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issue: August 2006 APPLIANCE Magazine

Enterprise-Wide Product Design
Managing Global Innovation


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by Jill Russell, Senior Associate Editor

As the appliance industry competes on an increasingly global level, companies are focusing on one particular buzzword to get them ahead of the rest—innovation.

Starting with Electrolux’s Floor Care Division, the Accolade® software from Sopheon will eventually change the company’s product development process across all regions and product categories. The goal is to enhance a culture of innovation that already exists, which has already brought to life unique appliances like the Intensity vacuum with fold-away handle. The upright vacuum is said to have the industry’s shortest air path, 3 inches (7.6 cm), and the highest suction power rating at 91 W. The 15-pound vacuum also features a two-motor system placed close to the intake with a dust cup, eliminating the need for a longer hose and air path.

With the increased focus on innovation, companies are looking for ways to manage the innovation process and make it more efficient. Appliance maker Electrolux decided it needed such a management tool as it moved its product development process from a regional level to a global one.
The Stockholm-based company recently made a record-breaking investment in product development management software from Sopheon (Minneapolis, Minnesota, U.S.). The program fosters successful and efficient product management flow by ensuring adequate resources, developing market research and tracking R&D spending from product idea to launch, on both a project-by-project basis and company-wide.
The program, Accolade® version 6.0, is a product portfolio and innovation process management system that encompasses all aspects of the product life cycle from concept to creation—including administrative functions, market research and assessment tasks, manufacturing and design feedback, quality assessments, technical analysis, and supply chain options. It organizes data in a useful manner so company decision-makers can evaluate the innovation process quickly and fairly and adjust projects in the pipeline to only bring products to market that will be successful according to current needs.
First adopted by the company’s global floor care division, Electrolux says the program will launch in all of its product segments on a global scale within a year and will be accessed by an estimated 1,400 users. Johan Skantorp, vice president of Electrolux’s Floor Care Group, explains how the software is in-line with the company’s competitive strategy.
“Electrolux is extremely focused on consumer wants and developing products to satisfy those,” he tells APPLIANCE. “We strongly believe that if we do that, it will help generate our future revenue stream. If we have the wrong product at the wrong time, we spend our money at the wrong place and that will work against us. Everything hinges on us developing the right products.”

Electrolux selected software provider Sopheon to implement a global product portfolio management system. The software automatically rates and prioritizes projects at every stage of the product development process to increase efficiency and revenue by eliminating investments on products with a low success potential.

The Language of Innovation

“Electrolux is trying to create a common language in its organization around innovation,” says Brian Seyfarth, solutions marketing director for Sopheon. “As a global company, when they look at their innovation pipeline from one part of the world to another, it is important that everyone is working from the same playbook and understands what it takes to execute their innovation process with excellence.”
One feature aimed toward achieving excellence is Accolade’s automated scorecards. This capability considers the criteria associated with a certain project and rates each with an appropriate score. Criteria include market attractiveness, competitive advantages, technical feasibility, and possible revenues. The software also rates project scores against each other—providing a summary of the likely success rate of each project in specific markets and also company-wide. The software also provides graphic analysis of project investments and market potential.
“This prevents any additional company investment in a product that is doomed to failure,” Seyfarth tells APPLIANCE. “It also frees up those resources to work on higher valued projects in the pipeline.” In fact, Sopheon says that companies implementing Accolade often reduce the number of projects by 30 percent to 35 percent.
Sopheon’s CEO Andy Michuda says that approximately 46 percent of all R&D spending is invested in products that either never make it to the market or fail after market launch. The company’s software, he says, can reduce lost investment and increase revenue by pinpointing a product’s overall success potential early in the innovation cycle.
The software is designed to intuitively lead the user through the system, eliminating the need for a hefty IT investment and extensive training. The company does provide initial demonstrations and guides users through the system after the initial rollout. Sopheon says the ease with which the software can be configured lets Electrolux modify it to fit other processes for its needs. “It is a Web-based configuration capability that is at the core of Accolade,” Seyfarth says. “This drives quick acceptance of the system and therefore adherence to the process, and as a result, drives the benefits the company hopes to achieve.”
Although using the software may be easy, Electrolux says initially deciding on such a program took some time. The company started its own internal version of such a system that was based on regional processes. After 2 years it decided to ramp-up the innovation process to a global level and turned to software experts. Electrolux says it chose Sopheon because Accolade covered the entire innovation process, in addition to offering a simple user interface that utilizes Microsoft Office tools. Additionally, Sopheon partnered with consulting firm Arthur D. Little, already an existing partner of Electrolux, which made Sopheon a winning decision.
With the goal to completely adopt the program across all product groups within 1 year, Skantorp says Electrolux expects Accolade to more effectively use the amount of revenue spent on R&D to eventually increase from 1 percent to 2 percent within the next few years.
After only 5 months with Sopheon’s system, Electrolux is confident the investment will quickly be outweighed by future product profits. “I’m a firm believer that we will get great effectiveness, speed up the time-to-market on a global basis and decrease investments in R&D for the whole organization,” Skantorp says. “The key is that we will be able to project our future business, and collect information in such a way that we will look at our total business today and what will be the total business in 2010. Today we keep track of running projects and we try to optimize them. In the future, we will look at current business, ongoing projects and future opportunities at the same time and know that we are making the right decisions.”

Suppliers mentioned in this article:
Electrolux Home Care Products
 

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