Acedemic Paper – Management of Technology
Management of Technology
My objective for writing this paper is to address the question around how businesses can improve their competitiveness and profitability, through the acquisition and development of new technologies to help them do things better, faster or more effectively. The departure point when compliing this paper takes cognisence of the fact that technology is not just a physical thing, but rather consists of knowledge, which is embeded in both the hardware and sooftware required to effectively operate any new technology.
This means that the acquisition or development of any technology does not end with the capital acquisition, but that it is a cumulative process, in which the full benefit of the technology is only derived from the development and continued use of the technology. Effectively utilising technology to improve productivity, perfromance and profitability is not just about research and development, but rather an on-going concurent process of both development and learning by doing i.e. increasing the efficiency of production operations on an on-going basis. A commitment to on-going and never ending improvement. This process is further enhanced through on-going training and development.
Development of Technology
The development or acquisition of new technologies to improve productivity, effectiveness or profitability is a process and never an event. It takes time and patience to accumulate the skills, experience and technical know-how at all levels of the corporation to develop and implement any new innovative technological improvements, which will sustainably enhance competiveness. The existing knowledge base must be understood, as this is the departure point for developing further knowledge, capabilities and new products or processes.
Technology Development and Transfer
It is important to note that there are two types of technology transfer and development, namely vertical and horizontal. Vertical transfer is when the technological development is transferred vertically from research to development to production. This allows for progressive development of technology as the development becomes more commercialised at each stage of development. This vertical development can be within one organisation or between one or more manufacturing companies and a research organisation.
Horizontal transfer occurs when an already established technology is transferred from one operational environment to another. This process is not about commercialising the new technology, but rather allows for an extension of the technology into other contexts and applications. This type of transfer allows companies to maximise the return they manage to enjoy on their investment into any new technology. There is seldom any improvement or change made to the technology. New applications are found, which allow the company to extend the use of their existing technology, thus allowing them to get more value from their investment.
This is the transfer of technology in the form of existing products or the transfer of know-how to allow or elements of it, to be used elsewhere within the organisation, which allow the technology to be utilised in its entirety to improve productivity, efficiency or profitability in another area of the same or different business.
This is where the business would transfer the means of production or process for production to another area within the business. The transfer of improved processes or production methods often accompanies the transfer of actual new physical machinery for improving efficiencies, productivity or bottom line profitability.
Technology and Competiveness
In this rapidly changing economic landscape, it must become a crucial part of any business to consistently search for and implement new technological advances. This is crucial if the business wants to remain profitable and compete in an ever expanding world. To remain competitive, in an environment, where businesses no longer compete only in their own geographical area or country, where any business located anywhere in the world is a competitor, technological advancement as a means of lowering costs and increasing productivity is no longer only a way to improve the bottom line, but often crucial to the survival of ay business.
To survive and thrive in countries like South Africa, where the cost of labour is increasing as a result of an unnatural amount of public holidays every year, legislated annual leave in the manufacturing industry of one full calendar month a year, restrictive labour laws, on-going strike action and unrealistic expectations on the part of labour, it has become crucial for business in this country to use technology and innovation to create and sustain cost and or product advantages, to gain or maintain strong positions in the market for its products and to maintain profitability.
It is for this reason that there needs to be effective interaction between marketing, formal R&D, design engineering and the team involved in manufacturing the products. There is a very strong correlation between a corporations sustainable competitiveness and its ability to consistently innovate and commercialise its new technology.
I own a manufacturing business, which operates from a factory situated in Benoni. As you can imagine, we are constantly under pressure from cheaper imports from India, China and other BRIC countries. The only way we have managed to stay ahead of the ever increasing competition and remain competitive, has been due to our commitment to innovation and the introduction of new technology to consistently improve our competitive position. We have developed a culture of innovation and consistent creative thinking within the business, where everyone, no matter at what level they work at in the organisation, is encouraged to contribute to the process of technological innovation and the introduction and successful implementation of new and cost effective technological advancements, which save both time, materials or other costs.
We hold weekly forums, where we encourage all stakeholders to offer input towards innovative solutions, where we explore opportunities to involve our own R & D department in the development to technological solutions to help improve productivity and reduce costs. If the requirements are beyond the capabilities of our own team, we solicit the support and guidance of external experts or R & D corporations.
