Best Practice

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Best Practice
Process Innovation Management

Edited by
Mohamed Zairi

~l Routledge
~~ Taylor & Francis Group

LONDON AND NEW YORK

First published by Butterworth-Heinemann

This edition published 2011 by Routledge

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 0 7506 3953 9

Contents

List of contributors vii

Foreword ix
Introduction xi

1 Understanding innovation from cradle to grave 1

Brian Cumming

2 Market orientation for superior competitiveness 32

Sattam Alshammri

3 Idea generation: creative problem-solving and innovation 73

Richard Duggan

4 Innovation by design 104

Dr Myfanwy Trueman

5 Bringing in and focusing on customer true needs 139

D. M. Ginn

6 Project management and modern tools of innovation 188

Mohamed Zuiri and Pervaiz Ahmed

7 Total supply chain for innovation 235

Mohamed Zairi

8 Customer management and development in retailing 283

Patrick Allen

9 Auditing innovation through effective performance management 305

Mohamed Zuiri
vi Contents

10 Being a world-class organization - what does it mean? 344

Kate Blackmon, Phil Hanson, Chris Voss and Frances Wilson

11 Sustaining a culture of discontinuous innovation 374

Pervaiz Ahmed

12 Concluding remarks 405

Index 417
Contributors

Pervaiz Ahmed
Unilever Lecturer in Innovation Management, University of Bradford.

Sattam Alshammri
King Saud University, Kingdom of Saudi Arabia.

Patrick Allen
Teaching Fellow in Marketing, University of Bradford.

Dr Kate Blackmon
Research Fellow, Centre for Operations Management, London Business
School.

Brian Cumming
Senior Engineer, Ford Motor Co.

Professor Richard Duggan

Senior Adviser on Innovation, Innovation Unit, Department of Trade and
Industry.

D. M. Ginn
Program Manager, Conix Corporation.

Phil Hanson
Practice Leader in Manufacturing Excellence, IBM Consulting Group.

Dr M. F. Trueman
Lecturer in Marketing and Innovation, University of Bradford Management
Centre.
viii List of contributors

Professor Chris Voss

BT Professor of Total Quality Management, London Business School.

Frances Wilson
Consultant in the E-Business Practice, IBM Consulting, Warwick.

Professor Mohamed Zairi

Professor of Best Practice Management, European Centre for TQM,
University of Bradford.
Foreword

The fist authoritativedefinition of innovation in the context of commerce and

industry was provided in 1967 by Robert L. Charpie in his influential report
to the US Department of Commerce. In this submission, ‘Technological
Innovation: its Environment and Management’, innovation is seen as: ‘The
successful bringing to market of new or improved products, processes or
services’.
This captures the same concept of innovation as the more succinct
definition adopted in 1992 by the working party of the Confederation of
British Industry and the Department of Trade and Industry which has now
become widely accepted throughout the UK: ‘Innovation is the successful
exploitation of new ideas’.
In the period between the formulation of these alternative definitions,
innovation has moved rapidly up the agendas of all involved in trade and
commerce.
‘Innovation is the central issue of competitiveness in the 1990s.’
Professor Michael Porter
‘Innovation must be the driving force behind the entire business policy, both
downstream and upstream of the actual production of goods and services . .. .
Innovation can be successful if all of the skills of the f i i are mobilized.
Conversely it will fail when this cohesion is lacking . .. . One of Europe’s major
weaknesses lies in its inferiority in terms of transforming the results of
technological research and skills into innovations and competitive
advantages.
Edith Cresson,
European Commissioner, Green Paper on Innovation, 20 December 1995

Within the rapidly growing body of literature on innovation, the role of this
volume is to bring together academic, public sector and industrial per-
spectives; and provide a holistic view of the many facets which must be
successfully balanced if ideas and inventions are to be transformed into
x Foreword

innovations. Equally importantly, the book balances contributions which

portray innovation as a ‘procedural’ process which can be successfully
accomplished if all pre-planned stages are successfully executed with the
behavioural concept of innovation.
In the latter approach innovation is regarded primarily as a culture which,
at its most productive, provides a fertile environment within which the innate
creativity of the human resource can provide a constant stream of incremental
improvements, interposed with periodic paradigm shifts.
As an experienced, hardened veteran of many attempts to introduce
innovation in products, processes and services into international markets
during the past thirty-five years, I welcome this pluralistic view. Innovation is
a hard and demanding process, where failure is the likely outcome and success
the elusive prize.
Would-be innovators encountering early setback, seem frequently to draw
comfort from the observations of that early student of change mangement:

‘There is nothing more difficult to carry out,

nor more doubtful of success,
nor more dangerous to handle
than to institute a new order of things.’
Machiavelli

Mastery of procedure and behaviour, backed by a sound grasp of both

theory and practice of innovation provides a prescription for beating the odds
in successfully exploiting ideas. This book, I hope, will provide a sound basis
for those striving for such mastery.
Richard Duggan
Senior Adviser on Innovation to the Innovation Unit, DTI
Introduction

What is best practice innovation management?

What makes some organizations more highly admired and innovative than
others may not be as obvious as we think. The power of innovativeness that
best in class organizations exhibit on a sustainable basis is not always
attributed to the same factors. The widely quoted 3M, for instance, is known
for its insistence on teamwork, the spirit of intrapreneurship, the 15 per cent
rule, among many others. Other organizations such as Cadillac, Rank Xerox
and IBM rely on the use of total quality management (TQM) engineering tools
and techniques, and the application of simultaneous engineering, and so on.
A benchmarking investigation conducted by the author on a selective group
of highly innovative and commercially successful organizations has revealed
that they each enjoy many unique attributes as the core to their business
success. A wide range of perspectives is presented below.

D2D
Vendor partnerships -joint improvement projects with vendors - regular
monitoring and review of vendor performance.
Vendors supporting corporate goals - integrated role in the planning or
inventory requirements and the achievements of set targets for time to
market and the overall cost reductions necessary for maintaining high
customer satisfaction levels.
Integrated supply chain management system - based on the use of
information technology (IT) and which captures value added throughout the
chain in line with the desired corporate targets.
Comprehensiveuse of IT - IT drives the supply chain and other functions,
particularly linking D2D with its major suppliers through EDI.
The development of an innovation culture - this is done through the
encouragement of benchmarking and high interest in technological
xii Introduction

exploitation. The external focus, networking and sharing for learning is

considered crucial for success at D2D.
A formal innovation process - this gets used for product and process
development and through a discipline of design for manufacturability
(DFMA) time to market is made possible. People are trained to use the
process at all levels, and the employee appraisal system includes the need
to be trained for using the process.
Idea generation process - various mechanisms in place for idea generation
including visits, conferences, research, collaborative projects with other
partners and the use of a corporate system, DELTA.
Heavy reliance on performance measurement - measures in all areas of
value added and the development of a culture which is committed to
continuous improvement.
Tools and techniques - extensive use of tools such as quality function
deployment (QFD), DFMA, simultaneous engineering, Taguchi, statistical
process control (SPC), among others.
TQM - a culture of quality which led D2D to win the European Quality
Award (EQA).

Rover Group
Supplier partnerships - critical to Rover, total partnerships with key
suppliers have been achieved through an evolutionary process which took
many years.
Time to market - achieved through interlinking all the activities and goal
congruence.
Scheduling processes - computerized systems, which trigger the need for
procurement on a local basis rather than in a centrally controlled fashion as
used to be the case.
Project management policy (PMP) - this is the complete routemap for
managing projects throughout the whole cycle which includes decision and
planning phase, delivery phase and post-launch phase. The PMP system
includes stages, activities, deliverables, reviews and measures.
A culture of research and technology management - technology is
researched continuously: it has to be proven in terms of its technical
performance, it has to lead to clear benefits and then it has to maintain high
standards of quality, manufacturability and reliability.
Tools and techniques - a whole range of tools are used including DFMA,
Taguchi, failure mode, effects analysis (FMEA), Poka Yoke, SPC, QFD
among many others.
TQM - Rover is a learning organization where quality management has
brought about a radical transformation within the company.
 Introduction xiii

IBM (UK) Ltd

TQM - use of TQM in the form of an approach which is dedicated to total

customer satisfaction, and called market-driven quality.
Tools and techniques - use of tools and techniques such as QFD, DFMA,
benchmarking, 6 Sigma Design, concurrent engineering.
Supplier partnerships - through commitment to zero defect and ‘six
sigma performance’.
Teamwork - wider employee involvement and management by a
multifunctional, team-based approach.
Technology - plays a key role in innovation through product and process
design and implementation.
Integrated product development process - a comprehensive system
which includes various stages of design and implementation, monitoring
and review development.

3M

Teamwork - characterizes the whole culture of the organization.

Ideas - ideas can come from anywhere within the organization and
everyone can sponsor an idea (known as intrupreneuring).
Innovation steering committee - to protect, encourage and monitor the
development of a culture of innovation.
Recognition for innovation - no reprimand or blame but high praise and
reward.
Corporate dependence on innovation - innovation is the business and not
just part of the business.
Technological exploitation - technological transfer and successful applica-
tion and implementation.

Ford

Engineering skills - people equipped with skills to make concurrent

engineering and parallel working work.
People skills - communication and interpersonal skills to make the
interface between socio and technical systems effective.
Tools and techniques - a wide variety of tools used at different levels
including Taguchi Methods, SPC, design of experiments, QFD, FMEA,
problem-solving.
TQM - the use of a comprehensive quality system referred to as quality
operating system (QOS).
xiv Introduction

AT&T
The Pace innovation process - a comprehensive gate-based process for
innovation.
Tools and techniques - various modem tools and techniques used,
including DFMA, QFD,IS0 9001 among others.
Project management - an effective way of successfully managing
projects, based on teamwork and cross-functional involvement.

Phillips BCS
Product release procedure - a comprehensive system with procedures and
guidelines for new product development.
Stages of new product development (NPD) - various stages in the product
life cycle, all clearly defined, including concept, feasibility, development,
introduction, distribution and end of life.

Cadillac
Simultaneous engineering - an entire stsucture of simultaneous engineer-
ing (reversed pyramid) including SEE Steering Committee, vehicle systems
management teams, product development and improvement teams, all
focusing on the end customers and dealers.
Product programme management process (PPMP) - a four-phase
innovation process based on gates and gatekeepers geared for achieving
time to market.
TQM - comprehensive use of quality management, in-process quality is
assessed at every stage of the new idea development (NID) process and
there is a five-step problem-solving process for conducting continuous
improvement.
Supplier partnerships - suppliers are assessed against excellence criteria
and partnerships are achieved through a commitment to supplier training
and development.

Hewlett Packard
TQM - dedication to total quality management with a deployment
approach from the top.
Quality innovation delivery chain -the approach used for achieving time
to market.
Product generation team - used to promote product evolution as a
transdivisional partnership throughout the organization.
Teamwork - research, development, production teams working closely
together for a shared goal of product and process innovation and
improvement.
 Introduction xv

Smithmine Beecham
Measurement - emphasis on corporate-wide measurement and inter-
activity linkages.

