Value Innovation Program for Product Planning of Samsung Electronics

08. 06. 04
VIP Center, Samsung Electronics Dong-Joon Kim, PhD, CVS, TRIZ Specialist, 6 BB

Review of past work

Creative VE activities using Value Curve
Conclusions by Byungmo Yang at SAVE 2005
Using Value Curve (W. Chan Kim and Renee Mauborgne)
We could easily decide which functions should be eliminated or created, and raised or reduced The Cross Functional Team could understand the product strategic concept more easily

We will further develop the use of the Value Curve and FAST diagram technique
More effective activities can be achieved through the exact performance measurement We also accumulate these data to improve the effects of VE activities

Review of past work

Creative VE activities using Value Curve
at SAVE 2005 by Byungmo Yang

Review of past work

Creative VE activities using Value Curve
Conclusions by Byungmo Yang at SAVE 2005
Using Value Curve (W. Chan Kim and Renee Mauborgne)
We could easily decide which functions should be eliminated or created, and raised or reduced The Cross Functional Team could understand the product strategic concept more easily

We will further develop the use of the Value Curve and FAST diagram technique
More effective activities can be achieved through the exact performance measurement We also accumulate these data to improve the effects of VE activities

Fortune(2005)

BusinessWeek(2006)

Sweden Business Daily Dagens Industri(2007)

Financial Times(2005 & 2008)

Samsung Electronics has institutionalized the use of the strategy canvas in its key business creation decisions by establishing the Value Innovation Program Center in 1998.
- Blue Ocean Strategy by W. Chan Kim & Renee Mauborgne

22:17

Samsungs Blue Ocean Approach

Blue Ocean Strategy
Tipping Point Leadership
Cognitive hurdle Resource hurdle Motivational hurdle Political hurdle

Samsung Electronics

Head

Corporate Business Innovation

Body Arms & Legs

Value Innovation
Buyer Value & Costs

Value Innovation Activity

(Differentiation & Cost reduction )

Fair Process
Engagement Explanation Expectation Clarity

GWP
( Great WorkPlace )

Samsungs Value Innovation

LOCKEM UP
Daily routines can interrupt the flow of great ideas, so Samsung isolates its development teams in the VIP Center-and requires all members to work there for weeks on end, until the project is completed.

GUIDING HAND
Some 50 specialists work at the Center, helping teams stay focused on the problems at hand, develop various alternative solutions, and reach a consensus when its time to make a decision.

MIXEM UP
Brainstorming is most successful when a wide variety of viewpoints is represented. So Samsung gathers teams of engineers, designers, and planners from across the company to develop new products.

SET A DATE
Deadlines force teams to make tough choices and overcome disagreements that can slow down progress. Each team is given a timetable for progress and a fixed date for the projects completion.

DO THE MATH
Team members draw value curves, graphs that rank attributes such as a products sound or picture quality on a scale from 1 to 5. These help the team set priorities and differentiate Samsungs products from rivals.

Source: BusinessWeek(2006)

Samsungs Value Innovation

Value Innovation is achieved only when the whole system of reality, identity, and image of a team project is properly aligned.

Reality

Value Innovation

Identity

Image

Reality

- What actually exists in life from a subjective or objective view

Identity

- What we intend to be in the future

from a corporate view - Planning & Production

Image

- What Customers might imagine

- Expectations based on past & present reality from a subjective view

Objectives for Value Innovation Program

Activate CFT (Cross Functional Team) activities in the initial stage of the New Product Development process Encourage communication and ownership among CFT members Formulate strategy for organization execution Build team projects into hit products through Value Innovation

Characteristics of the Value Innovation Program

Analysis of Customers Behavioral Psychology from a Zero Base Logic of Product Planning in New Product Development Logical Decision-Making Recognition of Anticipated Problems : Risk Management

Flow of the Value Innovation Program

Awakening Exploration
6 Paths
1. Alternative Industries 2. Strategic Groups within Industries 3. Chain of Buyers 4. Complementary Product & Service Offering 5. Functional or Emotional Appeals to Buyers 6. Time

Strategy Fair
Strategy Fair One Strategy Canvas

Systemizing
Report

Forming

CFT

Reframing the project

Observing/Understanding Customers

Redefining Value

Systematizing Concept

Decision Making by management

Step 1. Visual Awakening

Compare your business with your competitors by drawing your as-is strategy canvas. See where your strategy needs to change.
example) As-is strategy canvas
HIGH

Premium

Low-end

LOW

Price

Capability

Energy Saving

Design

Optional Function Ease of Use

Premium Space

Step 2. Visual Exploration

Go to the field to explore the six paths to creating blue oceans Observe the distinctive advantages of alternative products and services See which factors you should eliminate, create, or change
example) Customer observation

Step 3. Visual Strategy Fair

Draw your to be strategy canvas based on insights from field observations. Get feedback on alternative strategy canvases from customers, competitors customers, and noncustomers. Use feedback to build the best to be future strategy
example) To-be strategy canvas

The fashion icon

HIGH

New Product

B-Alternative
LOW Price Sound Easy of use Easy to get Moblility Capacity Storage Optional Function Movie

Step 4. Visual Communication

Distribute your before-and-after strategic profiles on one page for easy comparison. Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
example) Link to development through QFD
As-Is

To-be

Distribute strategy canvas

Communicate strategy

House of Quality

Pareto

CFT (Cross Functional Team) Activity

Best Practice: Bordeaux LCD TV

TV (Overall) No.1, Sales Amount & Vol. FP TV No.1, Sales Amount & Vol. LCD TV No.1, Sales Amount & Vol.
(DisplaySearch, 3Q 2006)

Sharing Best Practices

Annual Value Innovation Awards: reward best practices CEO, CTO, Corporate Business Innovation, Finance, Marketing, and Staff

Summary
Successful Value Innovation
Execute with companywide innovation activities Corporate Business Innovation Go with the organizations work process Try out at least one project following the BOS framework, sequence, and tools before making judgment : to form training and adoption strategy within the organization

Implication
No such thing as a completely different innovation tool - Additional work is always needed to customize it for your organization Even the best tools need work to use them innovatively Value Innovation ideas start from noticing the everyday things and viewing in a different angle