Morgan Advanced Materials, 5th Ceramic Leadership Summit

www.morganadvancedmaterials.com

Creating an InnovativeManufacturing Company

25 April 20165th Ceramic Leadership Summit

Cleveland Ohio

Mike Murray, Global CTOMorgan Advanced Materials

01/05/2023

1Morgan Advanced Materials Confidential Information

Abstract

• While product innovation and differentiation is always important, operational innovations lead to a more productive and profitable manufacturing company.

• Innovation in the manufacturing sector has a dramatic impact not just on the bottom line of individual companies, but also on the productivity of the entire supply chain.

• Some of the biggest challenges for industrial manufacturing companies include finding the right partners and suppliers and getting the right metrics in place to measure innovation progress.

• In this presentation, I will discuss the importance of creating a company culture that focuses on innovating in all aspects of the business enterprise.

Morgan Advanced Materials Confidential Information 2

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We are the midst of a technology revolution

1950’s TomorrowToday

What is innovation?

Innovation has nothing to do with how many R&D

dollars you I have…... It's not about money. It's

about the people you have, how you're led, and how

much you get it.

Steve Jobs, 1999

4

“ “

2015 Most Innovative Companies


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Source: BCG Global Innovation Survey, 2015

2015 Most Innovative Companies 1. Apple 14. SoftBank 27. General Electric 39. Roche

2. Google 15. Fast Retailing 28. Facebook 40. 3M

3. Tesla Motors 16. Yahoo! 29. BASF 41. NEC

4. Microsoft Corporation 17. Biogen 30. Siemens 42. Medtronic

5. Samsung Group 18. Walt Disney Co. 31. Cisco Systems 43. JP Morgan Chase

6. Toyota 19. Marriott 32. Dow Chemical Co. 44. Pfizer

7. BMW 20. Johnson & Johnson

33. Renault 45. Huawei

8. Gilead Sciences 21. Netflix 34. Fidelity Investments 46. Nike

9. Amazon 22. AXA 35. Volkswagen 47. BT Group

10. Daimler 23. Hewlett-Packard 36. Visa 48. MasterCard

11. Bayer 24. Amgen 37. DuPont 49. Salesforce.com

12. Tencent 25. Allianz 38. Hitachi 50. Lenovo

13. IBM 26. Tata Motors

Our world has evolved beyond our wildest dreams…..and will continue to do so

"I think there is a world market for maybe five computers." --Thomas Watson, chairman of IBM

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us," --Western Union internal memo, 1876.

"Louis Pasteur's theory of germs is ridiculous fiction." -- Pierre Pachet, Professor of Physiology at Toulouse, 1872.

"There is no reason anyone would want a computer in their home." -- Ken Olson, president, chairman, founder of Digital Equipment Corp. 1977.

Growth in Articles, Review, Papers by subject

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World share of papers (articles and reviews)

indexed in Web of Science for materials

science, compared with chemistry, engineering

and physics, since 1981.

Note the separate axis for materials science.


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Our vision is to be renowned for world-class material science, application engineering and customer focus

Introduction to Innovation in Manufacturing

• Over that past decades, innovation in industrial manufacturing has had an enormous impact on society. Agricultural equipment has made farming vastly more

efficient. Automation has transformed factory floors and made

it cheaper and faster to produce everything from cars to TV’s.

And now new technologies for wind turbines and electrical grids are forming the foundation for a shift to cleaner sources of energy.

And there is a clear correlation between innovation and success in growing revenues!


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Logo Company 10

The most innovative companies overall are growing significantly faster than the least innovative

• In recent research across industries, a clear correlation was found between innovation and success in growing revenues

• The most innovative companies overall are growing significantly faster than the least innovative.

• The difference for industrial manufacturing companies is dramatic – The sector’s most innovative companies grew 38% over the last three years—

nearly 12% per year—while the least innovative managed just 10% growth over the same period.

www.domainname.com

20% Most Innovative Companies(11.3% year-on-year)

38% 10%

20% Least Innovative Companies(3.2% year-on-year)

For Industrial Manufacturers, innovators expect to significantly outperform the rest over the next five years

0 1 2 3 4 5100

105

110

115

120

125

130

135

140

145Expected Growth

All IMLinear (All IM)20% Most Innovative IM

• Looking forward, the sector’s top innovators have more modest expectations, but they’re still targeting annual growth of 6.9%, while the least innovative companies expect to manage just 3.6%.

• Over the course of five years, that will create a major gap


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39.8%

26.6%

19.6%

Why does making innovation a priority have such a major impact?

The answer is simple:

• Top innovators are getting three times as many revenues from new products or services. The least innovative group of industrial manufacturing companies only generated 7.1% of their revenues from new products and services launched in the last year, while the top innovators managed a revenue boost of 22.8%.

• Most industrial manufacturing executives expect that they’ll need to generate the majority of their growth organically going forward. While global expansion was the biggest driver of growth for many over the past decades, PwC research shows that the tide is turning and innovation now tops the list.