Rank Xerox
Product delivery process (PDP) - an integrated approach to NPD,where
planning, engineering, manufacturing, marketing work in harmony to
manage projects, overseen by gatekeepers at appropriate levels.
PDP stages - seven stages involved, including pre-concept (Idea phase),
concept, design, demonstration, production, launch, maintenance.
TQM - comprehensive TQM programme called leadership through quality,
used to drive PDP.
Tools and techniques - comprehensive use of tools such as QFD,
benchmarking, SPC, problem-solving and FMEA, among others.
0 Measurement - emphasis on total measurement and a problem-solving
approach.
0 Teamwork - proper project planning and execution.
0 Integration - proper matrices used to correlate deliverables to responsibili-
ties - where people could be required to provide an input, where input can
be optional.

ICI-Imagedata
New product scheme -based on gates and gatekeepers through six phases.
Deliverables at feasibility stage include the involvement of all major
activities, including supply chain.

Exxon Chemical
Product innovation process (PIP) - five-stage process-based approach to
innovation.
Measurement - great emphasis is placed on measurement, in particular on
process measures to ensure the discipline of using PIP and its
effectiveness.
Project management - structure is based on having senior sponsorships,
team leadership, cross-functional team involvement and the use of satellite
contributions.
0 Tools and techniques - comprehensive use of tools and techniques such as
QFD, NEWPROD, marketing techniques, experience curves.
xvi Introduction

TQM - quality is used to ensure that PIP is optimized through continuous

improvement activity. Quality improvement teams are put together to
investigate ways for ensuring that PIP is made more robust and used more
widely.
Effective implementation of PIP - many reasons led to the effective
implementation of PIP using comprehensive awareness programmes,
videos, pocket guides, trend setters, away days and stewardship meetings,
technical transfer teams and process optimization teams, and so on.
Gatekeeping - effective gatekeeping through cross-functional and multi-
level representation to ensure that projects are in line with corporate
objectives and to steer them towards success.

Kodak Ltd

Integrated innovation process - represented by four stages, used for the

creation of customer value, using multifunctional teams working on
projects and using continuous improvement and a process-disciplined
approach.
0 Tools and techniques - comprehensive tools utilization including for
instance QFD, Customer Oriented Product Conceptualization (COPC),
seven planning tools, seven problem-solving tools, Taguchi techniques,
project management course, project leadership tool, benchmarking, value
engineering, value analysis.
Project management - based on multifunctional teams, using functional
skills and expertise, effective project leadership, having a project sponsor,
using project performance goals and relying on an integrated project
planning.

Cadbury
Innovation process -based on a series of phases and two gates using three
different routes: Mainstream, Fast-track, Repeat.
0 Product change management (PCM) - integrated, computerized
approach to project management, system developed on a mainframe
computer, leads to high success rate through extensive market testing.
0 Talking about time to market - for insurance, speed, breakthrough
launches requires a radically new and different approach to innovative
activity.

The vision for this book was put together using an all-encompassing, integrated,
current and effective model of innovation management. It was deemed to be
 Introduction xvii

considered necessary to broaden the theme of innovation management by doing

the following:

0 Taking a process-based perspective and discussing innovation in terms of

market-related issues and customer-focused outcomes and measured by
commercial benefits.
Widening the scope so that innovation is not described only in terms of
technological exploitation and product launches. This reflects a major
departure from all approaches addressed hitherto and a change from all texts
published so far.
Taking a balanced view of how innovation is and ought to be managed by
reflecting front-end and back-end issues, aspects of links and integration
between various key disciplines, placing emphasis on the balance between
having creative phases and productive phases, demonstrating the importance
of relying on modem tools and techniques for managing projects etc.
Demonstrating that innovation management is not a mechanistic approach
but rather a dynamic one by showing the importance of feedback through
continuous learning, continuous improvement and the emphasis on
performance improvement.
Sustainability of effective innovation management comes from the way
culture is managed, how it evolves and more importantly how it is steered and
guided for repeated success and world-class competitive performance.
Having a direct link between the engagement of businesses in their totality
and having a vision of market orientationand a very clear focus on customers
globally and on how world-class business performance can be achieved.

Structure and logic of the book

The key pillars in the development of this book include:

market orientation and customer focus

the triad of technology, product and process vision
creative phase (ideation and design)
productive phase (integrated supply chain)
partnerships (customer/suppliers)
emphasis on measurement
having a strong culture of innovation.

The richness of this debate is reflected in the text and the structure, the
contributions and the ideas and the concepts and examples of best practice that
have been incorporated.
We have not elaborated on each of the aspects representing the main pillars
of process innovation management as we currently understand it, and how
xviii Introduction

they would impact on organizational future competitiveness,but only to how

others have emphasized the importance of these individual components.

The importance of R&D and technology management

As an article in Technology Strategies, October 1996, reports: ‘It is not
possible to predict when discontinuities will occur, but an intelligent view
on what is and is not likely will enable you to predict the future better than
the competition, thus gaining a significant competitive advantage.
Research and development (R&D) and Technology Strategies have to be
detached from the present. They have to look at needs, future requirements
and emerging technological opportunities for the future. It will, however,
always be important to have a balanced technology portfolio by analysing
the market, developing the vision and putting together the means for
implementing the vision.
Greenwald and Rudolph (1996) suggest a multifunctional process with
three steps, as follows:

1 The creation of alternative scenarios, which describe the future business

environment.
2 The development of a ‘working vision’, which articulates the future
scope and position of the fm.
3 The development of a ‘pathway’ to achieve that vision.

The harnessing of technology and R&D management for continuous and

sustainable commercial outcomes can perhaps be seen from the way
Japanese organizations scan technological opportunities, assess cost and
complexity issues for development and manufacturing, evaluate marked
customer receptability and predict related commercial outcomes.
Hanyson (1997) reports on the experience of Sony and Canon whose
philosophy is, on the whole, based on sourcing specialized technologies
externally and using the internal R&D competitiveness for commercial
exploitation of technology.
In Sony and Canon, the emphasis is on education, training, cross-
functionalism and the adoption of a continuous and seamless process of
innovation. This process flows from research through design and to
manufacturing.

Research is focused on building and trying prototypes until they are

optimised.
Design involves the development of the product and process for ease of
manufacturability.
 Introduction xix

Manufacturing
Trials and optimization in terms of quality, cost and time ensure optimum
sums to support the innovation process that Canon and Sony use. Harryson
(1997) highlights three supporting initiatives:

1 The strategic training and rotation of engineers so that each member of the
innovation process gains a holistic understanding of the seeds of
technology, the needs of the market and the requirements of
manufacturing.
2 A focus on prototyping at the research stage to encourage researchers to
exchange knowledge with manufacturing at the outset. In other words,
research activity gets approved only if there is a commercial application in
mind.
3 The direct transfer of researchers to the factory floor in order to drive
technological competence into production processes and products.

Further, all personnel involved in R&D activities are required to have good
marketing and sales skills, and they are expected to lead projects with
marketing and sales [Link] of Canon’s representatives quoted in
Harryson (1997) describes the approach as follows: ‘We don’t have many
company members with business school backgrounds. Instead, we let our
engineers move into planning and marketing divisions to gain experience.
These engineers are better at bringing back knowledge from the market.’

Customer/supplier partnerships
It is widely agreed that some of the critical success factors for future
competitiveness tend to relate closely to factors of quality, delivery, flexibility
and responsiveness. The prediction is that cosdprice factors will not be
dominant in the next few years. The advent of technologies such as electronic
data interchange (EDI) and computer-assisted design (CAD) will greatly
influence and shape the nature and competitiveness. What will be very
significant is that the links for close partnership will manifest themselves in
in-bound and out-bound logistics, up and down the value chain, to optimize
aspects of quality, delivery, speed and cost. Further, it is anticipated that at a
more strategic level, more collaboration on design and new product
development will also take place.
Electronic data interchange (EDI), for instance, is very persuasive in many
industries and its benefits have been widely reported. This is not to say that its
implementation is not full of challenges and dogma. In its basic terms, ED1 is
defined by Lynch (1995) as: ‘the exchange of information, in a standard
xx Introduction

format between one organization’s computer and another, using electronic

means’.
Lynch (1995) argues that ED1 is not the penultimate mother of all tools for
electronic commerce. It has to be considered as one of many tools and has to
be introduced to reflect the vision and strategic direction of the business
concerned. Part of the reason why partnerships were difficult to forge is
because ED1 was not linked to the business intentions. As Lynch (1995) states:
‘many implementations “fail” to make the most technical activity of ED1 with
its business application, i.e. instead of stepping back to look at their business,
they concentrate too much on the technology, and simply try to replace all
their current manual transactions with EDI’.
In addition to obvious and tangible benefits such as improved accuracy,
precision timing, lower transaction costs, improved cash flow and improved
accountability, Lynch claims that the real benefits are those which are often
‘hidden’ and those that can lead to strategic benefits, such as:

more effective use of human resources

closer trading partner relationships
driving business process change
competitive advantage.

Process/product managemenvidea generation

It is often recognized that innovation comes through 10 per cent inspiration
and 90 per cent perspiration. Most of the literature tends to focus more on the
‘hard’ aspects of innovation, those often associated with aspects of design,
manufacturing and project management. According to Deschamps (1995)
innovation has to be divided into an upstream process (sensing and creating
opportunities) and a downstream process (converting selected opportunities
into winning products). The upstream process is essentially the creative phase
of innovation management and is described as having three stages:

Fertilization - to envision the opportunities.

Seeding - to generate and manage the idea flow.
0 Incubation - to manage precursor projects.

As far as downstream aspects are concerned, these include technical and

commercial feasibility, manufacturability, producibility and selectability,
among others. On the whole, this approach needs to reflect fluidity and
dynamism in terms of managing the process of new product development on
a micro basis, in terms of managing individual projects. Wealleans (1996)
refers to this parallel, simultaneously based approach by arguing that:
 Introduction xxi

in order to create effective product design programs with modem needs for
speed and innovation, companies can no longer afford to have design
specification and design implementation as serial events. The final brief for the
design has to be generated while development work is being carried out. This
results in faster design programs producing more exciting products. The mark of
those companies that can make it work will be that they will produce
tomorrow’s best and most up-to-date new products today.

On the approach to innovation process management, Deschamps (1995)

argues that: ‘the innovation process cannot be allowed to remain random and
undirected. While there are a number of ways an organisation can choose to
nurture and manage product innovation, and several approaches for allocating
responsibility, there must be commitment from senior management to set UP
a structure for the process to succeed.’

The management of design

Design as a ‘function’ is the critical link in the innovation chain. It is the
opportunity of linking customer wants into the organizational how. As
described by Peters (1995): ‘Design is not just about drawing shapes and
colours, it is a very practical discipline which also demands vision - seeing
into the future. Whereas all other disciplines relevant to market, such as
production, distribution and R&D are the products of intense specialization,
design takes what it needs from the specialists and applies imagination.’
Peters (1995) goes on to say: ‘Design is a moulding process, in which the
material of information and technology is squeezed often painfully into a
practical, possible shape. The conflict is creative.’
Modern design uses a wide variety of tools for creativity, optimization and
building-in engineering robustness. One of the tools growing in application is
rapid prototyping. This powerful tool can enable designers to develop
complex prototypes with speed, accuracy and minimum cost. These factors
are, of course, very important for time to market new product launches and
therefore effective competitiveness.
Chait (1996) describes rapid prototyping as: ‘the direct conversion of a
computer-aided design (CAD) image to any physical model or prototype’. He
reports that users of this tool are already reaping major benefits in terms of
cost savings, quality enhancements and speed reductions. It is likely that rapid
prototypes will have a major impact on building design capability and
enhancing the culture of innovation in any organization. The predictions
according to Chait and others are that:

all data will be highly mobile and access to rapid prototyping will be
decentralized
xxii Introduction

manipulation of data will be humanized (pictorial, speed, pen, tactile)

physical realization of ideas will become nearly instantaneous (i.e.
dreamware)
potential may develop for direct production
desktop prototyping machines are likely to be found in every manufacturing
company within the next ten years.

