Value Innovation Program
for Product Planning
of Samsung Electronics
’08. 06. 04
VIP Center, Samsung Electronics
Dong-Joon Kim, PhD, CVS, TRIZ Specialist, 6σ BB
Review of past work
{
Creative VE activities using Value Curve
z
Conclusions by Byungmo Yang at SAVE 2005
{
Using Value Curve (W. Chan Kim and Renee
Mauborgne)
z
z
{
We could easily decide which functions should be
eliminated or created, and raised or reduced
The Cross Functional Team could understand the
product strategic concept more easily
We will further develop the use of the Value
Curve and FAST diagram technique
z
z
More effective activities can be achieved through the
exact performance measurement
We also accumulate these data to improve the effects
of VE activities
Review of past work
{
Creative VE activities using Value Curve
z
at SAVE 2005 by Byungmo Yang
Review of past work
{
Creative VE activities using Value Curve
z
Conclusions by Byungmo Yang at SAVE 2005
{
Using Value Curve (W. Chan Kim and Renee
Mauborgne)
z
z
{
We could easily decide which functions should be
eliminated or created, and raised or reduced
The Cross Functional Team could understand the
product strategic concept more easily
We will further develop the use of the Value
Curve and FAST diagram technique
z
z
More effective activities can be achieved through the
exact performance measurement
We also accumulate these data to improve the effects
of VE activities
Fortune(2005)
BusinessWeek(2006)
Sweden Business Daily
Dagens Industri(2007)
Financial Times(2005 & 2008)
“Samsung Electronics has institutionalized
the use of the strategy canvas
in its key business creation decisions
by establishing the Value Innovation Program Center
in 1998.”
- Blue Ocean Strategy by W. Chan Kim & Renee Mauborgne
22:17
Samsung’s Blue Ocean Approach
Blue Ocean Strategy
Samsung Electronics
Tipping Point Leadership
Head
Body
Arms &
Legs
Cognitive hurdle
Resource hurdle
Motivational hurdle
Political hurdle
Corporate Business
Innovation
Value Innovation
Value Innovation Activity
Buyer Value↑ & Costs ↓
(Differentiation & Cost reduction )
Fair Process
Engagement
Explanation
Expectation Clarity
GWP
( Great WorkPlace )
Samsung’s Value Innovation
LOCK’EM UP
GUIDING HAND
MIX’EM UP
SET A DATE
DO THE MATH
Daily routines can
interrupt the flow
of great ideas, so
Samsung isolates
its development
teams in the VIP
Center-and requires
all members to
work there for
weeks on end, until
the project is
completed.
Some 50 specialists
work at the Center,
helping teams stay
focused on the
problems at hand,
develop various
alternative
solutions, and
reach a consensus
when it’s time to
make a decision.
Brainstorming is
most successful
when a wide
variety of
viewpoints is
represented. So
Samsung gathers
teams of engineers,
designers, and
planners from
across the company
to develop new
products.
Deadlines force
teams to make
tough choices and
overcome
disagreements that
can slow down
progress. Each
team is given a
timetable for
progress and a
fixed date for the
project’s
completion.
Team members
draw “value
curves”, graphs
that rank attributes
such as a product’s
sound or picture
quality on a scale
from 1 to 5. These
help the team set
priorities and
differentiate
Samsung’s
products from
rivals.
Source: BusinessWeek(2006)
Samsung’s Value Innovation
Value Innovation is achieved only when
the whole system of reality, identity, and image
of a team project is properly aligned.
Reality
Value Innovation
Identity
Image
Reality
Identity
Image
- What actually exists in life
from a subjective or objective view
- What we intend to be in the future
from a corporate view
- Planning & Production
- What Customers might imagine
- Expectations based on past & present
reality from a subjective view
Objectives for Value Innovation Program
{
{
{
{
Activate CFT (Cross Functional Team)
activities in the initial stage of the New
Product Development process
Encourage communication and ownership
among CFT members
Formulate strategy for organization
execution
Build team projects into hit products
through Value Innovation
Characteristics of the Value Innovation Program
{
Analysis of Customers’ Behavioral
Psychology from a Zero Base
{
Logic of Product Planning in New Product
Development
{
Logical Decision-Making
{
Recognition of Anticipated Problems :
Risk Management
Flow of the Value Innovation Program
Awakening
Exploration
Strategy Fair
6 Paths
1. Alternative Industries
2. Strategic Groups within
Industries
3. Chain of Buyers
4. Complementary
Product & Service
Offering
5. Functional or Emotional
Appeals to Buyers
6. Time
Forming
CFT
Reframing
the project
Observing/Understanding
Customers
Decision Making by management
Strategy Fair
One Strategy Canvas
Redefining
Value
Systemizing
Report
Systematizing
Concept
Step 1. Visual Awakening
„ Compare your business with your competitors’ by drawing your “as-is”
strategy canvas.
„ See where your strategy needs to change.
example) As-is strategy canvas
HIGH
Premium
Low-end
LOW
Price
Capability
Energy Saving
Design
Optional Function Ease of Use
Premium Space
Step 2. Visual Exploration
„ Go to the field to explore the six paths to creating blue oceans
„ Observe the distinctive advantages of alternative products and services
„ See which factors you should eliminate, create, or change
example) Customer observation
Step 3. Visual Strategy Fair
„ Draw your “to be” strategy canvas based on insights from field observations.
„ Get feedback on alternative strategy canvases from customers, competitors’
customers, and noncustomers.
„ Use feedback to build the best “to be” future strategy
example) To-be strategy canvas
‘The fashion icon’
HIGH
New Product
B-Alternative
LOW
Price
Sound
Easy of use
Easy to
get
Moblility
Capacity
Storage
Optional
Function
Movie
Step 4. Visual Communication
„ Distribute your before-and-after strategic profiles on one page for easy
comparison.
„ Support only those projects and operational moves that allow your company to
close the gaps to actualize the new strategy.
example) Link to development through QFD
As-Is
To-be
Distribute strategy canvas
Communicate strategy
House of Quality
Pareto
CFT (Cross Functional Team) Activity
Best Practice: Bordeaux LCD TV
TV (Overall) – No.1, Sales Amount & Vol.
FP TV – No.1, Sales Amount & Vol.
LCD TV – No.1, Sales Amount & Vol.
(DisplaySearch, 3Q 2006)
Sharing Best Practices
„ Annual Value Innovation Awards: reward best practices
„ CEO, CTO, Corporate Business Innovation, Finance, Marketing, and Staff
Summary
Successful Value Innovation
ƒ Execute with companywide innovation activities
Æ Corporate Business Innovation
ƒ Go with the organization’s work process
ƒ Try out at least one project following the BOS framework,
sequence, and tools before making judgment
: to form training and adoption strategy within the organization
Implication
ƒ No such thing as a completely different innovation tool
- Additional work is always needed to customize it for your organization
ƒ Even the best tools need work to use them innovatively
ƒ Value Innovation ideas start from noticing the everyday things and viewing in a different
angle