Redefining the process of brewing the "Butterfly Effect" inside Philips

A "butterfly effect" is brewing inside Philips, and the butterfly that flaps its wings, in addition to the new CEO of the global company, Frans van Houten, has a temporarily not so famous product.

Two years ago, Lu Shaojun, the manager of Philips China's automotive lighting aftermarket and business development, moved to join the mobile business unit. Before joining, he and the colleagues of the institute did not communicate at all.

This is actually a tradition of Philips in the R&D system: if there is customer feedback demand, they will first be reflected to the relevant development department of Philips, and then the development department will contact the research institute for product development or improvement. It is difficult for Lu Shaojun to do market work to meet colleagues in the institute.

Another feature of this system is that most of the new products are completed by the Philips Research Institute in a closed-door process. They know that "the business unit needs a new product," and what this new product should be is usually determined by the research institute. As the pace of market changes accelerated, it began to expose some deficiencies.

Lu Shaojun joined the mobile business unit, which is part of the automotive lighting division. The original intention of Philips to set up this business unit was to develop a vehicle aftermarket in addition to automotive lighting such as lights. In the traditional automotive lighting business, as the technology of LED and helium matures, the market begins to become saturated, and Philips needs to find new business growth points in automotive lighting.

The beginning of the matter is somewhat bland. The mobile business department found the research institute, and the next task was Zeng Yongqin, senior research and development director of the institute. His lighting system and application department mainly provides research and development services for the lighting business. At Philips China Research Institute in Shanghai, there are four such R&D departments, two of which are part of the lighting business, one is part of the quality life business, and the other is the medical business.

In accordance with the usual process, the Institute will develop new products and submit them to the global R&D headquarters for approval according to their own ideas. After that, the marketing department will get this new product and form a feasible plan.

But Philips China’s mobile business unit was formed shortly after, and it was brewing its first project, and they hoped to start. It is exactly what has changed from here.

In order to speed up the research and development, the mobile business department decided from the beginning to let the marketing department and the sales department, which are in contact with the market, also go to the research institute to meet.

From the later results, this decision has increased the success rate of research and development. In the past, the research and development staff of the Philips Research Institute had little contact with market customers because of the development of bulkheads, and the sensitivity to market demand, cost and pricing was very low. Examples of new technologies that have been developed that are difficult to product or that are too costly to implement are everywhere.

With the participation of the marketing department and the sales department, the market research and technical feasibility screening are carried out simultaneously from the beginning of R&D. The first new product of the mobile business unit was identified as the “Car Air Purifier” and the project name was Go Pure. Through the innovation of purification materials, the purification effect is more than twice that of similar products.

Some car manufacturers quickly became interested in it. For example, Honda tried to customize this product exclusively, and regarded it as one of the selling points of the new car.

But then there was a problem with communication. Both sides had a disagreement about the location of the purifier in the car. Based on the experience of Philips' global R&D headquarters, they propose to place the purifier on the dashboard, car roof or rear seat. This decision by Philips was strongly opposed by Honda. Because of this, they need to re-do the crash test, which greatly increases the cost and time.

The dispute exposed some of the inflexible aspects of Philips' existing R&D system: even the products of regional institutes, the global R&D headquarters has the final decision, and their judgments sometimes do not necessarily match the actual needs of customers.

“It’s been dead for a month or two, and both sides think they have a reason.” Shen Yizhong, R&D manager of Philips China’s lighting product development department, recalled. During this period, the Philips China Research Institute was completely speechless about its research results.

Finally, Lu Shaojun, Shen Fangzhong and others found an opportunity. Benjamin Azoulay, vice president of automotive lighting and general manager of mobile life, came to Shanghai for a meeting. They bought a ticket for the boss to the Honda factory in Japan and flew to the scene.

Azoulay, who had personally understood the customer's needs, took the board on the spot. Just next to the new car, they discussed with the customer the location where the purifier can be placed, and Azoulay has been pushing directly in the subsequent project execution and process transformation.

Not counting the middle of the delay, it took only three weeks from Azoulay's visit to the Honda factory to submit a commercial proposal to Honda. If you follow the previous process, it will take 3 months or more. "At the time, I was doing things during the day. At night, I had a meeting with people from Europe. The whole Spring Festival was like this." Shen Fangzhong said.