• To meet their growth targets and start to catch up with the top innovators, PwC believes industrial manufacturing executives will need to:

Define or refine a solid innovation strategy

Balance their innovation portfolio Make sure they can attract and keep

top talent Enhance collaboration (including

public/ private sector initiatives) Accurately measure what they’re

getting from their innovation investment.


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Five Fundamental questions industrial companies need to ask when examining their innovation vision:


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• Where are we now, and where do we want to go?

Is our current market position good enough in the short term—and in the long term?

Is our innovation strategy linked to future business opportunities?

Are we taking into account the possible impact of major trends like the rise of the industrial internet and the emergence of additive manufacturing?

Fundamental questions industrial companies need to ask when taking a closer look at their innovation vision:


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• What balance of innovation do we need?

Are we focusing solely on product innovation?

What can we do to make sure we’re innovating enough in other areas like business model, services, supply chain and technology?

Do we have the right mix of incremental vs. radical and breakthrough innovation?

Do we have the right mix of incremental vs. radical and breakthrough innovation?

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• Can we attract, keep and motivate key innovation talent?

Are we actively working to foster a strong innovation culture and position our company as a supportive environment for top talent?

Are we able to recruit and integrate skilled staff from new and emerging markets?

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• Are we collaborating enough outside of the organization?

How strong are our strategic partnerships?

Are we making good enough use of open innovation or other strategies like corporate venturing to identify and develop new relationships and ideas?

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• How will we know success when we see it?

What measurement systems for innovation are in place?

How well are they working?

Do they support innovation efforts or stifle them?

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Innovation Pentathlon Framework*

Morgan Advanced Materials Confidential Information01/05/2023

Ideas Prioritization Implementation

Market• Products• Services• Business Models• Processes

Innovation Strategy• Goals• Communication• Technology• Metrics

People and Organization• Culture• Reward and Recognition• Appraisal

Filtration of Ideas Rejected Concepts

Recycled Ideas

Projects Terminated

*Innovation Management, Keith Goffin & Rick Mitchell, Cranfield University

World’s First Graphite Fabric – produced in Fostoria, 1959….

Graphite Cloth on leading

edges

Carbon Ablative Cloth in solid fuel engine

nozzles

…used in Space Shuttle and other Aerospace Programs

Single crystal SiC growth by modified Lely method (seeded sublimation)

Journal of Crystal Growth, Volume 230, Issues 1–2, August 2001, Pages 1-9“Numerical modeling at the IKZ: an overview and outlook”

Morgan-supplied products:

a) Highly purified porous graphite;1. Very low boron (ppb)2. Highest purity in world

b) Graphite disks;c) Highly purified graphite powder;d) Fine grain graphite (crucible);e) Insulation material

Ultra-high Purity materials for Single Crystal SiC – from 2007

On March 21, 1956, Fostoria was the recipient of the First Oscar for Technical Innovation in Movie Production for the development and production of a high efficiency yellow flame arc carbon for motion picture photography.

Loyal Griggs, the director of photography for Cecile B. DeMille’s epic, The Ten Commandments, stated “I don’t know how I could have shot The Ten Commandments without the added power of yellow flame carbons.”

First Oscar for Technical Innovation – Fostoria, 1956

Incumbents vs. New Entrants

For an Manufacturing Company understanding evolutionary vs. revolutionary technology is important.


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Incumbents nearly always win

DisruptiveInnovations

New Entrants nearly always win

Pace of Technical

Progress

Sustaining Innovations

Time

Mea

sure

of P

erfo

rman

ce

Innovation`s Dimensions


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InstitutionalKnow-how

Greybeards

Collaboration

Knowledge

Learning

CreativityCompanyCulture

ExternalEnvironment

StrategyProcess

Leadership

Product innovation and differentiation vs. Operational innovations

• There is a view that companies either have to be product driven innovators or the lowest cost providers

• Where the two philosophies fit well together is be driven by both product and operational innovation in order to provide differentiation

• Process and operational innovation can drive as much, and sometimes more, product innovation than materials science alone

• In need the optimum approach need to consider the whole supply chain and innovation partners, both internally and externally


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Innovation in the entire Supply Chain

Morgan Advanced Materials Confidential Information 2601/05/2023

Raw Materialsuppliers

MaterialsScience

Manufacturing process

Propertiesand product performance

• Not only does an innovation strategy that encompasses the supply chain create the most value, but it also has a dramatic impact not just on the bottom line, but the productivity of the entire supply chain.

