“THE SOURCES OF INNOVATION”

1. “THE SOURCES OF INNOVATION” By: José Coutinho, Marco Bravo e Paulo Rebelo “SOURCES OF INNOVATION”

2. CONTENTS: • AIMS OF THE PRESENTATION; • BACKGROUND & KEY FINDINGS; • USERS AS INNOVATORS; • VARIATIONS IN THE FUNCTIONAL SOURCE OF INNOVATION; • SUMMARY AND CONCLUSIONS; • BEYOND THE ARTICLES… “SOURCES OF INNOVATION”

3. 1. AIMS OF THE PRESENTATION: • Where innovation comes from? • Who are the major sources on the innovation process? • Who are the players? How do they interact together? “SOURCES OF INNOVATION”

4. 2. BACKGROUND AND KEY FINDINGS • Innovation comes from the need: • Basic surviving needs • Food, Territory, etc… • For making things (tools) • Better, Faster, Less costly, etc… • Who has the need? • The users (do they innovate all alone?); • Manufacturer’s and supplier’s intervention. “SOURCES OF INNOVATION”

5. 3. USERS AS INNOVATORS • Innovation: • One of the oldest behaviors in the world; • Interacts with species evolution all living beings innovate when faced with unexpected/perturbing elements;  Koshima Island “SOURCES OF INNOVATION”

6. USERS AS INNOVATORS • The survival need • Koshima example “SOURCES OF INNOVATION”

7. USERS AS INNOVATORS • In 1952, on the island of Koshima, scientists were providing monkeys with sweet potatoes dropped in the sand. The monkeys liked the taste of the raw sweet potatoes, but they found the dirt unpleasant. An 18-month-old female named Imo found she could solve the problem by washing the potatoes in a nearby stream. She taught this trick to her mother. Her playmates also learned this new way and they taught their mothers too. This cultural innovation was gradually picked up by various monkeys before the eyes of the scientists. Between 1952 and 1958 all the young monkeys learned to wash the sandy sweet potatoes to make them more palatable. Only the adults who imitated their children learned this social improvement. Other adults kept eating the dirty sweet potatoes. Then something startling took place. In the autumn of 1958, a certain number of Koshima monkeys were washing sweet potatoes -- the exact number is not known. Let us suppose that when the sun rose one morning there were 99 monkeys on Koshima Island who had learned to wash their sweet potatoes. Let's further suppose that later that morning, the hundredth monkey learned to wash potatoes. • By that evening almost everyone in the tribe was washing sweet potatoes before eating them. The added energy of this hundredth monkey somehow created an ideological breakthrough! • A most surprising thing observed by these scientists was that the habit of washing sweet potatoes then jumped over the sea -- Colonies of monkeys on other islands and the mainland troop of monkeys at Takasakiyama began washing their sweet potatoes. Although the exact number may vary, this Hundredth Monkey Phenomenon means that when only a limited number of people know of a new way, it may remain the conscious property of these people. But there is a point at which if only one more person tunes-in to a new awareness, a field is strengthened so that this awareness is picked up by almost everyone! “SOURCES OF INNOVATION”

8. USERS AS INNOVATORS • THE TECNOLOGICAL BREAK THROUGH • 1st Field analysis – scientific instruments • Definition – Innovator is the one that develops an instrument and proves it to be useful through a publication “SOURCES OF INNOVATION”

9. USERS AS INNOVATORS • EXAMPLE – SCIENTIFIC INSTRUMENTS • Who’s the innovator? The user for himself ? The combination manufacturer & user? Case study: Nuclear resonance User Electronic Microscope (P. supply) Manufacturer Elect. Microscope (electron beam) User (minor) • DIFUSION • For the example all are university people and they: • Publicize the results (writing); • In form others on presentations / conferences; • 1 year later others replicate; • There’s a commercialized product; “SOURCES OF INNOVATION”

10. USERS AS INNOVATORS • The INNOVATOR • Detects the problem • Invents an instrument • Builds a prototype • Proves the prototype value and applies it • Spreads the information for replication If MANUFACTURER is involved Product Re-Engineering – Manufacture & sells it – “SOURCES OF INNOVATION”

11. USERS AS INNOVATORS • 2nd Field analysis – Process industry: • Definition – Innovation is production applicable, and is available for most of the users • EXAMPLE – A SEMICONDUCTOR & PCB ASSEMBLY • Visteon: a case study “SOURCES OF INNOVATION”

12. VISTEON: A CASE STUDY The Wave Solder Equipment: • Necessity enhances innovation; Wave Solder Machine “SOURCES OF INNOVATION”

13. The Wave Solder Process: “SOURCES OF INNOVATION”

14. Process Flow Solder Wave Project Background • Solder Short were the major failure cause affecting FTT; • The majority of the products contain single or multiple row leaded components on the wrong orientation for wave soldering. “SOURCES OF INNOVATION”

15. - 45 Degrees Soldering = ZERO DEFECTS. Process Flow 45º to the Wave Contact Solder Wave “SOURCES OF INNOVATION”

16. First Approach: • The first experiment (August ‘03) was carried out using pallets • to carry the board on a 45º position in relation to the process flow. • - Sample Size: 200 PWB’s; • - Product used: “Large Bezel 5000 Series Main Board”; • - Equipment: SEHO NGF 2100 - (Copy Exactly BKM); • - Quality: ZERO DEFECTS; - The Objective is NOT TO USE PALLETIZED PROCESS: - Lower process throughput; - Extra material circulating on the line (pallets); - Extra process variable (pallets); - More Maintenance required (pallets); - Non Standard Process Width. “SOURCES OF INNOVATION”

