Innovation Management & Concurrent Engg

Innovation Stages, Strategies, Models and Management Concurrent Engineering

Objectives ► Understand

what Innovation is ► Understand 5 stage approach to systematic innovation ► Innovation Strategies, Models ► Process Innovation ► Concurrent Engineering ► Innovation Management

What is Innovation? ►“

The purposeful and systematic search for change and opportunity” (Peter Drucker)

► When

an enterprise produces a good or service or uses a method or input that is new to it, it makes a technical change. The first enterprise to make a given technical change is a innovator. Its action is innovation. (Schmookler)

What is Innovation ►A

‘mould-breaking’ development in new products or services or how they are produced - the materials used, the process employed or how the firm is organised to deliver them - or how or to whom they are marketed, that can be linked to a commercial opportunity and successfully exploited

Innovation

Examples of Innovative Activity (Schumpter)

► Developing

new products and services ► Developing new methods of production ► Identifying new markets ► Discovering new sources of supply ► Developing new organizational forms

Sources of Innovative Opportunity ► The

unexpected

 be it the unexpected success or failure or the unexpected event ► The

incongruity

 between what actually happens and what was supposed to happen ► Innovation

based on process need

 the inadequacy in underlying processes, things that are taken for granted but can be improved or changed

Sources of Innovative Opportunity

►

►

►

Changes in industry structure or market structure  that take everyone by surprise Demographics  population changes caused by changes in birth rates, wars, medical improvements etc Changes in perception, mood, and meaning  that can be brought about by the ups and downs of the economy, culture, fashion and so on

Difference Between Invention and Innovation There is an important distinction between invention and innovation. An invention creates something new, while innovation assures commercialization—or to quote Dr. Peter Denning, innovation is the "process of technology adoption" of an invention.

5 Stage Approach to Purposeful, Systematic Innovation ► Start with the analysis of opportunities, inside

the firm and its industry and in the external environment. Do not innovate for the future, innovate for now. Timing is everything. The right idea at the wrong time is worth nothing ► Innovation is both conceptual and perceptual. Therefore look at the financial implications but also talk to people, particularly customers, and analyse how to meet the opportunity

5 Stage Approach to Purposeful, Systematic Innovation ► To be effective an innovation has to be

To be effective an innovation has to be simple and focussed. Don’t try to be too clever. Don’t try to do too many things at once. ► To be effective start small. Don’t be grandiose. Take an incremental approach ► Aim at leadership and dominate the competition in the particular area of innovation as soon as possible

Innovation Strategy

The cost and time required to create a new product or service are so large than lack of a perfectly aligned and executed innovation strategy can be extremely wasteful. The innovation strategy that is aligned with firm's core mission and values, but with also with the future technology, supplier, and manufacturing strategies. Lack of alignment between product and process architectures rapidly increases cost and risk.

Road-Mapping The goal of the road-mapping is to develop the innovation strategy - to choose and do the right things. The goal of innovation management is to implement this strategy well. Road-mapping leads to effective project portfolio development and management. It provides for company-wide technological strategy development and technology assessment, as well as division-level project evaluation and strategic aligning. Road-mapping tools provide also a common language for innovation and building bridges between technologists and business managers within your corporation, and with you major suppliers and customers.

Innovation Models

Innovation Models

Process Innovation ► It

is an approach in business process reengineering by which radical changes are made through innovations ► BUSINESS PROCESS REENGINEERING A methodology for process improvement comprising a study of the "As-Is" state of the process and then the development and implementation of process changes, leading to the "To-Be" state of the process, together with policy changes, organizational structure changes and a variety of other "interventions".

Business Process Reengineering

Concurrent Engineering ► Also

known as Simultaneous Engineering (Ford) ► Concurrent Engineering is team approach to product design involving Marketing, Engg., Manufacturing and other departments at all stages. ► Contrast to Sequential Approach ► Sequential approach is still the most commonly used in US and elsewhere & other manufacturers

Concurrent Engineering ►

►

  



Concurrent Engineering is defined as a systematic approach to the concurrent design of products and their related processes, including manufacture and support The goal of Concurrent Engineering is to improve the interactive work of different disciplines affecting a product. The following are some of the benefits: Minimize the product life cycle - Eliminate the redesign procedure Decrease production cost - results from the minimization of the product life cycle Maximize product quality - By spending more time and money initially in the design cycle and ensuring that the concept selection is optimized, the company can increase the prospect of delivering a quality product to the customer. Teamwork - Human Resources are working together for a common product.

► In

Sequential approach – ► Each deptt. In turn performs its specialized steps and then hands off its work to the next deptt. in the chain. ► Drawbacks of Sequential Engg. ► A) Sequential . represents forward progress also known as ‘throwing the design over the wall’. The errors identified by the next deptt. in the chain are fed back. So error feedback is an essential feature of the sequential approach and often leads to prolonged or elongated cycle of redesign at each stage of development.

