Innovation Management & Concurrent Engg

8/14/2019 Innovation Management & Concurrent Engg

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InnovationInnovation

Stages, Strategies, Models andStages, Strategies, Models andManagementManagement

Concurrent EngineeringConcurrent Engineering


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ObjectivesObjectives

Understand what Innovation isUnderstand what Innovation isUnderstand 5 stage approach toUnderstand 5 stage approach to

systematic innovationsystematic innovation

Innovation Strategies, ModelsInnovation Strategies, Models

Process InnovationProcess Innovation


Innovation ManagementInnovation Management


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What is Innovation?What is Innovation?

The purposeful and systematicThe purposeful and systematic

search for change and opportunitysearch for change and opportunity (Peter(PeterDrucker)Drucker)

When an enterprise produces a goodWhen an enterprise produces a goodor service or uses a method or inputor service or uses a method or input

that is new to it, it makes a technicalthat is new to it, it makes a technical

change. The first enterprise to make achange. The first enterprise to make agiven technical change is a innovator.given technical change is a innovator.

Its action is innovation.Its action is innovation. (Schmookler)(Schmookler)


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What is InnovationWhat is Innovation

A mould-breaking development inA mould-breaking development in

new products or services or how theynew products or services or how they

are produced - the materials used, theare produced - the materials used, the

process employed or how the firm isprocess employed or how the firm is

organised to deliver them - or how ororganised to deliver them - or how or

to whom they are marketed, that canto whom they are marketed, that can

be linked to a commercial opportunitybe linked to a commercial opportunityand successfully exploitedand successfully exploited


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InnovationInnovation


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Examples of InnovativeExamples of Innovative

ActivityActivity (Schumpter)(Schumpter)Developing new products and servicesDeveloping new products and services

Developing new methods ofDeveloping new methods of

productionproduction

Identifying new marketsIdentifying new markets

Discovering new sources of supplyDiscovering new sources of supply

Developing new organizational formsDeveloping new organizational forms


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Sources of InnovativeSources of Innovative

OpportunityOpportunityThe unexpectedThe unexpected

be it the unexpected success or failure or thebe it the unexpected success or failure or the

unexpected eventunexpected event

The incongruityThe incongruity between what actually happens and what wasbetween what actually happens and what was

supposed to happensupposed to happen

Innovation based on process needInnovation based on process need

the inadequacy in underlying processes, thingsthe inadequacy in underlying processes, thingsthat are taken for granted but can be improvedthat are taken for granted but can be improved

or changedor changed


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Sources of InnovativeSources of Innovative

OpportunityOpportunity Changes in industry structure or marketChanges in industry structure or market

structurestructure

that take everyone by surprisethat take everyone by surprise

DemographicsDemographics

population changes caused by changes inpopulation changes caused by changes in

birth rates, wars, medical improvements etcbirth rates, wars, medical improvements etc

Changes in perception, mood, and meaningChanges in perception, mood, and meaning

that can be brought about by the ups andthat can be brought about by the ups anddowns of the economy, culture, fashion anddowns of the economy, culture, fashion and

so onso on


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Difference Between InventionDifference Between Invention

and Innovationand Innovation

There is an important distinctionThere is an important distinction

between invention and innovation. Anbetween invention and innovation. An

invention creates something new,invention creates something new,

while innovation assureswhile innovation assurescommercializationor to quote Dr.commercializationor to quote Dr.

Peter Denning, innovation is thePeter Denning, innovation is the

"process of technology adoption" of an"process of technology adoption" of aninvention.invention.


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age pproac oage pproac oPurposeful, SystematicPurposeful, Systematic

InnovationInnovation Start with the analysis of opportunities, insideStart with the analysis of opportunities, insidethe firm and its industry and in the externalthe firm and its industry and in the external

environment. Do not innovate for the future,environment. Do not innovate for the future,

innovate for now. Timing is everything. The rightinnovate for now. Timing is everything. The right

idea at the wrong time is worth nothingidea at the wrong time is worth nothing

Innovation is both conceptual and perceptual.Innovation is both conceptual and perceptual.