This form of vertical transfer or technological development, where new solutions are developed from scratch, by R & D, then engineered and manufactured and finally introduced into our manufacturing process, is not our preferred method for technological innovation and improvement, due the high costs involved. We prefer to utilise horizontal transfer methods, where we look to transfer manufacturing processes from one area in our business to another or we look to modify already existing technology in our own factory, which has resulted in cost savings in one area and introduced it into another area.
We also look outside our business to other manufacturing operations. This is a very effective method and has required years of building good relationships with leaders in other manufacturing businesses. These strong relationships give us access to technology and ideas, which would have remained hidden, had we not invested so heavily into building these crucial relationships. We have enjoyed huge cost reductions and improved a number of manufacturing processes, improved our product design and on-going product quality improvement, with relatively low capital injection by following the horizontal, rather than vertical methods for introducing technology into our business.
Technological Innovation is Encouraged on every Level
The weekly innovation sessions are the culmination of an on-going drive every day, to encourage consistent knowledge transfer and contribution between all stakeholders in the business. We have a unified commitment to consistently improve productivity, reduce costs, improve our production methods and improve product quality throughout our business.
Our commitment to knowledge growth and transfer between all stakeholders is massive. We understand that the effectiveness of al learning within our business is dependent on the creation, distribution and application of knowledge. This commitment to knowledge development, distribution and application is a crucial part of our strategy to help drive innovation and the introduction of new and innovative technological solutions within the organisation.
We have a library of audio books available in both CD and MP 3 format. The workers who use public transport or Mini bus Taxis are provided with MP3 players and relevant training material to listen to on earphones during their commute to and from work. They are continually reminded about the importance of growing their knowledge base, distributing this knowledge with fellow workers and then utilising this to drive their creative juices and find better ways of doing things in their environments.
We also have a culture where we ask our team to read for a minimum of 10 minutes a day. We provide free books on innovation, inspiration and on specific technological knowledge resources, which could allow our team members to identify ways to improve their own area of production, through the use of new technology.
We offer an incentive scheme, where we pay each team member R 20 per audio book they listen to, R 50 per book they read. We have extended this to their family members too and offer each family member who reads a book or listens to one of the audio books the same incentives. This is an honour system and no one checks up to see whether they have read the book or listened to the audio book, before paying out any incentives. We have observed a huge improvement in the knowledge capital in our business since we have introduced this new incentive system. There is a wonderful culture of learning within the business.
We have posters throughout the factory and offices with these two simple questions on it “What have you learned today – Now share it with someone” and “How can this knowledge help you to improve personally or help you to find better ways of doing things?” We constantly advise our team to ask better quality questions about themselves and ways to make things better. This extends to include working conditions, remuneration, time off, team building activities and workplace safety.
We also arrange visits for various team members to the other manufacturing businesses where we have developed great relationships. It is refreshing to see the wonderful ideas that flow during and after those visits. They see different ways of doing things and in many cases this allows them to either improve things themselves or to ask for assistance to introduce something similar into their part of the process. There have been minor and huge technological improvements made as a result of this approach.
For Example: We had a manufacturing process where we needed to drill four holes into a plate. On one of our site visits, one of my team members noticed that they had engineered a system of putting two double headed drills back to back and so instead of having to drill two holes and then turn the plate around to drill the second two holes, they could drill only once. My R & D team very quickly designed a solution, which the engineering team built into a working model and as a result saved about 2 and half minutes per plate. This process has subsequently been improved further through the introduction of a hydraulic heavy duty punch that now punches all four holes and shapes the plate in one movement, resulting in a further saving of 2 minutes per plate.
Introduction of Technology
The introduction of improved technology into our manufacturing environment is not always earth shattering. It is simple consistent small improvements on an on-going basis that results in the cost and productivity improvements we need to remain competitive. The introduction of new technology or slightly improved technology has become an expectation and is an ingrained part of our corporate culture. We have moved way beyond the level of mere acceptance, when it comes to the need for constantly improving the technology with our manufacturing process. It has now become an active expectation amongst all team members, that we need to constantly search for and introduce new technological improvements to remain competitive and ahead of the ever growing competition.
