Teknor Apex Company

Teknor Apex Company is an international custom compounder of Plastics and Rubber materials. For U. S. markets we manufacture chemicals such as plasticizers and consumer goods including garden hose, and floor mats. We are a diversified polymer company using complimentary technologies to serve common markets.

Company Statistics



Founded in 1924



Privately Held



9 Divisions



1850 Employees



13 Locations



Sales in 70 Countries

The following divisions have been a logical evolution of our growth



Vinyl



Thermoplastic Elastomers



Teknor Color Company



Chemicals



Specialty Compounding



Rubber



Lawn & Garden



Commercial Products



Chem Polymer Company

Teknor Apex works to maximize synergies among its divisions to create greater value for our customers.



Market Expertise

. We have company wide expertise in a variety of markets such as wire and cable, medical, automotive, and consumer products.



Single-sourcing of materials

. Multiple product lines developed to work together for a particular market are available from one source.



Technical Support

. Our operations support extensive resources for materials research, application development, color control and process engineering. Our corporate analytical and physical testing Labs have extensive capabilities to support this effort.



Quality Programs

. We are a quality driven organization, which uses ISO/QS and TQM as a foundation for our operations.

Why we chose to Participate in the Stevens Innovation Survey (Fall 2000)

 It was necessary to become more innovative as a company to increase our profitability and long-term viability.

 We needed to create an environment, which both fostered and rewarded the creative thinking necessary to generate more and better ideas.

 These ideas would result in more new products, processes and systems.

 Just as important, we needed to cash-in on these new ideas quicker.

Details of Innovation Survey

 Employees were selected to participate in this survey so that we could obtain a baseline on the individual behaviors & management practices that effect innovation at Teknor Apex.

 We wanted to identify areas to focus on to become more innovative in the future.

 61employees participated in this survey, 29 from technical and 32 from the Vinyl business.

 The survey looked at the 4 characteristics of individual innovative behaviors (Goal-Directed, Inquisitive, Advocative & Collaborative) and the 7 management practices that encourage the individual innovative behavior (Employee Selection, Employee Development, Recognition, Support Systems for Development, Multifunctional Teaming, Strategic Drivers and Leadership).

Inquisitive

:

Advocative

:

Collaborative

:

Goal Directiveness

:

Strategic Direction

:

Employee Selection

:

Reward & Recognition: Employee Development

:

Support Systems

:

Multifunctional Teaming

:

Leadership

:

Definitions

: Search purposefully for new ideas Encourage new ideas from others Facilitate and encourage informal relationships Work towards specific Technology Goals Link Technology to business objectives Recruit and select top technology professionals Recognize publicly and reward for Innovation Training on teamwork, communication, ideas, etc.

Database for ideas, software, etc.

Encourage use of Teams, use within business units Management support and commitment.

Details of Innovation Survey (cont’d)

 Responses in these areas were used to gauge how Teknor Apex compared with the most innovative companies like 3M, Bell Labs, General Electric & Merck. Specifically, each area at Teknor Apex was rated from 1 to 5, with 5 being the best, and was compared against the best in class companies.  The participants identified the key factors that they felt would have the highest impact on future innovation.

 Interestingly, the Technology Group rated every one of the 11 behaviors and practices higher than the Vinyl Group (our largest business) by 2 to 19%. Meaning the Technology Group felt that they were more innovative than the support groups in the study.

Implementation Plan

 A review team was charged with making recommendations and setting priorities for the opportunities for improvement.

 Specifically, the review team prioritized the improvement opportunities in those areas of management practice having the greatest impact on encouraging individual innovative behavior.

 Recommendations were made and many of these ideas have been implemented; or are in the process of being implemented at Teknor Apex.

Some Key Results

I. Table 1 - Items Ranked by their Impact on Future Innovation

 Participants were asked to rank 86 items (questions) based on the relative importance of that item’s impact on future Innovation.

 Table 1 lists by rank (based on a weighted formula where the higher the number, the greater the importance).  Applying the 80/20 rule, the top 17 items that the participants deemed would most effect future innovation at Teknor Apex were identified.

