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INNOVATION MANAGEMENT
A PROJECT REPORT
Submitted by Bharat A. Lalwani (09054) & Rajkumar D. Patel (09078) Batch 2009 to 2011
Guided by Dr. Tejash Pujara
To Director (PGDM)
In partial fulfillment of the requirements of Tolani Institute of Management Studies, Adipur
For the award of the degree of Post Graduate Diploma in Management
Tolani Institute of Management Studies Adipur- 370 025 March 2011
EXECUTIVE SUMMARY
This project has been divided into 8 sub parts. First part (CH-1) is an introductory part, which gives definition of innovation, need of innovation, kinds of innovation. It also explains how innovation process spread across globe to reduce a lead time of product to reach market. It also consists of data of spending of multinational companies on innovation which shows importance of innovation. End with barriers of innovation.
Second part (CH-4) provides exhaustive information on product innovation. In which 4 forces have been discussed which are responsible for successful product innovation, followed by 2 case studies.
Third part (CH-5) consists of process innovation, in which 5 various level of process innovation has been discussed in detail. Then focus on TQM in context to process innovation, and concluded that TQM is a hurdle for process innovation, followed by case study.
Forth part (CH-6) focuses on inventory and logistics management. In inventory management, Microsoft dynamic NAV software has been discusses with advantage and disadvantage of software in inventory management. In logistic management, we focus on reverse logistic, explained it with help of case study.
Fifth part (CH-7) consist of HR, it is important than other because to attract and retain innovative workforce is not easy task, requires great effort. We take E-HRM as innovation in HR.
Tolani Institute of Management Studies, Adipur
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Sixth part (CH-8) focuses on fostering continuous innovation. It provides information for idea generation to innovation in market. Each step has been described in detail.
Seventh part (CH-9) contains role of knowledge management in innovation management, which explain than how knowledge management helps firm for innovation management. In which 3 different models has been mentioned.
Eighth part (CH-10) we derived business platform variables and Technical platform variables with help of 2 case studies.
Ninth part (CH-11) as our project is totally based on secondary data as time was short we have mentioned some limitation of the project and further scope of the study on same project title.
In the tenth part (CH-12) we conclude the whole project and mentioned the importance of the Knowledge management and foster innovation by management for continuous innovation.
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TABLE OF CONTENT
Sr. No.
01 02 03 04 05 06 07 08 09 10 Executive summary Table of content List of table List of figure Abbreviation List of Case studies Preface Declaration Acknowledgement CHAPTER 1 Introduction
Description
Page no.
2 4 7 8 9 10 11 12 13 14
1.1 Creativity and Innovation 1.2 Innovation v/s Invention 1.3 Innovation 1.4 Need for innovation 1.5 Types of innovation 1.6 Globalization of innovation process 1.7 Contribution of various multinationals in innovation 1.8 Impact of innovation on organization 1.9 Barriers to innovation 11 CHAPTER 2 Objectives 12 CHAPTER 3 Methodology
15 15 15 16 17 18 21 22 22 25
27
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Sr. No.
13 CHAPTER 4 Product innovation 4.1 Introduction
Description
Page no.
29
30 30 32 35 43
4.2 4 major forces that drive new product performance 4.3 A case study on Automotive industry 4.4 A case study on Canon mini copier machine 14 CHAPTER 5 Process Innovation 5.1 Introduction 5.2 Various levels of process innovation 5.3 TQM and Process innovation. 5.4 A case study on BOI and HP. 15 CHAPTER 6 Innovation in Inventory management and logistics 6.1 Inventory management. 6.2 Inventory management software. 6.3 Inventory management in Microsoft Dynamic NAV 6.4 Innovation in logistics. 16 CHAPTER 7 Innovation in human resource management (HRM) 7.1 What is HR? 7.2 Objectives of HR. 7.3 Need of innovation in HR. 7.4 Innovation in HRM. 17 CHAPTER 8 How Management can foster continuous Innovation 8.1 How idea get transformed into innovation. 8.2 Idea generation process. 8.3 Phases of idea.
