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A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
A Look at Ideal Innovation Management Process Architecture in Chemical Organizations
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A Look at Ideal Innovation Management Process Architecture in Chemical Organizations

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Effective and efficient innovation management requires a reliable and effective process architecture - like any other business process in an organization. Innovation management is multi-functional and …

Effective and efficient innovation management requires a reliable and effective process architecture - like any other business process in an organization. Innovation management is multi-functional and touches on many other business processes. As a result, you have to deal with many stakeholders across IT, finance, marketing, sales and supply - making it difficult to define the right approach.

This webinar will discuss process architecture best practices, based on our experience working with a number of leading chemical organizations. We will discuss:

• Variation of stage-gated process models
• Information requirements and KPIs
• Rules of governance for decision making
• Managing change for continuous improvement

From this webinar, you will learn how to define a well balanced process architecture for innovation management, as it pertains to chemical companies. You will also gain a better understanding of how to get organized for maintaining a good innovation management process.

To view this entire webinar, please visit http://budurl.com/aeld

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    • 1. Confidential A Look at Ideal Innovation Management Process Architecture in Chemical Organizations Huub Rutten, VP of Research Huub.rutten@sopheon.com
    • 2. 1. Introduction 2. Some definitions 3. Best Practice 4. Maturity Path Structure of this session
    • 3. A bit of theory as introduction
    • 4. What is the Chemical Industry?
    • 5. “Chemical Industry” • Delivers Products --- often presented as raw material, function, property, feature – Basic Chemicals & Commodity Chemicals • Polymers and plastics • Other Derivates – rubber, pigments, resins • Inorganic chemicals – salt, soda, chlorine • Fertilizers – phosphates, ammonia – Life Sciences • Pesticides, vitamins, crop sciences – Specialty Chemicals • Coatings, adhesives, films – Consumer products • Soap, cosmetics, detergents • Uses a range of Sciences and Disciplines • Chemistry, chemical engineering, nanotechnology, biotechnology, mechanical engineering, …. • Always a Lab for experiments and formula, property development • Has Manufacturing Processes -- plants
    • 6. Serves countless number of applications and market segments
    • 7. 1. The industry is IP sensitive (FTO, White Space Capturing, Defensive Patenting) 2. Compliance to Regulations and Standards –Reach, FDA 3. Safety health and environment (SHE) 4. “Green” is a main theme – search for bio-based materials and compositions, new sourcing options 5. Nano – development is a game changer 6. There is a lot of cross-industry collaboration 7. From Bulk towards Specialty -- tons to kilos 8. “Outside In” in stead of “Inside Out” is the management trend 9. Is THE enabling innovation force for many other industries Has Some Special Characteristics
    • 8. What is Innovation Management?
    • 9. It can be used to develop both product and organizational innovation. Innovation management includes a set of tools that allow managers and engineers to cooperate with a common understanding of goals and processes. The focus of innovation management is to allow the organization to respond to an external or internal opportunity, and use its creative efforts to introduce new ideas, processes or products.[1] Importantly, innovation management is not relegated to R&D; it involves workers at every level in contributing creatively to a company's development, manufacturing, and marketing. By utilizing appropriate innovation management tools, management can trigger and deploy the creative juices of the whole work force towards the continuous development of a company.[2] The process can be viewed as an evolutionary integration of organization, technology and market by iterating series of activities. Innovation Management Innovation management is the discipline of managing processes in innovation
    • 10. What is an Enterprise?
    • 11. 11 Porter’s entire Value Chain Definition
    • 12. What is Enterprise Innovation Management?
    • 13. Enterprise Innovation Management Corporate Strategic Plans R&D Supply Chain Production Sales/Mktg Finance Execution Activities R&D Supply Chain Production Sales/Mktg Finance PDM SCM MRP CRM ERP Enterprise Innovation Management Business Strategy
    • 14. 14 Enterprise Innovation Management Innovation Planning 50-70% of strategic initiatives fail to achieve their desired benefits. Portfolio Prioritization 80% identify misalignment between innovation strategies and execution activities. Portfolio Status Review 56% of projects miss launch deadlines. 44% are over budget. Idea/Concept Development 79% say their company lacks high-value ideas. Innovation Process Management 40% of resources are wasted on failed products.
    • 15. 15 The Authentic 5-stage, Stage-Gate® Process The Portfolio Management Process Portfolio Review & Decision Making Analyzing & Reporting of the Metrics Tracking Performance Metrics PM Goals & Spending Targets Gate Scores Clearly Defined New Product Strategy STAGE 2 GATE 1 GATE 3 STAGE 1 GATE 2 STAGE 3 GATE 4 STAGE 4 GATE 5 STAGE 5 The Start: Cooper’s 2-layered NPD Process “Do the projects right” “Do the right projects”