17. Before – “Standard Wave Solder Nozle”: Solder Short Solder Short “SOURCES OF INNOVATION”

18. After – “W-Shape Solder Nozzle”: No Defects “SOURCES OF INNOVATION”

19. Average 1216 76 88% “SOURCES OF INNOVATION”

20. W Nozzle Implement. on Main2 Wave Solder PPM: (Audio Mnfg. Lines - Main1 & Main2) W Nozzle Implement. on Main1 PPM Skips Main #1 Line (Seho 2) 1500 PPM Shorts 1000 500 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘03 ‘03 ‘03 ‘03 PPM Skips Main#2 Line (Electrovert 4) 500 PPM Shorts 400 300 200 100 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘03 ‘03 ‘03 ‘03 “SOURCES OF INNOVATION”

21. PPM Skips Audio PPM Shorts 600 500 400 PPM 300 200 100 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘03 ‘03 ‘03 ‘03 W Nozzle Implement. W Nozzle Implement. on Main2 on Main1 Audio Overall Wave Solder PPM: “SOURCES OF INNOVATION”

22. Wave Solder Process PPM Skips PPM Shorts 450 400 350 300 250 PPM 200 150 100 50 0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘02 ‘03 ‘03 ‘03 ‘03 W Nozzle Implement. W Nozzle Implement. on Main2 on Main1 Plant Overall Wave Solder PPM: “SOURCES OF INNOVATION”

23. “ W - WAVE ” NOZZLE RESULTS: (Final Assembly) Solder Shorts 10% Improvement Solder Skips 45% Improvement “SOURCES OF INNOVATION”

24. “ W - WAVE ” NOZZLE RESULTS (B&A Returns) 46% Improvement “SOURCES OF INNOVATION”

25. “W - Nozzle” Installation Timing Plan: Line Equipment Sched. Date Due Date Con.Audio Seho Nov. 22 Main 1 Seho Dec. 13 Main 2 Electrovert Feb. 15 Airbag Electrovert Feb. 15 Line 8 Electrovert Feb. 21 Line 7 Electrovert July.20 Enfield Plt. Seho July Markham Plt. Seho July “SOURCES OF INNOVATION”

26. Advantages: • - Applicable for a Patent; • - Drastically reduces the solder defects rate in current products. • 95% Improvement - Internal Quality • 46% Improvement - External Quality • - Increases the Solder Process Window; • - Opens product design horizons into off-the-shelf-leaded-through- hole components not so restricted by “design rules”; • -reduces our product cost increases competitive advantage. “SOURCES OF INNOVATION”

27. Advantages: (cont.) • - Contains the potential to replace currently used more costly processes to reduce solder defects (ex: “Hot Nitrogen Knife”); • By a simple Nozzle installation (1/2 Hour) the direct savings will achieve: • 570 000 USD • (Labor, Equipment Maintenance) • - Extending this to all seven Visteon Plants (as per the implementation plan, savings can achieve: • 2,2 Mio USD “SOURCES OF INNOVATION”

28. USERS AS INNOVATORS • Innovation Type 1st New technique applied for the process equipment 2nd New process for internal applied process • DIFFUSION • Innovators do not have the diffusion incentive • Hiding because of competitive advantage • Used for marketing purposes Innovation % “SOURCES OF INNOVATION”

29. USERS AS INNOVATORS– OUTCOME OBSERVATIONS Scientific instruments Process machinery Why a different normal perception ? Innovation chain ends at the selling company Manufacturing associations put value on the themselves Manufacturing marketing “SOURCES OF INNOVATION”

30. 4. VARIATIONS OF INNOVATION SOURCES • 1st example: Pultrusion • Process and machine innovation by the manufacturer • 2nd example: Tire shovel • Innovation by the manufacturer • 3rd example: Engineering thermoplastics • Manufacturer • 4th example: Plastics additives • Plastic manufacturer “SOURCES OF INNOVATION”

31. VARIATIONS OF INNOVATION SOURCES • 5th Example: Cable industry • Part supplier as innovator (material supply) • 6th Example Industrial gas (thermoplastic) • Supplier 34% • User 42% • Manufacturer 15% “SOURCES OF INNOVATION”

32. 5. SUMMARY AND CONCLUSIONS… “SOURCES OF INNOVATION”

33. 6. BEYOND THE ARTICLES… • Global distribution for inovations sources: • Millitary innovation and it’s diffusion? • Collaboration between innovator & equipment manufacturer? • The feed back on user innovation to the R&D laboratory? • What about servicies innovation? “SOURCES OF INNOVATION”

34. REFERENCES: • Von Hippel, E. (1988), “The Sources of Innovation”, Chapter 2: “Users of Innovation”, pp.11-27. Oxford University Press; • Von Hippel, E. (1988), “The Sources of Innovation”, Chapter 3: “Variations in the Functional Source of Innovation”, pp.28-42. Oxford University Press; • Conceição, Pedro et al (2000), “Science, Technology and Innovation Policy – Opportunities and Challenges for the Knowledge Economy”. Being Digital: The Unavoidable Transformation of Research Universities, p. 81-86; • Visteon edition (special thanks to António Aires); • “The hundredth monkey” 1968; • Life of the mammals- David Atenborough; • The primates: A life in the trees – National Geographic; “SOURCES OF INNOVATION”