The culture of innovation

The culture of innovation is perhaps a difficult area to address, as culture is a
unique characterizationof organizations,describing how they define, manage
and sustain a spirit of innovativeness and a discipline of continuity and
persistence to survive and prosper in the marketplace. One of the problems
that organizations encounter in defining innovation and building a positive
and ongoing climate and spirit of creativity is whether innovation is what
should be pushed out into the marketplace in terms of new products, new
technologies and new services, or whether it has to be reflected by pulling in
customer and market needs.
It is reported that 70 per cent of US shareholder reports include statements
on huge commitments to innovation and excellent performance outcomes for
the companies represented. A recent survey has disclaimed that figure,
however, and reported that only about 7 per cent of the public interviewed
knew or cared about innovation (Schwarz, 1996). Schwarz (1996) argues that
these results are due to the fact that, ‘the general public were being promised
innovation while actually receiving tired, old formulas’. He goes on to say:
‘Innovation is any form of value creation, both internally and in the market
place. Most of the time it is quantifiable, but sometimes it can be only a
perception of value creation.’ This statement is arguably of critical
importance. Innovative organizations are not necessarily those that can be
characterized by high levels of complexity and sophistication, but those that
leave a lasting impression on the customer.
In order to further elaborate on this important point, the following
examples, all of different industries and backgrounds, reflect unique cultures
of innovation, which impact immensely on customers.

Kodak
Kodak has been serving its customer base for over 155 years. It claims that the
spirit of customer satisfaction was initiated by its founder, George Eastman.

Kodak uses the Worldwide Innovation Network (WIN).

WIN links together innovation and quality (IQ).
 Introduction xxiii

Ideas are received from all over the globe and, by using a filtering process,
the big ideas are pursued vigorously.
WIN plays a key role at the front end for the generation, prescreening and
enhancment of ideas.
Kodak places emphasis on stakeholder benefits, realistic quantifications
and professional proposals.

As Schwarz (1996) puts it: ‘Encouragement by leaders to all employees to

join the innovation process is the most effective fuel to set the process in
motion. There is never a shortage of creative solutions to problems, but it
takes leaders and visionaries to nurture ideas from a seed into a giant
sequoia.’

Nordstrom
Created in 1901 as one of the leading fashion retailers in the USA, Nordstrom
offers a variety of quality apparel, shoes and accessories for everyone (Lavere
and Kleiner, 1997).
Gap was launched in 1969 and is known for the famous Levi Strauss
product range.
Body Shop was launched by Anita Roddick, using the famous slogan
‘Reuse, Refill, Recycle’. They soon established themselves and are seen as
caring for environmental and social issues.
The Table 1.1 compares and contrasts the three different cultures, using
some key factors.

Structure of the book

The structure of the book is perhaps better understood through Figure I. 1 . The
various contributions are intended to reflect the different and critical aspects
of process innovation management. Simulating each component of process
innovation and its management will present the reader with individually based
analyses, rich in terms of theory and concept and supported throughout by a
huge catalogue of examples and case studies of best practice applications.
All the chapters together are intended to provide a comprehensive and total
coverage of innovation management as it stands now and as it affects
academics and practitioners alike, now and in the future.

Chapter 1
This chapter looks at the meaning of the word innovation and how it evolved
to incorporate elements of successful commercialization. The criteria that
Table 1.1 Comparison of three retailing cultures

Company names

Factor Nordstrom Gap Body Shop

Leadership Promotes only from within CEO is known to be very Total alignment to company values and
Top management communicate by personal visits COmmunicative principles
Employees are encouraged to speak directly to top He encourages management to Clear and strong business philosophy
managers implement their own ideas Everyone has the same commitment to
Quarterly issued newsletter updates on business issues F’rOmotes only from within environmental causes
and used to reinforce values of company
Employees are encouraged to have an input on
strategy and policy

Quality and Retailing is not just for selling but also for forging Committed to quality and using the Committed to quality through observing
service relationships motto: ‘down-to-earth Gap basis’ impact on environment
Philosophy is always to look for ways to improve A casual approach to serving the Customer service is inherent in culture
products and services customer with total dedication of service to humanity
Uses a decentralized approach to buying Employees are ready and willing to
Buyers can team up with suppliers to produce jointly connect with and educate the customer
developed products while selling
Strong commitment to delighting the customer

Empowerment Employees are praised in large corporate meetings Use salaried staff only Similar to GAP
and reward Use of cash and other incentives Internal promotions opportunity ladder
structures Managers committed to training and
Use of all-star awards for exemplary service
coaching their staff
Use of recognition and praise

Source: Adapted from: Lavere and Kleiner (1997)

 Introduction xxv

Market
Understanding orientation
of innovation for superior
from cradle to grave performance

Bringing in an
d focusing on
customer tru
e needs

Ideation: Customer
an integrated Total management
approach to World-class supply chain World-class
design and
idea for development performance
generation innovation in retailing

ols of i nnov ation

d modern to
agement an
Project man

1
Auditing innovation through
Auditing innovation through effective
effective performance
performance measurement
measurement ~
I SUSTAINING A
SUSTAINING A CULTURE
CULTURE OF
OF DISCONTINUOUS
DISCONTINUOUS INNOVATION
INNOVATION I
------------------------------------
Figure 1.1 Structure of this book

support creativity and innovation are reviewed, as is the important role that
innovation has played in the development of the human race.
The chapter discusses how a good idea alone does not necessarily mean that
an innovation will take place; very often the idea will have to wait for other
enabling technologies to become available to support the development of the
creative thought into a successful application. The nature of these enabling
features is discussed and the continuous central role that materials develop-
ment has had in this process is illustrated.
The chapter proposes that, as a constant source of potential change, other
technologies evolve alongside materials and mature to provide incremental
opportunity for innovation to take place. The microcomputer enables this
incremental boost to innovation.
Process innovation is reviewed in the context of changes occurring in
engineering development, and the way in which the application of computer
technology is opening up the route to this change is discussed.
Some key factors that resist innovation and change are also discussed and
the proposal is made that these factors, which are increasing in influence, in
combination with the effects of engineering process innovations, may result in
the suppression of product innovation.
xxvi Introduction

Chapter 2
This chapter addresses several questions:

1 What is meant by market orientation?

2 What effect does a market orientation have on business performance?
3 What are the prerequisites for the application of market orientation?
4 What are the consequences of exhibiting a market-oriented strategy?
5 Is there any link between market orientation, quality, customer satisfaction
and business profitability?

In answering the above questions, an intensive review of the literature and

empirical works was undertaken. A model was developed and tested in a
service context. The findings revealed significant and positive relationships
between the degree of market orientation and level of customer satisfaction,
relative service quality, employee organizational commitment, and profitabil-
ity. Furthermore, the findings suggest that adopting a market orientation in an
organization depends on senior management characteristics (emphasis,
leadership, professionalism). Market orientation, in turn, leads to profitability
through satisfied customers and committed employees moderated by competi-
tion intensity, market turbulence and technology turbulence. Some examples
of best practice f m s , derived from the application of market orientation, are
included. Finally, a guide and recommendations for applying market
orientation are presented.

Chapter 3
This chapter examines tools and techniques for promoting creativity within
business organizations. It begins with an extensive review of the creative
process. First, the role of the individual as a creative entity is made, followed
by a discussion of creativity within and between teams. The range of tools and
techniques that can be used to enhance creative performance are highlighted.
Coverage of creative problem techniques for the individual includes
morphological analysis and problem redefinition and at the team level
includes synectics, hitchhiking, creative listening and Taguchi techniques. The
chapter also provides suggestions on how to run effective creative sessions,
and addresses implementation. Illustrative examples and cases are widely
used to enrich the discussion.

Chapter 4
There is a growing awareness that design is an important factor in industrial
competitiveness but a full implementation of this resource is often hampered
by a lack of understanding about its true value and potential. This
 Introduction xxvii

phenomenon is of growing significance in the light of intense global

competition since, for many small and medium-sized companies (SMEs),
design represents a tool which is at best used only in a limited way. This work
provides a fresh look at the meaning and value of design. It examines a wide
range of design attributes in a hierarchical framework for new product
development central to company strategy. These attributes are grouped
together at four levels, which represent a focus as well as control of projects
in terms of their value, image, process and production. This analysis is
illustrated with examples of some leading companies, which have used design
as a strategic resource to facilitate and improve their competitive performance.
It also applies the typology and framework in two case studies of deliberately
contrasting SMEs.

Chapter 5
This chapter focuses on how a very successful quality function deployment
(QFD) team within Ford of Europe has adapted to the new Ford 2000 culture
to become an example of best practice in ascertaining customer true needs.
Within seven years, the Emissions QFD team matured into an Emissions
Quality Forum co-ordinating all the emissions-related quality, robustness and
systems engineering subsystem team activities within the globalized Ford
Automotive Operations. The Emissions QFD and Quality Forum have
produced excellent results in terms of improved quality, timing and cost
criteria, by focusing in on true customer needs.
This team has developed its own proforma for integrating a comprehensive
toolbox of customer-driven quality techniques within the company-wide
product development process. It has also shown flexibility in customizing
existing tools, especially QFD and robustness engineering. In doing so, the
team has assisted the continuous improvement of the company-wide quality
process.
The chapter is divided into eight sections starting with a brief introduction
to three of the fundamental themes of the chapter: the needs of the customer;
the needs of the automotive industry and the need for QFD. This is followed
by a detailed look at the four key components of bringing in and focusing on
customer true needs by looking at a definition of the customer within the Ford
2000 perspective. To reinforce all these arguments, the sixth section identifies
a best practice case study from within Ford that demonstrates how a QFD
team became a world-wide quality forum. The criteria of success within the
case study is then correlated with the results of an internal Ford benchmarking
survey corroborated by a Massachusetts Institute of Technology (MIT) survey
to assess effective QFD. The chapter concludes by bringing together all the
arguments discussed into a coherent strategy for bringing in and focusing on
customer true needs, with an emphasis on deployment.
xxviii Introduction

Chapter 6
This chapter looks at project management in the modem innovation context,
highlighting the characteristics of successful project management and project
leadership. It goes on to elaborate how cultures of effective project
management can be built and sustained by examining examples of best
practice. Case studies of Rover, IBM, 3M, Ford and Kodak are used to
illustrate and develop theory. A review of tools for effective project
management is also presented.

Chapter 7
This chapter discusses the role of the supply chain within innovation. The
chapter highlights the necessity of having an integrated approach to the supply
chain if the process is to be effective in producing successful innovation
outcomes. The chapter uses case study evidence to highlight key issues of
supply chain management. Many cases are discussed in detail, including
Nissan, Kodak, Rank Xerox, ICL(D2D), the National Roads and Motorists
Organisation (NRMA), Cadillac Motors, Zytec and Texas Instruments. The
chapter ends by proposing a model of best practice on the basis of evidence
collected from a benchmarking exercise.