    • 16. Technical Layer •Product structure •BOM, WBS •Technical specs •Engineering Tools •Formula Management •PDM, parts, pieces Multiple Process Perspective Strategic Innovation Planning Innovation Front-end ExtensionsCapability and Function Development Enabling Technology Development Invention Management Portfolio or Master Planning Portfolio Management Business Layer •Strategic Planning •Portfolio Optimization •Gate Decision governance •Ideation 16 Transactional Layer • Cost registration • Financial transactions • Supplier Management
    • 17. 17 Typical Process Steps for Innovation Planning Review trends Business Management BU Leader Marketing Program Manager Innovation Leader R&D Management Review trends Supply Management Review trends Define 3yr Strategy Nov Dec Jan Feb Mar Apr May Jun Dec Review Strategy Board Proposed Plan Initiative list Segmentation Technologies choices Making & Delivery Deliver Updated Pan Initiative List Final Plan Initiate new or adapt existing R&D projects Approved Master Plan Plan and Optimize Portfolio Businesss Program Meeting • Detailed Initiatives • Propose Master Plan REVIEW DELIVERTHINK Commercial Definitions PLAN
    • 18. 18 Planning Across Horizons Technology Roadmaps Market Roadmaps Product Roadmaps Existing Markets/Programs New Markets/Programs Acquisitions / Divestitures Customer Collaboration Multi-Generation Alternative Scenarios New Product Introduction End of Life Platform Transformation Alternative Paths Disruptive Technologies Make vs. Buy Incremental Improvement Differentiated Business Value Breakthrough Opportunities Risk Mitigation Differentiated Products Horizon Plans ensure your innovation strategies extend to the medium- and long-term. 0-1 Year 2-4 Years 5+ Years
    • 19. Execution Processes are always multifunctional OrganizationStructure Executive X X X X X X X X X R&D X X X X Engineering X Project Mgrs X X X X X X Marketing X X X Finance X X X X X X X Manufacturing X X X X X X X X Service X X Sales X X Portfolio Planning / Management Product Planning and Roadmap Strategy IdeaGeneration Conceptualization Scoping BuildBusinessCase Design Development Launch Manufacturing Sales EndofLife Day-to-Day Operations
    • 20. What Would be the Ideal Innovation Management in the Chemical Industry?
    • 21. Basic Architecture has 3 components
    • 22. 1. An architecture of various collaborating process models
    • 23. Multiple Coherent Stage-Gated process models – all multifunctional • Models for Annual Planning – Innovation Planning for the Business and BUs –segmentation targets – Brand Planning, Product Planning, Technology Planning – Planning of Value Chain initiatives – Master Planning for the entire portfolio of initiatives • Models for Execution (of the Masterplan) – New Product Development – cradle to grave, full Lifecycle – New Process Development – Capex projects for Plants/Production Methods – Development of New Value Chain initiatives – Invention Management – IP Management – Electronic Notebooks – Fundamental Research development (Enabling Technology Development) – Technical service request process
    • 24. 24 Typical Planning Process Stage 1 Stage 2 Stage 3Gate 1 Gate 2 Gate 3 Stage 1 Analysis and Draft Concept Plan Stage 2 Propose Definite Plan Stage 3 Execute and Monitor Notes  Annual Planning cycles are repetitive; Annual Plans cover multiple years – rolling plans  It starts with evaluation of the market, the business, the technology and creates the first concepts  In the second phase the plan has to be made definite and get approval for execution. Once the plan has formal status, it will be transitioned to operations for execution  There is continuous monitoring and portfolio management to rebalance where needed
    • 25. Stage 1 Go to Development Stage 2 Feasibility & Build Business Case Stage 3 Stage 4 Stage 5 Go to Launch Go To Production Concept Review Typical process for process development/ improvement (alternative to product innovation) Stage 2 Stage 3 Development & Pilot Stage 4 Scale-up & customer validation Stage 1 Define Concept & Scoping Stage 5 (Production) Notes − This is typically a B2B process, done only by R&D − The customer (perhaps a converter) carries out the last two stages − The benefits are the cost savings achieved by the customer and the business case is based on these efficiencies − Some companies spend a lot of time on this, or are even highly specialized in process improvements Start Project
    • 26. Technology / Platform Development Process Stage 1 Stage 2 Stage 3Gate 1 Gate 2 Gate 3 (Migration to NPD process) Stage 1 Define Concept & Scoping Stage 2 Technical Assessment Stage 3 Detailed Investigation Notes  Refers to a special class of development projects where the deliverable is: − New knowledge, IP − New technology − Technical capability − Technological platform  Such research projects often lead to multiple commercial projects − New product or new process development projects
    • 27. Stage 1 Go to Development Stage 2 Feasibility & Build Business Case Stage 3 Stage 4 Stage 5 Go to Scale-Up Go To Launch Concept Review Typical 5-stage process – new products (typically small percentage, 10-20%) Stage 2 Stage 3 Development & Pilot Stage 4 Production scale- up & customer validation Stage 1 Define Concept & Scoping Stage 5 Launch Notes − This can be either a B2B or a B2C process − In a B2B situation they may typically be producing a branded synthetic material for a certain market (e.g. auto, construction) − In a B2C situation they may outsource production to a Toller − The business customer (often called a converter) will use this material to create a coating, a packaging material or a panel, etc.) − Difficult to estimate the lifecycle of new products Start Project