Therefore look at the financial implications butTherefore look at the financial implications but

also talk to people, particularly customers, andalso talk to people, particularly customers, andanalyse how to meet the opportunityanalyse how to meet the opportunity


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age pproac oage pproac oPurposeful, SystematicPurposeful, Systematic

InnovationInnovationTo be effective an innovation has to beTo be effective an innovation has to besimple and focussed. Dont try to be toosimple and focussed. Dont try to be too

clever. Dont try to do too many things atclever. Dont try to do too many things at

once.once.To be effective start small. Dont beTo be effective start small. Dont be

grandiose. Take an incremental approachgrandiose. Take an incremental approach

Aim at leadership and dominate theAim at leadership and dominate the

competition in the particular area ofcompetition in the particular area of

innovation as soon as possibleinnovation as soon as possible


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Innovation StrategyInnovation StrategyThe cost and time required to create a new product or service are so large thanThe 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 extremelylack of a perfectly aligned and executed innovation strategy can be extremely

wasteful. The innovation strategy that is aligned with firm's core mission andwasteful. The innovation strategy that is aligned with firm's core mission andvalues, but with also with the future technology, supplier, and manufacturingvalues, but with also with the future technology, supplier, and manufacturing

strategies. Lack of alignment between product and process architectures rapidlystrategies. Lack of alignment between product and process architectures rapidly

increases cost and risk.increases cost and risk.

Road-MappingRoad-Mapping

The goal of the road-mapping is to develop the innovation strategy - to choose and do theThe goal of the road-mapping is to develop the innovation strategy - to choose and do theright things. The goal of innovation management is to implement this strategy well.right things. The goal of innovation management is to implement this strategy well.

Road-mapping leads to effective project portfolio development and management. It providesRoad-mapping leads to effective project portfolio development and management. It provides

for company-wide technological strategy development and technology assessment, as wellfor company-wide technological strategy development and technology assessment, as well

as division-level project evaluation and strategic aligning.as division-level project evaluation and strategic aligning.

Road-mapping tools provide also a common language for innovation and building bridges betweenRoad-mapping tools provide also a common language for innovation and building bridges betweentechnologists and business managers within your corporation, and with you major suppliers andtechnologists and business managers within your corporation, and with you major suppliers and

customers.customers.


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Innovation ModelsInnovation Models


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Innovation ModelsInnovation Models


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Process InnovationProcess Innovation

It is an approach in business processIt is an approach in business processreengineering by which radical changes arereengineering by which radical changes aremade through innovationsmade through innovations

BUSINESS PROCESS REENGINEERINGBUSINESS PROCESS REENGINEERING

A methodology for process improvementA methodology for process improvementcomprising a study of the "As-Is" state of thecomprising a study of the "As-Is" state of theprocess and then the development andprocess and then the development andimplementation of process changes, leading toimplementation of process changes, leading tothe "To-Be" state of the process, together withthe "To-Be" state of the process, together with

policy changes, organizational structurepolicy changes, organizational structurechanges and a variety of other "interventions".changes and a variety of other "interventions".


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Business Process Re-Business Process Re-

engineeringengineering


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Also known as Simultaneous Engineering (Ford)Also known as Simultaneous Engineering (Ford)

Concurrent Engineering is team approach toConcurrent Engineering is team approach to

product design involving Marketing, Engg.,product design involving Marketing, Engg.,

Manufacturing and other departments at all stages.Manufacturing and other departments at all stages.

Contrast to Sequential ApproachContrast to Sequential Approach

Sequential approach is still the most commonlySequential approach is still the most commonly

used in US and elsewhere & other manufacturersused in US and elsewhere & other manufacturers


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Concurrent Engineering is defined as a systematic approachConcurrent Engineering is defined as a systematic approachto the concurrent design of products and their relatedto the concurrent design of products and their relatedprocesses, including manufacture and supportprocesses, including manufacture and support

The goal of Concurrent Engineering is to improve theThe goal of Concurrent Engineering is to improve theinteractive work of different disciplines affecting a product.interactive work of different disciplines affecting a product.The following are some of the benefits:The following are some of the benefits:

Minimize the product life cycle - Eliminate the redesignMinimize the product life cycle - Eliminate the redesignprocedureprocedure

Decrease production cost - results from the minimization ofDecrease production cost - results from the minimization ofthe product life cyclethe product life cycle

Maximize product quality - By spending more time and moneyMaximize product quality - By spending more time and moneyinitially in the design cycle and ensuring that the conceptinitially in the design cycle and ensuring that the conceptselection is optimized, the company can increase the prospectselection is optimized, the company can increase the prospectof delivering a quality product to the customer.of delivering a quality product to the customer.

Teamwork - Human Resources are working together for aTeamwork - Human Resources are working together for acommon product.common product.


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In Sequential approach In Sequential approach

Each deptt. In turn performs its specialized stepsEach deptt. In turn performs its specialized stepsand then hands off its work to the next deptt. inand then hands off its work to the next deptt. inthe chain.the chain.

Drawbacks of Sequential Engg.Drawbacks of Sequential Engg.

A) Sequential . represents forward progress alsoA) Sequential . represents forward progress alsoknown as throwing the design over the wall.known as throwing the design over the wall.The errors identified by the next deptt. in theThe errors identified by the next deptt. in thechain are fed back. So error feedback is anchain are fed back. So error feedback is an

essential feature of the sequential approach andessential feature of the sequential approach andoften leads to prolonged or elongated cycle ofoften leads to prolonged or elongated cycle ofredesign at each stage of development.redesign at each stage of development.