44 45 48 50 52
53 54 57 60 65
66 66 68 69 75
76 76 77
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Sr. No.
18 CHAPTER 9
Description
Page no.
83
Role Of knowledge management (KM) in innovation management. 9.1 What is KM? 9.2 Important dimension of knowledge. 9.3 Role of KM in innovation management. 9.4 Knowledge in context to lead innovation 9.5 Effect of KM in innovation. 9.6 Influence of KM in competitiveness and innovation. 9.7 Networking process of continuous innovation based on KM. 19 CHAPTER 10 The Business platforms variables that influence the Innovation management 10.1 What are technology platform variables? 10.2 What are business platform variables? 10.3 A case study of Windows operating system 10.4 A case study of Plain copier machine at Xerox. 20 CHAPTER 11 Limitation and further scope of Research 21 CHAPTER 12 Conclusion 22 CHAPTER 13 Bibliography 124 121 106 106 107 113 118 84 84 85 88 91 98 102 105
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LIST OF TABLES
Sr. No. 01 02 Types of innovation
Description
Page No. 17 59
Features of Inventory management software- Microsoft dynamic NAV
03
Activities in HR department
66
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LIST OF FIGURES
Sr. No. 01 02 03 04 05 06 07 08
Description
Page No.
4 major forces that drive new product performance Various levels of process innovation DCLs reverse logistic system Characteristics of individuals for innovation Summary of E-HRM Phases of ideas Effect of knowledge management in innovation Influence of knowledge management in competitiveness & innovation
30 44 63 68 70 76 91 97
09
Networking process of continuous innovation based on knowledge management
101
10 11 12
Innovation process of Windows operating system Innovation process of Plain paper copier machine at Xerox Conclusion
111 115 121
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ABBREVIATIONS
Sr. No. Abbreviations 01 02 03 04 05 06 07 08 KM IM DCL ROI FDI PPP SMEs MC
Full form Knowledge management Innovation management Dis Copy Labs Return on Investment Foreign direct investment Purchasing power parity Small medium enterprise Machine copier
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LIST OF CASE STUDIES
Sr. No. 01 02 03 04 05 06
Case studies Automotive industry- product innovation Canon mini copier- Product Innovation BOI & HP- Process Innovation Reverse logistic of DCL- innovation in Inventory Windows operating system for PC Plain paper copier from Xerox
Page No. 32 35 49 60 105 112
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PREFACE
Project work is an essential part of the syllabus of PGDM program. In project work student has to use his or her various skills like analytical skill, communication skill, writing skill, etc. This is why included in PGDM program.
The proverb Practical makes man perfect means a lot to the manager. Success does not come easily, one has to work hard for it and achieve it at each and every stage of life.
Conceptual studies are always observed during the project study. It
gives us the
complete understanding of the real life situation and happenings in the real world.
From the practical point of view a project plays an important role for the student. Before We present this project, We would like to say that it is mirror image of a reflection to whatever We have observed and have come through during our project work.
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DECLARATION
We hereby declare that the project work entitled INNOVATION MANAGEMENT submitted to Tolani Institute of Management Studies, Adipur, is work of an original record done by us under the guidance of Dr. Tejash Pujara, (Assistant Professor & Head- Corporate relations) This project is not submitted for the award of any other degree/ diploma/associate ship/fellowship or similar award.
Signature:
Name:
Bharat A. Lalwani (09054)
Signature:
Name:
Rajkumar D. Patel (09078)
Date:
February 2011
Place:
Adipur
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ACKNOWLEDGEMENT
We wish to express our gratitude to TOLANI INSTITUTE OF MANAGEMENT STUDIES for giving us an opportunity to enhance our knowledge by granting permission to do my project under their guidance.
We are grateful to Dr. Tejash Pujara (Assistant Professor& Head- Corporate relations) and all the staff of TOLANI INSTITUTE OF MANAGEMENT STUDIES, who guided us and provided their valuable guidance and cooperation during the course of the project. He provided us all the information and support whenever needed that has been instrumental in completion of this project.