► B)

Sequential approach - There is a lack of accountability for any project schedule or fro design errors. Each deptt. Can and therefore does blame the preceding deptt. For incomplete or erroneous data. In addition, each deptt. Can and often does blame the next deptt. In the chain for the extra time needed to receive feedback and correct errors.

► C)

Final product that does not meet the customer requirements. ► This happens due to ► i) A Marketing is not involved except at the very early stages before most of the important tradeoff are made. ► ii) As the schedule and budget run out, a compromised or even unfinished design is hurriedly thrown over the last wall to manufacturing & quality assurance.

►

Drawbacks of the Sequential Engg.   

Error feedback is inevitable Lack of accountability Final product not meeting the requirements.

The approach is slow, expensive, little accounatbility for results, generally leads to products that are late to the market and do not meet customer needs. Over a period of time, the cumulative impact is to concede the market share to competitive products.

Concurrent Engg. Advantages – ► Shortening of product design cycle ► Increased likelihood of manufactured products meeting the customer requirements ►

► Achieved

through Dedicated team of representatives from all deptts at the very start of the design effort. The team works together from the initial concept stage all the way through initial production and strive to eliminate the over the wall throwing approach.

Concurrent Engineering

Comparison of Concurrent Engineering with Traditional Engineering Process

CE relies on ►

► -

Carrying out the product development activities simultaneously in the areas of: product planning, design, process planning and manufacturing Team work within special created multidisciplinary Task Force team which consists usually of: Designers Process planners Marketing specialists Supply manager Finance specialist Main suppliers of manufacturing equipment Suppliers of key components of the product

Obstacles to Concurrent Engineering ► Weak

Team Leader ► Weak Team Members ► Weak Horizontal Authority ► Unrealistic Schedules ► Poor Team Dynamics ► Poor Team Process ► Lack of Management Support

Innovation Management ►

What is Innovation Management Innovation management emerged as a discipline in the 1890s with Edison’s innovation factory. Edison changed the image of the sole inventor by converting innovation to a process with recognized steps practiced by a team of inventors working together – laying the basic design of the R&D department. These steps are streamlined to the major extent in all industries and include idea generation, concept development, feasibility studies, product development, market testing and launch. Innovation management is thus corresponds to the development of new products, processes and services. In cases where the organization does not make or offer products (goods or services), innovation lies in improving the way jobs are done to meet the organization’s mission (i.e. process innovation).

Innovation Management

Innovation Management ►

Why Innovation Management The high demand for innovation in the knowledge economy – brought about by shorter technology and product life cycles as well as the sophistication of customers – increased the organizational demand for new ideas. This meant two things first innovation has to be pushed down to the frontline where knowledge of the customer is and where the number of ideas generated are greater. Second, it meant that top management has to adopt appropriate innovation strategies to lead the surge of the innovative activity. As a result innovation needed to be systemized as a business process into the way that the organization does business – and hence the need for innovation management. Only organizations that liberate the innovative spirit of their employees, tap into the knowledge of their customers and partners, and manage innovation projects as a portfolio are able to reduce time to market with successful products. Examples of such companies are HP, 3M and Procter and Gamble

Main Goals of Innovation Management 1. Effect a shift in the way the organization sees itself where innovation is recognized as the way of doing business 2. Deciding upon the innovation strategy that best fits the organization’s situation, and enable it attain its vision. 3. Creating a portfolio of innovation projects to translate competitive strategies and to manage risk across the whole organization. 4. Define a criteria for the selection and prioritization of projects within the portfolio to weed out less probable projects as soon as possible 5. Effect the necessary structural changes to arrange skills throughout the organization in competence centers, to enable the formation of the right team for the purposes of the innovation project.

Main Requirements for Innovation Management ►

Create and foster the right culture for innovation by allowing employees time to experiment and to develop their own ideas. An example is 3M which allows employees 15-20% of their time – using the company resources – to work on projects of their own, where they may own an equity later if the project grows into a new business. It is important to empower employees by making it clear that their contribution matters by allowing them to implement their ideas within certain budgetary limits.

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Provide an infrastructure to support employee innovation either through the creation of skunk works labs or venture capital units to capitalize on the ideas that do not fit into the business plans or strategy. This is important to avoid pitfalls that Xerox (the PC prototype and Steve Jobs), Lucent (the transistor technology and Intel) and IBM (the Windows idea and Bill Gates) suffered from by driving great ideas and people out, when their ideas didn’t fit into the core business areas of the organization.

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Adopt the appropriate strategies to lead the innovation process and define what projects are to be included in the innovation portfolio

THANK YOU