January, 2007

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Article Index

For more than 100 Years, this company has been baking new ideas
Article by: Justin Dorsey
It was the early twentieth century when Lakeville's Despatch Industries founder Albert Grapp was fascinated with the relatively "new" invention of electricity. His first attempt at manufacturing was to produce electric heaters for Minneapolis streetcars. Then he used his know-how to begin produce heaters for ovens. Today, Despatch is an industry-leading manufacturer of industrial ovens.
Becoming a Breakthrough Innovator --Tools to Generate Possibilities
Article by: Rod Greder
In the December issue, we talked about the need to view the world differently and to wake up and be truly aware of our competitive environment, our customer's real needs, and our place in this scrum. This issue discusses tools to open up new product possibilities. While there is not a standard check-the-box method to develop new-to-the-world products, there are best practices that can help us begin to "systematize" innovation.
COMPLIANCE NEWS NOTES: Recent Inspections
Article by: Vija Kelly
Inspection Trends
Minnesota's Business Conditions Index
Author Unknown
For the third consecutive month, Minnesota's Business Conditions Index declined, dropping to 50.5 from December's 51.7 and November's 55.5. Components of the overall index for January were new orders at 49.1, production at 49.3, delivery lead time at 57.1, inventories at 57.9, and employment at 45.5.
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For more than 100 Years, this company has been baking new ideas
It was the early twentieth century when Lakeville's Despatch Industries founder Albert Grapp was fascinated with the relatively "new" invention of electricity. His first attempt at manufacturing was to produce electric heaters for Minneapolis streetcars. Then he used his know-how to begin produce heaters for ovens. Today, Despatch is an industry-leading manufacturer of industrial ovens.

And baking ovens aren't only for brownies-- microchips need to be baked; carbon-fiber comes out of an oven; hard-drives need to tempered in an oven; and pharmaceuticals need pristine surfaces devoid of not only germs but of their microscopic remains. All use the kind of ovens that Despatch manufactures.

Despatch's most recent foray is into the world of photovoltaic cells. Worldwide, demand for finished cells is growing at an annual rate of 30 to 50 percent! This is a fledgling industry so its technology turnover is running at a rampant three to five years.

This kind of urgency and opportunity charges the air of Despatch with excitement and enthusiasm. And at the same time, because it has been in business for so long, Despatch has plenty of systems that are burdened with rigidity. Recognizing this, which is no mean feat in and of itself, Despatch leaders brought in a new Lean-oriented Director of Operations, Steve Vreeman, in large-part to remove the rigidity of legacy systems and to ensure that Despatch's photovoltaic division products were free of those burdens.

Steve started with a clean slate. Literally. And, he needed to because these ovens are nearly 100 feet long. In fact, it is their length that gives them their technological edge. Heretofore, photovoltaic cells were "batched" in an oven (and still are by many of Despatch's competitors). But, Despatch's ovens are "line" operating ovens. A conveyor belt pulls a never- ending line of cells though a series of different but precisely controlled infrared temperature variations until the finished product comes out at the opposite end.

The business has been growing, so to help him implement more Lean processes, Steve brought in Kevin Herber as Director of Manufacturing. Together, they have worked to improve processes throughout the plant. When analyzing process flow, they both agreed that a major constraint was sheet metal fabrication. While each of Despatch's products are encased in sheet metal, it is the electrical inner-workings that are really Despatch's tour-de-force. And, because its products are relatively large and extremely complicated there is not a high volume demand for sheet metal. Steve and Kevin agreed that sheet metal was not one of Despatch's core-competencies. They decided to outsource much of it.

Interestingly, that led to another, albeit indirect, "lean" opportunity. When the sheet metal was formed in-house, the press operators made many of the finished-parts from memory. For example, press operators simply told the welders which joints to weld. When some parts to be welded returned from the subcontractors, they no longer "fit." Steve and Kevin realized that there was an opportunity and a need to revisit design assumptions with the engineering staff so that "complete" drawings could be sent to the subcontractors. This became an opportunity for re-designing in-house efficiencies.

Ultimately by removing the manufacturing constraints and by building a "lean" line Steve and Kevin were able to far exceed engineering expectations for production. Initial forecasts called for one photovoltaic oven per week. After the first full year of production, the results were four units per week. Steve and Kevin credit their union workforce for being full partners in putting the lean procedures into place.