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CHAPTER:- 1 INTRODUCTION
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1.1 CREATIVITY AND INNOVATION Creativity and innovation might sound similar in contextual meaning. Of course, innovation typically involves creativity but it is not identical to it. Creativity is typically used to refer to the act of producing new ideas, approaches or actions, while innovation is the process of both generating and applying such creative ideas in some specific context.
In simpler words, innovation involves successful implementation of creative ideas. We can say that creativity is the act of producing new approaches and imaginative ideas. But, Innovation is the production or implementation of an idea in some specific context. So if we have ideas, but dont act on them, then it means that we are simply imaginative but not creative.
1.2 INNOVATION VS INVENTION Invention is the first occurrence of an idea for a new product or process, while innovation is the first attempt to carry it out into practice. Interesting thing is that, Innovation does occur when someone uses an invention or an idea to change how the thing it works. So to make it more precise, invention is a ladder to reach the spot called innovation.
1.3 INNOVATION The US federal advisory committee on measuring innovation defines innovation as follows. The design, invention, development and by implementation of new or altered products, services, process, systems, organizational structure or business models for the purpose of creating new value for customers and financial returns of the firm.
The Australias most comprehensive Innovation Survey (1996) defines, An innovation is any new or substantially improved goods or services which has been commercialized or any new or substantially improved process used for the commercial production of goods and services
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First at the level of an individual firm, Innovation is defined as the application of ideas that are new to the firm, whether the new ideas are embodied in products, processes, services or in work organization, management or marketing systems.
The definition of innovation can be divided into two perspectives, namely Opportunities to exploit and Opportunities to explore. Lets try to understand both of them.
First perspective, opportunities or changes to exploit are those where most of the parameters are well defined and understood. It is something like improving an ongoing process, reducing cycle time, increasing throughout or reducing cost. So these are basically incremental improvements.
On the other hand, opportunities/changes to explore are those areas, where we have newly started and have little information about it. Here we have ideas and solutions which are applied in new ways to solve new problems. It creates the environment for transformational innovation.
1.4 NEED FOR INNOVATION Why that innovation is playing a vital role in companies now? What is the need for innovation and how does it impact companys growth? In every industry, the leading companies are the innovators. They achieved that stage by extensive innovation and market presence for years. Meanwhile, todays innovators such as Wal-Mart (chain of retail shops), eBay (online auctions) are themselves relative newcomers. Such high turnover at the top suggests that the real problem is not with the lack of innovation, but it is sustained Innovation.
Companies may seize upon a good idea that gives them an advantage for a while, but sooner or later, they cede this advantage to a competitor who has found an even better idea.
As Nicholas Stein (2000) correctly mentioned, Innovation is at the heart of sustaining a companys competitive advantage. This holds very true as long as any company
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wants to stay on top of their competitors and win the innovation game. Innovation is very important criterion for success in the future.
An important study done on the rate of return of 17 successful innovations shows a mean return of 56% in comparison with an average Return on Investment (ROI) of 16%. It is clear that organizations need to innovate to survive and achieve good profit figures.
1.5 KINDS OF INNOVATION Based on the way, it is implemented Innovation can be divided into following major categories:
Major Effect of innovation on consumer habits and behaviors Minor
Major innovation Incremental innovation Enhances
Radical innovation Strategic innovation Destroys
Effect of innovation on organization established firms Table no. 1: Types of Innovation (Source: Costas Markides, Paul A. Geroski racing to be 2nd: conquering the industries of future, Business strategy review, vol 15, issue 4, Winter 2004, p25 to 31, Blackwell publishing Ltd.)
1.5.1 Incremental Innovation Incremental innovation projects are built upon an existing knowledge and resources within an organization. As a result the existing competencies of the company are being enhanced. There is a modest technological change and the traditional myths & habits may change firms incompetent to the current market and it is no longer useful existing product remains competitive in the market.
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Literally, these organizations dont work against their competitors, instead build innovation groups among their own different kind of products and be an active competitor for their products.