Chapter 8
This chapter examines the nature of relationships between retailers and their
suppliers, and the effect these relationships have on customer management
techniques. The chapter begins by introducing the retailing environment, and
examining the types of relationships that can be formed. Contrast is also made
with the Japanese practice of relationship building before drawing out key
elements of relationship building and maintenance. Discussion of relation-
ships within the context of category management is made in detail. The
evolution of efficient consumer response (ECR) and its implications for
current and future development of retailers is also covered. Case examples are
provided to back up the discussion.

Chapter 9
This chapter highlights the fundamental importance of continuously measur-
ing and tracking innovation. It reviews various methodologies of measure-
ment and presents a case for adopting an integrated perspective to the total
process of innovation. Specific criteria of measurement are presented for both
process and product-based assessments of innovation effectiveness. The
chapter highlights best practice through discussion of Hewlett Packard, Exxon
 Introduction xxix

Chemicals, Rank Xerox, D2D, Kodak, Mercury, M&M Mars group, and
others to highlight the form and format of assessment and audit. The chapter
also indicates how QFD and the McKinsey 7Ss model can be used as holistic
tools of measurement.

Chapter 10
This chapter examines how the competitiveness of manufacturing companies
has typically been assessed using high-level financial and economic measures,
which are proxies for managerial inputs and outputs. An alternative method is
to examine the operational practices and performances that are driving the
competitiveness of individual manufacturers. These practices and perfor-
mances need to be referenced to a so-called ‘world-class’ scale against which
manufacturing companies can be benchmarked and towards which they must
progress if they are to be competitive in the global market of the late twentieth
century.
World-class manufacturing is considered as a point at which a certain
standard of practice and performance has been obtained, equalling or
surpassing the very best of the international competitors in every area of a
company’s business, such that the company has achieved international
leadership and success.
The components of a model for benchmarking world-class status,
developed by IBM and London Business School (LBS) and drawing on the
ethos of the European Foundation for Quality Management (EFQM), Baldrige
and so-called ‘Japanese’ manufacturing, are presented, the central hypothesis
being that the implementation of best practice leads to superior business
performance and customer satisfaction.
The chapter illustrates how the technique of ‘best practice benchmarking’
can offer a significant insight into the workings of an individual site as well
as the competitiveness of sector and national manufacturing capability, the
latter through European manufacturing studies in which the model is applied.
For individual sites, the critical factors necessary for achieving world-class
status are dependent on a company’s current practice and performance.
The chapter also shows that, because the goal of achieving and maintaining
world-class manufacturing capability is a continuously moving target, it is
essential to examine every element of the model of ‘best practice’ to ensure
that it reflects the true state of the art.

Chapter 11
This chapter focuses upon the ‘softer’ dimension of innovation, namely that
of innovation cultures and innovation climates. The chapter presents a case
xxx Zntroduction

arguing that, despite the fact that the softer side of innovation is often ignored,
possession of a culture and organizational climate of innovation underpins
long-term competitive success. The chapter looks at how climates and cultures
of innovation can be built and sustained. Evidence is also presented to define
the parameters necessary for organizational cultures to be effective, and the
types of norms that need to be put in place to create innovative behaviour by
employees.
Individual motivations and characteristics are also discussed in relation to
their impact upon innovation and creativity within the organization. The key
role that leadership and employee empowerment play within innovation is
also highlighted, while characteristics that define innovation climates and
cultures are identified. The theoretical discussion is supplemented by case
studies to illustrate theoretical issues.

References
Chait, A. L. (1996) The business implications of developing technologies. Technology
Strategies, January, 11-13.
Deschamps, P. (1995) Nurturing and managing product innovation, Technology
Strategies, October, 16-19.
Greenwald, G. and Rudolph, S. (1996) Scenarios and long-term technology strategy.
Technology Strategies, October, 6-8.
Harryson, S. (1997) Lessons in R&D from Canon and Sony. Technology Strategies,
June, 24-6.
Lavere, S . and Kleiner, B. H. (1997) Key success factors from leading innovative
retailers. Technology Strategies, April, 23-5.
Lynch, G. (1995) The ED1 challenge. Technology Strategies, October, 7-10.
Peters, I. M. (1995) Design for the Future. Technology Strategies, October, 21-3.
Schwarz, W. (1996) Letting the customer drive innovation. Technology Strategies,
January, 27-8.
Wealleans, D. C . (1996) Losing control of design definition. Technology Strategies,
October, 8-10.
1 Understanding innovation from
cradle to grave
Brian Cumming

This chapter looks at the meaning of the word innovation and how it
evolved to incorporate elements of successful commercialization. The
criteria that support creativity and innovation are reviewed, as is the
important role that innovation has played in the development of the
human race.
The chapter discusses how a good idea alone does not necessarily
mean that an innovation will take place; very often the idea will have to
wait for other enabling technologies to become available to support the
development of the creative thought into a successful application. The
nature of these enabling features is discussed and the continuous central
role that materials development has had in this process is illustrated.
The chapter proposes that, as a constant source of potenlial change.
other technologies evolve alongside materials and mature to provide
incremental opportunity for innovation to take place The micro-
computer enables this incremental boost to innovation.
Process innovation is reviewed in the context of changes occurring in
engineering development, and the way in which the application of
computer technology is opening up the route to this change is
discussed.
Some key factors that resist innovation and change arc also discussed
and the proposal is made that these factors. which are increasing in
influence. in combination with the effects of engineering process
innovations. may result in the suppression of product innovation.

Innovation is . . . about maintaining the highest rate of change that the

organization and the people within it can stand. (Sir John Harvey-Jones, former
Chairman, ICI)
2 Best Practice: Process Innovation Management

Introduction
This chapter looks at the process of innovation, and its importance to society.
The automobile industry mainly is used to illustrate various points, because
this is the author’s background and the automobile industry is a good subject
for the study of innovation.

Key elements of effective innovation management

What is innovation?
Many authors have provided definitions for the word innovation, and each has
its own nuance.
In 1968, the Zuckerman Committee defined innovation as ‘a series of
technical, industrial and commercial steps’ (Robertson, 1974). In 1969,
Marquis defined innovation as ‘a unit of technological change’, quoting
Schmookler’s definition of technical change as ‘an enterprise producing goods
or services or using a method or input that is new to it’ (Marquis, 1969).
Important to this definition is the concept that it is only the f ist enterprise to
adopt the change that executes innovation; subsequent adopters are imitators,
not innovators.
In 1973, Tinnesand published the results of a study into the definition of
innovation gleaned from a review of 188 publications (Tinnesand, 1973). His
findings were as follows:
The introduction of a new idea 36 per cent
A new idea 16 per cent
The introduction of an invention 14 per cent
An idea different from existing ideas 14 per cent
The introduction of an idea disrupting prevailing behaviour 11 per cent
An invention 9 per cent

In 1985, Kuhn suggested that ‘creativity forms something from nothing’

and that innovation ‘shapes that something into products and services’ (Kuhn,
1985), while three years later, Badawy wrote ‘creativity brings something new
into being’ and that ‘innovation brings something new into use’ (Badawy,
1988).
Also in 1988, Urabe wrote ‘innovation consists of the generation of a new
idea and its implementation into a new product, process, or service, leading to
the dynamic growth of the national economy and the increase of employment
as well as the creation of pure profit for the innovative business enterprise’
(Urabe, 1988) and in 1990 Udwadia defined innovation as ‘the successful
creation, development and introduction of new products, processes or
services’ (Udwadia, 1990).
 Understanding innovation from cradle to grave 3

In 1992, Twiss stated that ‘for an invention to become an innovation it must

succeed in the marketplace’ (Twiss, 1992) and in 1996, the CBI/DTI
Innovation Unit stated that innovation is ‘the process of taking new ideas
effectively and profitably through to satisfied customers’ (DTI,1996).
It can be seen, therefore, how the definition of the word ‘innovation’ has
subtly changed over the last thirty years. In the 1960s and 1970s innovation
was thought of as a process; the introduction of change. Some, apparently,
regarded innovation as simply the generation of a new idea. In the Tinnesand
data, for example, the second, fourth and sixth categories all seem to be very
similar, as they relate merely to the generation of a new concept, and when
totalled, represent a sizeable 39 per cent of the understanding of the meaning
of the term innovation.
Most authors now agree that this process of idea generation is creativity,
and although creativity is an important precursor to innovation, the two terms
are not synonymous.
Since the late 1960s, the meaning of the term innovation seems to have
been refined. The implication that a new concept had to be brought into use
before innovation could be said to have taken place became widely
accepted.
Latterly, this definition has been further refined to encapsulatethe concept of
success: a new concept must be brought into successful use before innovation
has taken place. This is reflected in the words effectively,profitably and satisfied
customers used in the Innovation Unit paper. This hardening of the
understanding of the word innovation to include the concept of successful
commercialization is probably a result of the increase in business competitive-
ness and developing customer focus that have occurred in the last thirty years.
Summarizing all these ideas, perhaps the most succinct definition of
innovation that meets current thinking, and covers the broadest range of
applications, is that innovation is the first successful application of a product
or process.

Managerial and environmental elements required for innovation

There have been many studies on the important elements required for
achieving the successful application of a new idea (i.e. innovation), and there
tends to be broad agreement on the important criteria.
Many of these studies include analyses of the creative process that is an
important precursor to innovation. This is a logical inclusion since, without
creativity, innovation cannot take place. Using this premise, there are three
basic steps to be considered - idea generation, the successful development of
that idea into a usable concept, and the successful application of that concept.
Figure 1.1 summarizes factors gleaned from the literature that have a positive
effect on each of the three steps.
4 Best Practice: Process Innovation Management

Diverse information service I Risktakingencouraged 1

Staff with diverse interests Adequate resources

Suwortive manaaement Good strategic direction

Failures willingly tolerated Free information exchange

Freedom to pursue own ideas

B!rth of
inrbal idea Brainstorming encouraged
(creativitv)
Success recognized Access to external stimuli
Suggestion programmes Non-wnsbaining environment

Patent programmes Technically competent team

Nonconformitytolerated Challenging environment

r_______________________________________----

Adequate funding

Adequate personnel Clear oroiect obiectives

Management belief in project Full-timeteam members

1
Risk-takingencouraged Enthusiasticcooperativeteam

Strong projectchampion Suazssful

development
Senior project champion Use of external ms
e

Strong project leader Users' needs understood

Good project selection process Good contact with users

Innovdon
I Thorough development

Meets customers' needs outperfom cumnt products

application
Value for money Highqualii implementation
I

!
._______________________________________----- I

Figure 1.1

At the invention stage, previous researchers have highlighted the impor-

tance of correct managerial attitudes and working conditions in facilitating a
creative environment. Critical to this are:

freedom of the employee to think and act according to his or her own ideas
rather than following strict management plans
the encouragement of risk-taking
the non-critical acceptance of any failures that result
 Understanding innovation from cradle to grave 5

access to a diverse range of stimuli and ideas

the recognition of success.
The development phase of this process is where the new concept is refined to
ensure that it meets all the needs of the end user, in all respects, and that it
functions correctly with other parts of the system into which it will be
integrated. This is where the details and specifications are derived for the
proposed application. The most often quoted issues here are the provision of
adequate resources, strong support and direction from the company, the use of
appropriate external expertise, good co-operation within the team, and close
contact with the end user.
The third phase is ‘successful application’. This is the acid test: ‘will the
customer adopt the new concept?’ This is the last stage of the process, but it is an
area that must be considered early in the development programme. Many
researchers have highlighted the need to understand exactly what the end user
wants at an early stage in the development process, and there are many cases
quoted where a failure to understand the customer’s perspective have led to the
failure of a seemingly good idea. This point is well illustrated by Robertson
(1974) who cites the case of a food-processing firm that invested substantial
sums in developinga process for freeze-dryingfood, only to be overtaken by the
increasing use of domestic refrigerators,which provided a more acceptable and
convenient method of preserving food. They had failed to take a broad view of
what the customer really wanted at the outset of their development, and became
focused solely on one solution, a solution that, in the end, the customer decided
was not the correct one.
With hindsight, it is always easy to see the correct solution, and there is no
guarantee that gaining a good understanding of the customers’ needs will lead
to a successful implementation of the product. However, the reverse is almost
certainly true: failing to understand what the customer wants will almost
certainly work against the success of the project or product.
If we are considering innovation that relates to a marketable product, then
there are clearly many other marketing-related factors that play a part in
successful adoption. These factors include, for example, effective advertising
and the effects of branding. Their omission from Figure 1.1 should not imply
that they are considered to be unimportant; these factors do not have a direct
bearing on the technical development of a particular new product, which is why
they have been omitted. In other words, how a product should be advertised will
not affect the derivation of the design, whereas the end customers’ perspective
of value for money will be central to the development process.