The new technological improvements and innovations we consistently introduce into our factory have now become an expectation. Our team members have raised the bar and are always on the lookout for ways to innovate and introduce new technological improvements. Our team sees technology as a way to make things better and to allow them to work smarter, thereby getting far more done within their available time. The introduction of technology as the way we do things in the factory has increased innovative thinking and allowed technology to be introduced on many different levels within the organisation.
Technology and New Idea Generation
We have established a physical space and time; we hold a weekly forum where ideas are tabled by all stakeholders, regarding any areas they feel will help improve any element of their environment, with specific focus on any technological advancements that can improve productivity or reduce costs This weekly process allows all stakeholders to share ideas openly, which translates into open innovation and renewed collective strategic intent. I have seen on many occasions how new innovation contexts have been revealed and with consistent effort and commitment, these have been converted into real and tangible solutions.
These meetings are facilitated by an external coach, who has a very clear understanding of our innovation vision and mission. These sessions are always initiated with a reminder of what our innovation vision and mission is and what is expected from each stakeholder. Our innovation mission and vision statements are posted throughout the factory and offices. These constant reminders are there to act as a constant call to show the importance of on-going innovation is. It is our consistent commitment towards on-going education and by making innovation an integral part of our culture that we have managed to remain competitive in a very competitive environment, where new competitors spring up all the time.
We begin the session by inviting ideas from the floor. The ideas are first collected without any discussion around the viability of the ideas at all. Everyone is encouraged to only contribute their ideas and not offer any input at this point. No idea is ridiculed or judged at all. Feasibility of the ideas tabled is only interpreted later. The ideas are just collected and recorded.
The kind of ideas we encourage to be tabled at these meetings, are ideas to improve or speed up production processes, improve product quality, streamline administration and delivery. There have been a number of very creative ideas tabled to improve quality, without incurring massive increases in cost. This added value is passed on to our clients at no extra cost, as our commitment to on-going improvement and innovation.
Idea generation is an on-going commitment on the part of all stakeholders. Everyone is supported and offered access to learning and mentors, to guide and support them with any new ideas. This culture of encouragement has resulted in a never ending stream of very creative ideas flowing from every member of staff.
We encourage openness towards innovation and the introduction of new technological improvements within our business and encourage the continued success of every stakeholder. There is a willingness to acknowledge each person’s contribution towards challenges and a commitment on the part of everyone to find innovative solutions to solve or mitigate these challenges. There is a culture of personal accountability and everyone sees their role in contributing toward the bigger picture.
Everyone understands that innovation and the introduction of technological improvements is not always about the big things or the creation of completely new technological solutions, but that it can be something as small as a technological improvement, which allows us to lift steel more efficiently. There is a huge element of trust, which exists between all stakeholders and everyone is made to feel comfortable to share ideas during our weekly innovation forums for possible inclusion in the innovation process. NO ideas are dismissed, until we have had a chance to explore the possibility of using them to drive our innovation success and come up with new technological improvements.
We encourage creative potential and have a strong aversion to conformity. Yes we have rules and guidelines, but we encourage people to not only think out of the box, but to actually find a completely new box altogether to facilitate open and creative thinking. Conformity within our innovation culture is discouraged as we have thrived over the past 12 years not because we have conformed, but rather because our commitment to innovation and the introduction of new technology has allowed us to be completely transformed. We encourage people to upset the apple cart and to challenge the status quo. New introduction of new technology is a crucial part of our strategy to remain competitive in a market, which has new competitors entering every week.
Selecting new Technology
We are committed to producing high quality ideas, which we can then put into our innovation funnel to allow us to develop new value propositions, manufacturing processes or technological improvements. This process is executed to allow the mind to flow freely and allows our knowledge workers to trigger their inner imagination and even explore fantasy. Our objective is to never dispel an idea, no matter how ridiculous it may seem, until we have allowed our team to explore each one fully.
We thus do not dismiss any idea, until we have encourages participation from all the knowledge workers involved. Every idea is explored and expanded, until the feasibility is completely disproved. Some ideas which we have dismissed as impossible at some point have also been revisited and although they have been extensively adapted they have helped us create new innovative solutions that have really worked.
