INNOVATION July-August 2015

To a casual observer, battery-electric cars beat hydro- gen fuel cell cars to market, but which option faces the greater overall challenge? Hydrogen fuel cells face significant risks in each cate- gory: technology, with competing formulations, require- ments and cell designs; product development, with capability straining against packaging constraints, and unique demands for ancillary components; manufactur- ing, where most production processes and measure- ment systems are unique to the technology; market and procurement risks associated with consumer acceptance of hydrogen fuel, and hydrogen infrastructure issues. These risks are often intertwined and interdependent, such that the total risk is multiplied, not summed. By comparison, a battery-electric car can be built with commercially-available laptop batteries, lowering technology risk; and a car’s body can be designed to meet packaging requirements, lowering product devel- opment risk. Critical manufacturing and procurement risks are addressed by increasing capacity by expanding the use of existing tools, processes and infrastructure. This is not to say that the risk associated with develop- ing a battery-electric car is not in itself significant, only somewhat reduced. Both alternatives face market risks associated with disrupting an established incumbent. The path from inspiration to innovation is, by definition, unmapped. Every innovative product faces its own set of risks, and the intensity of each risk varies for each innovation. Innovation leaders must be able to assess strengths, weaknesses,

dimensions of risk, assuming that the process is even capable of production volumes. Consider capturing the ‘voice of the manufacturer’ early in the development process, ensuring product performance can tolerate production variability without demanding strict process controls. Successful manu- facturing relies upon complete characterization of the technology and the product to assess performance changes due to production variability. A well-executed Design Failure Modes and Effects Analysis (DFMEA) will identify product characteristics and controls critical to quality, performance and safety for inclusion in the Process Failure Modes and Effects Analysis (PFMEA), which identify where traditional Quality engineering tools are to be applied to maximize benefits. Transfers between design and production are greatly enhanced by drawings that adhere to known standards; Geometric Dimensioning and Tolerance (GD&T) techniques also improve the accuracy of information transferred to production, and reduce the potential for errors in the The procurement of the materials required to produce the product is essential. Risk to the provision of an innovative product increases if the technology demands material inputs that are rare, or a precursor with a manufacturing process that has a low yield. The costs of innovative products must ultimately be borne by the consumer, and marketing is key to ensuring costs are recovered: smartphones that cost several hundred dol- lars are often offered for sale at lower prices on condi- tion that consumers sign multi-year contracts with the service provider to offset the discount. Occasionally, an innovative product may raise procurement risks for well-known products and technologies simply by increasing demand. For example, making popular pick-up truck bodies out of aluminium forced manufacturers using the same material in lower volumes to confront higher costs, and material suppliers to invest in new facilities to meet demand. Alternatively, an ingredient for a chemical process might be discontinued by its supplier due to low margins, or government regulation. Strategic procurement and estimates of market demand can be useful in assessing the impact of these risks, and detailed understanding of the technology, product and manufacturing processes are vital for assessing the impact of these changes, and evaluating the performance potential alternatives. Conclusion Understanding the type and level of risks faced in each category can explain why some companies make innova- tion look easy, while others struggle to meet expectations. interpretation of drawings. Procurement Challenges

opportunities and threats in each of the five categories, recognize which quality tools apply, and implement them effectively at each stage of the innovation program. v Alex Saegert, P.Eng., is an ASQ Certified Reliability Engineer (CRE), a Certified Manager of Quality/ Operational Excel- lence (CMQ/OE), and a past contributor to ASQ’s Innovation Interest Group and Quality Management Division. He is the founder of Saegert Solutions, providing “engineering for inno- vation’s 99 percent.”

45

J U LY/AU G U S T 2 015

i n n o v a t i o n