BENCHMARKING ON INNOVATION MANAGEMENT. THE SPANISH PERFORMANCE · BENCHMARKING ON INNOVATION MANAGEMENT. THE SPANISH PERFORMANCE ... Siebel Systems Software EE.UU 4.500 ... - SWOT

PAGE 1FOUNDATION FOR DEVELOPMENT OF SCIENCE AND TECHNOLOGY IN EXTREMADURA

BENCHMARKING ON INNOVATION MANAGEMENT. THE SPANISH PERFORMANCE

INTERNATIONAL CONFERENCE ON BENCHMARKING

Stuttgart, 6th – 7th June 2002


STARTING POINT

ORIGIN: COTEC FOUNDATION – Spanish reference for S&T as far as studies, publications, trend analysis, etc. is concerned – “BUSINESS IM”

BENCHMARKING EXERCISE TO ANALYSE THE WAY SPANISH

COMPANIES FACE INNOVATION MANAGEMENT vs. AMERICAN

FIRMS


CONTENTS OF THE STUDY

• Methodology

• Reference IM model employed

• Some “best practices” identified in the different aspects of IM (technological strategy, RTD organisation, product development, cooperation activities, human resources, tech. Watch...)

• Conclusions of the BM Study (some areas)


METHODOLOGY (I)

Typical Benchmarking process has been followed.

a) Selection of the participating companies: – preselection 50 spanish companies (national and

regional innovation prizes, experts on innovation management, etc.)

– brief questionnaire (40%) – criteria to define the final target group (20 firms):

• innovative character• equilibrated sample by industrial sector• companies’ size, etc.

b) Selection of the IM elements – consensus with the target group


METHODOLOGY (II)

c) Detailed Questionnaire (based on a parallel IM study in 200 multinationals from Europe, USA and Japan)

d) Company information collection (interviews withthe company’s key people involved in TIM)

e) Comparative analysis, identification and description of best practices


METHODOLOGY (III)

A similar process, although not so deep, has been carried

out on the 8 foreign companies. The analysis of these

companies has been especially used to enrichen the

research with the identification of additional examples of

good practice, as well as to globally evaluate the IM level

achieved by the Spanish companies.


SELECTED SPANISH FIRMSFOR IN-DEPTH STUDY

132Ona Electroerosión

Machinery 1.410Copreci

290Indalux

4.980Indra

472Ikusi-Ángel Iglesias

124Eliop

4.620Alcatel EspañaElectronic,IT

4.987Lear Corporation

6.500Grupo Antolín

750Autoliv KieAutomobile

2.500Grupo Leche Pascual

1.439Freixenet

10.000Campofrío Alimentación

Agrofood

EmployeesFirmSector EmployeesFirmSector

1.100Telefónica I+DTelecommu-

nications

800SenerEngineering& TechnicalAssistance

655AntibióticosChemist &Pharmacy

952Patentes TalgoOther

TransportMaterial

230Mikalor

981Gres deNules-KerabenMaterials

37.400Repsol-YPFEnergy& Water


SELECTED AMERICAN FIRMSFOR IN-DEPTH STUDY

20.000UKFoodUnited Biscuits

4.500EE.UUSoftwareSiebel Systems

513EE.UUDigital OsciloscopesLecroy

39.800EE.UUPersonal Hygiene Products

Gillette

2.300GermanyMechanical EquipmentCompau

300EE.UUElectronic Components

BTU

97.000UKEnergyBP

24.000EE.UUMedical EquipmentBecton Dickinson

Employees 1998

CountrySectorFirm


PROCESSES OF THE IM MODEL

NUCLEAR PROCESSES:

• directly involved in the technological innovation

• results are related to the transformation of opportunities and ideas into innovations which have an impact on the market.

FACILITATING PROCESSES

• not exclusive of the TIM, but are equally necessary for the nuclear processes to work in an effective way.


IM MODEL DIAGRAM

TechnologicalStrategy

TechnologyAcquisition

ProcessesInnovation

ProductDevelopment

ProjectManagement

Organisation

Q/ Indicators

HR

Technologywatch

Co-operation


NUCLEAR PROCESSES

4 nuclear processes:

Development of the technological strategy: a process which can and usually does culminate in the definition of a Technological Plan

Technology acquisition process: incorporation of technology from outside as well as the internal generation of technology

Product or Service Development Processes: all the activities which go from the identification of an opportunity or the generation of anidea for a new product up to the moment in which the product is introduced into the market

Process Innovation: identification of an opportunity or the generation of an idea for a new or improved process, up to the point in which the process is put into practice in the company.