    • 28. Request Work Acceptance, rejection of job Request form (=CIS) Milestone Planning Report in one document - Additional reports in Related Documents Go 3. Technical service requests and measurement services (generally a minimum of 20% but may go up to 40% or more of R&D effort) − Some companies track all service requests no matter how small − This is a very small process which enables just that. − May also be used for measurement services, etc. − The advantage of capturing this is that you can quantify what gets done and for whom – firms can keep tabs on the percentage of resource they’re spending on these activities as opposed to, say, Innovation. − Suggestion: put the hours into various “buckets” for portfolio view.
    • 29. Confidential Poll Question
    • 30. 2. KPIs and Management Data for transparency and visibility of history, actual situation and future business prediction
    • 31. 1. Taxonomies for your Market Segments, your Brands and major Technologies – often in ERP system 2. Your organization structure and nomenclature 3. Clear criteria for 1. Business metrics – Cost/revenue Financials, %, Volumes, Values, Potential 2. Market typology – declining, growth, emerging, etc. 3. Risk Assessment 4. Innovation Assessment – new, adjacent, breakthrough 5. Quality Assurance 4. Traceability information model 5. IP Assessment 31 Must Haves for KPIs and Data
    • 32. Confidential Poll Question
    • 33. 3. Rules of Governance for disciplined, effective decision-making.
    • 34. 1. The Rules of Governance for Innovation Management are written in a Charter and published by the Board 2. The Rules define accountabilities for each “role” (function) participating in the processes, as well as the “access to data” 3. Roles are top-down and the rules are precise 4. It is a “mandate” structure for decision making: the gate keeper owns the budget and the resources for a specific business 5. It is maintained through a system of incentives 6. The Rules are annually reviewed and reconfirmed 34 Methodology
    • 35. Very Critical: You need a good “Gate” culture • Visible Directives from the Board – targets, rules of governance • People – middle management -- are really held accountable by the top • Gate Meetings are Business Meetings, not project meetings. • The “Gate Keeping” process is evaluated and updated annually • Transparency is promoted • Gate Keepers take their job seriously • It is allowed to make mistakes • Teams and people are trained to do their job • Functions trust each other and understand each other– we feeling • Lean is better than bureaucratic – value added activities only • Differentiation over BUs is fine and appreciated, but as part of a bigger Framework
    • 36. Confidential Poll Question
    • 37. To Conclude…
    • 38. Typical in Chemical Industry today… • No Enterprise Innovation yet • Mostly 5 process models for R&D work and technology development: – Full and Fast track process for “New Products” – Full and Fast Track process for “New Processes” – Sometimes: Process for TSRs (Technical Service Requests) • More and more we see process models for – “CAPEX” projects – innovation of the plants – IP Management – Ideation – less intensive • All initiatives have timelines, calculate NPV, P&L, register and plan resources: basic metrics are in place • Most companies know the “status” of their R&D projects. In one way or another, in reports and portfolio views • Portfolio Planning & Management: still not very mature • Gate Culture is mostly difficult • Beginning: Innovation Planning is coming on the Board’s Agenda
    • 39. 1. Companies underestimate what it takes to improve a business process like Innovation Management a) The time b) The Change Management investment • Establishing a Culture for Innovation – creativity, incentives, kill/go • Rules of Government • Company language harmonization -- taxonomies • New information systems c) Top down commitment – board, BUs, gatekeepers, etc. 2. Companies have difficulties to set innovation targets – arenas, buckets.. 3. Innovation Management is equivalent for “Control” in stead of managing the “Evolution” of the Company 4. Technology is still often in the lead, not the business – who owns innovation? Fruitless discussion. Some Bad Experiences
    • 40. 1. Companies are more and more aware of Innovation Management as a “professional” capability 2. Young MBA people know about Stage Gate and Portfolio Management 3. R&D people understand they need customers to get their “stuff” to the market – functional R&D 4. The integrated Innovation Agenda is coming – Value Chain orientation 5. Companies begin to understand typical characteristics of Innovation Management software Some Good Experiences
    • 41. Innovation Process Maturity Path 3. Configuration 2. Process Architectureand Blueprint 1. Kickoff 4. User Acceptance 5. Go-Live 41
    • 42. 1. Establishing an integrated Innovation Planning framework is key to developing, communicating, and building transformational strategies 2. Structured Innovation Planning helps to Prioritize and Balance: • Bring together market, product, technology, and capability information required to create better strategies • Reveals gaps, challenges, and uncertainties in time to proactively meet them • Prioritizes initiatives based upon market and product drivers 3. Expands the ability to forecast products years into the future 4. Accelerates time-to-market by minimizing the disconnect between R&D and business units 5. Helps you focus resources on most profitable new business Key Benefits Ideal Innovation Management
    • 43. Confidential Thank You Huub Rutten Huub.rutten@sopheon.com nl.linkedin.com/pub/huub-rutten/6/813/995
    • 44. Confidential Please Join Us for the Next Webinar in the Series Driving Innovation Performance: How do leading global chemical companies excel at innovation and remain leaders? October 10th, 2013 at 10:00 am CDT http://budurl.com/chemseries2013

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