Example: It was proposed that we eliminate the need for preheating our plates, before bending, as this was costing us a fortune in electricity. We explored this and no matter how our team applied their mind, there was not an affordable or simple solution to this challenge. A few years later one of our team proposed that we build a massive press to allow us to do bend the plates without heat. The cost of the press needed was so high it was not viable. One of our frontline staff, then came forward and offered to build the press from materials we had available at the factory. As this was an affordable option we built the press and have since saved hundreds of thousands on our electricity bill.
These weekly forums, the on-going commitment to constantly learn and expand and the culture of innovation we have fostered within our business, means that there is no shortage of new ideas for us to explore and assess for inclusion in our innovation process. After discussion at the weekly innovation forum, a team is created to assess all the ideas which are tabled. These ideas are assessed and the team first tries to combine as many ideas together as possible. This process seeks to explore all the new ideas tabled and see if there are not combined solutions, utilising all the ideas simultaneously.
This process allows the team to shift mental gears and look at the issues simultaneously, which very often reveals novel ideas which may have remained hidden, had they not explored the options together. The main purpose of this process is to try to identify the best value proposition in terms of the available resources, financial, operational and human capital.
During the selection process, we always stay focused on process, cost to introduce, cost benefits to the manufacturing process and product quality. As product quality is the cornerstone of our success, we never introduce any technological innovations or improvements, if it is going to negatively affect the product quality in any way.
Selecting Ideas to Develop and Introduce as New Technology
All the ideas are analysed by our innovation team. The knowledge workers then seek workable solutions through careful observation. The knowledge workers explore all the ideas and keeping the wider environment in mind they explore the best options by eliminating the non-important information. The ideas that emerge are continuously formed and reformed until a fully-fledged solution emerges. The driving force behind the introduction of any new technology is one of improving the bottom line and adding value to the business and customers. There is a continuous process of idea forming and reforming, until the best possible technological improvement is uncovered. The actual individual who tabled the idea is always included in the process of development and the person who will ultimately use th new technology is also regularly consulted for their input.
Example: A number of ideas were tabled at one of our meetings which included ideas for improving the commitment to learning, better utilisation of time and use of technology as a means of improving production efficiency. These ideas were assessed and after deliberation, a completely new and really innovative process was developed, where technology was introduced in the form of MP 3 players, which would allow team members, who commuted via mini bus taxis, to better utilise their commuting time, for learning and growth. Our eyes are always open looking for innovative ways of utilising technology to improve all areas of our business.
Resistance to Premature Closure
All the ideas generated during our weekly innovation forum, are carefully assessed to ensure that ideas are not eliminated due to personal judgement. The innovation is driven by mind storming and brain storming sessions, where all team members are challenged to only table reasons why an idea will work, not a single reason why it will fail. This time where we suspend any negative input allows us to get some really incredible and innovative solutions to challenges. We have achieved incredible breakthroughs in both production process improvement and technological improvements, which have resulted in huge time and cost savings as a result of this approach.
Example: When we were searching for a solution to the challenge with heating plates prior to bending. It was this very process, which highlighted the fact that one of our team members could design and build a hydraulic press to eliminate the need for heating the plates prior to bending. Had we not allowed the process to continue we would never have discovered a really innovative solution, which has saved the business hundreds of thousands of rand’s in electricity savings over the years, since this technological innovation was introduced.
Potential Risks Associated with New Technology
There is always the risk that new technological improvements may not work and that there may in fact be an increase in costs or a reduction in productivity. This is extremely rare, as we try to evaluate all new technological changes as thoroughly as possible, before we introduce them. Despite our diligence, there have been a few occasions where things have not always gone according to plan.
There is also a fear amongst employees that as we mechanise and introduce new technology, they will become redundant. We have allayed all these fears and over the past 12 years have not retrenched a single staff member and it is our policy to never ever do so.
We have a culture within our corporation where everyone knows that they are important and their ideas are valued. We play open cards with our team, regarding the challenges we face, as a result of constant price increases of raw materials, electricity etc. Our team knows that we care about their wellbeing and in return they are committed to help us reduce costs and improve efficiencies. Our team is very supportive of all technological changes and improvements and even have a quiet competition between themselves, to see who can innovate and improve their production processes the most.