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B) Sequential approach - There is aB) Sequential approach - There is alack of accountability for any projectlack of accountability for any project

schedule or fro design errors. Eachschedule or fro design errors. Each

deptt. Can and therefore does blamedeptt. Can and therefore does blame

the preceding deptt. For incomplete orthe preceding deptt. For incomplete orerroneous data. In addition, eacherroneous data. In addition, each

deptt. Can and often does blame thedeptt. Can and often does blame the

next deptt. In the chain for the extranext deptt. In the chain for the extratime needed to receive feedback andtime needed to receive feedback and

correct errors.correct errors.


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C) Final product that does not meet theC) Final product that does not meet thecustomer requirements.customer requirements.

This happens due to -This happens due to -

i) A Marketing is not involved except ati) A Marketing is not involved except at

the very early stages before most of thethe very early stages before most of theimportant tradeoff are made.important tradeoff are made.

ii) As the schedule and budget run out, aii) As the schedule and budget run out, acompromised or even unfinished designcompromised or even unfinished designis hurriedly thrown over the last wall tois hurriedly thrown over the last wall tomanufacturing & quality assurance.manufacturing & quality assurance.


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Drawbacks of the Sequential Engg.Drawbacks of the Sequential Engg. Error feedback is inevitableError feedback is inevitable

Lack of accountabilityLack of accountability

Final product not meeting the requirements.Final product not meeting the requirements.

The approach is slow, expensive, littleThe approach is slow, expensive, littleaccounatbility for results, generally leadsaccounatbility for results, generally leadsto products that are late to the market andto products that are late to the market anddo not meet customer needs.do not meet customer needs.

Over a period of time, the cumulativeOver a period of time, the cumulativeimpact is to concede the market share toimpact is to concede the market share tocompetitive products.competitive products.


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Concurrent Engg.Concurrent Engg.

Advantages Advantages Shortening of product design cycleShortening of product design cycle Increased likelihood of manufactured productsIncreased likelihood of manufactured products

meeting the customer requirementsmeeting the customer requirements

Achieved through Dedicated team ofAchieved through Dedicated team ofrepresentatives from all deptts at the very startrepresentatives from all deptts at the very startof the design effort. The team works togetherof the design effort. The team works togetherfrom the initial concept stage all the way throughfrom the initial concept stage all the way through

initial production and strive to eliminate the overinitial production and strive to eliminate the overthe wall throwing approach.the wall throwing approach.


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Comparison of Concurrent Engineering with TraditionalComparison of Concurrent Engineering with Traditional

Engineering ProcessEngineering Process


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CE relies onCE relies on

Carrying out the product development activitiesCarrying out the product development activitiessimultaneously in the areas of: product planning,simultaneously in the areas of: product planning,design, process planning and manufacturingdesign, process planning and manufacturing

Team work within special created multidisciplinaryTeam work within special created multidisciplinary

Task Force team which consists usually of:Task Force team which consists usually of:- DDesignersesigners- Process plannersProcess planners- Marketing specialistsMarketing specialists- Supply managerSupply manager

- Finance specialistFinance specialist- Main suppliers of manufacturing equipmentMain suppliers of manufacturing equipment- Suppliers of key components of the productSuppliers of key components of the product


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Obstacles to ConcurrentObstacles to Concurrent

EngineeringEngineering

Weak Team LeaderWeak Team Leader

Weak Team MembersWeak Team Members

Weak Horizontal AuthorityWeak Horizontal Authority

Unrealistic SchedulesUnrealistic Schedules

Poor Team DynamicsPoor Team Dynamics

Poor Team ProcessPoor Team ProcessLack of Management SupportLack of Management Support


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What is Innovation ManagementWhat is Innovation Management

Innovation management emerged as a discipline in the 1890sInnovation management emerged as a discipline in the 1890swith Edisons innovation factory. Edison changed the image ofwith Edisons innovation factory. Edison changed the image ofthe sole inventor by converting innovation to a process withthe sole inventor by converting innovation to a process withrecognized steps practiced by a team of inventors workingrecognized steps practiced by a team of inventors workingtogether laying the basic design of the R&D department.together laying the basic design of the R&D department.These steps are streamlined to the major extent in allThese steps are streamlined to the major extent in allindustries and include idea generation, concept development,industries and include idea generation, concept development,feasibility studies, product development, market testing andfeasibility studies, product development, market testing andlaunch. Innovation management is thus corresponds to thelaunch. Innovation management is thus corresponds to thedevelopment of new products, processes and services. Indevelopment of new products, processes and services. In

cases where the organization does not make or offer productscases where the organization does not make or offer products(goods or services), innovation lies in improving the way jobs(goods or services), innovation lies in improving the way jobsare done to meet the organizations mission (i.e. processare done to meet the organizations mission (i.e. processinnovation).innovation).