The limitation of product innovation

A useful way to view these criteria is to look at innovation as a process, and
to analyse the parameters involved using a ‘P’ diagram. This is a tool designed
6 Best Practice: Process Innovation Management

L Noise

Signal
Signal + System + Response

controls
Controls Error state

for the analysis of engineering systems, and it uses the concept of energy flow
to focus on the processes within that system. It is used to provide an
understanding of the parameters involved in the function of that system.
Figure 1.2 shows the configuration of the ‘P’ diagram.
In Figure 1.2, the system is shown as having three parameters acting upon
it - Signal, Controls and Noise - and it has two potential outputs - Response
and Error state. Each of these is defined as follows:

Signal - This is the basic input into the system, the ‘trigger’ that causes the
system to function. In a simple example this might be the action of
switching on a lighting system.
Controls - These are the features of the system that are readily open to
control. In the lighting system example this could be the power of the bulb,
the position of the lamp, and the distance of the lamp from the subject.
Noise - These are parameters that can affect the system but over which
control is difficult or impossible. For the lighting system this could be
variations in the voltage available, the quality of the wiring and
connections, and variability in the function of the switch.
Response - This is the desired outcome, and in the example this would be
the correct level and quality of lighting on the subject.
Error states - These are possible but unwanted outcomes. In the example
these could be no light, variable light, uneven light, or light that is too dull
or too bright.
 Understanding innovation from cradle to grave I

I Noise
Corporate impatience
I
Re-direction / instability
Changing financial situation
Changing market or customer wants
New/better competitor product

Signal
Original idea
Originsl
custwner
Customer want
Corporate
corpwate strategy
mw
+ Development
Development
process
Pro=
- Response
Response
Innovah-firstsuccasfu
Innovation - first successful
application of a mncept
application concept

Controls
Funding Error state
People
Expertise Unwanted product
Knowledge Faulty product
Tools
Plans

Figure 1.3 Influences on the innovation process

Figure 1.3 uses the ‘P’ diagram to look at the innovation process in order to
highlight the important parameters that can have an influence.
The inputs to the innovation process are the initial idea, a customer want
that can be shown to be correctly addressed by this idea, and an understanding
that the development of this idea is compatible with the corporate strategy.
The controls are the resources that can be brought into play to turn the idea
into an innovation. These include finances, people with the right knowledge
and expertise, the right equipment, and a good and well-managed plan that
brings all these aspects together. If any of these aspects is inadequate or
missing, the innovation process is more likely to fail.
Noises that affect the innovation process include internally applied
perturbations such as pressure from the corporation for success, failing
confidence in the innovation and attendant waning support from senior
people, and concern over the costs of the project.
External noises include changes to the environment into which the
innovation is targeted. These changes could include competitive actions and
changes to the customer wants driven, for example, by changing fashions,
legal requirements or political issues.
The ideal response is that innovation should result - that the initial idea
should be successfully applied.
Potential error states include a product that the customer does not want.
This could be because it does not meet functional or performance expectation,
because it is too costly to adopt or maintain, or because it has adverse effects
upon other important customer needs. Such a condition is likely to arise when
8 Best Practice: Process Innovation Management

the initial understanding of the customer’s needs is incorrectly or incompletely

understood - an error in the input; a change in customer needs during the
development; a noise in the system.
Another potential error state is when the product is faulty and fails to
achieve its functional objectives. This indicates that the development process
is inadequate, and possible influences here are lack of appropriateresources to
support a full development of the product, or impatience that forces the
product through to the customer before it is ready.

The role and importance of technology

Technical innovation as a historical shaping force

Technical innovation has been the engine at the centre of humankind’s
development since prehistoric times. From the first application of early hand
tools to facilitate simple daily tasks, to the most complex application of many
disciplines that allows humankind to live and work in space, developments in
technology have provided the route to advancement.
Whichever aspect of life you choose to examine, technology is one of the
major shaping forces, as a brief examination of history will illustrate. The
great feats of maritime exploration were enabled by technical innovations. For
example, the development of the magnetic compass, which allowed the
required course to be maintained without reference to the sky; the
development of the sextant, which allowed an accurate determination of
latitude to be made, and the development of accurate and reliable mechanical
clocks that allowed calculations to be made to determine longitude. With these
three technologies mariners could establish where they were and navigate an
accurate course. Charts of the world’s oceans were then developed and world
trade became possible. Empires were built on the basis of these trading
relationships and the fortunes of many countries and millions of people were
shaped by three relatively simple technical advances.
Military history is almost totally tied to advances in the technology of war.
Weapons have increased in power, range and accuracy, and while it is
debatable whether this is to the advantage of mankind it has certainly changed
the nature of conflict. Now, wars lasting years, with relatively localized
fighting have been replaced with campaigns that last only a few weeks or
months, but with the potential to involve the whole world.
The other important factor in military confrontations is that the outcome is
more likely to go in favour of the more technically advanced. Clearly this is
not assured since there are some good examples of where this has not been so
- the conflicts in Vietnam and Afghanistan, for example - but here, other very
strong factors were at work which could outweigh a strong technical
advantage of one of the participants.
 Understanding innovation from cradle to grave 9

Industrial innovation has also played a major part in the development and
success of many nations. The impact of the Industrial Revolution is well
known and understood, and its effects have led to higher living standards for
the industrialized countries. Industrialization was made possible by a number
of technical innovations which allowed industry to be organized into large
productive units, and which changed the nature of the industrialized country
from that of a mainly agricultural based society to one which derived its
wealth from manufacturing and selling goods.
The steam engine is a very good example of a piece of technology that
made all of this possible. By making large amounts of power conveniently
available to factory units it became possible to organize the manufacture of
goods in a far more efficient and affordable manner. The advent of
technologies such as the steam engine brought about changes that had far
reaching effects upon society.
In addition to these major effects, which have had a profound influence on
the development of mankind, technical innovation has also been of direct
benefit to society in almost all aspects of our daily lives. Three examples are
chosen for illustrative purposes:

1 Advances in communication by means of phone, fax and computer links

make it possible to contact people all over the world and to exchange
information and ideas with them almost instantly.
2 Technology has provided for better medical care through the development
of better drugs, better diagnostic instruments, and better implements for
treatment and for surgical procedures.
3 Technical advances in the home have provided for more comfort in terms
of heating, air conditioning, and protection from environmental extremes,
and convenience in terms of domestic appliances to deal with food storage,
food preparation and cleaning-related tasks. Technology has also provided
entertainment with such things as television, radio, music reproduction and
computer games, although critics of technology advances will argue that
many of these developments bring unwanted side effects.

The Industrial Revolution triggered a demand for power that has caused
atmospheric C 0 2 levels to rise by 25 per cent since its start in the second half
of the eighteenth century (Bridgeman, 1990) and there is concern that this will
have a strong negative impact upon the global climate. The demand for, and
the availability of, personal transport has led to congestion and atmospheric
pollution in cities. Weapons of mass destruction threaten the world’s
population in a way that was never possible as little as sixty years ago.
It is true that technical innovation has created some major challenges for
society to manage, but there can be no argument with the proposal that, on
balance, technology has provided substantial benefits to the developed
10 Best Practice: Process Innovation Management

countries. For example, based on data from North America, average life
expectancy has risen by 60 per cent, infant mortality has been reduced by 95
per cent and the average hours worked each week have fallen by 27 per cent,
and all this since the beginning of the century (US Bureau of Census, 1975,
1996a). At the centre of all of this is technical innovation.

Innovation as a competitive tool

The DTI published these words in 1995:

For the past twenty years the United Kingdom has experienced a severe decline
in its market share of international trade, particularly within the consumer
products sector. Our traditional home and export markets have been under attack
from international competitors who have penetrated our markets with better
products. These have frequently scored on higher specification, customer
appeal, innovative features and value for money.
To regain our international market share, UK companies must match or
improve on the products offered by our competitors. Many company directors
do not appreciate that it is the product design and development process which
largely determines their ability to become competitive, affecting a company’s
cost base and its market performance.
To create wealth and growth, a company commitment to the product is
needed by manufacturing industry. (HMSO, 1995)

Innovation is the key to that product focus and to the provision of new
competitive opportunities.
When designing any system, the engineer is faced with a number of
compromises. The chosen solution will depend upon the target application,
and the designer will seek to bias the choices in a particular direction to meet
the needs of that application as fully as possible. Deciding upon the optimal
compromise is one of the key tasks for the system designer, and the success
of the system will be heavily affected by this. This point is illustrated in Figure
1.4 using the motor engine as an example.
The design environment can be thought of as a flexible enclosure within
which the designer is constrained. In Figure 1.4, some of the key parameters
for consideration in the specification of an engine are shown, such as power,
fuel consumption, size and cost. The model shows those parameters that are
ideally reduced (i.e. fuel consumption, weight, exhaust emissions etc.) as
pushing into the enclosure, and those that should ideally be increased (i.e.
safety, durability, power etc.) as pushing out. The concept of the flexible
enclosure model is that each part is connected to some or all of the others and
that moving one parameter will affect others, some positively, some
negatively.
 Understanding innovation from cradle to grave 11

Driveability
Driiility Ease
Ease of
ofmanufacture
manufacture
Size
Noise Complexity
Recyclability Durability

Lead time Emissions

Conflicting
e needs
needs
Safety Power
Weight Fuel
Fuel consumption
consurnpbon
Cost

Reliability
Reliability Quality
Qualty

Figure 1.4

For example, low fuel consumption is an important feature of a modem

engine and this can be aclueved by specifying a smaller engine. This will have
a positive effect on size and cost, but is likely to adversely affect power,
driveability (covering issues such as the vehicle’s ability to accelerate
smoothly and climb hills easily), and possibly durability since it will have to
work harder to meet the driver’s needs.
An aluminium cylinder block could be specified for less weight and to help
with fuel economy, but it would have an adverse affect on cost and radiated
noise.
Each choice has positive and negative implications and the designer must
consider carefully the needs of the specific application. In a large luxury car,
cost and weight might not be as important as good driveability and low noise,
while in a small economy car, these features might be compromised for size,
cost and fuel consumption benefits.
In this context, innovation can change the relationships between the
parameters involved. Links between parameters can be weakened or broken
completely, and opportunities for new and better compromise may be
created.
There are a number of good examples of this phenomenon at work. For
instance, the introduction of inlet manifolds made from plastic provided a
lighter-weight part, at a reduced cost, and with improved safety since this part
would now deform during a crash (particularly important in transverse engine
installations).The use of the plastic inlet manifold itself became possible only
with the availability of fuel injection, since with earlier carburetted engines
the surface of the manifold had to be hot (to vaporize the fuel), and the low
thermal conductivity of the plastic manifold did not support this need.
Systems to provide variable inlet and exhaust valve timing have helped to
break the conflict between the needs for high power, good economy and low
12 Best Practice: Process Innovation Management

exhaust gas emissions. Focusing on each of these needs individually would

result in a camshaft design that would reduce the achievement of the other
requirement, but the availability of systems that allow the timing of the cams
to be changed while the engine is running allows the engine designer to come
closer to meeting all these needs at one time. Such a system does of course add
to weight, cost and complexity, and would carry additional reliability risks!
Innovations may change the nature of the design environment, but they do not
provide a means of escaping the basic issue of the interrelation between
needs.