For example, the Hewlett-Packard Company produces both laser and ink jet printers. These products equally compete in the market. They came up with a plan, to divide the markets of both the ink jet and laser divisions. As a result, HP has become the leader in both laser and ink jet printers.
1.5.2 Radical Innovation On the other hand, Radical Innovation projects are developed and implemented in a completely new area of operation. So organizations require to completely acquiring new knowledge and resources. In the execution, it involves large technological advancements.
As a result the existing competence of the organization might get turmoil and become obsolete. For example, Intel, one among the largest PC processor manufacturers, appreciates radical innovation. It initially developed single core processors, however as soon as it released its dual core processors, the former became obsolete and the later gained its market. This process is endless, as Intel recently released its multi core processor, which might cease the interest of dual core processors in future.
Literally, Intel cannibalizes its own business by constantly bringing out better processors to replace the ones that are once market leaders.
1.6 GLOBALIZATION OF INNOVATION PROCESS Innovations have acquired a key-role in the growth and competition strategies of firms today. They are regarded as an essential tool to stimulate growth and enable firms to master the competition brought about by the forces of globalization. In developed countries they are thought to provide a vital buffer against challenges from low-cost producers from emerging countries.
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At the same time, innovations in todays globalized world are hardly feasible in isolation. World-wide economic reforms and far-reaching technological
advancements have brought to fore new economic powerhouses, such as China and India, which possess strong scientific capabilities. Products are marketed internationally which often necessitates adaptation to specific needs of targeted markets. All these developments are leading to the globalization of innovation. There are various factors which lead to innovation to globalization.
1.6.1 Access to global expertise and know-how Many studies suggest that one of the most important drivers of global innovation is the search for global expertise (EIU, 2004). Whereas many Western countries are experiencing a decline in the number of science and technology (S&T) students, countries such as China and India are producing a large number of S&T graduates.
In China, 61% of undergraduates are studying for a science or engineering degree. Also as far as the quality of the higher education is concerned many emerging countries are able to produce world-level graduates. Three out of the top five Asian schools for S&T are located in India (EIU, 2004). Asian countries are thought by some to enjoy an edge in higher education (Guo, 2005).
Moreover, restrictive immigration policies in industrialized nations, especially in USA and Western Europe prompt firms to establish R&D centers abroad in order to tap global talent, see e.g. two reports by American Electronics Association (Kazmierczak and James, 2005/2007).
1.6.2 Reduce bottlenecks in the R&D pipeline and shorten time-to-market Global innovation activities may ensure that work can be carried out simultaneously from multiple locations and on multiple projects if needed. Several independent modules of a single project may be worked upon at the same time to shorten time-tomarket.
Following the same logic, even a single step of a project may be worked upon round the clock in changing shifts the world-over whereby the data is transmitted electronically from one center to next. Such a step could be of crucial importance for
time-critical projects, The shortened time-to-market may be crucial to ensure large scale competitive advantage (BCG, 2006).
1.6.3 Meet demand for localized products in external (fast-growing) markets The number of the middle class consumers is growing rapidly in emerging countries particularly China and India. In India alone over 6 million new mobile phone subscribers are added per month. The middle class in India, comprising of estimated 200 to 250 million people, is believed to be one of the largest worldwide. More and more people in emerging economies are having financial resources to buy high-end products (EIU, 2004).
1.6.4 Relieving cost pressures Global activities, particularly in emerging countries, may lead to significant reduction in the costs (EIU, 2004). According to a McKinsey study, a software developer costs 60 USD an hour in USA. A software developer with similar skill costs only one-tenth of this amount in India (McKinsey, 2003).
The starting salary of a software developer working for the German software firm SAP in India was reported at 8,000 euros per annum in 2004, while the salary for a similarly qualified person at the headquarters in Germany was reported 5-times higher at 40,000 euros (Mller, 2004).
