Building design capability

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How is India Gearing up to Build Manufacturing Competitiveness?

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Building design capability

  1. 1. Building Design Capability How is India Gearing up to build manufacturing competitiveness Shridhar Lolla, PhDFirst Rough DraftNeeds Significant EditingThis article is about building product development competitiveness through Design.Key words: Entrepreneurship, Sustainable Growth, Design, Innovation, Manufacturing,India, MSMEs, Manufacturing Competitiveness, National Manufacturing CompetitionCouncil, NMCC, Design Clinic, Business Excellence, Execution, BusinessTransformation, Change Management, Business Model Innovation, Leadership, Theoryof Constraints, System Thinking, Focusing Mechanism, Management Technique, Processimprovement,________________________________________________________________________April20, 2012After the theory on Emerging Nations and BRICS… Ruchir Sharma gives a newdimension through his Breakout Nations theory and rings out what could prevent thepampered high growth nations from achieving a potential to reach developed nationstatus.…He mentions, "In early stage of development, emerging nations can narrow theincome gap with rich nations with relative waste, by borrowing or copying thetechnology and management tools of cutting edge nations. At a certain point however,emerging nations have borrowed all they can and need to start innovating and inventingon their own, and many fail at this challenge. Their economies suddenly stop growingfaster than those in the rich nations, and thus they stop catching up. They have hit themiddle income trap, where they can idle for years, like unhappy resident of a lowermiddle class suburb…." Ruchir Sharma, Breakout Nations- In pursuit of next economicmiracles.Notwithstanding the warning from Ruchir Sharma, India is way short of even adoptingtechnology and management techniques in an all encompassing way. As far as innovationis considered… it is at very early stage. A part of this initiative is appearing in improvingmanufacturing competitiveness of Indias MSMEs and it starts at innovation throughDesign. Though, I wonder why not so in Service Industry, when a vast majority of GDPas well as employment is in Service Sectors. 1Copyrights ©2012, CVMark Consulting, All rights reserved.
  2. 2. National Manufacturing Competitive Council under its NMCP and in line with the newmanufacturing policy has rolled out program to establish Design culture amongstMSMEs in India. This was long overdue.The goal is to help MSME manufacturing industries move up the value chain byswitching the production mode from original equipment manufacturing to original designmanufacturing and hence original brand manufacturing.The objective of its flagship program, Design Clinic scheme is to enhance industryunderstanding and application of design and innovation, and to promote design as a valueadding activity and integrate it into mainstream business and industrial processes ofMSME’s.It aims to bring Indian manufacturing sector and design expertise on to a commonplatform and to provide expert advice and cost effective solutions on real time designproblems, resulting in new product development or continuous improvement and valueaddition for existing products.Design Clinics scheme will be implemented through National Institute of Design (NID),Ahmedabad who will act as single coordinating body responsible for delivering thescheme.The Design Clinic scheme will help MSME’s to avail independent advice on all aspectsof design. It helps MSME’s realize and achieve their design-related objectives. Practicalsupport is provided to MSMEs via one-to-one advice, seminars, and workshops. Thisspecialist advice is provided by experienced designers for new product development aswell as enhancing existing product portfolio.The scheme is divided in two major parts viz. Design Awareness and Design ProjectFundingDesign AwarenessThe objective is to create general awareness and sensitization about the value and powerof design for businesses through seminars, talks, workshops and other engagementmethods. It will be a combination of Design need Assessment Survey and workshop/seminar for the participant members of the cluster selected. This would be divided intoactivities like seminar, workshop and diagnostic study.Design Project Funding 2Copyrights ©2012, CVMark Consulting, All rights reserved.
  3. 3. Through Need Analysis, Consulting and Funding, the funding assistance will be providedto the MSMEs in their selection and engagement of design consultants and professionals.About Design and its Position in BusinessThe assumption is that Design is an important competitive attribute for the success andgrowth of an organization and today, MSMEs have less appreciation of Design. Further,MSMEs have shortage of funds to seek Design services that are highly specialized todayin India.The NMCP is of the opinion that value of Design is largely invisible in the value chain ofan organization and hence, for most of the people do not realize its importance. It is alsobased on the premise that Indian MSMEs are heavily beaten abroad as well now in theirwon backyard.There is a belief that if Indian MSMEs develop design capabilities they can competebetter in international market for the world is becoming flatter, day by day.This also gives us a feeling if large Indian organizations are good in design, while truthcould be far from reality. For design in India is limited to furniture, fashion, apparel,interiors, art designs etc. What NMCP is coming to is about industrial products.Modern management is based on observability, measurability and controllability ofactivities. And true Design (not reengineering) is one where for business managers, it hasbeen not possible to predict how good design emerges, and therefore, this is one processwhich is highly uncontrollable. For the same reason design has not yet found its place inmain business process.Yes, to most of India, design is intangible, though it is practiced in every business. Andyet, if you are a designer, people would ask you why should they pay you for you havenot created anything. Remember the early days of IT, when people would say that theycant pay much for the binaries (and that gets into a tiny CD), because they cant see it.(And most common culprit for this mentality was the traditional cost accounting andtaxation practices, who have least of imagination in understanding different way of valuecreation. They want to count everything, inventory, parts, money….. they do not haveinsight to value intangibles.Design actually has a service market. Today, appreciation of innovative designs is foundniche areas of high value items, bought by high net worth people and it seems ifappreciation of design is a refined taste. Not for nothing that for a vast majority of peopledefine Aesthetics as the first element of design.It is a laudable initiative. I went through the policy document and I have a few things tocomment. 3Copyrights ©2012, CVMark Consulting, All rights reserved.