We encourage open communication at all our staff forums and welcome their feedback regarding any new technological innovations. Our philosophy of having clear and very open lines of communication between all stakeholders, has allowed all team members to see the huge benefits, which flow to them as a result of technological improvements, in the form of greater job satisfaction, production bonuses and general wellbeing and satisfaction.
Our team feels inspired and better equipped to face the challenges of tomorrow, realising that the very technological innovations they help introduce on a consistent basis are the reason we still remain profitable. The introduction of technological innovation and improvement is allowing the corporation better serve their team. There is an on-going drive towards improved thinking and decision making, resulting in the introduction of new and innovative technological improvements.
The introduction of technological innovation and improvement has in many cases resulted in a chain reaction of other improvements within the production process.
We have noticed that most workplace challenges or limits in the production process are interrelated in some way or other. Starting with the basic concept of bottlenecks, due to one process taking too long and so other processes are delayed, to the possibility of introducing similar improvements in other areas based on the learning and experience gained as a result of the technological change or improvement.
The technological improvements result in the formation of a value chain, in which the new knowledge concepts, effective leadership, creativity and experience gained, result in concurrent improvements in other areas of the business.
We have seen that technological improvement have resulted in the deployment of knowledge in many different areas of the business. Our marketing and sales departments have also identified new products; we are able to develop and market as a result of the technological improvements we have made.
We have also managed to discover new opportunities to develop new products, or re-design existing products to service different customers and markets as a result of some of the technological changes we have made.
Benefits to all Stakeholders
The benefits of the technological improvements we have introduced have reverberated throughout the corporation and has helped us introduce other support programmes, which have helped in many other areas as well.
- It has helped develop staff relationships, due to their improved attitude as a result of employee coaching and training.
- The teams throughout the business are inspired to participate in the on-going drive to introduce new technology, due to the incentive scheme directed at rewarding team members for new ideas, which result in any improvements.
- All team members feel part of a team and actively try to have the best idea every week at our weekly meetings.
- There has been a consistent improvement in staff skills and knowledge. This has resulted in not only better equipped team members, but also much happier individuals, who enjoy what they do.
- Technology has reduced cost at all levels, helping the corporation remain profitable despite the ever increasing competition from imports.
- The technological improvements most certainly help the production team to feel more included and motivated.
- All stakeholders from the production team to our marketing department have managed to leverage new technology to our advantage. This has allowed us to constantly improve our value proposition, maintain and in some cases even improve our competitive advantage.
- The technological improvements, incentive schemes, staff coaching and training has resulted in improved staff relations and has resulted in zero union involvement in any staff related issues.
- Our cost structure has also evolved and been transformed due to technological improvements. The application of new technology into our business, which is production driven, has and continues to improve our cost per unit and our bottom line.
- The process encouragement of ideas, has allowed for the maximisation of thinking, participation and decision making on all levels in the business. This has resulted in a culture of innovation and the desire on all levels to support the introduction of new technology at all levels in the business, especially the production processes.
Implementing new Technology
The majority of technological improvements are the result the involvement of the manufacturing team directly. All team members are encouraged to look around their own space and introduce new ideas for consideration. This has resulted in a far more positive thinking process amongst all team members and allowed them to be creative and to actually express this creativity.
Once they actually see their new ideas being implemented, they feel proud and are publicly thanked and the resultant cost saving in time etc. is also highlighted to other team members. We have found that this does not only encourage the person who has brought the idea up in the first place, but it also inspires other team members to want to discover some great ideas for technological improvements themselves.
Yes the new technological improvements do work, in almost every case, but there are always a few concurrent challenges that the changes bring with them. The technological changes result in the need for new systems and in most cases new guidelines are required, as the technological improvements in some cases do not require as many procedures and standards. We have found that by reducing the standards and procedures and offering only safety guidelines, we have allowed the team to express their creativity far better, resulting in an on-going drive and search for ways to improve their workflow.
