By Aminu Owonikoko
To create wealth, peace and health for Nigeria, critical issues affecting our dear country’s manufacturing business need to be identified and tackled judiciously with reverse innovation without punitive cost. Succinctly, reverse innovation is a frugal innovation tailor to the challenges of the base of the pyramid (approximately 500 billion poor people around the world) such as creating buying power, shaping aspirations and improving access to better life. That is: Local Solutions!
The key information about Reverse Innovation is to develop and manufacture/produce the novel product or develop a novel service here in developing country on a “clean slate” with concerted efforts of Local and Foreign Experts and later export resultant excess back to developed country for the needs of “Classical Poor People” and Rich people particularly during recession period as a “shock absorber” for the rich and middle class people. Reverse Innovation has given birth to the likes of basic range products which have served and still serving as food (and other products) provision and availability enablers such as one pound shop, discounter shop, Grameen Bank Service Models (from Bangladesh) in developed countries such as United Kingdom, USA.
Reverse innovation is geared up to respond to these critical issues and Nigerian Industrial Revolution Plan (NIRP) mandate which is: to build a strong, relevant, holistic and robust manufacturing platform for Nigerians and Agricultural Transformation Agenda. The following common issue areas have been identified among different manufacturers (such as: Foods, Oil and Gas, Pharmaceutical, Cement, Tissue Paper, Beverage Tin/Can manufacturers) in Nigeria using research questionnaire as a survey tool for primary research (physical meetings with manufacturers with “cold calling and emailing” for follow-up) and internet-based deductive research as secondary research. The following areas itemised below will be seen to benefit from Reverse Innovation Practice:
1. Procurement of exact specification of foreign process equipment is always a problem, despite the fact that the local company may know what they want and give to the foreign vendor/supplier a specification clearly stated in the equipment order, the foreign supplier/vendor supplies equipment which may not work at optimal performance and often leads to product rework/recall, production breakdowns and production line stoppages or even total shut-down. In the case of equipment for solids handling, which is a major industrial activity, a root cause of this problem is that both foreign equipment supplier/vendor and local manufacturer are not aware or they don’t know how to conduct measurement of the flow properties of the materials that affects how the process equipment will behave. Conducting meaningful flow material properties enables excellent understanding of the geometric reasoning of the process equipment design and fabrication/construction that will be operationally effective.
2. Another key issue among manufacturers in Nigeria is Production Decision Problem (that is uncertainty problem) on the quantity of the products to produce daily/weekly because of inconsistent market demand shift and unreliable process equipment: That is, deciding on what the production unit should produce particularly when there is constant fluctuation in market demands which consequently disrupts manufacturing processes such as material planning, equipment utilisation and human capacity. Flexibility and reliability of production are therefore of paramount importance.
3. Lack of adequate and up-to-date research and development culture among manufacturers such as non-availability or non-usage of laboratory based manufacturing equipment to conduct experimental work to support their Research and Development base or to test their concepts and investigate potential solution.
4. Lack of Continuous Improvement of Business and Manufacturing Processes to turn process data into critical actions that focus on process control and capability.
5. Lack of manufacturing data systems to leverage upon to improve industry information and empower managers to take action and implement change.
6. Lack of Energy Efficiency Handling. Effective and adequate energy handling can be achieved via robust and holistic introduction of renewable energy.
Reverse Innovation Benefits matrix:
Customer Pain Points Benefits
Performance gap New technologies and business emerge
Infrastructure gap New design and construction market
Sustainability gap Building of Local growth teams from scratch
Regulatory gap Less expensive and excellent products/services
Preferences gap Achieving full potential in emerging economy by starting from scratch
References: Aminu Owonikoko (2013), Chris Timble and Vijay Govindarajan (2012), Lyn Bates (2000)
Conclusively, to tackle all these issues concerted efforts are required from Local Experts and Foreign Experts and other well-differentiated/unique organisation by innovating locally from scratch in Nigeria. The concerted efforts will enhance the realization of Nigerian Industrial Revolution Plan (NIRP) because manufacturing/process Industry is the foundation of universal prosperity. Also, Agricultural Transformation Agenda (ATA) aimed at Optimisation of Food Products/Non Food Products lifetimes will be fully achieved. The turning point in farmers’ life is to turn their deficit into surplus and this will only come from the farmers’ harvest processing because processing/manufacturing is the centre of profit as there is much more profits in the processing, logistics and retail than there is, in the actual farming. Since manufacturing is the engine of Nigeria Growth, reverse innovation will serve as enabler to capturing rare opportunities for the country to build novel/new capabilities by leveraging local and global resources from Nigeria and foreign partners.