04 Structured Innovation Process Flashcards
Innovation (Definition)
An invention with market success. Innovations can be distinguished into product innovations, process innovations and market innovations.
Innovation involves – from external or internal sight – new ideas and inventions as well as their economically successful implementation.
o Degree of novelty distinguishes Basic, Key and Improvement innovations
o Fundamental attribute of an innovation: Exploit of the underlying idea
Areas of Innovation
- Product Innovation
- Process Innovation
- Business Model Innovation
Further Innovation Areas: financial and marketing innovations
Product Innovation
o Completely new to the market or new basic functions
o New, expanded or adjusted functionalities or properties
Process Innovation
o Intra-company changes in the factor combination process for goods and services
o Focus: New technologies for production
Business Model Innovation
o Creation of new markets
o New additions to existing solutions in old markets
o New or advanced business models
o Focus: Products, services and procedures
Innovation Process (Definition)
The cross-functional road from the idea to the product. For product innovations also called Product Emergence Process (PEP).
-> Covers all activités from the idea to the market launch
Phases of the Innovation Process
Innovation Planning
Identify market and customer requirements (“Market Pull”)
Compare the requirements with the technological possibilities for implementation (“Technology Push”)
Idea evaluation
Development of ideas
Stage-Gate Process
Describes a conceptual and operative procedure for new product ideas from the initial product idea to the introduction of a product.
- Typically consists of 3-7 phases
- Project is broken down into defined subsets of cross-departmental parallel activities
Each section entering through a gate
Degree of concretization increases from section to section
Gates serve to monitor success
Innovation Strategy
Part of the business strategy, providing a guideline for innovation processes.
-Innovation Strategy is directly dependent on the higher-level corporate strategy and serves as the strategic alignment point of the innovation processes. -> Must be aligned with other company strategies (e.g. marketing or technology strategy)
Frontloading the innovation process
o Frontloading: Increased efforts in the early stages of the innovation processes.
o More capacities are allocated to the activities in the early phases of the innovation process -> Well-founded approach in these phases sets the course for an efficient handling of the innovation project.
o New innovation project is compared with the existing product range and the technologies previously used in the company.
Steps of an innovation strategy
o Step 1: Analysis of the strategic starting position (with regard to internal and external company conditions)
o Step 2: Strategic target position is determined (taking into account central factors such as costs, quality and time)
o Step 3: Definition of the strategic means to achieve the set innovation goals
Aspects of an innovation strategy
o Results-orientated aspects: Comprise the delimination of the relevant innovation area and the innovation objects as well as basic statements on innovation types and timing strategy to be applied.
o Potential-related aspects: Identify and define core competences and establish and maintain a knowledge and technology pool.
o Process-related aspects: Identify relevant sources of information or purchase technologies or knowledge via the market.
Incremental Innovation
Innovations that are based on existing technologies and address existing markets/customers
Degree of technological novelties: Low
Degree of newness to market: Low
Technological leap
Innovations in form of new products or technologies for existing markets/customers
Degree of technological novelties: High
Degree of newness to market: Low
Disruptive Innovation
Innovations that create new markets and address new customers, but usually use or recombine existing technologies
Degree of technological novelties: Low
Degree of newness to market: High
Breakthrough Innovation
Innovations that both possess a high degree of technological novelty and address new markets/customers
Degree of technological novelties: High
Degree of newness to market: High
Benefits of Innovation Leadership
Faster market entry at higher cash flow
Definition of standards resp. of “Dominant Design”
Creation of market entry barriers
Benefits of the “Early Follower”
Reduced risk and development costs
Superior marketing concepts
Cost savings due to economies of scale
Already established market with a known “dominant design”
Push Strategy (technology push)
The innovation comes from the R&D area. The result is a technological development that is realized and introduced to the market on the basis of the company’s internal technology and performance potential, independent of customer needs identified on the market.
Result: Often radical innovations with high earnings potential Risk of not finding a market but potential to create new markets
Realization associated with high expenditure of time and considerable risk
Pull Strategy (market pull)
The drive comes from the market (it demands an innovation). Needs are satisfied by a new product. R&D activities are induced by customer demand.
Prerequisite: Identification of latently unsatisfied customer needs, which takes place within the framework of market research with suitable instruments (e.g. customer surveys)
Usually lead to incremental innovations in existing programs
Associated with rapid implementation and relatively low risk
Action Scheme of innovation planning
- Gathering Information and ideas
- Project proposals
- Evaluation and selection of projects
- Specifying the range of products
- Project planning
Deterministic/Classic Innovation Process
Characterized above all by a linear, sequential and plan-oriented process
Empirical/Agile Innovation Process
Innovative and characterized by many short learning and feedback cycles in the sense of a “trial and error”
o Used above all in software development
o Agile innovation processes can be described on three levels
Principal level: Forms the common basis for all agile procedures
* Core is about a strong customer focus and simultaneous active involvement of the customer in the innovation process, a short-cycle generation of physical prototypes for the validation of partial results, a permanent response to changing requirements and framework conditions as well as a culture of trusting cooperation
Scrum Process: One possible process model. Sprints form the core of the scrum process.