Technology as an enabler for innovation

As stated earlier, innovation can start after the generation of a new idea, and
it is easy to believe that the creation of the new idea is the spark that drives
the innovation process. There are many cases where this is true: the 3M ‘Post-
it’ note is an often quoted example. The Pilkington float glass process and the
‘windows’ software interface are other good examples of innovations for
which the invention of an initial concept was the prime trigger for the
development of a commercial success.
When a new product is brought into being, or a new technical development
takes place, we tend to think we are witnessing the birth of a new idea. But
this is not always the case. There are numerous examples of ideas that have
been around for many years but have not been developed, or have found only
limited use because some factor was missing that would allow each idea to be
fully realized. Very often the missing factor is a technical one. As technology
progresses, new doors are opened that were previously closed and ideas that
were once unfeasible may become practicable.
For example, the first helicopter flew in 1936 but Leonard0 da Vinci had
drawn designs of a very similar machine over 400 years before. The creativity
had taken place, but the innovation had to wait for a number of technical
enablers to become available.

Materials development as an ‘enabler’

There is one technical enabler that has been at the heart of innovation for
thousands of years and that is the development of materials. Indeed, this factor
is so important to the progress of humankind that certain periods in our history
are named after the new material that became available at that time.
In the Stone Age tools were developed from naturally occumng stones and
flints. Knives, axes, hammers and scraping tools were produced that allowed
the people of those times to be more effective at hunting, preparing food,
making clothing, building shelters and defending themselves.
 Understanding innovation from cradle to grave 13

The Bronze Age saw the combination of copper and tin to produce a
relatively hard material that could be cast and worked into a variety of tools
and utensils. This material was used for knives, swords, spearheads, shields
and armour, for storage and cooking vessels, and for the manufacture of
sculptures and ornaments.
The Iron Age was initiated by the discovery of the means to process iron ore
into iron, a material that was much harder than bronze, opening the way for
the development of much more durable cutting edges, more effective
weapons, and tools such as saws and farming implements.
We stopped using materials as labels for later periods in history but those
labels could easily be applied. The Steel Age would have started in the mid-
18OOs, when the Bessemer process was invented and the bulk production of
steel became possible. Steel can be produced in a number of forms and
lends itself to a very wide range of applications. Its use for the structure of
ships and buildings, fasteners, springs and cutting tools illustrates both the
broad capability of the material and the industries that its development
fostered.
Aluminium became available in usable quantities early in the twentieth
century, and it rapidly found use in applications where a high strength-to-
weight ratio was paramount, notably in the manufacture of aircraft frames and
bodies.
The Plastic Age would have started around 1920 with the f ist commercial
applications of early plastics. The term plastic covers such a wide variety of
materials that it would be possible to assign various periods in history to the
introduction of each important breakthrough. Plastic materials have found
application in all walks of life. Clothing, furnishing, building, transport,
domestic appliances and packaging are all areas where the application of
plastic materials have had a profound effect, generally replacing a more
traditional material with one that has strength, resilience, self-coiour and is
light in weight.
An important stage in the ‘Plastic Age’ is marked by the advent of plastic
composites. The development of glass strands and carbon, and other fibres, for
inclusion into a plastic matrix has produced materials with extremely high
strength-to-weight performance, coupled with the ability to produce complex
shapes.
Such a list of materials would not be complete without a mention of
ceramics and metal composites. Ceramics and metal composites are providing
designers with tough, wear resistant, lightweight materials that are often
capable of working at very high temperatures, and for which there are no,
more conventional, alternatives.
Each new material development allowed innovations to take place, and
many of those innovations had been ‘ideas in waiting’ for a number of years.
A perfect example of this is the concept of human-powered flight.
14 Best Practice: Process Innovation Management

Human-powered flight had been a dream of humankind for centuries, and

many attempts were made to achieve this goal, costing many lives in the
process. Very limited successes started to occur from the early 1900s, but it
was not until 1977 that the ‘Gossamer Condor’ finally succeeded in this
illusive challenge, and claimed the illusive Kremer Prize. The reason it had to
wait until 1977 before this could be achieved is largely a question of materials
development. The success of the Gossamer Condor was reliant upon the use
of very thin wall aluminium tubing for the frame, and a Mylar skin. The
challenge of human-powered flight centres around power-to-weight ratio, and
the entire aircraft weighed only 32kg even though it had a wing span of
almost 30 m (Reay, 1977). Without access to appropriate materials, the project
would have failed, as so many had proved before.
The internal combustion engine relies for its function upon a number of
different materials, with certain specific properties. Examples of these are
castings of iron and aluminium, steel forgings, steel springs, high-strength
steels for valves and valve seats, and aluminium alloys for the pistons.
Without such materials, the concept could not have been realized.
Before leaving this subject, it is important to note that the pace of materials
development has been accelerating. This characteristic of the nature of
progress has been observed in many fields of technology.

Other enabling technologies

Alongside the ever-present phenomenon of materials development, other
technical developments bloom and create additional opportunities for
innovation of their own. A recent and very powerful example of this is the
advent of microelectronics. This technology has allowed innovation to take
place on an enormous scale, and it has done this in a number of ways.
By replacing known electrical concepts with smaller and more efficient
designs, this technology has made known ideas much more practical. Mobile
phones, for example, were available over fifty years ago (as radio telephones),
so the idea is not new, but their then bulk, weight and performance were
limited by the electrical technology available. The idea of being able to
communicate freely without the restrictions of a physical connection is clearly
a very attractive one, but fifty years ago the limitations were so severe that
their use was constrained to only the most demanding applications, such as
military use. The advent of microelectronics enabled this concept to become
commonplace. The cost, weight, size and performance of this concept ceased
to be inhibitors, the desirability of the concept of the freedom of commutation
was still present (arguably more so than ever before) and thus the innovation
of the mobile phone was assured.
Microelectronics have made the retention of, and ready access to, large
amounts of information possible. The Internet, and similar communications
 Understanding innovation from cradle to grave 15

networks that are now being established within many companies are obvious
manifestations of this.
Perhaps the most important capability that microelectronics has provided is
that of very powerful control technology, a capability that has far-reaching
effects. This is well illustrated by an examination of its effects in the motor
industry. Every modem car has an electronic system controlling its engine.
The amount of fuel delivered, the timing of the spark to ignite that fuel, the
air flow into the engine, the speed of the engine and other important
parameters are monitored or controlled by electronic means. Twenty years ago
this was all under mechanical control and, although the basic control
processes were similar, the accuracy and speed of response were missing.
Microelectronics have enabled the application of better emission control
systems and modern engines are significantly cleaner and more efficient that
the previous mechanically controlled systems.
Electronic controls have enabled known technology to compete for new
applications. The crankcase scavenged two-stroke engine, for example, was
invented in the late 1800s,at just about the same time as the four-strokeengine.
This engine found successful application in many areas, particularly where
power-to-weight ratio is important. But the nature of its combustion system led
to the loss of unburned fuel into the exhaust. The impact of this is that the fuel
economy, exhaust emission and exhaust noise of this engine are inferior to the
four-stroke alternative. These characteristics meant that, in automotive
applications, where these performance features are more important than the
power-to-weight ratio benefits, the two-stroke engine has not been successfully
used, and the four-stroke engine is the norm. In the mid-1980s that balance was
changed by the development of a direct injection system for the two-stroke
engine. This system removed all the negative features of the previous two-
stroke design and maintained much of the beneficial power-to-weight ratio
characteristic. The injection system was basically a mechanical system; its
design could have been envisaged many years earlier, but there would have
been little point in doing so for the system is reliant upon very accurate control
that only electronics could provide. It was a concept awaiting a technical
enabler, in this case a fast control system derived by use of microelectronics.

Process innovation
In a competitive marketplace, three critical parameters in the business
equation are quality, cost and timing, as described below:

Quality is the ability of a product to meet customers’ expectations.

Cost is the fully accounted cost of manufacturing the product. This cost
will, in a competitive market, determine the profit the manufacturer will
make, and thus is fundamental to the success of the business.
16 Best Practice: Process Innovation Management

Improving
Improving
quality
quality

Reduced
Reduced
lead
leadtime
time
*

Reduced
cost

Figure 1.5

Timing is the lead time of the product, or the amount of time taken to get
the new product designed, developed, manufactured and into the market.

All are important and, on first consideration, within a given process, each
potentially works against achieving the others. This is illustrated in Figure
1.5.
For example, a reduction in cost can be achieved by the specification of
cheaper materials, but this might result in substandard performance and thus
a loss of quality. Shorter product lead time can be achieved by reducing the
scope of the design and development process, but again, product quality may
suffer as a result. The quality of a product could potentially be improved by
increasing the amount of time spent in the development stage but clear
impacts of this would be to increase the lead time of the product and also its
cost.
In a competitive market it is not acceptable to sacrifice any one of these
needs, as all are important and the competitive challenge is to meet all three.
The manufacturer who does this better than the competition has the edge.

The traditional engineering development process

The traditional engineering process is centred around the design, procurement
of the parts, build, test and evaluation cycle. Figure 1.6 shows one cycle of
this process.
The concept is designed and parts made or bought. They are assembled,
tested and evaluated. The cycle is repeated a number of times as the
knowledge from one cycle is used to improve the design for the next cycle.
 Understanding innovation from cradle to grave 17

Design ProcUm Build Test Evaluate

The process attempts to iterate to an acceptable design, which is then taken

into production. There may be as many as three iterations, as shown in Figure
1.7.