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Why Innovation ManagementWhy Innovation Management

The high demand for innovation in the knowledge economy The high demand for innovation in the knowledge economy brought about by shorter technology and product life cycles as wellbrought about by shorter technology and product life cycles as wellas the sophistication of customers increased the organizationalas the sophistication of customers increased the organizationaldemand for new ideas. This meant two things first innovation has todemand for new ideas. This meant two things first innovation has to

be pushed down to the frontline where knowledge of the customerbe pushed down to the frontline where knowledge of the customeris and where the number of ideas generated are greater. Second, itis and where the number of ideas generated are greater. Second, itmeant that top management has to adopt appropriate innovationmeant that top management has to adopt appropriate innovationstrategies to lead the surge of the innovative activity. As a resultstrategies to lead the surge of the innovative activity. As a resultinnovation needed to be systemized as a business process into theinnovation needed to be systemized as a business process into theway that the organization does business and hence the need forway that the organization does business and hence the need forinnovation management. Only organizations that liberate theinnovation management. Only organizations that liberate the

innovative spirit of their employees, tap into the knowledge of theirinnovative spirit of their employees, tap into the knowledge of theircustomers and partners, and manage innovation projects as acustomers and partners, and manage innovation projects as aportfolio are able to reduce time to market with successfulportfolio are able to reduce time to market with successfulproducts. Examples of such companies are HP, 3M and Procter andproducts. Examples of such companies are HP, 3M and Procter andGambleGamble


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Main Goals of InnovationMain Goals of Innovation

ManagementManagement1. Effect a shift in the way the organization sees itself where1. Effect a shift in the way the organization sees itself where

innovation is recognized as the way of doing businessinnovation is recognized as the way of doing business

2. Deciding upon the innovation strategy that best fits the2. Deciding upon the innovation strategy that best fits theorganizations situation, and enable it attain its vision.organizations situation, and enable it attain its vision.

3. Creating a portfolio of innovation projects to translate3. Creating a portfolio of innovation projects to translate

competitive strategies and to manage risk across thecompetitive strategies and to manage risk across thewhole organization.whole organization.

4. Define a criteria for the selection and prioritization of4. Define a criteria for the selection and prioritization ofprojects within the portfolio to weed out less probableprojects within the portfolio to weed out less probableprojects as soon as possibleprojects as soon as possible

5. Effect the necessary structural changes to arrange skills5. Effect the necessary structural changes to arrange skills

throughout the organization in competence centers, tothroughout the organization in competence centers, toenable the formation of the right team for the purposes ofenable the formation of the right team for the purposes ofthe innovation project.the innovation project.


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Main Requirements forMain Requirements for

Innovation ManagementInnovation Management Create and foster the right culture for innovation by allowing employeesCreate and foster the right culture for innovation by allowing employees

time to experiment and to develop their own ideas. An example is 3Mtime to experiment and to develop their own ideas. An example is 3Mwhich allows employees 15-20% of their time using the companywhich allows employees 15-20% of their time using the companyresources to work on projects of their own, where they may own anresources to work on projects of their own, where they may own anequity later if the project grows into a new business. It is important toequity later if the project grows into a new business. It is important toempower employees by making it clear that their contribution matters byempower employees by making it clear that their contribution matters byallowing them to implement their ideas within certain budgetary limits.allowing them to implement their ideas within certain budgetary limits.

Provide an infrastructure to support employee innovation either throughProvide an infrastructure to support employee innovation either throughthe creation of skunk works labs or venture capital units to capitalize onthe creation of skunk works labs or venture capital units to capitalize onthe ideas that do not fit into the business plans or strategy. This isthe ideas that do not fit into the business plans or strategy. This isimportant to avoid pitfalls that Xerox (the PC prototype and Steve Jobs),important to avoid pitfalls that Xerox (the PC prototype and Steve Jobs),Lucent (the transistor technology and Intel) and IBM (the Windows ideaLucent (the transistor technology and Intel) and IBM (the Windows ideaand Bill Gates) suffered from by driving great ideas and people out, whenand Bill Gates) suffered from by driving great ideas and people out, when

their ideas didnt fit into the core business areas of the organization.their ideas didnt fit into the core business areas of the organization. Adopt the appropriate strategies to lead the innovation process andAdopt the appropriate strategies to lead the innovation process and

define what projects are to be included in the innovation portfoliodefine what projects are to be included in the innovation portfolio


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THANK YOUTHANK YOU

Innovation Management & Concurrent Engg

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