Innovation can be defined any number of ways. It can refer to something mundane, such as a “change” or an “alteration.” Or it can signify something with much greater impact. Try “revolution” or “breakthrough.” And it's probably fair to say that Dell Inc., headquartered in Round Rock, Texas, often has been synonymous with the latter definition, certainly in supply chain management. For instance, its postponement strategy in computer assembly has been emulated by countless manufacturers. In addition to computers, Dell makes servers, data storage devices, mp3 players, network switches, computer peripherals, HDTVs, printers and cameras, and says Maher, the company strives for innovation at every level, in every department or internal “organization” and in every function.
What drives innovation at a company like Dell, and how does an innovative idea actually become a reality there? In an attempt to answer that, SupplyChainBrain sat down with Maher at the International Supply Management Conference in Las Vegas earlier this year, to get his views on the subject.
Q: In the supply chain management press, we think of Dell as a highly innovative company. Consumers may feel that way also. So, do you have a process at the company for driving or nurturing innovation?
A: Maher: We do pride ourselves on innovation within the company, and within my own organization what we've done is develop a global process for innovation.
Q: Walk us through that then.
A: Maher: It starts, really, with a few principles. We want to make sure for our entire organization that individuals are focused on coming up with ideas that solve customers' unmet needs. So if you're going to have a solution, it's got to be around the customer. We want everybody focused around the customer.
Q: Surely, every company says something like that.
A: Maher: We also want to make sure that all of our team members know that there are no boundaries here. That's true across every function and across every operation within those functions, literally opening up so people can come up with innovative ideas on – well, it could be anything from governance to supplier management to the regular things like process or technology change. Even career development and how we train our employees.
And – it can't stay just within Dell. It has to be a process that is opened up to our suppliers and our partners, who are a critical part of our supply chain, and even with universities that we work closely with, primarily Arizona State. That's where we get lots of great ideas in the academic world, and we want to make sure that everybody is working together.
So, we had to have a set of principles, and with that we've built out a global process that's really three steps. There is an intake process, which is technology enabled, and it makes it very simple for a team or an individual team member to submit an idea. They can do it in a matter of seconds. And second, then it goes to an assessment step. And at that assessment there’s a steering committee, for lack of a better term, which consists of subject matter experts across multiple functions. And they're going to look for some simple things: Do we already have a solution for that that we're comfortable with? Did we already get that idea from somebody else? So we have a means to track that. We’re cautions about this. Probably the thing that made me most nervous in this process is, we didn’t want to turn it into a bureaucratic endeavor. We didn't want to make it so people would say, 'Oh, I have to do three submissions every month or I’m not doing what's expected of me.' We wanted to make it part of the culture. We wanted to have a method to track things, but make it very simple.
Q: Spell out just what the steering committee you mentioned does.
A: Maher: So the steering committee will go through some of the ideas and make sure they align with the company's strategic initiatives, etc. Then, everything goes to the third and final step, which is the decision. If the committee feels an idea was a good candidate, it comes up to me and my staff. We review these ideas on a monthly basis, and if it's something we feel we're going to put our full weight behind, that we would budget, would fund the initiative, develop IT road maps, what have you, then we would align that idea into our next annual or three-year plan and drive it forward. Then it culminates in something we started a couple of years ago, which is an annual summit.
Q: And what happens there?
A: Maher: We bring in all of our suppliers. All of my functions are represented and in addition that, other functions or organizations within Dell are as well. And what we start with is probably 80 submissions from our suppliers and we’ll dwindle that down to about 10 and we'll give great feedback to the individuals throughout the critical steps in the process. Every time we get an idea, be it from the academic world, those from within my own organization or from a supplier, we have to have the follow-through, and that follow-through means, if it’s a 'yes', that we're going to go do it, great. But even more important, if we’re not, we have to explain why we're not going to do it.
So we'll get about 80 submissions from our suppliers a year and we'll really take a hard look at 8 to 10 of those and we'll do that at a summit over a couple of days, such as the next one coming up in Penang, Malaysia. We'll give them real-time feedback. We'll solicit more information potentially, but within a couple of weeks of that summit we’ll let all those suppliers know if we are going to go forward with their idea or not going to do it. We treat it the same way internally, if a team or individual team member comes up with an idea. So that's the process that we've developed.
Q: It sounds highly complex, or at least highly detailed. I'm curious about the evolution of this process over, say, the last four or five years.
A: Maher: Innovation is always strong within the culture of Dell, but within my organization there's a fast pace. I run the aftermarket supply chain, so there's customer needs we're trying to adhere to on a daily basis. So you have some good ideas that fall though the cracks. So what we wanted to do is get away from the ad-hoc process where somebody gets a great idea in a meeting or through the regular governance, things like a face-to-face meeting where you bring in all your leadership team or have ops reviews. We wanted something where we're getting these ideas on a daily basis and enabling them.
Back five years ago, we were more regionally based and not really global. We built my organization from three different regions into a single global organization, which allowed us to get away from everybody doing everything their own way. That allowed us to have some of what I think is critical: having the people who touch the process, who touch the customer, who deal with day-to-day issues, help us develop the process we have today. Like people in material handling, the IT programmer, the supplier manager – and let them come back and say, 'Here's where we think we’re failing, we've got great ideas.'
That really built out the process. It was all with an objective, really two objectives. One, make it part of the culture so it never goes away. And second, make sure everybody understands everything we do, even if it's just changing a basic governance process in how we run a meeting. It's all focused on better supporting our customers.
Q: Can you illustrate this? Is there an example, for instance?
A: Maher: One of the best examples I can share with you just came out recently. Somebody came up with the idea that in every ops review – three slides; that's it; maximum. I said 'OK, I'm not sure that's the right answer or not', but they put some more detail behind the idea and we're starting it; we're going to have our ops reviews with a three-slide maximum.
Q: Not a terribly big area – procedure at an operations meeting.
A: Maher: The ideas are about something as small as that or something as big as driving a brand new distribution model. We've done one of those recently, in Shanghai, opening a global distribution center where we're utilizing it in ways that we haven’t done before.
Q: What special qualifications does someone need to have in this innovative culture that you have and they want to emulate?
A: Maher: I think there's a few things, but first, I would take some liberties with the term 'qualifications.' We don't want to put boundaries on things, and there’s clearly more than one way to drive the DNA of an innovative culture. But I think one of them is this, you cannot make it bureaucratic. You've got to go from bottom up. The best ideas don't come from me. They don't come from the executive teams. They come from people who actually deal with the issues on a day-to-day basis. You've got to have a process that you enable. One that really lets those ideas percolate upwards.
The thing we found that really drove this for us is this: in your process, you have to have follow-through. And you've got to drive some of these. Do you need some quick wins? We had a couple of false starts, for example, but once we had a few wins, everybody involved with it got excited. They realized and said, 'I can bring an idea.'
We literally had an intern who submitted ideas that we have then taken and launched. So anybody in the company has got to have the ability to easily submit an idea and get the feedback, get an opportunity to show their passion around it and tell us why that's a good idea.
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