The culture and strategic vision for the corporation is one of constant and consistent improvement. Our drive towards technological improvement is one of our most crucial strategic initiatives. It has been the consistent innovation and the introduction of technological improvements, which has kept us ahead of the foreign imports and retained our competitive advantage over the past few years. We do not have a level playing field when it comes to the cost of labour, so we are forced to keep improving productivity, efficiency and effectiveness to remain competitive.
Capital Expenditure – New Technology
We always explore every idea from a perspective of reducing the capital expenditure as far as possible. It is for this reason we first explore the option for horizontal transfer of technology which is already working in our plant or technology, we have seen working at the plants we visit. We have found it to be extremely expensive to engage in vertical transfer, where extensive research and development of completely new technology is required.
This type of development, where outside research organisations are required, has proven too expensive. The resultant cost savings we have seen after this massive capital expense has not proven cost effective, even when examined over the medium to long term. It is for this reason that we favour introducing, improving or adapting already existing technology to improve our production capabilities.
Our criterion when selecting new technology to include in our production processes is obviously cost to develop, vs. the resultant cost saving in the medium to long term. The shareholders are always looking for return on investment. This is sometimes in conflict with the need to improve workflow and working conditions for the manufacturing team.
The main criterion when exploring any capital investment into any new technology, is around the question of increased output, within cost time, and quality parameters and will the investment be beneficial in the medium to long term
When Considering Capital expenditure, we explore the following:
- Does it align with the strategy of the corporation? –Short, medium and long term.
- Are the resultant benefits worth the capital expenditure required?
- What is the expected ROI period?
- Do we have the capacity to conduct research and development internally?
- Do we need outside help? – We shy away from consultants as our experience shows that they cost far more than budgeted.
- Is there going to be other resultant improvements possible as a result of the new value proposition that will come as a result of the new development?
When exploring any capital investment in new technology, we always consider the medium to long term benefits and see whether these will bring the desired benefits of reduced production cost per unit, time saving per unit, improved quality at lower cost. This is amortised into the future to see if the expenditure is worthwhile. All capital expenditure decisions are based on the resultant benefits to improving productivity or reducing costs.
Exploring the Value of Capital Investment – Technological Improvements
- Improving output from each machine
- Lower cost to repair or maintain machines as a result of technological improvements.
- Lower costs as a result of reduced machine down time.
- Depreciation and tax savings.
- The period to earn a ROI.
- The cost of any technological improvements vs. the on-going cost of spare parts and the down time during repairs.
These are the benefits, which will be examined during the decision making process on whether it is viable to introduce any new technological into the business. The resultant cost benefits are explored and examined against any resultant cost savings in the medium to long term.
Time Based Process Map
There are many different methods for mapping processes within the corporation. The one we have chosen is time based process Mapping as this offers us the quickest and most intuitive methods for documenting a myriad of different processes and activities within our business. We explore many different activities and processes within our business, from regulatory compliance, to process and activity improvement, to education and training needs. We have found process maps to be the best, most effective and cost effective way of documenting and communicating, exactly how the business works. We have found that it highlights non value add items, actions or processes and helps us eliminate these from the value chain. It also helps us to keep making improvements to all areas within the value chain.
This is a simple process of drawing a map showing the flow of information, customer interactions, the flow of equipment and materials through the various production processes. The Process maps, also known as flow charts or flow diagrams can, if required be nested within each other to allow for the examination of complex processes such as Sales Order Processing. This allows the map or flow chart to be displayed as a single item on top levels in the map and then broken down into more complex processes lower down in the mapping process.
There are very complex software packages available, which can help with this process, allowing different flow charts or maps to be linked together, allowing for detailed drill downs to take place. We have found these flow charts to be an incredible asset in the training process of our production, sales and marketing teams. The effects of any technological changes or improvements can easily be tracked and explored. When we add each individual process time to the map, we are able to asses every product from start to finish in the production process.
This has allowed us to constantly review all existing processes with the corporation, evaluate any proposed new processes or technological improvements. This is achieved by reviewing the current production or processing times against any resultant improvements, we may enjoy as a result of the changes or improvements. These potential improvements are also compared to requirements by existing customers and prospective customers. It is unwise to improve production output, if there is insufficient demand for that product. We also explore the availability of resources and see if we can source the extra raw materials that would be require if we increased production.
