Fostering Innovation For Success

When Electrolux decided to discontinue production at their factory in Alcalà, Spain in 2009, Enderson Guimaraes, Head of Electrolux Major Appliances Europe, declared, “The European market for household appliances is fiercely competitive. Unfortunately, we cannot manufacture products at a competitive cost level in the Alcalà factory – which is why Electrolux will stop production there in 2011.”

Just about the same time, an SMB, Wholesale Leather Handbags, received the Fast Growth Business Award (FGBA) 2009. Bill Roy, the 25-year-old America Born Chinese CEO of the company, had set up his Internet-based handbags wholesale company barely in 2008, and managed the same through various innovative ways. He created an informative and customer-friendly handbags wholesale website, supported by a highly innovative factory in China. Also, a winner of the Top 10 Most Successful CEOs of Medium-small Business in 2008, Bill incorporated a mix of strict management theory of the USA and humane principles of the Chinese way of management.

Although, it is not wise to compare the above two instances, as the parameters are of varying nature, a common truth automatically surfaces that even during the peak period of global economic crisis, innovative ideas can lead to success.

Edward de Bono very nicely stitched the words as – “Traditional thinking is all about ‘what is’. Future thinking will also need to be about ‘what can be’”. There are several business constraints, however, simultaneously exist at least a few business opportunities. Every organization has its own strengths and weaknesses, which are internal to it – based on the resources that it possesses, its structural characteristics, leadership and marketability. Today’s markets are buyer or customer driven. Thus, inclusion of customers’ needs, ideas, choices and facilities in the business strategy helps faster growth.

Both opportunities and constraints are generally external to the company, but normally the strength lies within its boundaries – may be extended boundaries in case of an extended enterprise. A good leadership or management needs to encourage this through combining the strengths lying at different pockets of the establishment in order to build the cutting edge against the constraints.

Evolution of innovative practices
Although of late ‘innovation’ has been the buzzword in the manufacturing world, its history roots back to the primitive age of manufacturing, however, it was always treated as an inherent process associated with manufacturing. In today’s situation, tough competition, rising raw material price, increasing cost and complications related to manpower, supply chain complications, fast depletion of natural resources, environmental awareness etc., are compelling companies to specifically focus onto innovation.

As obviously in today’s organizations multiple minds are involved in defining, designing, procuring, producing, distributing and disposing the products and processes, need for a common string or platform to hold the isolated thoughts of innovation has been imperative. Besides, geographically widespread positioning of the personnel and plants too has been posing the challenge of collaboration.

Under such circumstances, information technology (IT) has been of great help. Application of IT helps in catching the innovative thoughts from different people – who may be inside or outside the organization, and store those on a central platform to share and develop further. The days are gone when a single mind used to generate ideas for improvement in an organization. In today’s complex organizational structure, different people from different functional areas contribute innovative ideas for further development, refinement, feasibility test, validation and implementation. This also eliminates or lessens the risk of failure to a great extent.

Enormous development of Product Lifecycle Management (PLM) solutions has been playing a major role in capturing ideas, streamlining daily activities and fostering innovation in the agile manufacturing organizations these days. As discussed earlier, it is not always true that the innovative ideas originate only from the employees within the organization, there are many instances where companies picked up ideas from outside the boundaries of their organizations, refined them to suit their needs, implemented and enhanced profitability.

Ingredients for innovation
Innovative ideas flow everywhere, and the streaming may originate from any source – more specifically – not necessarily such ideas will originate only from the personnel at managerial level or consultants, even ordinary workers may contribute extraordinary thoughts. A successful organization fishes these ideas, refines them and implements for growth and prosperity. All Indian manufacturers need to implement this practice irrespective of their category of products, size of the company and other factors.

Many effective ideas originate from the employees of the organizations itself. However, for that top management’s willingness and involvement are absolutely essential. A case study of the de Bono Services informs: in Scroll Compressors, when employees were not giving their innovative ideas to the management anymore, the management took interest to create a leveled playing field between supervisors, engineers and frontline workers. It resulted in improved communication and positive flow of energy – which ultimately led to reduction of scrap by 20 per cent resulting in an annual cost saving of $48,000.

In today’s busy business environment, calling frequent meetings often leads to wastage of time and idling of the core activities and increase in costs, wherein PLM offers a highly effective medium for catching, exchanging and designing the product and manufacturing process for enhanced profitability eliminating wastes and unnecessary activities. In Maruti Suzuki India, there was a time when the company was experiencing increasing pressure to introduce new models in a shorter time frame, as well as pressure was growing to improve quality and reduce costs. Also, customer needs and perceptions were rapidly changing. They used PLM to tide over the situation. In the words of Mayank Varma, Assistant General Manager, Tool & Die Shop, Maruti Suzuki, “Our die design process clearly represented and still represents one of the most important opportunities for reducing overall die development time and thereby accelerating car-to-market time.”

IT as an innovation enabler
Rapoo develops, designs, manufactures, markets and supports computer peripherals, including the wireless mouse, the wireless keyboard, audio equipment and joypad etc. When its sales volume decreased drastically in 2009, as a business enhancement initiative, the company thought of steps like – avoiding dispersed data storage, implementation of deficiency and change management, integrating with ECAD and MCAD and improving project management. They established unified data and project management platform, improved project management including automatic delivery and progress tracking, enabled standard parts and generic parts management and optimized R&D process. New capabilities implemented included team collaboration, visualization and CAD data management with PTC packages. The results were – reduced R&D cycle by 30 per cent and reduced design errors by 50 per cent, improved R&D efficiency by 20 per cent and reduced R&D cost by 20 per cent and overall data integration.

As discussed earlier, in today’s business environment, there is no dearth of innovative ideas, even if the internal sources of a manufacturing company are blocked because of any reason; there are opportunities outside to pick up the best practices. Deployment of right technologies accelerate the process of innovation to optimize the processes of product development – in modern scenario, intelligent product development is no longer possible without integrating and analyzing the inputs from the customers or users, suppliers or vendors, sales or marketing agents and of course other sources like several compliance authorities etc. Thus, without deployment of technology, it is no longer possible to align the product development goal with the business goal to stand ahead of competition in the global market.

Conclusion
The old proverb goes “A stitch in time saves nine,” which is very true in this age of fierce competition. But how to put the stitch, if where to put it is not known? Traditionally, manufacturing organizations viewed the production and commerce as two different aspects of their businesses. However, the time has come when both need to be mingled; if its product is not accepted in the market, then no manufacturing organization can do business. On the contrary, if high quality product can be designed and manufactured through the safest and most economic and environment-friendly ways to cater to the customers’ choice (which changes fast these days), there cannot be any deterrent to success. PLM packages are now capable enough to cater to all these needs of the manufacturers, thus their deployment in the manufacturing organizations is inevitable.

PLM not only helps innovation by ensuring flexibility in manufacturing to create product variants fast, but also takes care of their sustainability in the market, which keeps the manufacturing organization agile. The way the concept of cloud computing is catching up, and technology is coming within the reach of the small Indian manufacturing companies, if all PLM vendors start offering their services in SaaS (Software as a Service) model via the cloud, of course assuring data security and privacy, undoubtedly there will be a revolution in manufacturing innovation in this sub-continent. ∎