FACILITATING PRACTICES

RTD Organisation: analysis of the operative structures of the IDT area- difference between R and D- other strategic and operative aspects of IDT (decision taking structures, financing, external technology,resource distribution, etc.)

Management of the Human Resources involved in IDT.

Collaboration with third parties: company’s value chain (suppliers and customers) or organisations belonging to the technological offer.

Quality management and assurance : indicators to measure a company’s innovation system.

Technological Watch: information collecting activities, as well as its analysis and further exploitation within the company.

Project management: horizontal ability which affects the efficiency and effectiveness of the whole organisation and especially the process of productdevelopment and process innovation.


BEST PRACTICE: DEFINITION

Best practice in this context:• activity or group of activities related to TIM • clear and specific objective• defines a concrete way of doing things• has been put into practice by a specific company• stands out especially for its quality and/or the innovating

character of the tasks it entails as well as for the results it obtains.

• can be applied to other kinds of companies and sectors (adapting it to its own reality).


TECHNOLOGICAL STRATEGY: REPSOL-YPF

1. Leading Spanish company in the hydrocarburates sector.2. 3 areas of explotation:

• Oil and Natural Gas Production activities• Production and commercialization of derived petrochemical

products.• Distribution and commercialization of gas liquified from petrol (GLP)

and natural gas.

Turnover 2000: 45.738 million euroForeign commerce 2000: 37%Employees 2000: 37.400


BEST PRACTICE: REPSOL TECH. STRATEGIC PLAN (I)

TSP Mission:

• define, bearing in mind both the Business Units and Repsol Group Corporation, the technological threats and opportunities of the Group’s business interests.

• Satisfy the technological needs through the putting into practice of integral and common projects defined within the framework of a Strategic Plan.

HOW:

• Non-written process, fairly structured methodology.

• Promoted and lead by the Director of Technology, but with the collaboration at other levels within the company.


BEST PRACTICE: REPSOL TECH. STRATEGIC PLAN (II)

METHODOLOGY:

• Joint meetings between those in charge of the programmes and the Business Units (Operations, Marketing and Commerce Managing Directors, etc.)

• A few months intensive work, obtaining a PT in five years.

• For each of the Business areas:

- Sector analysis.

- Analysis of Repsol’s position in the sector.

- SWOT analysis and strategic positioning to achieve

- Definition of strategic objectives from a technological point of view.

- Identification of the areas for technological development and RTD projects (title, typology, years, budget, resources etc.)


BEST PRACTICE: REPSOL TECH. STRATEGIC PLAN (III)

REASONS FOR SUCCESS:

In addition to other less important methodological elements:

• Very structured meetings and diagrammed analysis, rather than lots of

research.

• Discussion and decision taking directed to achieving a reciprocal

concensus rather than the searching of data and information.

• High level of descipline

• The abundant information provided by the review of the project

portfolio designed annually by the Technology Unit.


OPTIMIZATION OF THE PRODUCT DEVELOPMENT PROCESSES: COPRECI

COMPANY’S CORE ACTIVITIES:

Development, manufacture and sales ofcomponents for electrodomestic appliances,providing a service to manufacturers andfinal users of the following sectors:

– Cookery (taps, valves and security thermostats for kitchens, ovens,...)

– Washing (programmers, pressure measurers for washing machines, ...)

– Air heating (security elements for gas heaters etc.)

Forms part of Mondragón Corporación Cooperativa (MCC). Integrated into the components division. This allows the company to know the needs of its customers and the new demands which are proposed to them.

Turnover 2000: 126 million euro Exports 2000: 72% Employees 2000: 1.410


BEST PRACTICE:COPRECI CUSTOMER-GUIDE (I)

WHAT: a figure which allows COPRECI to ensure that their P&S respond

to and are executed according to market needs and requirements.

WHEN: applied fundamentally in projects whose objective is the

development of a new platform of non-standard products which

normally require a technological jump.

WHO: usually a habitual customer, although it may be a company which

is not one of their customers but representative of the market which

the product is being directed to.


BEST PRACTICE:COPRECI CUSTOMER-GUIDE (II)

WHERE: throughout the whole development process, from the

conceptual phase all the way through to its launch.

