How innovative is your company? What proportion of your sales do you generate with products that are no more than three years old? Please think beyond product variants. What is really new? Which products offer their users completely new benefits? With which products do you open up completely new fields of application or markets?
When you are asked about innovations, you probably think first of product innovation. But in addition to product innovations, process innovations are also possible. Do you perceive possibilities to create the same product with completely different processes or the same service in a completely different way?
Example 1: A 2nd-tier automotive supplier manufactures belt pulleys. The manufacturing process involves sawing tube sections and then turning the sections in a second operation. With the expansion of infrastructure, tubes became expensive in the 2000s. As a result, it was now worthwhile pressing the pulleys from sheet metal sections in a single operation.
Example 2: New manufacturing processes, such as 3D printing, can also be interesting alternatives to previous processes, sometimes even allowing more design options. Castings, which require extensive mold making, and assembled components, which require a lot of labour, are particularly suitable for this.
Take a systematic and open-minded look at the matrix of your products and suitable processes for their manufacture!
In doing so, also look closely for opportunities to make sudden changes and improvements to your products that are made possible by technologies. Disruptive innovations do not result from the further development of existing solutions. Such disruptive innovations often build on completely different technologies, materials and processes than their predecessor products, offering entirely new functionalities and energy efficiencies in completely different dimensions. On top of that, much smaller sizes often enable completely new applications of the products in other submarkets.
Example 1: Consider the disruptive evolution of recorded music. The good old vinyl record was replaced by an electromagnetic recording on tape, which was then replaced by a CD; the CD was eventually replaced by a purely software-based solution, the MP3, which was eventually replaced by streaming services.
Example 2: A further development of the flame does not lead to an incandescent lamp, a further development of the incandescent lamp does not lead to a fluorescent lamp, and a further development of a fluorescent lamp does not lead to the LED. The innovations are each based on their own technologies, which require their own capabilities.
Which technology will enable the next stage in the development of light source?
Because of the completely new approaches, it is hard to imagine what the next step in development might be. And yet, this next step will happen again. Free and creative thinking without everyday business life, networking with people from completely different fields and markets support innovations. Enable employees in your company to create suitable conditions for product innovation. Encourage your employees to look beyond the status quo.
Process innovation can be a new sales channel for the company, such as a sales channel through a competitor or an online sales channel.
Process innovations can also be carried out by changing the business model. It is a good idea to simply look at one’s business model with a little distance and ask oneself whether it always has to remain as it is currently practiced. Maybe a manufacturer can additionally run a trading business with relevant articles. Perhaps a trading business can produce certain items itself to reduce its dependence on suppliers or to bring the contribution margin in-house.
Finally, system innovations are also a possibility.