GeoCache Where you are… Where you need to be… How you get there
Does a focus on product improvement (incremental or disruptive) come at a cost to process innovation? It shouldn’t. Companies should do both. Product innovation done right drives sales. Process innovation done right has the potential to do more: reduce defects (increasing customer satisfaction), increase throughput without capacity expansion, reduce unit cost, decrease energy costs, reduce inventory (raw materials/finished goods), and potentially reduce redundant manpower. In many companies, however, the product innovation path is less murky than process innovation.
About ten years ago a visit to a plant owned by a large air conditioning and heating equipment (now owned by an even larger Japanese parent company) revealed a very recent process innovation: barcoding units as they moved through the plant. Before that, management had no visibility on where units were as they moved through the plant- or even exactly how long it took the company to produce one air conditioning unit. Hopefully by this time the company has adopted a more expansive process technology strategy.
A company recently asked us to examine demand for an industrial IT offering (supporting process control platforms, technology & networks on the factory floor). Conversations at recent MODEX and FABTECH shows centered on tools linking the board room and the factory floor more effectively- and analyzing and acting on data rather than just collecting it. This conversation goes beyond Integrated- displays-flow-rate-of-35o-water - and it goes beyond Lean.
Process innovation is as complicated as product innovation because of the broad cast of characters: the manufacturer, OEMS, EPCs, systems integrators, software (proprietary/open-source) providers, etc. And internally, whose job is it to scan the landscape for new technologies that could improve the process? Operations? Quality control? IT? How does he/she validate the need for improvement? How does he/she get approval to expend resources to study it?
Today, a technology strategy is critical for every company- not just tech companies. Manufacturers need to think hard about the implications of not having the right hardware, software, and personnel in place to operate plants effectively and efficiently.
Nancy Musselwhite is Senior Consultant of Geo Strategy Partners, a B2B/Industrial focused market research and Strategy consulting firm.