HOW: the customer-guide recieves the same information that COPRECI

uses to internally validate the product. This normally requires the

establishment exclusivity or confidentiality clauses in which COPRECI

promises not to sell to a competitor.

DIFFICULTIES: sometimes is difficult to match the planification and

speed of the developments. This entails delays for the whole process.


PROCESS IMPROVEMENT: ALCATEL ESPAÑA

COMPANY’S CORE ACTIVITIES:

– Telecommunication equipment

– System, cable and component suppliers.

– Offer complete solutions to problems concerning anything from network infrastructures to user terminals for operators, service providers, businesses and consumers.

Alcatel España is integrated in the European group of businesses Alcatel Telecom.

Competitors: Ericsson, Siemens, Lucent Technologies or Nortel.

Turnover 2000: 1,450 million euro

Exports 2000: 20%

Employees 2000: 4.620


BEST PRACTICE:ALCATEL HIGH-SPEED PROGRAMME (I)

What is this:

A programme that designs and implements projects thought up to achieve business process improvement in very diverse areas.

How does it work:

Management defines a set of areas where it would be interesting to make improvements. For instance:– Customer satisfaction.

– Benchmarking.

– Cost improvement.

– TTM improvement.

– Service assessment.

– Internal satisfaction.

– Stable customer relationships.

– Cost/quality relationship.


BEST PRACTICE:ALCATEL HIGH-SPEED PROGRAMME (II)

• Anyone can propose a High Speed project in an area of interest (duly justified)

• Specific projects are created: a project team and a sponsor from the company’s Senior Management (VERY IMPORTANT)

• Top Management - very close follow-ups for the different projects, fundamentally via presentations from the project team both during the development of the project as well as at the end.

Achieved Results: Through the customer satisfaction questionnaires, it came to light that some of Alcatel’s more relevant customers did not consider the service as highly as before. With a High Speed project centred in this area the customer’s levels of satisfaction were brought back to their previous high levels.


DIFFERENT METHODS FOR TECHNOLOGICAL ACQUISITION: SPANISH COMPANIES’ PREFERENCES

Spanish firms value more those methods which imply a greater control on behalf of the company:

1. Internal RTD2. Continuous Formation3. Subcontracting of RTD activities to companies and third parties4. Incorporate suppliers’ technologies5. Consortiums6. RTD Sponsorships in the University7. Joint ventures / strategic alliances


DIFFERENT METHODS FOR TECHNOLOGICAL ACQUISITION: FOREIGN COMPANIES’ PREFERENCES

The multinationals have no reservations in using methodswhich may escape the company’s control. (joint-venturesor licences, for example).

1. Internal RTD2. Incorporate suppliers’ technologies3. Joint ventures /strategic alliances4. Licences5. Incorporate customer technologies6. Continuous Formation7. Acquisition of internal RTD products


TECHNOLOGY WATCH: LEAR AUTOMOTIVE (EEDS) SPAIN

Leading world seat manufacturer. Currently, a technologically strategic line is based on the integration of electronics in vehicle’s interior modules (Intertronics TM).

Turnover 2000: 395 million euroExports 2000: 91%Employees 2000: 4.987

NB: This study is based on the Spanish subsidiary before it was bought by the Lear Corporation in May 1999.


FeedbackFeedback

InfoInfoAnalysisAnalysis

Identification Identification andSearching ofandSearching of

InformationInformation

Storaje andStoraje anddistributiondistribution

NeedsNeedsUseUse

Searching and analysisOf patents

Internet

Magazines

TechnologistNetwork

KnowledgeStock

Data Base

Bulletin

ProductBenchmarking

Open meetingsfor proyect

disemination

Patentslibrary

BenchmarkingData base

BEST PRACTICE: LEAR TECH.WATCH SYSTEM (I)


BEST PRACTICE: LEAR TECH. WATCH SYSTEM (II)

• Surveillance not managed globally, but rather each of the initiatives that have been developed over time.

• Great diversity of the initiatives and systematic approach -area of improvement.