It can be seen this: if there is no need to pull Azoulay to the scene, this will be a more efficient process transformation. It gave up the step-by-step full control from top to bottom, omitting the intermediate reporting and communication links, in exchange for a substantial increase in information accuracy, efficiency and speed. It took less than two years from the formation of the proposal, the entire R&D project to the final listing.

Turning on the research and development results of Philips, you will find that CDs, Xenon Xenon lights and other star products are long-term research and development products of this company. For a long time, this company is a huge cash cow. .

For example, Xenon lights are Philips's more than 10 years of research, accumulated a large number of patents, markets, and product development after the technology is mature. It relies on patents to monopolize the market. At present, the market share of Xenon Xenon headlights in China is around 70%.

But now the world has changed. Needless to say, Moore's Law, even in the traditional industry, speed and efficiency are playing an increasingly important role. In the report of the reporter over the past year, 3M companies involved in all aspects of our life have started to generate about 35% of their annual revenues from new products developed in the past five years. At DuPont China R&D Center, there is even a judgment on the development of new products. A more direct standard - "Is the marketing department involved?".

It takes more than 10 years and 20 years to develop a project. It is becoming a special case. It may only be used in products with strategic significance. Instead, it is a rapid development that fits the needs of the market.

But in those huge multinational companies, it is not easy to do this. Philips is a very typical example. In China alone, it has 12 R&D centers, 26 wholly-owned and joint venture companies, more than 19,000 employees, and operations in more than 500 cities across the country.

Philips is not unaware of this. In 2011, Marriott, who became the CEO of Philips, also cut off the TV business and moved the global headquarters of the home care business to Shanghai while implementing the former Kecilei's focus on quality life, photos and medical care. "I am particularly concerned about the results and speed of implementation." He said in an interview with the media.

Marriott's attention has been placed more on the company's research and development system. He proposed within the company that new products should be combined in production, sales, and sales, rather than separate.

The key to determining whether Marriott's plan is a “castle in the air” is whether there are projects that can demonstrate their success with new processes and facilitate the implementation of high-level programs by large research teams. In this sense, the Go Pure car purifier may be one of the catalysts for Philips' entire R&D process.

In addition to the renewal of the entire R&D business concept, the new process also means that relationships must be redefined between local R&D and global management. The latter situation of the Go Pure project reflects this problem: Honda hopes that Philips' logo and industrial product packaging will not appear when R&D is nearing completion. The local team considered the pressure of performance and indicators, and wanted to meet the customer's requirements, but with the insistence of the global management team, the Philips logo finally appeared in the product, packaging and product manual.

Once the company-wide process transformation begins, the collision between performance-oriented and brand-oriented will become a common problem and determine the final direction of the process transformation plan.

At the same time as the simultaneous participation of various departments, the new process has also liberated the creativity of those important market developers. Taking the Chinese market as an example, the plans of the China Research Institute and the product department do not need to report through the Asia-Pacific R&D department step by step, and have greater autonomy.

"We are providing more and more customized products to our customers. We are slowly adapting ourselves, and communication with departments and customers has changed from passive to active." Lu Shaojun said.

Objectively speaking, Go Pure's success is also inseparable from some coincidence factors, such as the leader's personal management style, the newly established business department needs performance stimulation, etc., but it does provide a feasible reference for Philips' R&D system reform. .

In addition to the innovation in the process, Philips internally regards Go Pure as “neighboring product industry innovation”, which means that each business can penetrate each other and open up some new research and development in the field of existing business.

The other three types of R&D projects include “continuous innovation” for upgrading existing products, “revolutionary innovation” to bring new technologies to market, and innovation in emerging business areas.

“This classification makes it easy to control and manage the allocation of R&D expenditures,” said FRANK JAC GREIDANUS, a CTO of Philips Asia.

New processes will help increase their efficiency and success rate. In the past, the regional R&D department and the global R&D headquarters, which need to control products from beginning to end, will retreat behind the scenes in a way that constitutes a global management committee, and only control them when necessary.

Philips wants to take advantage of its next opportunity, which is hidden in the increasingly complex and volatile market demand. Within this large multinational company, butterflies have begun to flap their wings – it is a Go Pure project, and may include other products, and the results can only depend on the size and duration of the “storm”.


(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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