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The management of innovation
…adding brainpower to horsepower

Don't imitate, innovate! So goes the popular TV advert for a line of consumables. But what does this slogan really mean for industries like road transportation and heavy vehicle manufacturing? Innovation is an exciting word yet despite the South African market being ripe for innovation, it is often said that if you are smart, you leave the country to seek your fortune in the global marketplace. What a downer! FleetWatch correspondent Professor Graeme Addison takes a behind-the-scenes look at the launch of the Cummins Signature and ISX engines as a thought-provoking case study in the management of innovation. It's a lesson to us all.

In 1993, the thinkers at Cummins Diesel in Columbus, Indiana, decided to "walk in the customer's shoes". An extensive market research team was formed to define and deliver a new engine aimed at the target markets. In the world of engine manufacture, this was a step into millennium marketing for Cummins not only walked in the customer's shoes, they trod a new path towards integrated research, design, marketing and review. The project has become a model of how to launch a new product in a competitive world.

The outcome was the birth of the Signature and ISX engines, launched throughout the world and in South Africa with much well-deserved fanfare. The Cummins Engine Company is the world's largest independent manufacturer of diesel engines ranging from 35 to 2000 hp.

By the early nineties, Cummins had realised that the reliable workhorse engines that had buoyed the company's profitability for so long were declining towards obsolescence. New federal and state laws on vehicle emissions, competition from the Japanese and the Europeans, and world-wide demand for cheaper, more fuel-efficient diesel engines was inexorably changing the landscape for Cummins. So the innovators set about their task.

First they asked a significant portion of the market, the owner-drivers who run their own rigs, what they wanted in a diesel engine. The demand was for high horse power at lower-cost that would be easier to maintain, quieter, and offer more torque; it would be smaller, more responsive, brake better and have fewer parts. What they said was what they got.

Dream list for truckers
It was a quite a wish list - really a dream list for truckers who wanted everything for next-to-nothing - but undaunted and driven by customer-orientation, Cummins created an engineering process that they called their "tapestry of design". It called together engineers and marketing people, financial wizards and tool manufacturers, customers and management, to formulate the ideal product for the new high-horsepower diesel truck market. The synergies between all these people resulted in the prototype of the Signature engine, which finally appeared in the United States in 1997.

The development cost billions but when you are playing for world market share, that's what you spend. Technical enhancement and sales promotion went hand-in-hand, for the best engine is only as good as the number of trucks it drives - and that relies on marketing. All the costs of retooling must be met by increased turnover or profit margins.

The Signature 600hp engine is, in effect, a 1200hp electronic engine with a standard Intebrake system, jointly operating off a twin overhead cam. The company says combination of 600hp "to go" and 600hp "to slow" creates a 1200hp system.

Cummins in the US anticipates up to over 1 million miles (1.6mil km) of life to overhaul providing maintenance practices are adhered to. There are 30% fewer parts and the engine is 300lbs (138kg) lighter than any other engine with a brake in its class.

No compromise on design
For all this there has been "no compromise" on design. Outstanding engine responsiveness results from the variable output turbocharger, and the various efficiencies have resulted in savings on fuel. The engine electronics manage accessories like the cooling fan and air compressor and most importantly, they maximise engine performance and braking.

After much local fanfare in South Africa the engines are now available in Peterbilts, Freightliners, Internationals and the UK-sourced ERF as seen on our roads. Arriving here as part of SKD kits or CBU units, the engines become the heart of the vehicle that has to cope with rather different conditions from those commonly found in the US.

The first Signature 600 engine was launched in South Africa last October and the first vehicles (Peterbilt) powered by the ISX 500hp engine were delivered in the Western Cape a month later. There are now over 60 of these engines operating around the country with the number growing steadily. They include ratings of 475hp, 500hp and most recently 600hp.

The local launch is an extension of the global roll-out of an innovative approach to engineering problems. More than anything, the Cummins case demonstrates that staying ahead means having a head in the first place: think, plan, and work to satisfy the market. Engineering today is an extension of what management theorist Peter Drucker calls "knowledge work". It is the addition of brainpower to horsepower.

Key to sustainable competitiveness
Successfully introducing new and improved products and processes is one of the key attributes for sustainable competitiveness. Unfortunately this is easier said than done. Not only does it require a thorough understanding of customer expressed and unexpressed desires but also a professional approach to satisfy them, coupled with access to global technology. It is a daunting challenge for the smaller company to increase the speed, volume and level of innovation within an affordable budget.

There is an important role for the regional support infrastructure, focusing on an environment where companies can participate in projects and 'best practice' exchange programmes. This, sadly, is where South Africa often falls down. While the enthusiasm for new technologies is certainly abundant, the ability to carry an idea over the threshold from dream to reality depends very much on support from financiers, government and a public attuned to new ideas. But we can learn from the example of Cummins.

Cummins is, of course, not alone in the high-stakes diesel redevelopment game. For instance, Hino's J-series engines have gone through a similar mental and marketing mill to take the company into the next generation. Hino is attached to Toyota while other manufacturers such as Renault, Mack, Scania, MAN, Iveco, Volvo and Mercedes Benz all use their own engines. But let's stick to the Cummins story here.

Electronic systems
Take the electronic systems in these engines. State-of-the-art circuitry provides fully integrated information on the condition of the engine, governing its operation and speed according to limits that can be set and allowing access to data that can be usefully networked. The key principle of the Information Age is that the more you know, the more you can extend your margins because things are better controlled, more efficient, and less wasteful. So with electronically enhanced engines, they run better because they recycle their own data.

