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What Does Embracing Innovation Truly Mean?

March 8, 2019
Internal culture, close customer relationships and a commitment to continuous improvement all play a role.

The rapid pace of advancing technology and growing customer expectations mean that manufacturers must continually reinvent themselves through research and development and the introduction of new products.

Openly embracing innovation and inventive design can also help break down organizational barriers and bring people together across the various disciplines of an organization.

But what does it truly mean to be innovative? Listening attentively to customer needs and understanding their challenges are key. This frontline feedback empowers R&D engineering, product development and manufacturing teams to continually improve existing product lines and develop new products to meet emerging challenges.  

It’s one thing to strive for innovation, but it takes a combination of internal culture, close customer relationships, a commitment to continuous improvement and R&D with a focus on economic growth and the protection of strong international intellectual property laws to truly wear the mantle of “innovative manufacturer.”

As the only remaining U.S. manufacturer in its product category—currency and coin handling systems—Cummins Allison feels the pressures of competitive differentiation and continuous innovation. The majority of our competitors are from Asia and offer less-expensive, lower-quality products, so we have to stay ahead of the game to remain the market leader.

We innovate based on customer needs—either overt or anticipated—and rely on both daily interaction and intentional customer research to continue to evolve our offerings. Along with innovative products, quality and consistency of sales and service support are particularly important to large enterprise customers, such as banks and armored carriers, that want a uniform level of high-quality product and service performance nationally.   

Fostering an Internal Culture of Innovation

Innovative environments can be challenging to maintain and manage, and doing so requires the right combination of standard processes and free-form ideation.  

Like many companies, Cummins Allison utilizes a five-stage “tollgate” process, establishing key milestones and timelines for each part of the process before the team can move on to the next stage. Consistent methodology keeps the focus and creative energy squarely on the problem, not the process. This structure has reduced by 50% our variance between planned and actual deliverables.

In addition, we’ve allotted 5% of the engineering staff’s time to pure ideation not related to any specific project. Some engineers thrive in an environment that allows them to use their creativity to solve undefined and challenging issues. This type of environment creates the opportunity for developing patents, which facilitates career advancement, personal recognition and fulfillment.

By its nature, the work is more complex and challenging and the opportunity to solve complex problems satisfies a passion and enhances long-term engagement. Knowing there are such positions is exciting and rewarding and something certain individuals strive to achieve.

Everyone Get Involved

Through a series of Kaizen events and education seminars, Cummins Allison employees have identified and implemented process changes that have decreased the space required to assemble products and radically improved throughput times.

Company-sponsored educational sessions are held onsite and outside experts brought in to raise the skills of many types of employees, including electrical, mechanical, and software engineers.  

For example, one seminar conducted by an outside consultant, lead to the adoption of new “snapfit” technology now used to reduce cost and assembly time. A kaizen event engaging roughly 10 factory employees of various levels resulted in a 50% reduction in the space needed to assemble one of our products, as well as improving the flow, effort and time to produce the product.

A series of weeklong kaizen events have saved us enough square footage to accommodate future product growth and additions. We have shared these successes at our company-wide communications meeting, providing recognition for the participants and creating interest in other parts of the organization. We are now introducing the improvements to other departments, such as administration, and employees are embracing the change.

Leveraging the Power of 'Tribal Knowledge'

Bridging the gap between "tribal knowledge" and "new ways of thinking" can create organizational stress and frustration. Cummins Allison has begun a deliberate program of knowledge-sharing between senior employees and "newbies" so that they can learn from each other, accelerating development cycles and avoiding costly mistakes. These knowledge exchange sessions are deliberately inserted into the Product Development Process (PDP) to ensure that the information is shared and not unintentionally missed.  

During the planning phase of a project, individuals that are knowledgeable in relevant core competencies or technologies are identified and become part of the project team. They are then used for internal consultation as the project team progresses.  As a further way of institutionalizing this "tribal knowledge,” reference documents are created and shared so other project teams can use them. These documents become part of a library and are identified during the planning phase of other projects. This intentional sharing of prior successes and proven processes prevents "reinventing the wheel,” shortens the learning curve, increases organizational knowledge and ultimately, reduces time to market.

Leveraging Customer Connections

Customer involvement early in the development of new products is a key part of innovation. Ensuring that sales and service teams are interacting with customers and learning about their challenges on a daily basis can have a profound effect. In fact, according to the PwC Innovation Benchmark survey, companies that apply customer engagement strategies throughout the ideation process and all the way to the product or service launch are about twice as likely as their peers to expect growth of 15% or more over the next five years.

As valuable customer feedback is shared with product development, design and engineering teams, companies can ensure that the products they are developing are directly in line with the pain points that customers face (e.g. the need to streamline banking or retail processes to improve efficiency, reduce costs and generate positive cash flow).

For example, we had a very successful coin sorter on the market for many years.  We recently introduced a redesigned coin sorter to add new customer-desired features but also to address feedback we received from users of the legacy product. Users told us that the bagging system on the legacy product was inefficient and the bags were prone to dislodging. We modified the design to address ergonomic and productivity issues, as well as designed a new clamping method used to hold the bags in place more securely.  The results were very well-received by the market, and our market share is growing.

A Commitment to Continuous Improvement

With the U.S. dropping out of the Top 10 in the 2018 Bloomberg Innovation Index for the first time, it is now more important than ever for the U.S. government to provide an economic climate that is more conducive to innovation, manufacturing and job creation.

Over the next decade, new technologies and products will be key drivers for U.S. economic growth, new jobs and wealth generation. In the quest for breakthrough innovations, companies will invest a significant portion of sales into R&D—and to best support them, local, state and federal governments should promote these advances by working to reduce regulatory barriers and provide an economic climate that encourages American innovation and manufacturing. This will, in turn, create jobs that are critical to the economic future of our communities and nation.

Walking the Innovation Talk

As noted in the PwC Innovation Survey, 54% of innovating companies struggle to bridge the gap between innovation strategy and business strategy. To make the connection, manufacturers must support a collaborative approach to R&D, have a keen sense of how changing customer needs will impact product design and solution offerings, and, embrace a business-wide understanding that innovation drives jobs and is critical to economic success.

Douglas Mennie has been awarded 178 U.S. patents and awarded the 2014 Creator of the Year Award by the Intellectual Property Law Association of Chicago. He has served as president of Cummins Allison since 1998.

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