Living for Innovation and for Continuous Learning – 1 of 2

In the Philippines, hardly any basic research is being done that gets to commercialization. Much research is adaptive in nature followed by product development in response to realities in the market. My professional life was mainly in the area of technology scanning, adapting and diffusing in the private sector.

My very first successful adaptation was in process innovation. I headed a team that implemented JIT in TMX, Cebu from a book in 1984 – 85. The book was Richard J. Schonberger’s Japanese Manufacturing Technique that was published just two years previously in 1982. I bought a bootleg copy from Caves bookstore in Taipei on my first ever trip overseas in late 1983 to train in MTM.

Then, I was the 23-year old industrial engineering manager. I was fortunate that the management then allowed me to put together a skunk works – remember Peters’ and Waterman’s In Search of Excellence – with the best deep-selected team of supervisors and engineers from the different departments to prove the concepts in a separate, four-walled area. (Thank you RQ Lim and EE Williams for the experience.)

In the skunk works, the team connected the total assembly process by changing the plant layout and removing WIP stock – a major change from the standard global operations setup. We improved each operation and the process one bottleneck at a time and progressively reduced inventory.

The project proved that JIT works and was implemented plant-wide with total inventory reduction at US$4M. More importantly, we proved Professor Schonberger’s model (see image above) on the interplay between quality and quick feedback from lower inventory – cumulative assembly yield improved from 92% to 98+% on year one of implementation. Cebu TMX became the global best practice benchmark. The lower inventory, faster action time and higher quality standards were institutionalized by building the new standards into the MRP (Materials Requirements Planning) and Standard Costbook systems.

The successful implementation of JIT probably helped keep the Cebu operations as the center of global consolidation instead of being closed and moved elsewhere. I did manage to document the achievement in an unpublished paper at AIM. I also submitted the paper to Professor Schonberger and got a signed copy of his book for my efforts. Thanks, Professor!

Another insight I obtained from the experience is that hard engineering and system standardization can only account for maybe up to 98% max of performance. The last 1.996% (to six sigma) up the asymptotic productivity curve can only be approached with improved corporate culture, teamwork and empowerment (given standardization).

Later, I transferred a factory from Taiwan to the Philippines starting with visiting, observing and writing down the whole process into TMX-style Operations and Data Sheets. Documentation took seven trips and iterations with the one Taiwanese engineer who could speak English. Sadly, that factory later shut down with the hallowing out of Philippine industry and has moved offshore with much of the electronics industry.

I was involved in change management as Managing Director of a Singaporean-owned food processing company in New Zealand. My brief was to prepare the company for new investment or for sale. I worked with an Australian change agent and succeeded in right sizing and adapting for a smaller volume. The company was eventually sold back to New Zealand ownership and is now thriving.

I have put together an ingredients distribution company for investors and returned all original investments as dividends in three years. I created an ingredient brand and successfully commercialized it out of a commodity ingredient, a chemical in fact, differentiated and sold on assay and form.

My most recent innovation opportunity, in 2005 – 2008 period, was to help build a savory ingredients blending platform from base to top notes and enhancement. This includes acquiring alliances with supply partners who are able to provide strategic components of the flavor pyramid to lock in value.

Another recent opportunity was building a portfolio of functional ingredients from enzymes, oxidizing agents, emulsifiers etc including identification of strategic suppliers to form a technology platform for customized bakery ingredients.

I will always be involved in the technology side of innovation. Now, I see bigger opportunities in the IT-enabled post-industrial space like e-learning, intelligent systems and dynamic decision support, etc. For the country, the biggest opportunity is in linking together winning sectors like medical care, ship crewing, business process and software, learning with appropriately trained human resources and avoiding the dual economy that prevailed in the past. SYNTHESiST is my effort to achieve this and the next post will fine tune possible approaches.

Next week, I will be attending the ASIALICS (Asia Learning, Innovation and Competence-Building Systems) conference in Hongkong. I hope I am able to bring back something that contributes to SYNTHESIST’s future efforts in the public sphere.

Click here for Part 2 of 2.