The reality today is that you can plug into a PC to monitor how the fleet's engines are running, from your desktop. It's the equivalent of having a heart chip implanted to check the body's cardiovascular status, so that when stress hits, a patient can register immediately and scale down his personal workload and worry less.

Take the notably new and different dual overhead cam design. Cummins spokesmen like to compare the Signature's design to today's high performance racing engines. That's true for the first cam, which forces fuel through under high pressure to give a quicker response with more muscle, while fuel economy is superior. (Remember, that's what the owner-drivers wanted, and it was what the room full of technovisionaries were tasked to achieve. They came up with the dual cam solution).

The second cam handles braking, with lobes on the cam designed solely for this function. The idea of splitting fuel injection and engine braking lies at the heart of the design innovation in the engine. In effect, the dual cam offers the full 600hp power of the engine as thrust and another 600hp as deceleration, a combination that the now-outdated engines of the early nineties simply cannot match. The outcome is exactly what was itemised on the owner-drivers' wish-list: more power with better braking.

Concept refined
In some ways, looking back over the history of diesel engine evolution, not a lot has happened since the first one was patented by the German, Rudolf Diesel, in 1892. The concept has been refined rather than revolutionised in the century since its inception. Cummins has now added further refinements, as have other manufacturers in a continual, incremental process of improvement. This is rather different from the radical leaps forward in, say, computing, where centralised mainframes gave way to networked PC's, changing the whole way in which we work. The diesel has been adapted, rather than totally reinvented, to fit the age of computer chips.

Could South Africans ever have developed an engine comparable to the Signature 600? Certainly not from design to execution due to the enormous cost and resources required - but possibly from conception to the first phase of engine-building and testing. The panel story alongside takes up this question briefly. We must be realistic. In the global marketplace today, only giants like Cummins can begin to imagine a roll-out on the scale that we are seeing now for the Signature, throughout the world.

What South Africans have proved to be very good at in the past is adapting global technologies to local uses. We proved it with the ADE engine which was good technology in its time, before truly high-tech electronics changed the face of motor engineering forever.

ADE saw the country's industries and armed forces through years of isolation performing the role that has now been assumed by imported engines. Today, American, Japanese and European - in the main - engines are taking the place of ADE engines in many heavy trucks.

Is this a tragedy for South Africa and a sure sign that innovations here will finally, and inevitably, run into the sand and die out? Not necessarily: it depends, say theorists of innovation, on how you look at things and how you respond to regional and global markets.

The fact that ADE was able to secure a diesel engine export order totalling 7 400 units to Cuba for 1997-8 indicates that some trading partners are ready and willing to buy from South Africa. It's not the lack of markets but the strategy of manufacturing that counts. The world is changing, and unless products change with it, they are bound to be overtaken by events and be beaten by more aggressive competitors.

In his Year 2000 State of the Union address to Congress, President Clinton proposed major tax incentives for R&D on so-called "green vehicles". He was referring to super fuel-efficient cars and he called on automakers to make all new vehicles with available modern technologies. These include hybrid electric-gas engines, ceramic (rather than metal) engine parts, and more environmentally friendly factory processes.

Not merely a technical experience
It was precisely these demands - foreseen at the beginning of the 1990s - that set Cummins off on its billion-dollar odyssey to develop the Signature engine. The bottom line is that the Cummins experience was not merely a technical exercise. It was a challenge to management. It consolidated what they knew about customers and they carried it forward into new design and business methods. Learning from this experience, these are the pointers for South Africans embarking on the development of new products for the world market

• Foresight, then, based on the best possible imaginative forecasts of the best brains in the company, is what prepares any firm for survival in today's world. Part of all such innovation cycles is brainstorming, a technique that demands good, informal communication between staffers in the company. Brainstorming sessions involving engineers, businessmen, academics, and salespeople should lead directly to design, injection moulding, toolmaking and testing.
• Foresight on its own is not enough: there has to be implementation. Following their initial surveys and focus groups involving customers, Cummins defined its problem clearly and then set out to analyse the component parts and devise a detailed design. Finite predictions were tested and verified, first on the test bench and then in the streets, once again using customer feedback. Failed components were discarded but the lessons kept. Finally the prototypes were carried through to large scale manufacture.
• Evaluation is not left to grease monkeys. It must involve the digital druids, the monks of information, and it must connect thought to physical processes. Importantly, the process of forecasting, implementation and production should be streamlined to ensure reduced time to market. In other words, the pressure must be kept from all sides, with regular reports-back to the foresight group which includes salespeople.
• Finally, the roll-out is as much a part of design and manufacture as is brainstorming and components tooling. In America, the Cummins "Customer Council" has provided feedback from the target markets of owner-operators, specialised hauliers, local delivery truckers and premium truckloaders. The entire exercises has worked out to the advantage of the company and its customers. In South Africa, Cummins continues the rollout - as it is doing in other parts of the world. It aims to be nearly everywhere that diesels are used.
• The campaign has been strategised, and through its local representatives, the company has identified opportunities or "slots" where its product can fit in. Hence the spate of American-built vehicles now rolling out onto our roads with the Signature engine.

If there is one thing that stands out among all this, it is that the new era of diesel engines is not solely the manifestation of engineering ingenuity? There is far more to it than that and the lesson here is to adopt an holistic approach with the first step being to involve the customers.