Content

Innovation
Types of innovation
Product innovation
Steps in product innovation
Process innovation
Steps in process innovation
Concurrent engineering
 Innovation

• First of all, we have to recognize that there are many

different definitions of what innovation is.
• Innovation is a process of value creation, which consists in
changing the composition of a set of variables describing a
system.
• innovation is the successful introduction of a new or
improved product or process to the marketplace.
 Theory of innovation

• there are many different kinds of innovation. J.

Schumpeter (1934), for example,
• new products,
• new methods of production,
• new sources of supply,
• the exploration of new market, and
• new ways to organize business.
 Theory of innovation

• What is Innovation???
Transformation of an idea into something useful.
There are two basic types of innovations

1.Product innovation and

2.Process innovation
 Product innovation
 Product innovation implies introducing new products or
services to achieve an external market or to satisfy user
need (Utterback and Abernathy, 1975)

 New product development is one of the riskiest, but most

critical strategies in any competitive industry (Cooper,
2001).

 To compete in the future of textiles and apparel, firms will

need to be innovative, while reducing cycle times and
cutting costs.
 Product innovation
A Product / Good is any tangible offering that might satisfy
the needs or aspirations of the consumer.

Anatomy of a product can be studied along three

dimensions:
 Core benefits – these are the basic functions and
attributes meant to be provided by the good / product.
 Tangible specifications – these define shape, size,
appearance etc of the product.
 Augmented features – these are the additional benefits or
utilities associated with the product like after sale service,
perceived benefits of a brand etc.
Product innovation

Anatomy of product
 Product design

Product design refers to complete specification of a

product to be manufactured and contains following details:
• functions / attributes
• weight, size, appearance
• engineering / technical specifications
• constituents / components / parts of final product
product design may be for a new product or for
modification of existing product.
 Product design

Product design is normally the first step immediately after

accepting the concept of the product.
• Product design has direct impact over selection of
processing equipment's & methods, plant layout and in
process material flows.
• A proper product design ensures that
 the intended functions are discharged by the
product
 it can be manufactured with ease in the
factory
 it can be sold to the customer
 Product innovation/ Drivers of change

Reasons for Change in Product Design / Product

 Redesign Change in customer requirements

 Adding more functions / attributes
 Increasing saleability (appearance etc.)
 Enhancing ease in manufacturing
 Tapping new markets or market segments
 Increasing product’s life cycle
 Enhancing convenience to use (ergonomic
considerations)
 Technological advancements and progress
 Product innovation/ Drivers of change

 Standardization and simplification efforts in an

organization. --- Simplification aims at reducing product
complexity and Standardization seeks manufacture of
standardized products and dropping what is unnecessary
or superfluous.
 Improving quality
 Improving product reliability
 Maintaining technological leadership
 Reducing processing and manufacturing costs
 Gaining competitive edge
 Sustaining competitiveness
 Steps in Product innovation

 Idea Generation and Screening

 Concept Development and Testing
 Marketing Strategy
 Business Analysis
 Product Development
 Test Marketing
 Commercialization
 Process innovation

Process innovation refers to the introduction of new

elements (e.g. input material, work and information
flow, task specifications and equipment) into the
organisation's production process or service
operations that are then used to make a product or
service. (Utterback and Abernathy, 1975)
 Process innovation

A Process is combination of facilities, skills and technologies

that are used to produce products or provide services.
A process usually consists of :
 a set of tasks
 a flow of material and information that connect these tasks
and
 storage of material and information.
These tasks transform inputs into output. Thus process results
into change. Process changes i.e.
Inputs are - land, labour, capital etc. Output is- goods and / or
services.
 Process innovation

Inputs: Out put

Production process:

Property Saleable
Machinery Goods
Labour Conversion &
Raw materials Service
Consumables Knowledge
gathering &
Valuable
presentation
information:
 Process design

 It means the complete delineation and description of

specific steps in the production process and the linkages
among these steps that will enable the production
system to produce products / provide services as per the
goals / policies of the organization.
 Like product design, process design is very crucial to
the success of an organization.
 Process design directly influences plant layout.
 It affects processing wastage and quality of output.
 Process design