11 11 11 14 14 14 14 13 13 12 18 16 16 14 Rank 30 29 18 TABLE 1 Question

Recruit and select technical professionals regarded as leaders in their field Challenge the status quo in pursuit of new ideas Downplay status differences and encourage input from junior associates Demonstrate a real commitment to innovation Recruit and select top professionals with applied research experience Conduct purposeful searches for new ideas and technologies Guide work with both technological and business goals in mind Base career development and promotions on innovated-related performance Provide adequate people resources to achieve innovation-related goals Reward & protect risk takers Create action plans & timetables to ensure technology/business goals are met Incorporate innovation-related objectives into employee appraisal programs Provide you with the technology & equipment you need to do your work Provide training on key roles required for successful innovation, e.g. champions Have formal systems to identify business opportunities across the organization Monitor progress to ensure the technology/business goals are achieved Incorporate innovation measures as explicit part of managers’ annual goals

Table 2 – Compares Teknor’s Individual Innovative Behaviors with the most Innovative Companies

Goal directedness at Teknor was very near the best in class for innovative companies

.

 Largest behavior gaps between the best in class and Teknor Apex were Advocative and Inquisitive behaviors by about the same margin.

 Of the 25 questions asked in these four (4) individual behavior areas, no score for any question was rated below 2.00.

Table 2

3 4

Rank Behavior

1 2 Goal Directed Inquisitive

Teknor Apex Best in class

2.95

2.54

3.02

3.48

Collaborative Advocative 2.43

2.39

3.06

3.38

Gap

0.07

0.94

0.63

0.99

Table 3 – Compares the Management / Organization Practices of Teknor Apex with the Most Innovative Companies.

 Largest gaps between best in class & Teknor were in the areas of Employee Development, Innovation Support Systems and Employee Selection respectively.

 Because Recognition, Leadership, and Innovation Support Systems scored the lowest on a relative scoring basis, these areas seemed to offer the greatest opportunity for improvement.

Table 3

Rank Practice

5 6 7 1 2 3 4 Employee Selection Strategic Drivers Employee Development Multifunctional Teaming Innovation Support Systems Leadership Recognition

Teknor Apex

2.43

2.22

2.12

2.04

1.98

1.92

1.79

Best in class

3.40

3.00

3.30

2.30

3.00

New to survey 2.60

Gap 0.97

0.78

1.18

0.26

1.02

N/A 0.81

Table 4 – Identified the greatest opportunity for improvements based on the specific questions where the response was less than 1.80

1.79

1.57

1.67

1.77

1.46

1.66

1.67

1.72

Score 1.72

1.77

1.77

1.77

1.56

1.67

1.77

Of 61 questions asked in the seven (7) management practices, 15 questions scored below 1.80 (lowest 25%) which are listed below.

Practice Recognition

Recognition Recognition Recognition

Leadership

Leadership Leadership Leadership

Support Systems

Support Systems Support Systems

Functional Structures

Functional Structures Functional Structures Functional Structures

Table 4 Question

Have formal recognition programs for individual innovators Have formal recognition for team innovation Incorporate innovation-related objectives into appraisal programs Incorporate innovation measures as part of employee annual goals Reward & protect risk takers Coach & develop innovative champions & sponsors Solicit & support new ideas from all associates Communicate the importance of innovation to all levels of associates Have formal mechanisms to circulate new ideas across organizations Maintain electronic comm. Systems specifically for idea sharing Maintain a centralized database of ideas to support future innovation Empower project teams to make allocation and spending decisions Have formal systems to share technologies across the organization Formal systems to identify business opportunities across organizations Encourage collaborative efforts to individuals/team outside company

Implementation

 What have we done to address some of these areas?

 We realized that we had limited resources and had to start somewhere. Based on the survey results, Reward and Recognition appeared to be a good starting point.

 Although, over the last 5 year period we have addressed or made in-roads in about ½ of the key areas (top 20% of issues) which also included leadership training.

Innovation Reward & Recognition Awards

 We have implemented an innovation awards program for the Technology Group  It is for Lab Salaried Professionals (Lab hourly contributors are verbally recognized as a group)  While we feel that it is Technology’s job to innovate, we still want to publicly recognize significant accomplishments.

 Awards are given upon completion of a Gate 5 review in our CTC (Concept to Commercialization) process, pass or kill. Note: the CTC process is based on the Stage-Gate process and is used for our major R&D projects  Awards are also given out to significant line extension work and process/method development work.