• Some of the processes are worth emphasis:

1. Product Benchmarking:

• person in charge (Marketing Manager) and a benchmarking team

• internal resources (subcontracting in some cases)

• BD benchmarking – globally available for Lear Corporation


BEST PRACTICE: LEAR TECH. WATCH SYSTEM (III)

2. Search for patents through the PST (Patent SearchTeam):* a team of 6 people (Technological Centre, Engineering and Legal Department)* identify needs* WPINDEX and JAPIO DB* STN patent distributor- minimum information for each patent- more information register


BEST PRACTICE: LEAR TECH. WATCH SYSTEM (IV)

• With the results of the searches, a library of patentes is being designed (complemented with the information from their patent agents).

• In general, the whole organisation participates in one

way or another in the different activities of technology

watch, although there is a team with very defined

roles.


Technological Plan Development REPSOL

RTD Projects Selection LEAR

RTD Organisation GRUPO

RTD Process Structure COPRECI

Product Development & Launching Process LEAR

Guide Client COPRECI

High Speed Program ALCATEL

New Products Industrialisation & Process Improvement AUTOLIV

RTD Indicators LEAR

Multiple Types of RTD Strategical Partnership SEVERAL

Seeking for Collaboration and External Financing ONA

Best Collaboration Framework: Summary of Ideas Implemented by Different CompaniesSEVERAL

Skills Identification System REPSOL

Project Management and Development Methodology TELEFÓNICA

"Project-Maker Machine" SENER

Risk Management System LEAR

Scientific Adviser Comitee CAMPOFRIO

International Practices on Technological Watch ALCATEL

Technological Watch System LEAR

Technological Map REPSOL

GOOD PRACTICES COMPANY

BEST PRACTICES SUMMARY


CONCLUSIONS BM STUDY

1. TECHNOLOGYCAL STRATEGY

2. OPTIMIZATION OF THE PRODUCT DEVELOPMENT PROCESSES

3. PROCESS IMPROVEMENT

4. TECHNOLOGY WATCH


TECHNOLOGICAL STRATEGY:CONCLUSIONS OF THE BM INVESTIGATIONS

1. IMT in Spanish companies has suffered various important changesover the last five years:

– more ambicious objetives (Technology & innovation)– greater range of products and markets.– more sophisticated equipment for the RTD activities.– growth in costs and organisation.

2. The development of a technological strategy is not generalized. It isvalued very positively:

– responds to a participative process– focused on obtaining immediate tangible benefits.

3. Success is highly conditioned by the figure of the Technology ManagingDirector or General Managing Director.

4. The companies which use more advanced practices rely on an evaluation and project selection systems


OPTIMIZATION OF THE PRODUCT DEVELOPMENT PROCESSES: CONCLUSIONS OF

THE BM RESEARCH

• Some businesses: process innovation is more or less relevant than product innovation (such as in the agricultural o pharmaceutical sectors)

• However, product innovation was normally the area of greater interest for all of them.¡¡¡¡¡ New markets and greater market share – strategic objective!!!!!!!!.

4 key aspects for product development: – Capacity to develop more and better products and services– quicker– cheaper– respond to the customers’ needs


PROCESS IMPROVEMENT: CONCLUSIONS OF THE BM RESEARCH

Less systematized methods than those used in the product development.However, companies such as Copreci, Alcatel and Indra are, amongstothers, quite rigorous in the approach and execution of theirimprovements.

Critical factors for process improvement success are:

• The qualifications, versatility and mentality of the people participatingin the improvement teams (their participation in the project must be done alongside the everyday tasks as they are not normally people who dedicate their work wholly to projects).

• Especially in some smaller businesses, requires work which will be done outside working hours.

• Direct involvement of Top Management.

• Clear leadership.


TECHNOLOGY WATCH: CONCLUSIONS OF BM RESEARCH

+ information on the surroundings- deeper knowledge concerning competence.

Techniques currently used:• Benchmarking excercises,• Market observers• Specialized information services• Patents analysis• Etc.

A GREAT NEED TO IMPROVE IN AREAS CONCERNING ANALYSIS, SHARING, DISTRIBUTION AND

STORAGE OF INFORMATION- COMPANY INTRANET.


Further information

• FUNDECYTCarolina [email protected] – SpainTf: 00 34 924 207690

• COTEC FOUNDATIONwww.cotec.es

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BENCHMARKING ON INNOVATION MANAGEMENT. THE SPANISH PERFORMANCE · BENCHMARKING ON INNOVATION MANAGEMENT. THE SPANISH PERFORMANCE ... Siebel Systems Software EE.UU 4.500 ... - SWOT