1.6.5 Proximity to production centers The globalization has moved production centers of many industries to emerging countries, where new industry clusters have grown up. Some industry-specific innovation activities, e.g. in Automotive sector, may require close interaction with the production department. It may be useful to locate R&D facilities in the proximity of the production center, unless other factors (e.g. availability of knowledge resources, affordable costs etc.) threaten to hamper the process.
Especially German firms seem to locate their R&D activities in close vicinity of their production centers. Whereas many international studies found access to knowledge resources as the leading reason for many international offshore R&D activities,
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1.6.6 Learning from lead markets Unsaturated, emerging economies in Asia are rapidly taking over the role of lead markets by their openness for consumption and the willingness to spend money on technological innovation. The Asian consumers already play a key-role in the electronics industry, today. The above mentioned advantages may be translated into a BCF strategy, which enables a better, cheaper and faster development of products, process and/or services. The BCF factors may be regarded as characterizing the goal model of a modern, international firm.
1.7 CONTRIBUTION OF VARIOUS MULTINATIONALS IN INNOVATION According to UNCTAD, multinational firms spent on average 28% of their R&D budget outside their home country. European firms spent on average 41%, American 24%, and Japanese 15% of their R&D budget abroad. Two-thirds of all respondents foresaw a further increase in this expenditure. More than half (57%) of surveyed multinationals already had an R&D presence in China, India or Singapore, and Developing Asia is the most often mentioned location for further R&D expansion by firms, reveals UNCTAD (2005b). The same survey showed China as the most preferred R&D destination for next 5 years, followed by the US and India in second and third positions respectively.
The emerging markets of India and China have attracted substantial foreign direct investment (FDI) in R&D sector. India as a R&D location has reportedly attracted many Fortune 500 firms (Srinivasan, 2004). Over 100 of the Fortune 500 firms were conducting a part of their R&D activities in India by 2003 (GOI, 2003The largest investing country was the USA followed by Germany (TIFAC, 2006).
Domestic R&D expenditure in India and China increased substantially in recent years as both countries are undertaking concerted efforts to build cutting edge scientific capabilities. The EU counts India and China among major R&D performing countries in the world (INNO METRICS, 2006). Chinas R&D expenditures surged from USD 17 billion in 1995 to USD 94 billion in 2004 in terms of purchasing power parity (PPP), registering an average growth of nearly 20% per annum. China was projected to become the second largest R&D
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investor worldwide by overtaking Japan in 2006 in PPP terms (Dyer, 2006; OECD, 2006).
According to figures available with UNCTAD (2005c), The trend of offshore R&D is not limited to multinational concerns alone. Many small and medium-sized enterprises (SMEs) too have started to recognize the opportunities that the globalization enables not only in the production but also in R&D.
1.8 IMPACT OF INNOVATION ON ORGANIZATION Arise the problems with managing changes, which are the results of innovation activity. Most organizations are resistant to rapid and discontinuous change, because of many factors like its traditional values, business strategies etc.; moreover it is difficult for them to find solutions in a new direction in which their business is not focused.
The fear of change makes many companies to stick in their standard mode of operation. They work hard to bring up existing model work better and dont spend time looking for a better model, or a better method of operation. Most companies are built for continuous improvement, rather than for discontinuous innovation. They know how to get better, but they dont know how to get different.
But successful companies deploy their managers to take responsibility for initiating and directing change in addition to their objectives. Successful companies believe that they need to do something that the world has not seen before. They change and innovate so that they are first and unique in this wild and competitive market.
1.9 BARRIERS TO INNOVATION There are 2 types of barriers, one which is significantly influenced by firm means internal barriers and those which are not influenced by firm are external barriers.
1.9.1 External barriers Top external barriers to innovation, which owed their existence to external factors and as such could not be influenced in a significant manner by the firm concerned,
included financing issues, the problems in finding suitable and qualified personnel, bureaucratic hurdles, and the trouble finding right cooperation partners, the negative impact of these barriers can be gauged from the fact that the financial constraints alone were cited 22 times as having led to abandonment of one or more innovation projects in the surveyed SMEs within past 3 years. Whereas 42% of the project abortions took place in the early phases of a project, the rest had to be aborted in an advanced stage of implementation (42%) or even marketing (16%), thereby suggesting a significant loss in the form of sunk costs and lost opportunities.
