Project
Focus on Process Innovation
A report
Submitted to
Prof Anil Gupta
In partial fulfillment of the requirements of the course of
Understanding Creativity, Innovation, knowledge Networks and entrepreneurship (CINE)
On
Feb. 28, 2008
By
Pavan Kumar Chiluka
INDIAN INSTITUTE OF MANAGEMENT
AHMEDABAD
Innovations
Innovations in general terms can be said as anything like new product or altered , technology, techniques and process etc. are introduced for the first time and which are useful for practical purposes
Inventions differ from innovations significantly. Inventions are first occurrence of new idea or process where as innovations are first attempt to carryout in practice. Innovations can be radical or incremental but both aim at increase in the efficiency and usage. Radical innovations are often disruptive in nature which explores new technology with high uncertainty and creates radical change which often transforms the whole industry or market structures and creates new ones. Where as incremental innovations exploit existing technology with low uncertainty and improves competitiveness of the firm within industry or market.
Typical characteristics of innovative projects
Incremental innovation projects,
•Incremental innovation projects have low levels of uncertainties and are usually follow the orderly process
•A potential marketable improvement to an existing product/service/process is quickly placed within a clearly defined, time-tested process designed to prove or disprove its value to the company
•The process has organizational sponsorship, funding, and the assignment of a development team
•Development and commercialization are directed along a formal phase gate process
Radical innovation projects
•Radical innovation projects have high levels of uncertainties and cannot be described by this orderly process
•Projects are of long-term in nature, highly uncertain and unpredictable
•sporadic in nature - starts and stops, dead ends and revivals
•nonlinear in implementation - detours, recycling back through activities in response to discontinuities and setbacks
•stochastic - waxing and waning of interest and funding, key players come and go, priorities change
Characteristics of innovative projects
•Innovation projects tend to start with loosely defined; sometimes even ambiguous objectives that become clearer as the project proceeds. The processes used are more experimental and exploratory and seldom follow strict linear guidelines.
•Teams need to be more diverse and have a higher level of trust as they explore new territory where failure is a possibility.
•With failure as a built-in possibility, innovation teams are more actively involved with risk management and need to learn to fail fast and fail smart in order to move on to more attractive options.
•Also, innovation projects generally need to be sold to project sponsors and funding committees, a responsibility usually not required from normal project teams
PRODUCT Vs PROCESS innovation
Product innovations are always seen lime light but it does not undermine the importance of process of innovation. Process innovations are as important as product innovations because they increase any business bottom line, profitability, improves efficiency in performing operations, improves productivity and increase employee satisfaction. But unfortunately the process innovations are not traditionally shared among companies in the same industry due to competitive atmosphere. Even in the same company they have been suppressed because of negligence in middle and top management levels and not shared among different plants. Even though process innovation gives competitive advantage over competitors but they are hard to sustain as well because the competitors soon reproduce it.
Blockers of process innovation
•Many ideas originate from work floor, but these people are rarely asked about and if they do, they are often discarded at middle level
•Around the edges syndrome- executives keep looking at the edges of the problem and not at the heart
•Black box syndrome- executives see their processes as black box, they don’t know the details, but somehow processes produce results
Indicators of process innovation
•Ask the question: why do we process this way?, if the answer is: because we have always done it like this, then it is clear indication of need for innovation
•Think from the customer perspective
•Look for the innovative ideas across the industry and try possibilities
•Check where the pain and frustration in a business process which provide initiatives
The phenomenon of process innovation:
The above picture clearly indicates how small improvements on floor of firm lead to bigger change in whole industry
Small improvements like avoiding having one standard process for various situations which could improve efficiency and reduce processing time.
The organized way of taking care of process innovations in any firm
Foreseeable Advantages of Process Innovation
•meet the challenges of a changing world, and to exploit the opportunities presented by those changes
•Substantially improves effectiveness, quality, flexibility and productivity
•Companies that innovate both product and process consistently emerge at the top in terms of profitability
Examples of process innovations:
•assembly-line production of burfi, dahi, kheer, shrikhand, gulabjamun, rasagollas, mishti doi and the like, by adapting the Western tools and technology
•The manufacture of khoa, using roller dryers and other scraped surface heat exchangers
•In Italy, Mozzarella cheese balls are being packed in whey in consumer packs. This can be tried to market rasagollas and gulabjamuns
•Intel treats its process innovations as a competitive weapon, striving to create a “new generation” every two years. That enables the company’s chips, even if there were no changes in their design, to perform better and cost less to make
•United phosphorous ltd. achieved lowest production costs due to eliminating un-necessary steps and now can ale to export even to china
Economic success comes not from doing what others do well, but from doing what others cannot do, or cannot do as well." – John Kay
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