• The process design decision influences processing time,

in-process-inventories and processing costs.
• It influences capability of an organization to make timely
deliveries.
• A cost effective process design helps in procuring job
work / contract work
• A proper process design ensures that
 Production is completed by delivery date.
 Goods or services are of desired quality
 Processing costs are optimal thus leading to
cost competitiveness
 Process innovation/ Drivers of change

Factors Necessitating Change in Process Design /

Process Redesign
• For controlling and reducing process wastage
• For improving quality of output
• For controlling and reducing work in process
inventories
• For reducing processing time
• For reducing processing costs
• For improving process efficiency
• For improving productivity
 Process innovation/ Drivers of change

 For improving ease in manufacturing

 For ensuring timely deliveries
 For reducing health hazards and improving safety of
workforce
 May be thrust upon / forced by
– Changes in product design
– Overall technological advancement / progress
 Gaining competitive edge
 Sustaining competitiveness
 Steps in Process Innovation

Successful process innovation requires the following:

 Proper Planning as to focus area of innovations; deciding

about use of technological tools for mechanisation,
computerisation & automation; setting targets, goals;
deciding timeframe of commercialization etc.

 Creating a multifunctional team of Technical, Production

and Maintenance Department
 Steps in Process Innovation

 Selecting a small group of operators and workers,

seeking their participation in process innovation
though communication, counselling, training and
rewards etc.
 Pilot run of the new process
 Observations and improvements in the new process
based on feedback from pilot testing
 Large scale training of entire work force
 Commercial use of new Process
 Process innovation
Tools for Process Innovation
 Developing Assembly Charts for studying conceptual
framework of material flow
 Developing Process Charts for studying conceptual
framework of process flow
 Computer Aided Designing (CAD), Computer Simulation
 Time Study for comparing time taken for various operations
and tasks
 Value Engineering and Analysis
 Business Process Reengineering
 Benchmarking
 Using Change Management Strategies
 Financial Appraisal
 Concurrent engineering
 During initial stages of innovation process, many
organizations mainly focus on new product development
and its commercialization as major goal is to satisfy the
needs of the customers and reap the benefits of product
innovation.
 During initial period, little / less efforts are made for
process development.
 During later stages, as the product designs get stabilized,
focus shifts to attaining process efficiencies, hence to
process innovations.
 This approach is suitable when the rate of technological
change is slow or when the applications are being
developed for emerging technologies, thus making large
time available for innovation process.
 Concurrent engineering
Traditional innovation process time frame

Time frame of product and process innovation

 Concurrent engineering

 Above approach is not suitable in situations where

rate of technological change is fast or when due to
high competitive pressures firm wants to launch new
products in lesser time or when the firm has adopted
Entrepreneurial Fast Track Experimentation
Innovation mode.
 In such situations, less time is available / allowed for
development and commercialization of new product
or processes.
 Concurrent engineering

 Modern era is a period of fast changes including fast

technological changes.
 Time available for development and commercialization of
products or processes is limited / less.
 In the simultaneous engineering or concurrent engineering
approach, the product design proceeds at the same time as
process design with continuous interaction between two
developments i.e. both product and process are developed and
improved at the same time.
 The continuous interaction between product design and
process design is shown in the exhibit given below:
Concurrent engineering
 Concurrent engineering

Advantages
 Concurrent Engineering provides benefits such as
reduced product development time, reduced design
rework, reduced product development cost and
improved communications.
 Examples from companies using Concurrent
Engineering techniques show significant increases in
overall quality, 30-40% reduction in project times and
costs, and 60-80% reductions in design changes after
release.
 Concurrent engineering
Dis advantage
 Multi dimensional focus – coordination & integration
problems
 High degree of creative chaos – poor order in
organization
 Unwillingness on the part of top management to
institutionalize Concurrent Engineering
 Maintenance of traditional functional reward systems
 Maintenance of traditional reporting lines
 Large teams – members may not have training in
teamwork
 Unrealistic schedules – pressure to speed up development
 a focus on computerization rather than process
improvement
 Reference

Cooper R. G. (2001). Winning at New Products (3rd ed.). New

York: AddisonWesley. p. 8, p. 14-15, p. 130-141.

Schumpeter, J. (1934), The Theory of Economic Development

(Harvard University Press, Cambridge, Massachusetts).

Utterback, J. M. & Abernathy, W. J. (1975). "A dynamic model

of process and product innovation", Omega, vol. 3, no. 6, pp.
639-656.