Innovation: A Key to Competitiveness
Ed Miller, President, CIMdata

Over the past several years, the primary focus of initiatives to increase competitiveness and success in manufacturing companies has evolved to reflect both the unique challenges of the time, and the then current availability of alternative solutions. Past initiatives have focused heavily on reduced time-to-market, reduced cost, and increased quality as primary factors for market success. For years, both economic conditions the competitive environment enabled initiatives focused on these initiatives to work effectively. Manufacturers that addressed one or two of these factors effectively could be successful, because the competition was well known and understood and a company with decent operations and reasonable products could be moderately successful.

But intense global competition and the economic challenges of the last few years have changed the situation significantly. Today, manufacturers who previously dominated their respective markets have aggressive contenders that may be totally new to their markets. In many cases, once-reliable revenue streams from established product lines have slowed to a trickle.

Most manufacturers have begun to realize that the best way to survive is to innovate: to develop unique products and processes that stand apart from others. Product cost, quality, and time-to-market are still critical market factors. But initiatives aiming solely at these issues are no longer enough to gain substantial competitive advantage. In a recent CEO survey conducted by IBM, the surveyed executives identified that a stream of new and innovative products was essential for their companies to gain revenue and market share.

Achieving innovation in a manufacturing organization is not necessarily easy. The innovation challenge involves creating products that can be clearly differentiated from others and are, at the same time, affordable, reliable, and timely to market. Innovation can apply to, for example, the design of the product with respect to size or performance, as well as manufacturing processes and other phases of the product lifecycle--as long as these differences provide clear customer value and meet a definite market need. Companies need to be aware of market directions, often anticipating trends before they emerge and integrating the “voice of the customer” into product development. But innovation can also be applied very successfully to the processes that are used by an organization to design, produce, distribute, or support the product. These process-oriented innovations make our companies more effective at what they do, and enable them to transform the ways that they work to achieve success in highly competitive markets.

To facilitate innovation, teamwork is vital to exchanging ideas, bringing new concepts forward, and getting people with different perspectives into the product-development decision-making process. By exchanging ideas in real time, people come up with concepts that might not otherwise have surfaced. Some of the most successful companies bring together people from across the enterprise, from diverse groups such as design, manufacturing, marketing, procurement, customer service, and field support as well as suppliers and customers. Collaboration across the extended enterprise is essential in achieving product and process innovation and is one of the major factors determining which companies maintain a strong market position.

One big obstacle to getting everyone to work together is geographic dispersal of the groups and individuals. Design centers, test labs, and production facilities are often located in widely separated sites, often around the world. The situation is compounded by the increasing trend to delegate design responsibility to supplier and partner companies in the product’s value chain. Of course the outsourcing trends of the past few years has put even more pressure on companies to be able to accommodate and work effectively through widely distributed organizations with facilities located around the world.

Enabling the distributed team to work together is no simple task. Face-to-face meetings are difficult to coordinate, and travel is expensive and time-consuming. Sending documents via mail or fax is usually inadequate, as are telephone conversations. Video conferencing can be helpful, but certainly isn’t any panacea. And email doesn’t work well because the attachment capability is too limited to handle large files of models, drawings, and documents.

Companies would have to be satisfied with these conventional forms of communication were it not for product lifecycle management (PLM): a strategic business approach that supports the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise from concept to end of life-–integrating people, processes, business systems, and information.

Collaborative technologies, which are the foundation of PLM, have tremendous potential to facilitate teamwork among individuals at distributed facilities, enabling them to work together regardless of time zone and geographic location. Effectively implemented PLM solutions effectively re-create the environment of the small company by allowing people in separate sites to work together as if they were located side-by-side.

By facilitating product and process innovation, PLM collaboration goes beyond the bottom-line savings of efficiency-based solutions and focuses as well on top-line revenue growth. As a result, executive-level decision-makers are increasingly recognizing that PLM is critical to business success because it leverages a company’s most important asset: its intellectual capital and knowledge of its products and markets. By enabling businesses to effectively bring innovative and profitable products to market, PLM and the collaborative capabilities it provides have become essential tools in transforming companies into the engines of innovation that are necessary to compete in the today’s global markets.

About the Author:

Ed Miller is president of CIMdata, a leading independent worldwide firm providing consulting and research in Product Lifecycle Management (PLM) solutions, best practices, and technologies that help companies develop products in the evolving global business environment. Contact him at e.miller@CIMdata.com, or (+1) 734-668-9922, or visit the CIMdata Website at www.CIMdata.com.