1.9.1.1 Bureaucratic hurdles There are several ways in which bureaucratic regulations may hamper the innovation activities of firms in a region. To cite an example closely related to the previous issue we can have a look at restrictive labor laws in India, which according to a McKinsey study cause many firms not to hire and thereby cause bottlenecks (Farrell, 2004).
1.9.2 Internal barriers Internal barriers to innovation were reported, amongst others, in the areas of marketing, conceptualization of innovative products, internationalization the extent to which an industry-sector was hit by certain barriers to innovations varied considerably. Figure 9 illustrates this point in an interesting manner. While the IT sector had relatively less trouble managing its projects, the tradition-rich machinemanufacturing sector faced more inconvenience with it. Also the shortage of suitable and qualified personnel though present in both the sectors to a significant extent, affected the latter more, reflecting the declining interest of the youth in studying Engineering and Natural sciences.
1.9.2.1 Availability of Skilled Labour Another major hurdle faced by the survey respondents related to the difficulty in finding suitable, qualified personnel. In 33 instances, the firms cited vacant positions in past 3 years which could not be filled owing to a lack of suitable candidates. Almost all respondents who cited such a problem reported the shortage of experienced engineers. However, experienced skilled labour was generally difficult to find. This problem is particularly interesting since both Germany and its Hamburg region endure
substantial unemployment with an unemployment rate of nearly 10%. At the same time the industry is unable to fill vacant positions with skilled labour. Other studies, too, have pointed towards this discrepancy see e.g. (Rammer et al., 2005). Moreover, this problem may be expected to worsen further due to the aging population and the relatively low birth-rate in the society.
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CHAPTER:- 2 OBJECTIVES
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OBJECTIVES: 1. To Study the Innovation in followings: Product Process Inventory management& Logistic Human resource
2. To study how management can foster continuous Innovation. 3. To study Role of knowledge management in innovation management. 4. To study the business platform variables and Technical platform variables that influences the innovation management.
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CHAPTER:- 3 METHODOLOGY
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In this project we focused on secondary data and case studies. Secondary Data collection: Internet, Books and Journal.
In this project first we studied about the innovation and creativity then identified the related factors that influence the innovation. After that we went for innovation in product, process, inventory management and logistics and in Human resource management so that we are able to understand the relationship between them.
Then we focused on the role of management in fostering innovation then we also studied the role of Knowledge management in innovation management and then understood some models to identify the relationship between innovation management and knowledge Management.
We also viewed some Business variable platforms which influences the innovation process and innovation management with help of the case studies.
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CHAPTER:- 4 PRODUCT INNOVATION
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4.1 INTRODUCTION We defined product innovation as development of new products, changes in design of established products, or use of new materials or components in manufacture of established products.
Product innovation means different things to different people. Indeed, since about 1970 there seems to have been a steady swing towards product improvement rather than totally new products, throughout the industrial world1. We felt there was good reason, therefore, to adopt a broad rather than a narrow view of product Innovation.
In other words, anything which is new to the business and its product range is counted as innovation, even if similar products are available elsewhere or if the change is an incremental one.
4.2 FOUR MAJOR FACTORS OR FORCES DRIVE A NEW PRODUCT PERFORMANCE
Figure no. 1: 4 major factors that drive a new product performance (Source: Successful product innovation, A collection of our best, By- Robert G. Cooper & Scott J. Edgett.)
4.2.1 Strategy: Top performing businesses put a product innovation and technology strategy in place, driven by the leadership team and the strategic vision of the business. This product innovation strategy guides the businesss product innovation direction and helps to steer resource allocation and project selection. 4.2.2 Resource investment and focusing on the right projects portfolio management: Top performers commit sufficient resources to effectively undertake their new product projects; and they boast an effective portfolio management system that helps the leadership team effectively focus these resources on the right strategic arenas and to a short list of high-value projects.
