Innovation for Competitive
Advantage in Manufacturing
Randal Karg
PIMA/TAPPI Annual Meeting March 2007
Innovation Topics
ƒ Broaden the concept of technology
ƒ Illustrate the practical management of
technology innovation
ƒ Practical principles for managing innovation
for competitive advantage
Copyright © 2007 Sinclair Group, Ltd.
Disruptive vs Sustaining Innovation
Innovation
Unbounded creativity
In side /Out side
Outside / Inside
Support Current Business
Models
Disrupts Business Models
Bounded Creativity
Enables new entrants
Discourages new entrants
Copyright © 2007 Sinclair Group, Ltd.
Technology
From Webster’s Dictionary:
The application of scientific knowledge,
especially in industry or business
Copyright © 2007 Sinclair Group, Ltd.
Technology is Everywhere in Your Business
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Human Resources
Financial Methods
Strategy and Planning
Sourcing
Marketing and Sales
Manufacturing
Product Design & Development
Copyright © 2007 Sinclair Group, Ltd.
Technology- A Management Definition
THE SINCLAIR GROUP , LTD .
A SSET R ELIABILITYL EVEL 3 P ROCESSM AP P AGE 2
TAM
1.5
TAM
5.3
SP
1.1
AM
1.1
TSG ASSET RELIABILITY 5. 1
PHASE6 – MONITOR AND ANALYZE PROGRAM PERFORMANCEPHASE7 – ESTABLISH RCA CRITERIA
AI
1.2
AA
3.2
AI
5.2
AM
4.12
EX P E R T
N A N CE
Work Process Design
7.1
ESTABLISH RCA
LEVEL CRITERIA
FROM4.3
5.1
6.1
6.2
6.3
8.1
8.3
8.4
8.5
8.2
FROM4.6
IMPLEMENT RISK
MANAGEMENT
RECOMMENDATIONS
MONITOR ASSET
RELIABILITY
ANALYZE
PROGRAM
PERFORMANCE
IDENTIFY AND
PRIORITIZE
POTENTIAL
OPPORTUNITIES
FOR RCA
PROJECTS
ASSEMBLE
RCA TEAM
AS S E T OP E R A T I O N S EX P E R T
AS S E T MA I N T E
15MAY 2006
DETERMINE
PROBLEM
CAUSE
(S)
IDENTIFY AND
DOCUMENT
CORRECTIVE
ACTIONS
Tools
8.2
8.2
DETERMINE
LEVEL OF RCA
TO BE DONE
YES
TEAM
REQUIRED
?
NO
Standards
TA S K PE R F O R M E R
OP E R A T O R S
OP E R A T I O N S MA I N T E N A N C E
GA T E K E E P E R
THE WOODLANDS , TX 77380
COPYRIGHT
© 2000-2006
ALLRIGHTSRESERVED
PHASE8 – PERFORM ROOT CAUSE ANALYSIS
AM
4.15
AS S E T OP E R A T I O N S LE A D E R
OT H E R WO R K PR O C E S S E S
PHASE5 – IMPLEMENT TASKS
The application of knowledge, especially in business or industry
Copyright © 2007 Sinclair Group, Ltd.
Information Architecture Structure
Business Architecture
Systems Architecture
Drivers
Influences
Technical Architecture
Product Architecture
Copyright © 2007 Sinclair Group, Ltd.
Results of Using an I/T Architecture
Business
Aligned Work Processes
& Strategy
Systems
Re-engineered, Coherent
Work Processes
Technical
Technical Framework for
Integration & Low Cost
of Ownership
Product
Standard Application
Toolset Portfolio
Copyright © 2007 Sinclair Group, Ltd.
Instrument Installation Systems What Are These Things?
Process Piping
Impulse Piping
Transmitter
Copyright © 2007 Sinclair Group, Ltd.
The Conventional Wisdom
ƒ Process Measurements are Critical to
Operational Excellence
ƒ Accuracy Requires Routine Calibration
ƒ Installation Should Facilitate Maintainability
ƒ Tubing Fittings are the Obvious Low Cost
Piping Method
Copyright © 2007 Sinclair Group, Ltd.
Analysis of Experience
ƒ Maintenance Work Order History
Revealed 60% of Effort Non-Value
Added Activity
ƒ “Zero Transmitter”
ƒ “No Problem Found”
ƒ Transmitter Is Not the Problem
#1 Source of Error & Maintenance -Impulse Lines!
Copyright © 2007 Sinclair Group, Ltd.
The New Reality
ƒ Electronic Transmitters Do Not Fail or Drift
ƒ Over 50% of Field Maintenance Activity is Non
Value Added
ƒ Root Cause Failure Analysis Determined That ƒ Most Problems are Caused by Improper Installation
ƒ Installation for Maintainability Caused Most of the
Problems
Copyright © 2007 Sinclair Group, Ltd.
The Solution
ƒ Design Standard Installations for High
Accuracy and Low Maintenance
ƒ Standard Designs Reduced by 10X
ƒ Determine Fabrication Method
ƒ Reduced Set of Standards Enables Shop
Fabricated Welded Piping Design
» New Designs Significantly Stronger With Reduced Leak
Points
» Improves Safety and Environmental Performance
ƒ Changed Work Processes for Design and
Construction
Copyright © 2007 Sinclair Group, Ltd.
A Typical Design
Copyright © 2007 Sinclair Group, Ltd.
Impact On Work Process
ƒ Virtually Eliminated Instrument
Installation Design from Detailed
Engineering Effort
ƒ Significantly Reduced Field
Construction Effort and Cost
Copyright © 2007 Sinclair Group, Ltd.
Impact on Construction Process
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Old Process
Weld Root Valves to
Process Piping
Obtain Transmitter
Build Stand or Mounting
Bracket
Mount Transmitter
Install Impulse Piping
Install Conduit
Install Wiring and Verify
Continuity
Verify Calibration
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New Process
Weld Root Valves to
Process Piping
Obtain Transmitter and
Mounting Kit
Install Mounting Kit and
Transmitter
Install Conduit
Install Wiring and Verify
Continuity
Verify Calibration
Copyright © 2007 Sinclair Group, Ltd.
Impact on Installation Costs
Cost Breakdown: Avg. Traditional vs. Direct Mount
Normalized Installation Costs
100
Savings vs. Trad Method
~40%
75
50
Engr
Procurement
Labor
25
Material
0
Traditional
Direct
Copyright © 2007 Sinclair Group, Ltd.
Results in the Field Three Year’s Experience
ƒ 90% Reduction in Transmitter Work Orders
ƒ 46% Reduction in Transmitter Maintenance
Copyright © 2007 Sinclair Group, Ltd.
Instrument Installation Lessons Learned
ƒ Business Objectives Drive Technology Objectives
Technology Solutions Should Not be Searching
for a Problem to Solve!
ƒ Use Data to Develop Profound Knowledge
ƒ Variability is the Enemy!
ƒ Separate “Develop Technology” Process from
“Implement Technology” Process
Copyright © 2007 Sinclair Group, Ltd.
Instrument Installation Experience
st
Co
Fa
st
w
Lo
The
The Ideal
Ideal
Solution
Solution
Good
Enter
Here!!
Copyright © 2007 Sinclair Group, Ltd.
Disciplined Innovation Principles
ƒ Create the environment for success
ƒ Align innovation to business objectives
ƒ Measure the results of innovations
Success is measured against the
business objective
ƒ Separate technology innovation from
technology application
ƒ Actively manage the work processstandards-tools relationship
Copyright © 2007 Sinclair Group, Ltd.