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
► Itis 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 Re-
engineering
 Concurrent Engineering
► Alsoknown 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.

► 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.

► Adopt the appropriate strategies to lead the innovation process and

define what projects are to be included in the innovation portfolio
THANK YOU