As Steve says, "Despatch is an open-book employer. Everyone sees our profit and loss statements.Our financial metrics are communicated to all our employees. When we have strategic planning meetings, the union plays an important part. They're the ones who are ultimately building our products and we welcome and need their input."

There is still work to be done. Other lines need to be made more lean. And, there is still some resistance to change.

Kevin observes, "Change is easier to make when there's a sense of urgency. With our photovoltaic line, there was and is that sense of urgency. So, everyone was quick to offer new and good ideas. But, with established lines it's harder to convince people to try new things."

Both Steve and Kevin are committed to the challenge of integrating lean principles fully into the company. They were familiar with Manufacturers Alliance from prior jobs and value MA's peer-to-peer approach.

As Steve said, "In Lakeville, it's easy to become an island. But, innovative manufacturing techniques are undeniably improving productivity. So, regardless of your industry you must keep up with these advances. The MA lets us see what works and doesn't for others. There is no doubt in my mind that networking and sharing experiences pays dividends."
Justin Dorsey, Director of Sales & Marketing, Advanced Capital Group located at 50 South Sixth Street, #975 Minneapolis, MN 55402. call (612) 230-3009, email jdorsey@acgbiz.com, or visit www.acgbiz.com.

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Becoming a Breakthrough Innovator --Tools to Generate Possibilities
In the December issue, we talked about the need to view the world differently and to wake up and be truly aware of our competitive environment, our customer's real needs, and our place in this scrum. This issue discusses tools to open up new product possibilities. While there is not a standard check-the-box method to develop new-to-the-world products, there are best practices that can help us begin to "systematize" innovation.

First though, we must honestly be open to the promise of what "could be." George Bernard Shaw said, "Some men see things as they are and ask, 'Why?' I see them as they have never been and ask, 'Why not?'" If you are willing to try this approach then we can begin to look at tools to answer the "why not?" question.

In the book, Innovator's Solution: Creating and Sustaining Successful Growth," by Clayton Christensen, the author suggests that the highest-potential route to new growth is to create a disruptive innovation that brings simple, cheap, and convenient solutions to overshot customers at the low end of an established market, or to bring the same type of solutions to people who are currently non-customers. For example, Hyundai, Kia, and Tata have stepped into the low end of the automobile market. They are creating new car customers around the world, a customer base that didn't exist before because of price and affordability. What can you do in your product space that creates a new possibility for a customer?

One possible tool to use, systematic inventive thinking, is discussed in "Finding Your Innovation Sweet Spot," from the Harvard Business Review, 2002. The authors support the use of five activities to force innovation of an existing product: subtraction, multiplication, division, task unification, and attribute dependency change. These five actions were gleaned from the original 40 inventive principles that make up the TRIZ problem-solving method that relies on logic and data to discover patterns that can predict breakthrough solutions. These successful principles were reverse-engineered from an analysis of greater than one million patents. We will talk more about TRIZ in a future column. The iPhone is an example of one of these actions, that of task unification: verbal and text communication, music/sound recording and playback, video recording and playback, internet connectivity, and numerous other capabilities are meshed into one package of solutions that significantly broaden the target market and elevate the value proposition. How can you subtract, multiply, and divide your mix of product or service features to create a unique offering?

Another tool is the breakthrough generator matrix, which forces you to choose an arbitrary combination of a primary benefit (size, speed, price, dependability, etc.), secondary benefit (image, shape, emotion, social connection, etc.), and then apply an action to make a difference (add, minimize, combine, reverse). For example, "What could we minimize to increase our speed and improve our social connection with the customer?" Choose the phrase(s) that have the most intuitive energy for the group and brainstorm possibilities to make them come alive. This activity will force you to explore new pathways to breakthrough products.

Tom Kelley, founder of IDEO, one of the world's leading design firms, in "The Art of Innovation," advocates that we think of products as verbs and not nouns. When we think of 'cell-phoning" versus "cell phones" we are forced to think about how people use the phone to communicate, watch videos, and most importantly share life's moments. Customers are looking for rewarding experiences. Think about experiences that are derived from active verbs--feeling, seeing, doing, smelling, touching, and tasting, and then innovate to impact the experience. Ask yourself, "What is the product of the product?" The customer buys a power drill so he or she can end up with a hole. How can you help them get a more, better, or different hole in a more, better, or different way?