D P B T E
D P B T E
D P B T E

Figure 1.7 Iteration of the design process

In the motor industry, this was the approach to engineering development

right up to the 1980s, when it became apparent that this process was no longer
adequate. Competition, particularly from the Far East, was delivering a better
product to the marketplace, and more quickly.
On first consideration, the iterative process seems a very logical way to
develop a new product. Slowly and carefully, the new product is tested and
refined until the required result is obtained. However, this approach had a
number of inherent problems that limited its ability to meet the three wants of
quality, cost and timing. Clearly cost and timing are an issue since the process
is a sequential one and each iteration extends the development time and adds
to the cost. The negative effect on product quality is less obvious, since this
iterative process should provide an ideal opportunity for the engineers to
resolve all the design problems and to verify those resolutions.
In reality this did not always happen. Listed below are a number of reasons
why:

The knowledge that there were several iterations of the design took the
pressure off the engineers to get the product right first time and encouraged
experimentation.
Early prototypes were often relatively crude representations of the intended
design and thus what was learned from them was not always relevant.
Pressure on the programme often led to the iterative cycles being
overlapped so that the procurement of the next phase of parts was underway
before the learning had been gleaned from the previous phase, thus negating
the potential benefits of sequential testing.
18 Best Practice: Process Innovation Management

Several phases of prototype, often compounded by interim update levels,

meant that maintaining an accurate understanding of what had been tested
was difficult. A potential result of this is that final level parts might not be
fully tested.
Prototype parts were often not fully representative of production parts,
since the manufacturing methods were often very different and, thus, testing
was not fully valid. For example, a prototype aluminium engine cylinder
head is likely to be sand cast, for cost and timing reasons. However, the
production part will most probably be made in metal tools with sand cores,
since this represents the most effective option for mass production. The
resulting parts will therefore be different dimensionally, in design detail,
and [Link] differences, while apparently subtle, can result in
problems occurring in the mass production part that did not occur in the
prototype part.
The potential result of these shortfalls is that this approach to engineering
development can result in a poor quality product, elevated engineering costs
and extended development time: all of the negatives without any offsetting
benefit. In a competitive market it is clear that such practices will not
endure.

Innovations in the development process

Historically, the motor industry has used this iterative approach to its
engineering programmes. However, over the last ten years, it has been forced
to change its product development practices to keep abreast of fierce
competition.
Process innovation has been required to effect this change, and a number of
key elements have been brought together to enable this innovation to take
place. The most important of these elements are:

The mature delivery of any new technologyfrom the advanced engineering

areas. The effect of this is to ensure that time is not lost in the engineering
process due to unforeseen problems with any new technology. Any new
concept taken into a production programme should have been sufficiently
well developed in the advanced areas so that the only additional work
required would be to ‘tailor’ it to a specific application.
A full understanding of customers’ expectation of the product. This will
require a translation from customers’ perception of what the product should
be capable of achieving - for example ‘good performance’ - to something
that the engineer can design towards, in this case, measures of vehicle
acceleration, vehicle gearing and weight, and the engine torque curve. The
QFD process is one approach that has been established to help achieve this
goal.
 Understanding innovation from cradle to grave 19

A broad approach to the engineering task. This will enable the engineer to
design each component of a system, taking into account the needs and
constraints of interacting systems and components. In the past, changes have
been made to parts of a system without a full appreciation of the impact on
other parts and interrelated systems, with undesirable consequences.
Systems engineering provides a disciplined approach, which enforces an
integrated view of all affected parts. A cascade process passes engineering
requirements down from system to subsystem and back again to ensure that
all interrelationships are correctly addressed.
A method of retaining and reusing the knowledge and experience of
previous programmes. This prevents the repetition of known problems, and
to enable the engineering programme to proceed in the most efficient
way.
Staff movement, a particular characteristic of large firms, means that the
personal experience element is often lost from one project to the next.
Without a means to retain the knowledge, the new engineer will have to
relearn what his or her predecessor had already discovered and the
company pays repeatedly for the same information.
One part of the systems engineering discipline is to provide a means of
formally documenting this knowledge such that it is naturally included in
the next project. Design specifications, past problem resolution analyses,
FMEAs, collated test data are all means by which the corporate knowledge
can be retained and reused.
A rigorous approach to the acquisition of knowledge. This is an important
part of the route to product quality and process efficiency. The correct use
of designed experimentation will ensure that the function of a component or
system is more fully understood, and this will enable the engineer to
develop more efficient and robust designs. This approach will also provide
data on the component or systems performance in a way that will facilitate
its capture in the corporate knowledge base, and thus make it available for
future reference.
The people involved in the design team. This is perhaps the most important
part of the process innovation, and what is required of these people, in a
nutshell, is that they work more effectively. A great deal has been written
on this subject and it will not be repeated here, but the essence of this
element is to develop a project team that shares a common understanding
of what is to be achieved and how; one that is mutually supportive, that
communicates very effectively, and is highly motivated towards success.
The full integration of component and subsystem suppliers into the
development team and process. This allows the focused resources of an
expert group to be brought to bear on a project. It forges good commercial
links between the supplier and the customer, and it is another way of
making the most effective use of existing knowledge.
20 Best Practice: Process Innovation Management

The growing availability of computers to support the engineering process.

This last issue is the most important one. Computing power is the newly
available ‘enabler’ that allows this innovation in the engineering develop-
ment process to take place.

All the items in this list except the last one have been available to the planners,
managers and executors of engineering programmes for many years. Without
the ‘enabler’ of widely available powerful computers, such a process
innovation could not happen. This issue is so important that it warrants special
examination.

The role of computers in engineering process innovation

There are four aspects to the use of computers in engineering that have
enabled innovation in the engineering process to take place:

1 Computer-aided design (CAD).

2 Computer-aided manufacturing (CAM).
3 Computer-aided engineering (CAE).
4 Information management.

Computer-aided design
Computers are being used by designers to produce drawings of components
and assemblies. This function has replaced the drawing board and has been a
developing feature of the engineering process for well over a decade. It is the
most mature of the computer-aided functions and is known as computer-aided
design.
Computer-aided design reduces the time taken to produce a design by
allowing the designer to copy often used features from a library, allowing easy
changes to a design and providing automatic scaling and measurement. It also
encourages the reuse of existing designs, resulting in cost and quality
benefits.
A feature of CAD is that there is a significant overhead associated with
establishing the system. Individuals have to be trained, component libraries
established and the approach has to become accepted and understood as a
normal part of the business. In fact, for a number of years, CAD was regarded
as a slower means of producing a simple drawing when compared to a
draughtsperson on a drawing board.

Computer-aided manufacturing
The second area of computer influence is that of computer-aided manufactur-
ing. Again, this technology has been available for many years, having
 Understanding innovation from cradle to grave 21

developed from earlier numerically controlled machines, and is one that has
been gaining in sophistication and maturity as the power, speed and cost of
computers have improved.
Computer-aided manufacturing works by directing flexible machine tools
to follow specified tool paths using computer data files. It reduces the lead
times and high investment costs associated with designing and building
dedicated machine tools for specific actions, under hardware control, which is
the traditional approach to mass production manufacturing.

Computer-aided engineering
The third way in which computers have had a major impact on the engineering
process is that of computer-aided engineering. This is the most important
enabler in the reduction of engineering development programmes and by far
the least mature.
With CAE, computer models are used to design and provide an
understanding of the performance of the product in question, and this
information is used instead of physical testing.
The concept is an extremely attractive one, and it is central to the process
innovation that replaces the traditional iterative approach to engineering
design. Instead of refining the design physically, the iterations are done within
a computer model.
The impact of this can be dramatic. One physical iteration of a design can
involve a design, procure, build and test cycle of several months, depending
upon the complexity of the subject component or system, whereas the
computer equivalent can be completed in days. However, since this is the least
mature of the computer-aided processes, many aspects of it still require a lot
of development. For example, models that attempt to predict complex
dynamic activities can, currently, be relied upon only to give rough,
directional, indications of a system’s performance. A good example here
would be the modelling of the combustion process in an internal combustion
engine, and the prediction of the characteristics of the resultant exhaust gases.
There is, nevertheless, a great deal of activity in this area and significant
improvements are being made.
The benefits of CAE are well illustrated by consideration of the case of
vehicle crash testing. Legislation requires vehicle manufacturers to subject
new vehicles to a number of different impact tests. The crashed vehicle is then
inspected to establish if it has met various criteria for deformation that relate
to the safety of vehicle occupants. If the criteria are not met, the vehicle
cannot be released for sale.
The practical approach to this is to build and crash a prototype vehicle, to
make any design modifications that may be indicated by the test, and then to
22 Best Practice: Process Innovation Management

build and crash another prototype. This process being repeated until a
successful result is achieved.
The timing and costs associated with a typical crash test are as follows:

Prototype vehicle build time three months

Prototype vehicle cost $300,000
Crash preparation time one to two weeks
Crash test cost $25,000

In comparison, the timing and costs associated with a computer simulation

of the same crash are as follows:

Computer model preparation time two to three months

Computer model cost $60,000
Crash simulation cost $2,500

From the perspective of the time taken for the first test, there is little to
choose between the practical crash and the computer-simulated alternative; it
takes three months to build a vehicle and about the same to build the computer
model. But that is the only area in which the two approaches are in any way
similar.
In terms of cost, when a single test is considered there is a fivefold benefit
in favour of the computer simulation, and when repeat tests are required to
develop a design, the computer wins overwhelmingly. Each practical test costs
$325,000 (the cost of the vehicle plus the cost of the test), whereas, the costs
of a repeated computer simulation are only those associated with any
modifications to the model (one to two days, depending on the level of design
change) plus the computer costs of the crash calculation, a total of $3,000.
Thus, when repeat tests are considered, the computer-based approach beats
the practical test by two orders of magnitude. In addition, several development
test iterations can be conducted in just a few days.
Other benefits that the computer approach brings to this type of testing are
that the crash can be examined from various viewpoints, it can be stopped at
any point, it can be viewed in slow motion, and the performance of individual
parts of the structure and the associated stresses can be analysed in detail. This
is very valuable in the development process, since such information greatly
assists the engineers when inadequacies in crash performance are revealed and
design improvements are required.
The only area in which the practical test is quicker is the crash itself, which
takes a few milliseconds to complete compared with several hours with
current computers! This is a small price to pay for a substantial increase in
overall efficiency, and even this insignificant penalty is diminishing as
computer power increases.
 Understanding innovation from cradle to grave 23

Information management

The last area in which computers are offering the chance for change is in the
storage, retrieval and dissemination of information within an organization.
This is a relatively new area of opportunity, and one that is currently
undergoing rapid expansion. Many large organizations are developing their
own internal computer networks that allow the rapid and easy interchange of
data, and this capability supports one of the stated facilitators of process
innovation, that of capturing knowledge and having it available for future
programmes.
Such an approach to information storage has many advantages:

Lessons learned from one programme can be passed on to the next.

Specifications and procedures can be centrally maintained so that all
employees are working to the same up-to-date information.
Existing designs can often be reused.
It can operate as a conduit through which team members can pass and share
data and project information; this is especially important when the team is
geographically dispersed.

