’08. 06. 04VIP Center, Samsung Electronics

Dong-Joon Kim, PhD, CVS, TRIZ Specialist, 6σ BB

Value Innovation Programfor Product Planningof Samsung Electronics

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 reducedThe 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 measurementWe 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 reducedThe 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 measurementWe also accumulate these data to improve the effects of VE activities

Fortune(2005)

BusinessWeek(2006)

Sweden Business DailyDagens Industri(2007)

Financial Times(2005 & 2008)

22:17

“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

Samsung’s Blue Ocean Approach

Blue Ocean Strategy Samsung Electronics

Head

Tipping Point LeadershipCognitive hurdleResource hurdle

Motivational hurdlePolitical hurdle

Corporate Business Innovation

Body Value InnovationBuyer Value↑ & Costs ↓

Value Innovation Activity(Differentiation & Cost reduction )

Arms & Legs

Fair ProcessEngagementExplanation

Expectation Clarity

GWP( Great WorkPlace )

Samsung’s Value Innovation

LOCK’EM UP GUIDING HAND MIX’EM UP SET A DATE DO THE MATH

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.

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 it’s time to make a decision.

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.

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 project’s completion.

Team members draw “value curves”, graphs that rank attributes such as a product’s sound or picture quality on a scale from 1 to 5. These help the team set priorities and differentiate Samsung’s products from rivals.

Source: BusinessWeek(2006)

Reality

Identity Image

Value Innovation

Value Innovation is achieved only when the whole system of reality, identity, and image

of a team project is properly aligned.

Samsung’s Value Innovation

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

Strategy FairOne Strategy Canvas

Report

Reframingthe project

Observing/UnderstandingCustomers

RedefiningValue

SystematizingConcept

Forming

CFT

Decision Making by management

Awakening Exploration Strategy Fair Systemizing

6 Paths1. Alternative Industries2. Strategic Groups within

Industries3. Chain of Buyers4. Complementary

Product & Service Offering

5. Functional or Emotional Appeals to Buyers

6. Time

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

Price Capability Energy Saving Design Optional Function Ease of Use Premium Space

Premium

Low-end

HIGH

LOW

Go to the field to explore the six paths to creating blue oceansObserve the distinctive advantages of alternative products and servicesSee which factors you should eliminate, create, or change

example) Customer observation

Step 2. Visual Exploration

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

Price Sound Easy of use Easy to get

Moblility Capacity Storage Optional Function

Movie

‘The fashion icon’

New Product

B-Alternative

HIGH

LOW

Step 3. Visual Strategy Fair

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

Communicate strategy House of Quality ParetoDistribute strategy canvas

To-be

Step 4. Visual Communication

CFT (Cross Functional Team) Activity

TV (Overall) – No.1, Sales Amount & Vol.

FP TV – No.1, Sales Amount & Vol.

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

Best Practice: Bordeaux LCD TV

Sharing Best Practices

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

Execute with companywide innovation activities Corporate Business Innovation

Go with the organization’s work processTry out at least one project following the BOS framework, sequence, and tools before making judgment: to form training and adoption strategy within the organization

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 innovativelyValue Innovation ideas start from noticing the everyday things and viewing in a different angle

Implication

Successful Value Innovation

Summary