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What Is Your Manufacturing Innovation Quotient?

How do you squeeze the most return out of your investment in innovation? It’s not always about new products — they don’t always produce bigger profits.

Despite the wealth of research and knowledge on how to spur innovation and creativity, in the end, it often comes down to having to wait for it to occur. Given this type of reality, what can ultimately make the difference on how innovation is best captured is often dependent upon how observant and vigilant you are, and how quickly you can then act upon that observation. For the purposes of this article, I will define these capabilities as an “Innovation Quotient.”

If you seek to improve innovation, then a good strategy is to maximize your quotient. The first step is to have good processes and systems in place to diligently watch your surrounding marketplace including customer behaviors and competitive actions. This is likely an activity you are already engaged in. The only other tactic that remains is to improve your ability to execute, which ultimately relies upon:1.) How adaptive you are? And, 2.) How collaborative is your organization?

What if one of your more ambitious manufacturing engineers came up with a great idea on how to improve cycle times within your production process? Couple this knowledge with digital modeling capabilities to test viability, could you then validate and implement the necessary process changes to execute this innovation tomorrow? Could you do so in a week or a month?

If you can’t answer yes to any of these questions, then it is likely you have an opportunity for improvement.

Some manufacturers can now make a minor process change in as little as 15 minutes. Others can evaluate and test bigger improvements over a couple of weeks, which can then be implemented in a month or two. Think about it. The ability to execute is just as important as coming up with the next great idea. In fact, I would argue it is more important. As Peter Drucker says, “Plans are only good intentions unless they immediately degenerate into hard work.”

The modern manufacturing enterprise has multiple ways to create advantage out of something new. Digital manufacturing techniques now enable considerable testing and evaluations to be performed without building a single prototype or consuming any raw materials. Internal forces can drive toward new solutions and products by applying new processes, which then meet new customer needs while providing new types of solutions for end users.

How do you squeeze the most return out of your investment in innovation? It’s not always about new products — they don’t always produce bigger profits. Extensive R&D investment can significantly defer future profit. Even successful new product introduction (a big “if” indeed) does not ensure future profits will be long-lived because new products can be quickly copied or improved upon by the competition. To achieve more lasting results, companies must focus on integrating product innovation with business model, process and service innovations.

The Importance of Process Innovation

When competition is stiff, the important part of building new products becomes critical — including what is made and how it is being made. A process innovation that cuts operational costs by 10 percent can be compelling, especially in low profit margin businesses (e.g., consumer goods).

Small savings found in process innovations on the single shop floor can accumulate when shared and implemented across a large enterprise. After a generation of focusing on efficiency and software-enabled automation, the focus for next-generation manufacturing has circled back to an emphasis on process. Most major corporations have identified agility as a key objective in manufacturing operational excellence. All the great ideas in the world won’t mean a thing if you can’t adroitly maneuver toward executing them.

Responding to External Forces

Agility — the power to move quickly and easily with intellectual acuity — is not only essential when opportunities are identified from within an organization. Outside forces that increasingly drive innovation must also be accommodated. How well can you survive a crisis born of political unrest or natural disaster? How quickly can you seize upon an advantage created by a new technology? Outside influencers take many forms and present myriad challenges to a company’s agility and business focus.

Thanks to manufacturing intelligence, Big Data projects and digital modeling and optimization capabilities, companies are now better able to collect and analyze endless amounts of customer feedback, usage data, and purchasing trends. This wealth of customer information can be mined for rich rewards. In the best-case scenario, customers essentially hand you your next big idea on a silver platter.  Can you react quickly enough to be able to reap the benefit before customer tastes change again?

Likewise, the rapid rise of a middle class in the BRIC countries presents new markets full of opportunities, along with challenges related to new cultural and ethnic profiles, country-specific regulations, and distribution methods. For example, there will be over three billion new consumers of cosmetics over the next decade (imagine all the new product possibilities).

Does your Systems Infrastructure Block or Support Process Improvement?

Once an idea is identified for process improvement, the hard work then begins if innovation is to actually occur — in its execution. It is at this point where you should ask yourself if your IT systems are helping or hurting the process. If they are enabling, then congratulations — you have already established an enviable position within your marketplace, which likely has resulted from competitive advantage. For the rest of you, perhaps now it is time to consider what other options might exist? Modern manufacturing systems now are quite capable of responding quickly to change, including the ability to identify, model and implement process improvement across all of your manufacturing operations — in such a manner so as to encourage innovation.

In an enterprise culture where new ideas are heard and acted on, the outcomes can often be much bigger than the resulting new process or product. Examples of such benefits might be new or more satisfied customers, higher profits, brand equity building, and so forth.

Perhaps even more importantly, enterprise capabilities are expanded. You can learn many lessons in the process of bringing an idea to fruition — lessons that can then be applied to future endeavors. By consistently executing on these innovations, it is then possible to create a culture and reality of process innovation that will pay dividends for many years to come! 

Tom Comstock is Vice President of DELMIA Strategy & User Experience Digital Production at Dassault Systèmes

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