R&D in Contract Manufacturing
Companies allocating time for their best and brightest to innovate is not a new school of thought. Many, technology based and otherwise, have realised that the return on investment of allowing employees to work autonomously on projects of their own choosing is substantial. This is not the case in the SME sector where people tend to be employed on task roles that are easy to measure and are perceived to give value but will little innovativeness. We struggle as SME managers to embrace our employees to dabble with new technologies that we see as a waste of time but fail to see the learnings this dabbling can create and the greater job satisfaction for the employee. But for SME companies to evolve from manufacturing companies to solution providers it must be embraced and realise the reward will outweigh the risk.
A good example of a company who are the forefront of this thinking is 3M
Bill Coyne, a former senior vice president of R&D at 3M encourages all engineering staff to spend 15% of their time on their own ideas.
Most of the inventions that 3M depends upon today came out of that kind of individual initiative… You don’t make a difference by just following orders.
The 15 percent rule was instituted after an employee at the then-struggling company went a bit rogue at work and invented the world’s first masking tape back in 1925. Post-It notes hit the market in 1980. The company now employs 7,350 researchers and has sales of $27 billion a year.
One challenge we face is coming up with a way to involve all of our teams, including support and marketing, in the R&D programme. Involving non-technical team members from time to time could allow the development team to get inspiration and ideas from a different angle.
Other challenges can be
• High costs and risks – There is excellent support from Enterprise Ireland but R&D can be expensive but we aim to fail cheap and fast on projects especially at early stages
• Long timescales – it can take 2 years to bring some projects over the line
• Finding the time in a busy contract manufacturing environment to put the time in to move project forward
• Difficulties in anticipating how conditions will change in the market and whether customer needs will change during the long R&D process. Competitors may come up with a rival product that is just as effective.
The Keltech way
• We use a stage and gate system to avoid ad-hoc or chaotic processes
• This process was developed using a very similar model we use for NPI in our engineering department and taking a model developed by Cooper.
• The key to this is developing effective gates and having a simple scoring metric to either bin or move forward the new process/Product
• Always have the customer in a continuous loop in the process so you know that the solution is customer centric whilst also keeping a close eye on your competitors
• Using FMEA tools we challenge all the projects risk management
The evidence is clear that we’re off to a good start, we have only being working I this way for less than 12 months but the number of ideas we have brought forward are fantastic to see and by applying the process we have avoided things like “pet projects” being pushed along for the wrong reasons. Yes we face challenges but
SME’s need to find time to be innovative, contract manufacturers are no different, most fabricators can manufacture an acoustic enclosure but have they offered their customer an improved product that saves them time and money, not so many I guess
We are curious to learn more about what other companies are doing to foster innovation. Does your company have an R&D program? How is it structured – as a percentage of time, designated days, another format? How else are employees encouraged to innovate?
Enjoyed reading this post or want to find out more contact me on Declan.Walsh@keltech.ie
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