* Precisely defined development runs, which must be completed with the generation of a new functionality.
Product Architecture (Definition)
The product architecture is the sum of product structure, function structure and their transformation relationship.
- Aim: Map complex products and their structure
Elements of the Product Architecture
- Functional Structure
- Product Structure
- Linking of the functional structure and the product structure via so-called transformation relationships These answer the questions, how and with which elements of the product structure the individual functions are fulfilled
-> Determines the product architecture and thus the basic shape of a product
Functional Structure
Describes the breakdown of the required function into subfunctions
Required function results from the concrete requirements that must be fulfilled by the product
Solution-neutral formulation of functions is an essential characteristic of the function structure
Product Structure
Describes the physical composition of the product consisting of assemblies and subordinate components
Key Properties of a generic function structure
Generic: Composition of the overall function of a product using generic sub-functions
Customer oriented: Holistic description of a product from the customer’s point of view
Cross-portfolio: The function structure supports the cross-product series description of functions
Stability over time: Continuous fulfilment of requirements over several product generations.
Key Impacts of a generic function structure
Communality: Function-based consideration of communalities between products within similar functions
Variant diversity: Definition of necessary module variants by assigning function variants to modules
Market analysis: Defines possible need for action from a market point of view if functions are not implemented by modules
Documentation: Structuring the documentation and thus ensuring improved transparency
Key properties of a generic product structure
Generic: The generic product structure is a set of “containers” being specified when generating/deviating a product from it
Functionally oriented: Ensures the fulfillment of a product’s functionality by holistically capturing variety with distinct modules
Cross-market/variant validity: Facilitates interchangeability of modules and/or components across markets due to identical product description
Stability over time: Enables reuse of modules and/or components across generations due to identical product description
Key impacts of a generic product structure
Planning and configuration of variants: The configuration of projector variants will be based on the generic product structure by specification and combination of module variants
Development activities: Development activities will strictly follow the generic product structure in terms of project setups or module development projects
Organizational Implementation: The structure of the development organization will strictly follow the generic product structure to ensure the platform’s sustainability
Documentation: The documentation of development work will follow the generic product structure and thus enhances transparency.
Modular Product Platforms
Modular product platforms share the communality-thinking with platform structures and still allow more flexibility
o Consist of the combination of those components, interfaces and functions that can be standardized over an entire product family, i.e. that are stable over time
o Consist of building blocks (modules), which can be assemblies or components. By defining standardized interfaces, a variety of combinability is possible, so that a multitude of variants can be efficiently generated
Strategic Road Mapping
Introduction of a modular system should answer questions regarding the production technology of the modules to be produced and the location via strategic road mapping.
o Coordination between product and production roadmaps Aim is to produce core modules using core processes as far as possible
-> Changeover to the core modules is planned over time and the ramp-up should be as steep as possible in order to be able to comprehensively leverage the economies of scale in a timely manner
Shell Model
Methodical support for the visualization of module variants
o Helps to define standardized and flexible parts of the product & the manufacturing process
o Components of the generic product architecture are placed into the shell model based on their flexibility
-> Evaluation of the flexibility of individual components and their subsequent integration into the shell model is based on company-specific evaluation criteria
-> Possible criteria: development effort, manufacturing costs, stability of the technical solution over time, frequency of use
Elements of the shell model
Core: “Stable” module variants
* Determined in the analysis that they have a high internal effect, which should not be changed by constructive variants
* Variation should be avoided throughout the entire construction kit and throughout the lifecycle
* Constituent Features: Features that describe modules in the core
* Normally standard modules that are manufactured in large quantities and are only rarely subject to change
Middle Shell: “Modifiable” modules
* Average modification effort
* Can realize market-side requirements with limited additional costs by means of clever variation
* Normally modules with higher variance and therefore a lower number of units per derived variant
Outer Shell: “Easily Changeable” modules
* Often offer a high differentiation potential when generating product variants
* Make it possible to realize the variety demanded by the market at low cost
* Normally modules that are manufactured in smaller quantities per variant Subject to frequent changes
Modular function deployment (MFD)
Descirbes a method for the systematic development of modular product structures
The MFD…
Is a structured method to define the optimal modular product design
Supports the entire product development process
Consists of five steps
Should be used by interdisciplinary teams
Steps of the MFD
- Define Customer requirements -> Information derived describes the product in customer’s language
- Select Technical solutions -> Requirements are broken down into functions and subfunctions, most suitable solution is chosen
- Generate concepts -> e.g. with help of a design structure matrix (functions are mirrored on components
- Evaluate concepts -> Evaluation on basis of key features with regard to development effort, mountability and customer benefit
- Improve modules -> The steps can be performed iteratively, the starting point can vary
Module Profiles
o Individual modules are documented in the form of module profiles for sustainable anchoring
o Contain all information relevant to the product architecture design of the respective module