Types of Awards

1.

Certificate

Significant Contributors 2.

Shirt/Gift

Main Contributors (Gift amount is based on ROI) 3.

President’s Award

Recommendations made to President

Reward & Recognition (cont.)

 We have incorporated innovation-related objectives into each Salaried performance appraisal  Incorporated innovation measures as part of the employee incentive compensation program.

 The incentive program has been opened up to more people at lower levels.  We have established a Technical Ladder, which defines job levels. It has both a Technical and a Managerial side so that the advancement path for Technology employees is clearer.

 Related to this, detailed job descriptions for every position and level have been established that detail each job’s requirements. These requirements define the complexity of the job, experience needed and the degree of creativity/innovation that is expected.

Concept to Commercialization

(CTC) process, which is our Stage-Gate, process.  Again the CTC process is what we use for significant R&D projects  We have streamlined our prior CTC process, which once required 5 steps for all projects.

1.

Simplified

- Incremental projects (lower risk) is now a 3-Step process 2.

Standard

Platform projects (higher risk) is now a 4-Step process  Using software from Qualisci to

manage

our CTC process. (Currently piloting in TPE business, will roll out to other businesses in 6 months).

1. All projects and new ideas will be tracked in this centralized database.

2. Project actions plans are kept current and are visible within the software.

3. Adopted voice of the customer methodology (a.k.a. QFD) to better understand customer requirements and needs.

4. Can view the status of individual projects; or portfolio of projects by each business.

5. One page

Project Summary Dashboard

contains the up to date status of each project including financial information.

6. All information and data are “mapped” so that there are no redundant entries 7. Key Metrics for projects are easily generated to gauge progress.

Fast R&D

 Fast R&D is the software we use for design of Experiments.

 Software from Qualisci was developed to handle up to 12 input variables and 12 responses to optimize formulation and process work.  Allows us to develop new products quicker at a lower cost.

Teknor Apex conducted a Strategic Planning Survey in 2004

 As a result of the Strategic Planning Survey it was clear that New Product Development (NPD) was important for the growth of the Corporation.

 Most people believe that we do not develop new products fast enough.

 Our consultant demonstrated that a problem exists at the interface between Sales/Marketing, Manufacturing and Technical that slows down NPD.

Our Top 5 obstacles right now which limit Innovation

1.

Not enough good ideas

2.

We do not for the most part have a focused market approach for NPD

3.

Our CTC (Stage-Gate) process is too complicated

4.

We have too many projects for the available resources

5.

There are few business goals for NPD

We have already discussed some of these and the rest of the slides will touch upon these issues in more detail.

Plan for the future (Goals)

 Business Managers must take ownership of the NPD Pipeline.

This should not be run by Technical. 

N

eed to set specific Goals for the individual business areas

:

For example, 10-20% of new revenue must result from new products over next 3 years  Marketing needs to play a stronger role in the idea opportunity identification area.  Resources are still overbooked and projects take longer than expected. Need to improve resource management and allocation issues.

 The Business Team must take ownership and responsibility for these projects. Projects will be very visible by using our CTC software.

Plan for the future (Resource Allocation)

 Sales/Marketing and Manufacturing will assess their resources and make decisions regarding who will be involved in the NPD effort.

 An overload of projects will delay all projects and will waste critical resources from being applied to the superior projects. We need to pay more attention to this.

 In PVC, Technical has put many projects on hold to provide the necessary resources to execute the Fireguard project strategy established by the Business Team

Plan for the future (NPD Culture, New Approach to NPD)

 WE still do not have enough new good ideas, which have gone through the CTC preassessment stage (Stages 1&2). We need a better method or way to generate new ideas and communicate these.  NPD must be a continual process. It requires someone, or a group of people such as a dedicated marketing group, constantly looking for new ideas/projects to work on. We have one business unit (TPE) which is doing this.

 These new ideas need to be put into the combined stage 1&2 (preassessment stage) of the CTC process.

 We need to Kill inferior projects quicker so that more resources are available for superior projects.

 The business team then must decide which projects should go into Stage 3 of the CTC process where the bulk of the work takes place and significant resources must be committed. Also, which project(s) will be put on hold until resources become available.