Making This Work for us
We have found that process mapping and the drawing of flow charts has been an invaluable tool, which has helped us to reduce delays and has equipped us to more easily highlight any improvements or to test any new proposed improvements, which have come from the production team. The introduction of new technology has been the lifeblood of the corporation over the past ten years and is the very reason we have maintained our competitive advantage. We have managed to optimise staffing levels through natural attrition, improved outputs and reduced the cost to produce each item, without ever compromising the quality of our product.
We have managed to make improvements on all levels:
- We have eliminated unnecessary delays, due to bottlenecks, constraints or hotspots.
- Removed unnecessary steps or actions form the production process.
- Removed duplicated actions or processes.
- Removed or changed processes, which do not make logical sense.
The Mapping Process has helped us to:
- Improve production processes, remove bottlenecks
- Understand variations in production outputs or variations from outlined practices and procedures.
- Developed a shared understanding of challenges amongst all stakeholders. Developing a culture of innovation and constant technological improvement amongst all team members.
- Created a feeling of camaraderie amongst all team members, helping them to feel and function as consolidated teams.
- We have also managed to better schedule and change capacity and demand analysis to better serve our customers.
We have made the Following Improvements:
By utilising flow charts, it has allowed us to examine very complex issues related to demand from customers, both seasonal and in the medium to long term. It has also allowed us to compare demand to supply of raw materials. This has allowed to forecast better, allowing us to place orders for raw materials ahead of time. There has been a number of challenges with the supply of certain sizes of steel sections in the past. By examining demand and supply on our flow charts we have managed to better forecast demand for certain sections. Which were out of stock. This has allowed for better supply of the required sections.
We have eliminated unnecessary processes from the production line. We were spot facing the front of one of our vices, which was a requirement when we were receiving, un- galvanised washers. After analysing the process using flow charts, it was seen that we could make significant savings by eliminating the need to spot face the vices. A new supplier was found fr the washers and we eliminated one step in the production process, without compromising quality in any way.
We explored new ideas which came from the floor. For example when we wanted to eliminate the need for pre-heating plates prior to bending, we used flow charts to chart the resultant benefits and cost savings. We found the amount of capital expenditure, which would give us the best ROI. Using this as the starting point we developed the 500 ton press internally and enjoyed a massive reduction in cost and a huge improvement in working conditions. The temperature in the factory dropped by 5 degrees Celsius, as a result of no longer requiring a furnace in the factory and our electricity bill dropped by almost R 22000 a month.
Improved technology and output allowed us to eliminate bottlenecks. By introducing a new punch, which could punch four holes instead of drilling them allowed us to save almost 4 minutes on each item produced. The ROI on this was incredible and we managed to amortise the cost of the jigs and press in less than three months.
Partnerships, Strategic Alliances and Joint Ventures
We have seen the huge benefits, which have flowed to us, as a result of aligning ourselves with other organisations and developing great relationships with key people in those organisations. We have an open door policy with a number of corporations in our area. There is a culture between all of us in which we encourage visits by our team members to their facilities and they do the same to ours. This has resulted in wonderful ideas flowing from our teams. They have seen better ways of doing things at the plants they have visited. This has allowed us to make technological improvements, with low capital and minimal R & D expenditure.
We have built up a trust relationship with all our partners and we view the mutually relationships as crucial to our profitability and technological improvements. Although we use each other’s technology to make improvements to our own processes, there is a clear understanding that this will never be shared with any competitors. All relationships have been developed over many years and there is a commitment to support each other and to help both sides grow their businesses.
The sharing of ideas and technologies which has resulted in these relationships, partnerships and in some cases joint ventures has allowed us to transfer production processes between production facilities. We have a huge powder coating facility, which has capacity well beyond our own needs. We have formed strategic alliances with a number of other manufactures in the area. We do powder coating for certain of their processes and they in turn, blacken our steel or place it in acid baths to remove the black scale on the out, which has allowed us to remove uneconomical plants from our premises and reduce the cost of production. Our strategic business partners have enjoyed similar cost savings.