The IDEO staff also uses "idea wading." They browse dozens of offbeat magazines and websites and observe advancements in noncompetitive industries to look for ideas. Solutions often already exist and are just waiting for you to "discover" them. This method is called knowledge-bridging, "applying knowledge from one technical domain to innovate in another."

There are many techniques that can be used to conduct brainstorming and to open up the portal to breakthrough ideas. Examples are listed below.
  • Small's ideation list

  • 6-3-5 brainstorming

  • Piggyback brainstorming

  • Pluto brainstorming

  • Brain-writing

  • Metaphorical thinking

  • Springboard stories

  • SWAMI SOARS!

Capturing the voice of the customer about his or her real needs is still the number one way to innovate. However, there are other forceful ways such as those listed above that allow you to listen to the voice of your product. Customers don't know what they don't know. Be deliberate about trying out new product possibilities and then asking yourself, "Why not?"
Rod Greder, Ph.D. founded Breakthrough Forum, an innovation dialogue and accountability group, for product developers and marketers to tap the collective intelligence of their peers who have been there and done that. rgreder@improveproducts.com, (763)443-1531.

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COMPLIANCE NEWS NOTES: Recent Inspections
Inspection Trends
Lately compliance experts have noticed a developing trend in recent inspections. OSHA is no longer willing to accept the fact that companies have the required written programs in place. They are reviewing the written programs with a fine-tooth comb and addressing shortcomings.

Here's one case that demonstrates the trend:

During a recent inspection of a company, the inspector noted that in the written Hazard Communication Program the hazards of non-ionizing radiation were not addressed even though the company was doing arc welding.

The inspector wrote: "Please take note and correct in your programs, as necessary."

In other instances, the inspectors seem to go beyond the letter of the rules. For example, at another recent inspection:

The inspector insisted that wheel chocks were necessary on both wheels of trucks being loaded by forklift. We have never seen this requirement before.

Routine Citations
Most citations, however, have been for the type of issues that we have regularly addressed in this newsletter:
  • Lack of CO monitoring for forklifts

  • Container labeling

  • Forklift training not current

  • Lack of safety nozzles

  • Wheel guards on grinders

  • Electrical issues

  • Confined Space Trends

OSHA inspectors have of late been scrutinizing Confined Space Entry Procedures.

In one instance the company decided not to enter a degreasing tank because the OSHA requirements were too difficult to meet.

In another instance, the OSHA inspector actually removed the program from the company's safety book and threw it away. He then cited the company for not having a Confined Space Entry Program. The reason being that the Confined Space Entry Program that was in place referenced a standard that had been changed!

Another inspection resulted in the company having to monitor and record the presence or absence of harmful atmosphere in open-topped tanks. The fact that no hazardous atmosphere was present was irrelevant.

In a different inspection, the OSHA representative was upset that oxygen levels were measured by holding the test unit over the edge of the tank. His assertion was that the person monitoring was "breaking the plane of the space," and that was not allowed prior to establishing that the space was safe for entry.

Furthermore, this inspector required that far more information be added to entry permits:
  1. Acceptable entry conditions

  2. Results of test along with names of tester

  3. Time tests were done

  4. Type of testing equipment used

  5. Calibration dates of equipment

  6. Each specific item of personal protective equipment

  7. Rescue equipment to be used


It is helpful for those responsible for compliance of industry standards stay on top of OSHA trends, and to make appropriate changes, proactively.
<img src="http://www.mfrall.com/newsletter/authorpics/vijakelly.jpg"align="left">Hazard Management is a consulting and training firm specializing in occupational safety and hazardous waste management. Call Vija Kelly at 651-697-0422 for more information.

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Minnesota's Business Conditions Index
For the third consecutive month, Minnesota's Business Conditions Index declined, dropping to 50.5 from December's 51.7 and November's 55.5. Components of the overall index for January were new orders at 49.1, production at 49.3, delivery lead time at 57.1, inventories at 57.9, and employment at 45.5.

"A lot of the recent softer economic numbers from Minnesota were the result of downturns in several industries including food processors, telecommunication firms, and firms with ties to transportation equipment manufacturing. On the other hand, growth has been healthy for trucking, insurance and nondurable manufacturers, except food processing," said Goss.





Dr. Ernest Goss of Creighton University, used the same methodology as The National Association of Purchasing Management to compile this information. The overall index ranges between 0 percent and 100 percent. An index number greater than 50 percent indicates an expansionary economy, and an index under 50 percent forecast a sluggish economy, for the next three to six months.
Author Unknown

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