathroom than educatingthem to use less water.Unilever is running a global program aimed towards reducing greenhouse gases, water and wasteassociated with the consumer use of its products. It has embarked on a journey to not only reduceemissions from its manufacturing plants, but has taken upon itself the responsibility of the entire valuechain, from suppliers, distributors to its consumers. Around 68% of the company‟s carbon emission isdirectly related to consumer use, while the manufacturing process contributes only 3%. The effortshave led to a sustainable sourcing model and better livelihood for farmers. Realizing the challenges ofthis Herculean mission, the company is leveraging open innovation programs. Time will tell the resultsbut a job well begun is a job half done.Waste handling - When we set aside something as waste, rag pickers engage in sorting to reclaimreusable and recyclable materials. The process leads to creation of livelihood for the rag pickers, theirdependents as also ensures good use of materials which otherwise would have otherwise led to landfilling. Waste pickers may collect waste from households, community dumps and various othersources. There have been efforts for indiscriminate automation of dumping grounds. This would onlymean depriving the livelihood opportunity for Waster pickers and sub-optimal recycling of materials.On the other hand, one cannot ignore the safety hazards to the lives of the Waster handlers andtherefore a collaborative solution is necessary. This will mean waste pickers working as sorters orprocessors in recycling centres.Nike has taken up initiatives to figure out ways to incorporate materials in the products so that theyare not only great for performance but are also regenerative and recyclable. This approach hasvirtually transformed their supply chain. Nike‟s Sustainable Clothing Coalition and GreenXchange arealready benchmark achievements. This establishes a clear case of sustainability driving innovation ofan organization‟s products and processes.In our various engagements globally, we are enabling Customer Centric Innovation Models forcontinuous improvement. These run various themes such as portfolio rationalization, legacymodernization, etc. that help Clients in continuous improvements on time, cost, quality andorganizational dimensions. Value Stream methods are deployed to identify process wastages andeliminate them resulting in sustainable processes. Major enablers include: Common Processes,Bottom-Up Innovation, Best Practices, Objective evaluation frameworks, Traceability andAccountability.As part of Program Management, we have helped Clients with intuitive dashboards providing nearreal time view of key performance parameters and predicative modeling. Technology has been agreat enabler of traceability and information management for effective decision making andcompliance management. We have participated in large programs involving overall of productdevelopment processes, remanufacturing/reconditioning of parts, reverse logistics, network andinventory optimization.12 Page
  • 7. ConclusionBottomline, it simply means doing the right thing. It may seem to take time but as long as the path isdetermined and the journey begun, you will get that sooner than anticipated. One might have the bestof intentions but if the approach and implementation is not holistic, it will never yield the desiredresults. The roadmap will have to be skillfully crafted, tools and techniques meticulously nailed downand a communication plan enabled to improve the chances of program success. All stakeholders willhave to do their bit without which any form of innovation for sustainability will be met with sub-optimalresults. Time will tell if we are able to make or break this resolve.8. References1. Changing Business Models to Change the World by Paul Murphy (Valid Nutrition) MIT Sloan Management Review th2. Economic Times of India dated 25 April, 2012: Sustainability & INDIA INC.3. Project Managers are Agents for Economic Growth Transcript Presented by Mark Phillips, Fichtner4. Project Management and Economic Growth: A 21st Century Competitive Strategy for Technology-Based Industries John M. Aaron 11/19/055. The Sigma Guidelines – Putting Sustainable Development into Practice – A Guide to Organizations6. http://www.triplepundit.com/2011/10/nikes-road-integrating-innovation-sustainability/7. http://hbr.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation/es#.T- x_61MR5JQ.email8. http://www.triplepundit.com/2012/07/ford-sustainability-new-nike/?dhiti=19. www.envplanning.com/.../sustainability.html10. http://www.inclusivecities.org/waste_pickers.html13 Page
  • 9. Author’s ProfileIt should also include address for postal communication, name of the organization, email address,photograph, phone and fax numbers. Anurag Jain, 21 plus years of total experience with 11 plus years of core industry experience and close to a decade spent in Consulting and Advising multinational manufacturing corporations. Has worked on a variety of transformation programs spanning across the entire Value Chain. Core focus areas is NPI & Supply Chain Email: anurag6.j@tcs.com Edzil Gonsalves, 21 plus years of total experience which includes 15 years of core industry experience in Product Development, Supply Chain and Program/Project Management. Has worked on a variety of large Consulting and Implementation Programs in the area of NPI, Supply Chain and Customer Experience Management in North America and Europe. Email: edzil.gonsalves@tcs.com Jimish Shah, 5 plus years of total experience in the areas of Market Research, NPI and IT. Has worked on multiple large Business Consulting and IT programs across geographies for government agencies and manufacturing clients. Email: jimish1.s@tcs.com14 Page