Innovation has been a buzz word in business for at least the last decade. Yet large companies still struggle to capture new ideas like those presented by startups and entrepreneurs. In the latest issue of Harvard Business Review, Bharat Kapoor, Kevin Nolan and Natarajan Venkatakrishnan outline how GE is aiming to seize some innovation magic through FirstBuild.
“Midway through 2014, GE Appliances launched FirstBuild — a GE-equipped innovation lab and micro-factory — to augment the strengths of a long-established company with those of an entrepreneurial startup,” Kapoor, Nolan and Venkatakrishnan write. “Separation is the key. As a freestanding enterprise operating under its own brand, FirstBuild is decidedly not another attempt to transform a traditional company’s corporate culture.”
To start, while FirstBuild is in Louisville, Kentucky, it is a few miles away from GE’s Appliance Park. FirstBuild is located on the University of Louisville campus in what the authors describe as an “open community” that includes industrial designers, scientists, engineers, students, amateur inventors and FirstBuild employees. And, APICS people, don’t worry: There’s an operations leader on staff, along with a director and a commercial principal. Plus, FirstBuild employs a community manager who makes sure the organization attracts and encourages innovators. These strategies must be working because the community now claims more than 12,000 members.
FirstBuild’s work is open source, a stark difference from GE Appliances and other manufacturers. “Visitors and inventors are warmly welcomed to the FirstBuild facility, and the innovations unfolding there are proudly exhibited, not shrouded in secrecy,” the authors note.
Its setup enables FirstBuild to take ideas and quickly prototype, manufacture and commercialize them into new products. Usually, it makes about 1,000 units of a new product. If demand goes beyond that number, the product is viewed as a win, and GE Appliances could choose to integrate it into its own line of appliances. “What GE Appliances gains is the powerful advantage of being first to market,” Kapoor, Nolan and Venkatakrishnan write.
The FirstBuild community includes technology experts to further the idea of smart appliances. For example, FirstBuild created and manufactured ChillHub, a refrigerator with two USB stations and integrated Wi-Fi. Going further, the authors report FirstBuild inventors are investigating smart features, such as auto-fill water pitchers, deodorizers and bacteria sensors.
Representatives from other Fortune 1,000 companies have toured FirstBuild to examine if this idea can be duplicated. “Market-leading innovation is intrinsically linked to market-leading growth, yet is inherently difficult to deliver in large companies,” the article notes. “The FirstBuild model goes a long way toward resolving that core dilemma.
Supply chain innovation
As soon as I read this story, I considered how supply chain professionals could help FirstBuild on its innovation quest. Good ideas could be underscored by good supply chain knowledge. On the other side, supply chain professionals could learn how to break patterns and embrace innovation.
We’ve been talking recently about the Internet of Things (IOT) and how it is destined to revolutionize supply chain. Consider the IOT definition as found in the APICS Dictionary: “An environment in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. This allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computer-based systems.”
How might IOT transform your company’s products and supply chain? Are you ready to embrace the innovation it will surely bring? Prepare yourself for the future by beginning your APICS Certified Supply Chain Professional journey today. Visit www.apics.org/credentials-education/credentials/cscp to learn more.