UK Factory of the Future


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New Business Models


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Manufacturing Value Chain


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Challenges in the Manufacturing Sector

• Finding the right partners or suppliers Raw materials Material Processing equipment Product design houses Modelling partners Test laboratories to accredited standards Customers Academic institutes Start ups/incubator sites Advisors


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Challenges in the Manufacturing Sector

• Probably the hardest challenges is getting the right metrics in place to measure innovation progress

• The metric will drive behaviors• All are valuable, but you need to be careful how you

interpret the data• %R+D to sales• % New products less <5 years old• % Sales covered by patents• Size of New Business development pipeline

Pipeline conversion rates Time between gates


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Creating a company culture that focuses on innovating in all aspects of the business enterprise

• They are all good things to do• In reality, you will focus on the areas that are a priority for

the business today• They will change and you will have to continue to

readdress the balance depending on business needs and market conditions

• The key challenge is maintaining focus on all of the important areas and that can only be done when it becomes part of your company culture and the way you do business

• Designing an Innovation Network


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Designing an Innovation Network


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Support and

govern

Connect

Manage and

Track

Set Boundaries

and Engage

2 Set Boundaries and Engage

• Define role of network in meeting organization’s strategic goals

• Establish network goals and objectives

• Plan how to establish trust among network members and engage them quickly

4 Manage and Track• Define how members will

be recognized• Establish performance-

management criteria• Establish tracking criteria• Define timing for

assessment and review• Plan process to facilitate

network and its impact

1 Connect • Find Pockets of people

with right mind-sets for innovation

• Combine people with different approaches (i.e., idea generators, researchers, experts)

• Ensure mix of people with different levels ofseniority and skills

3 Support and Govern • Define sponsorship and

leadership• Determine role of face-to-

face meetings• Identify additional

support that may be necessary

• Define key knowledge and information inputs

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Morgan Advanced Materials - What we do ....

• Leading edge material science

• Sophisticated application engineering

• Solving complex challenges in technically demanding applications

• Providing real value-add to our customers, enabling their products and processes to perform more efficiently, more reliably and for longer

Driving differentiated, market leading positions

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Our technology families - leading positions in the markets we serve

Ceramic Cores Assemblies & Braze Alloys

Fibre Structural Ceramics

Electrical Carbon &

Rotary Transfer

Seals & Bearings

Piezoelectric ceramics

Composites and Defence

Systems

Molten Metal Systems

Insulating Firebricks / Castables

‘One Morgan’ is delivering a consistent R+D strategy across our materials technologies

http://www.morganmms.com/default.aspx?p=crexhi


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Insulating Fibre Technology Innovation Path

Superwool® Fibre offers up to 40% lower thermal conductivity than competitive insulation at 1000°C

Superwool® Plus™ and FireMaster® Marine Plus™ offer:

• Superior insulation performance• Up to 40% weight and volume savings

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Morgan Advanced Materials

Global Materials Centre of Excellence

Global Materials Centre of Excellence

• Vision Statement“The Global Material Centre of Excellence will be the acknowledged leader in the materials science supporting Morgan Advanced Materials objective the World’s very best advanced materials company in our chosen technology families. It will deliver differentiated materials technology that is scalable with quantifiable benefits and value for our customers”

• Gives opportunity to increase the effectiveness of R&D spend in accelerating profitable growthOwns the fundamental material science developments for MorganProvides critical mass for efforts, ideas and interactionOwnership of new formulation and processesDelivers materials and processes to global organisation Recognized externally and internally as the experts

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• The Centre’s aims are to emulate the world-leading breakthroughs we have already made in chemistries and processes in our Superwool® fibre range

• On Completion this will give Morgan 4 CoE’s to span its technologies• Bromborough, UK (high-temperature fibre, 2008)• Stourport, UK (structural ceramics, 2015)• Carbon Science, USA• Brazing and Joining, USA

In 2016, Morgan Advanced Materials announced the formation of another 2 Materials Centre of Excellence


New Horizons

Building relationships withWorld Leading Academics and Customers

New Horizons – Working with Universities and Research Centre's around the globe (current)


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Morgan – University of Manchester partnership

Expertise in Carbon

Expertise in

Graphene

Morgan has been an industrial sponsor of the Graphene work at Manchester since 2008 • Exploring New Horizons in materials science• Understanding of the ultimate properties in carbon science• In 2015 signed a joint development agreement with Manchester

• Focus on scaling up a patented process• Morgan embedded 2 R+D engineers to work at the National Graphene Institute

Morgan Brings• Processing and manufacturing

expertise• Raw material knowledge and

selection

Manchester Brings• IP and experience in graphene

exfoliation• Internationally renowned Research

base


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We were the first company in the new National Graphene Institute


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Morgan’s vision is to extend its technology lead by increasing R+D investment

Increase R&D SpendTo accelerate current technology projects and enable new R&D priorities

Create two new global Centres of ExcellenceCarbon ScienceBrazing and Joining

2012 2013 2014 2015

1.92.1

2.3

2.8

R&D as a percentage of sales, 2012-15

Strengthen and embed our Stage Gate ProcessesTo benefit further from both customer pull and technology push effects.

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Summary

• While product innovation and differentiation is always important, operational innovations lead to a more productive and profitable manufacturing company.

• Innovation in the manufacturing sector has a dramatic impact not just on the bottom line of individual companies, but also on the productivity of the entire supply chain.

• Some of the biggest challenges for industrial manufacturing companies include finding the right partners and suppliers and getting the right metrics in place to measure innovation progress.

• The importance of creating a company culture that focuses on innovating in all aspects of the business enterprise.


01/05/2023

Morgan Advanced Materials, 5th Ceramic Leadership Summit

Engineering

Transcript of Morgan Advanced Materials, 5th Ceramic Leadership Summit