There has also been significant sharing of knowledge and innovation, which has allowed us to improve our product quality and reduce costs at the same time. One of the businesses involved in a strategic business alliance with us, found a way to improve the handling of steel around the factory. The MD telephoned me to come and see the improvements. For a small injection of capital and a slight modification to our overhead crane we saved almost an hour a day, delivering steel to the various stations around the factory.
The regular team visits between all the alliance partners is invaluable and after each visit there is a stream of new ideas, which flow from the teams. There are technological innovations occurring all the time and this sharing of ideas helps us all to stay abreast of new developments in a far more cost effective manner.
We have linked up very strategically with alliance partners, who offer mutual beneficial opportunities to share technology, ideas. This allows us to stay focused on the bigger picture and sustain our mutually beneficial relationships with them.
Alliances in South Africa
There has been an ever increasing rate of change in the development and deployment of technology in developed and developing countries all around the world. The development and deployment of new technology has become a crucial part of most human endeavours. The proper management of technology is what ultimately creates progress and wealth in developing countries, including South Africa. Technology is crucial to the national development and improving national competitiveness. The technological revolution will and is having a far greater impact on developing countries than the industrial revolution ever did.
The technological revolution has its strength in information, rapid communication methods and ever increasing knowledge. It is the greatest contributor to the consistent improvement in intellect and know-how. Human development has been accelerated at unprecedented levels. There have been massive improvements in productivity and efficiencies. The very fact that communication, information transfer and knowledge dissemination are crucial to this, means that developing and sustaining alliances both between local and international business is vital. It also means that the South African government must build and sustain relationships both within the BRICS community and first world countries.
The World is closer together
The advancement and on-going proliferation of technology means that the world is closer together. In fact we now live in one big global village. All information now flows freely across borders. The improvement and innovations in transport and logistics have allowed for the free movement of people, technology and goods across international borders at an ever increasing rate. It is not viable or possible for a country to exist without relationships with its neighbours and trading partners. There is also a huge influence on the internet which has rapidly grown E businesses, which do not depend on borders at all. Small businesses with great internet capabilities can compete with much larger corporations across the globe.
The dissolution of the Soviet Union, Certain Eastern bloc countries joining the EU and most world players adopting a combination of democracy and market type economies, political globalisation seems to have been realised. South Africa is a player in the BRICS community, albeit a small player. If we play our cards right we can become a powerhouse in Africa. Although we need to look North as there are a few major players, nipping at our heels.
Tapping into or Building Alliances with Other Countries
By being part of BRICS and other African based alliances, South Africa is poised to become a real force to be reckoned with internationally. We need to address issues such as corruption, nationalisation, draconian labour laws, BBEE, cultural differences, loss of skills due to reverse racism, crime and a lack of commitment and support from government towards making South African businesses competitive in the world arena, if we are to leverage all these to our advantage.
South Africa needs to build technological alliances with other African countries as well as within the BRICA alliance. If we want to maintain our dominant position in Africa and become the powerhouse we can become. In essence the race for Africa is on and if South Africa is not careful and we do not address the issues I have alluded to above, we will be left behind.
Innovation and the introduction of new technology is crucial for the survival of all enterprises and leaders within these organisations need to support knowledge creation and the introduction of new technology rather than try to control it. Knowledge is the foundation, which will drive and inspire creativity and the introduction of new technology within any organisation. It is for this reason that knowledge creation must be carefully encouraged and supported by a number of activities, which will enable the learning process despite any obstacles which may surface.
Innovation is a doing word and when a culture of innovation and technological improvement is encouraged within any organisation. It becomes the way things are done, rather than an event, which occurs only occasionally. Innovation and resultant introduction of new technological improvements, which improve productivity and efficiencies and reduce costs, starts with education, which helps drive and encourages learning, thinking and innovative attitudes. This process must be supported by great communication and a commitment to mutual support within the organisation.
When all the elements of education, communication, innovative attitude and mutual support are combined, great ideas are generated by all stakeholders, which can be placed in the innovation funnel and worked until they are converted into great new innovations. Innovation is not the job of any one person or department in an organisation, but the collective responsibility of every stakeholder within the organisation.
We have adopted a strategic approach to including new technology into our manufacturing operations. It is in fact an ingrained concept within the culture if our business. Innovation and technological improvement is encouraged and supported at every level within the organisation.
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