These four elements, CAD, CAM, CAE and integrated information manage-
ment, individually provide for substantial benefits in terms of enabling
efficient design, but the greatest potential is to be realized by combining the
elements into one entity, as illustrated in Figure 1.8. The data used in the
CAD, CAM and CAE files all set out to define the nature of the component
or assembly to which they relate. They define its shape, the materials used and
how it relates to its surroundings. The most efficient solution is to have one,
common, data source and to use this for all the purposes of CAD, CAM and
CAE.
Such an apparently obvious solution is not an easy one to achieve, largely
because each methodology was derived from different roots and has different
purposes.
Computer-aided design for example, in its f i s t embodiment, simply
provided an electronic form of the hand-drawn equivalent, and such drawings
are often poor representations of a part, especially where complex surfaces are
concerned.A good illustration of this is a complex casting. Without providing
a large number of sections, much of the surface definition detail is missing and
it is left to the skill and experience of the pattern-maker to fill in this missing
detail.
For CAM systems to work, every movement of the machine tool must be
strictly controlled, and thus the computer file must have a full description of
the shape of the part. A simple CAD representation of a part does not provide
this level of detail and thus cannot meet the needs of CAM.
24 Best Practice: Process Innovation Management

Customer Legal
requirements requirements

Cost CAD Competitor

information Dimensions, benchmarking
tolerances, and
materials

Warranty Design
data guides
Cost Integrated Problem
information information resolutions
management
CAM CAE
Tool paths, Part and system
clearances and performance
production planning models

Test
FMEAs Material data
specifications

Figure 1.8

Computer-aided manufacturing information, on the other hand, would not

be toleranced in the way required for a CAD drawing. Thus a representation
of the part that serves the purposes of both CAD and CAM must be a more
comprehensive set of data than is required for either purpose individually.
There is a further step in definition required with the move to CAE.
Computer-aided engineering is intended to replace physical testing with
assessments carried out using mathematical models of the part or system.
?)lpically these models are established to predict stress levels and deflections
within a system, heat flow, chemical processes, sound radiation, vibration and
kinematics. To meet this need, the models must have enough physical
information about the part or system to describe its nature, and they must also
contain information about the external influences acting upon the part or
system. This requires additional information to that needed for CAD and
CAM purposes.
CAD sets out to aid the process of defining the physical nature of a part or
system, CAM is in place to facilitate its manufacture and CAE attempts to
provide information about the performance of that part or system.
The need for complete data, and the partially overlapping demands of the
different computer-aided methodologies, explains why the fourth aspect of
this approach to engineering, that of information management, is so important.
A common, compatible source of information, and an ability to exchange data
and predictions between the various computer-based approaches will
 Understanding innovationfrom cradle to grave 25

substantially affect the efficiency of the design, development and manufactur-

ing process.
With each step down the CAD-CAM-CAE path, more information is
required and the processing requirements on that data become more
demanding. CAE is the most challenging of the methodologies and, as stated
earlier, the one that requires the most development.
Computer-aided engineering offers the potential to replace physical tests
with predicted data, but for this to happen, a full understanding of the nature
of the system under examination has to be available. Very often this is not the
case. Apparently simple systems become quite complex when they are studied
for the purposes of predicting their responses. Complex systems may require
many years of study and experimentation before an accurate model of their
performance can be developed. Even when this has happened, these models
are likely to be reliable only when they are used within well-known and
understood boundaries. If they are used to predict the responses of a system
that is away from the usual, the accuracy of their predictions must be
questioned.
If CAE can be developed to a mature level, then the traditional iterative
approach to product development can be reduced to a process involving fewer
prototype series. Ultimately, with fully mature CAE tools, it would in theory
be possible to go directly into production without physical prototypes, since
all the development would have taken place by computer simulation. It is
unlikely, however, that this will ever happen since even small changes bring
a potential for unknown and unpredictable responses and, therefore, some
preproduction prove-out phase would be required.
A rationalized product development programme using computer-aided
design techniques may well be as shown in Figure 1.9.

Wign &evaluate using CAE P W W Build confirmatoly tests

The use of computer-aided design processes brings additional benefits.

Photo quality images of a part or assembly can be produced easily, thus
helping the design process, and allowing subjectivejudgements on appearance
to be made. Stereo lithography can be used to automatically generate physical
replicas of parts and assemblies, which again can assist with the design and
development process.
This latter process provides a major efficiency gain and is time saving,
since physical models of a part can be made available directly from the
computer in a matter of minutes or hours. This effectively bypasses the
26 Best Practice: Process Innovation Management

procurement and manufacturing processes, and all the bureaucratic delay that
usually surrounds them.

Could process innovations stifle product innovation?

Process innovation can provide a route to producing better products, more
quicMy and at lower cost. However, it could have the undesirable side effect
of stifling product innovation.
The rationale for this proposal is that shorter development lead times
encourage more conservative design approaches; it is easier to deliver familiar
technology than it is to develop new technology. There is a lot less learning
to do, and fewer unexpected issues will appear to thwart the development
process.
The issue here is how far existing knowledge and experience is to be
extrapolated. Working within known boundaries of design provides for the
lowest level of risk in the development of the new product. As the designer
moves away from the familiar into the unfamiliar so the risk increases, and it
does so rapidly.
Increasing risk implies lower product quality or extended development time
and cost, both potentially incurred in order to resolve the new issues that are
likely to arise.
This issue is reinforced when product is being developed using aggressive
development plans such as that shown in Figure 1.9, which relies upon the use
of computer simulation and modelling as a basis for the engineering.
Computer simulations rapidly become unreliable as one moves away from
familiar ground and, as the process relies upon accurate predictions of part and
system performance, and since the physical iteration of prototypes is not
anticipated, even more conservatism is encouraged.
This trend to conservatism is reinforced by three other factors:

the ever-increasing expectation by customers for quality and reliability

0 the fact that any newly introduced product will have an initially higher cost
than when it is mature
0 fear of litigation, especially in North America.

Each point is expanded below.

Increasing expectations for qualify and reliability

From a quality and reliability perspective, any change introduces the
possibility for a new problem to get into production. The bigger the change
and the further away from known technology, the bigger the attendant risk to
quality and reliability.
 Understanding innovation from cradle to grave 27

3.0

25
2.5
B
Magnitude of problem

2.0
A C
1 .5

1 .0
D
0.5

0.0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47
Production month

This is illustrated by Figure 1.10, which shows warranty data relating to a

subsystem of a commercial product. The ‘x’ axis of Figure 1.10 shows the
month of production. The ‘y’ axis shows a measure of warranty cost
associated with the particular subsystem under consideration. Clearly the
objective is to keep this as low as possible, as this number relates to potential
customer dissatisfaction and a cost to the company in terms of warranty
repairs.
A number of important issues are illustrated by Figure 1.10. Model changes
with attendant design revisions tend to be introduced on an annual basis and
these twelve-monthly points are emphasized by arrows ‘A’, ‘B’, and ‘C’ in the
figure.
Figure 1.10 shows that there is a typical annual characteristic of increasing
warranty costs in the first few months of the new model year, with a declining
trend towards the middle and end of the twelve-month period.
Prior to point ‘A’, for example, the warranty cost was typically 0.50 units.
Point ‘A’ saw the introduction of a major change to the subsystem, which was
driven by changing legal requirements on the product. This change increased
the subsystem complexity and introduced new [Link] effects of this
can be seen in the chart; warranty costs increased threefold, and were only
starting to be brought back under control towards the end of the following
twelve-month period when they were back to twice the starting value.
Point ‘B’ indicates the start of the next model year and this again shows a
dramatic increase in warranty costs as a result of the associated changes to the
28 Best Practice: Process Innovation Management

subsystem. In the period 27 to 35 months, the warranty costs were again

brought back under control, as the engineers developed a full understanding of
the issues and were able to introduce product revisions progressively to
resolve the problems.
Two years after the introduction of the new technology, the associated
service problems were resolved and warranty costs for this subsystem had
returned to the background levels that were present before. However, the net
effect was a significant direct cost to the company, and the potential for a
negative impact on customer satisfaction.
The beginning of the fourth year shows a sharp rise and then fall in warrant
cost in the first three months and then a steep rise at point ‘D’. Point ‘D’ can
be identified as the point in which a specific design change was introduced.
This design change was initiated to provide a system cost saving by the
application of a more design-effective approach. It used technology for which
there was previous production experience and yet in this application it was
found to have unexpected problems not detected in the development
programme. Although these data do not show the subsequent effects, this
concern was not resolved for a further two months.
The issue illustrated here is that it is not possible to be completely certain
that all problems have been discovered, addressed and eliminated from a
product prior to its release into production, and any revision brings the
attendant risk of problems in service. The bigger the change, and the further
this change takes the design away from familiar territory, the greater the risk.
This issue is well understood by industry and the natural response is to take
a conservative approach to any change.
Until the 1980s, much development work was unwittingly conducted by
customers; products failed in service and industry learned from these failures.
This knowledge was used in the next design to improve the system
performance.
The development process was far from exhaustive, as competitive pressure
was not intense, and customer expectation was far below today’s levels. An
increase in world trade and competitivenesshas led to an increase in customer
awareness and expectation, making such an approach unacceptable.
The manufacturer has two choices: either to develop a much more rigorous
approach to the development process, or to be more conservative in the level
of product change planned. Indeed, a combination of the two may be the best
approach.

Higher costs during the introductory phase

Very often the initial cost of a new technology starts high and reduces as the
product matures. A number of factors are at work to produce this effect:
 Understanding innovation from cradle to grave 29

The design and development process is likely to be longer since

additional time will be committed to training the design engineers in new
techniques and skills. New and unfamiliar issues will arise that will take
more time to solve than more familiar problems.
If new manufacturing processes are involved, an initially high, ‘safe’,
cost will be placed on this part of the process to ensure that all
contingencies are covered. As the manufacturing process becomes famil-
iar, confidence in the ability of the manufacturing activity to make the
product will increase and ways of saving cost will be found.
On this note, it is interesting and illustrative to consider the background
of the automotive camshaft. This part has lobes which are neither round
nor symmetrical, and yet have to be ground to a fine surface finish and
to a high degee of accuracy. It is contended that this part is only
feasible for mass production today because the motor industry has
‘grown up with this part’; furthermore, it is contended that if there was
no such part in mass production today, it would not be possible to
introduce it, since the initial cost of manufacturing it would be totally
prohibitive. The knowledge, confidence and experience in the manu-
facture of this part were obtained in a much more benign period of
industrial development.
Cost savings will be achieved eventually through the development of
more efficient designs and the integration of other functions, but these
are not initially available.
Production volumes are likely to be low initially, as the new technology
is introduced progressively with growing acceptance.

The effect of these factors is to inhibit change, since the initial high cost
of the new idea may be unacceptable and the forecast of future cost
reductions difficult to prove.

The fear of litigation

The increasing fear of litigation, especially in North America, is leading
manufacturers to be more cautious about change, especially in areas where
safety is potentially involved (Sontag, 1988).
Any change to a product that is subsequently involved in a safety-related
incident places the manufacturer at risk, since it can always be claimed that
the new design was deficient in some way, thus leading to the incident.
The manufacturer has no history of reliability to offer by way of
defence, as the change has potentially negated all the product’s historical
experience. The manufacturer is therefore more at risk than if there had
been a policy of limited or no change.
30 Best Practice: Process Innovation Management

Conclusions
In summary, innovation has been the most important shaping force in the
history of humankind. This shaping force has been fuelled and driven by the
creativity of the human mind and, in general, constrained by technical blocks.
These technical blocks are freed when appropriate enablers are discovered,
thus allowing the innovation to take place.
A constant enabler has been that of materials. Materials development is as
old as mankind and is still key to our progress. However, history has seen the
appearance of other, supporting, enablers of which the current example, that
of microelectronics, is without doubt the most significant by far.
Innovations open new windows of opportunity and process innovations are
no exception. Currently, in the manufacturing industry, process innovation is
being applied to allow the potentially conflicting goals of quality, cost and
timing to be achieved concurrently. Indeed, it can be argued that, with the
correct approach to development, these three important goals become
mutually supporting; an effective design and development process providing
a good design with high confidence in a short span and hence at lower cost.
An innovation (a novel approach to the design and development process) has
provided a new operation environment that results in a new relationship
between features that have historically been seen to be in conflict.
However, each new operational environment brings its own new constraints
and this analysis contends that the new environment created by the use of the
computer to improve the engineering environment, reinforced by increasing
customer expectations and concerns about introduction cost and litigation,
will result in a new period of conservatism. This will stifle product innovation,
the very phenomenon that brought these changes into play in the first
place.

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