  4. 4. On the Design Clinic InitiativeThe Goal of any intervention to MSMEs, and therefore this initiative is to ultimately helpMSMES is growing their business (increase their opportunity for sustainable revenuegrowth). Most of these MSMEs are run by entrepreneurs, who are highly resourceconstrained; skill, people and money included. And, they have very little time to waste,because of the way they manage their business. They tend to operate extremely scheduleand often, struggle to invest not just in design but in any other initiative unless it isstrongly driven by customers or quick revenue generation opportunities.It also means that non appreciation of design may not be the only reason for MSMEsadopting latest design practices, but Design is likely to be one of several constraintsamongst MSMEs. It means that the Program must take into cognizance that at a givenmoment of time, growth of only a few companies would be constraint by lack of Designskills. Which also means that including other organizations, for whom other factors areconstraints would not be a good idea and it will not give the desired results.Lets get to brass tacks. From an Entrepreneurs point of view, it is important that anyimprovement in the design capability of the organization brings far more benefits to anMSME than improving any other aspect of the business. This is possible if and only if anorganizations design capability is a bottleneck in the complete process of value creation(as explained below).….Business is a system comprising a set of interdependent building blocks, which togetherallow it to progress towards a common goal. The following figure shows a conceptualmap of business as a system, that is responsible for managing the circle of creating,delivering, capturing and investing value. It is the prime objective of any Entrepreneurto operate this circle faster and faster with time. However, at any moment of time, theflow of Value (& therefore money), represented by this circle would be constrained byone of the building blocks. That is the pipeline of value flow will be thinnest in the blockthat constraints the flow. Which also means that by focusing attention of such constrainedblock, performance of the organization (flow of value) can be quickly improved. Since, ina pipeline, flow rate is dictated by the thinnest section, trying to improve any other part ofthe business than the constrained one will not deliver any improvement but would onlyexhaust precious resources of the organization. 4Copyrights ©2012, CVMark Consulting, All rights reserved.
  5. 5. Figure: A simple 4 block business modelFigure: The circle of value flow of a businessWhich means that for NMMC, a candidate organization for Design clinic would be theone for which Design capability is the thinnest pipe in its value flow circle. Trying tobuild design clinic for organizations, where the constraint is not in Design, would notdeliver real results. Just think about an organization where the current key constraint is inSales (it does not have sales channels established and the entrepreneurs team is busy in 5Copyrights ©2012, CVMark Consulting, All rights reserved.
  6. 6. rolling out new products). Even if the organization realizes that improving its Design isimportant, it may just not have enough time to pay attention to any new initiative onDesign process improvement. For such an organization, it would not help be enrolled intothe program.Figure: For an organization to leverage benefit of improvement in design, its flow ofvalue must necessarily be constrained by its design resource.….In this regard, design must be seen by the entrepreneurs as a part of the overall systemand a methodology must help in identifying change in the design process of theorganization. Now since all organizations are not same, it is important to search out thosespecific organizations that are constrained by design.Once organizations whose business is constrained by lack of design capability areidentified, the next job would be to identify those elements of design that prevents aparticular organization from adding value through design.Once an element of design is identified, in an entrepreneurial environment, it is possibleto get quick results by enhancing that particular aspect of design for the organization.However, as this particular aspect of design is addressed, one would find that otheraspects of product design as well as organization design will come on the way. For theentrepreneur to ultimately leverage the improved Design process, the new capability mustbe ultimately capitalized. And if an organization is hitherto not used Design as animportant attribute then it would not have the necessary capabilities to sell the new found 6Copyrights ©2012, CVMark Consulting, All rights reserved.
  7. 7. capability. It is important that organizations are then handheld in building a capability tocapitalize on their design quality. Realization of the support provided by NMMC, mustultimately result in making more money for the entrepreneur. Having a systematicprocess to improve one by one aspect of design of the organization will build the cultureof design.Let us again understand why do we say so?Because we are talking about MSME and not large well fed and resourced organization.Most of the MSMEs are led by entrepreneurs. By nature, these organizations are resourceand capability constrained. Often, these organizations are busy in operational mode. Anyapproach to improve their business that takes substantial time and attention ofentrepreneurs puts enormous pressure on them and disruptions to their ongoingoperations. In such a situation, having a methodology of improvement that deliversresults after 1 year or even 6 months is too long a period for an entrepreneurs to wait andinvest themselves NOW, for they seldom have that long of visibility of business,especially in todays ever changing business environment.In order to do justice with building design competencies in MSMEs it may therefore berequired to have an approach that gives results to them while building their capability.The engagement must be more of an iterative approach than a waterfall approach. Theapproach must allow the entrepreneurs to make quick sellable improvements.The truth is that in todays competitive environment, an organization must be able tobring out products rather quickly with features and competencies that build with time,each iteration and each version.Clet:03-1-12__________________________________________________________________CVMark handholds business leaders in creating organizations that are built to transform.For developing, innovating and executing your business model, call Tel: +91 94480 70081 or Email details to : lolla@cvmark.com .CVMark Consulting, #2304, Nandi Park, Gottegere, Bannergatta Road, Bangalore 560083, INDIA Web: http://www.cvmark.com 7Copyrights ©2012, CVMark Consulting, All rights reserved.

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