4.2.3 An idea-to-launch framework for doing new product development projects right: A best-in-class new product process exists in top performing businesses a system or process that drives new product projects from the idea phase through to launch and beyond. This idea-to-launch system emphasizes quality-of-execution, up-front homework, voice-of-customer input, and tough Go/Kill decision points. This is a vital success driver for virtually all of the Best Performers.
4.2.4 The right climate and environment for innovation: Senior managers in top performing businesses create a positive climate and culture for innovation and entrepreneurship, foster effective cross-functional new product project teams, and are themselves properly engaged in the product innovation decision making process.
These are the main practices that separate the Best Performers from the rest. These four themes make up the four points of performance of the Innovation Diamond. And they are the keys to successful product innovation. While many investigations have identified different sides of new product management as vital to success there is no one key to success in product innovation. Thus management must step back from looking just at a single driver or even individual new product projects, and consider
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the broader picture. For example, having a great idea-to-launch process is not sufficient its not a stand-alone driver of positive performance.
The Innovation Diamond highlights the main drivers and practices that are common to the Best Performers in product innovation. This Diamond proves to be a valuable model for helping senior managers focuses their efforts to improve their businesss new product development productivity and performance.
4.3 A CASE STUDY ON AUTOMOTIVE INDUSTRY Stagnation means regression to innovation management in the automotive industry. All of the auto executives whom Oliver Wyman interviewed in the course of the study were convinced that innovation was one of the most important success factors to maintaining a strong competitive position in the auto market. Innovation is also a key to resolving most of the global challenges that the industry faces. Without innovations by the auto industry, the entire concept of individual mobility is put at risk. In 2005, the industry invested EUR 68 billion in R&D that is 4.2 percent of sales, or EUR 783 per vehicle. The continuous cost pressure in the automotive industry created by legislation, competition, increasing risk and stagnating customer demands has a strong impact on innovation management. Traditional cost-cutting programs are not enough our forecast shows an additional EUR 1,500 of cost reduction (or 11 percent of costs) must be implemented to make car production a profitable business in the future. OEMs and suppliers will have to significantly improve efficiency in all R&D processes to keep costs under control. Furthermore, the effectiveness of each innovation must be investigated. Cost-improvement measures, such as offshoring of engineering, complexity-reduction programs, standardization and modularization or the development of low-cost cars will help the industry control some of the cost increases produced by the growing number of functions. This will be accompanied by structural changes in the auto industrys R&D departments. OEMs will only slightly increase their R&D spending. While Western car manufacturers will cap their R&D investments, OEMs from China, India and South Korea will boost their spending on innovation. Overall, the supplier sector and engineering service companies will be the winners of this development with
additional R&D spending of EUR 20 billion in 2015 (in 2005: EUR 46 billion). The concentration process in the supplier industry will improve innovative strength and networking opportunities with other partners another way of cutting costs while increasing the quality of innovations. Oliver Wyman has analyzed the innovation strategies of the industrys most successful auto companies. The study Car Innovation 2015 identifies the levers that car manufacturers and suppliers must pull to become state-of-the-art innovation leaders. Depending on the business design of the supplier and OEM, four dimensions must be brought into alignment: innovation proposition, competence focus and collaboration, innovation business case, and innovation organization and structure. The leading suppliers in innovation management generate a 16 percent higher EBIT margin than their peers all by employing a clear innovation strategy and balance along those four dimensions. The Oliver Wyman study Car Innovation 2015 concludes with five recommendations for innovation management in the automotive industry:
Increase customer orientation and marketing focus on R&D Generate a diverse innovation product & services portfolio Improve R&D effectiveness and efficiency; reduce innovation risks Enhance the innovation culture and organization Align innovation strategy according to Oliver Wymans Innovation Strategy Framework
The worldwide megatrends in politics, societies, economies and technology define the requirements that future cars will have to fulfill and these will affect almost every aspect of the automobile. Car Innovation 2015 has identified 27 megatrends that will have a significant impact on the automotive industry. Innovation strategies must reflect the respective trends in order to meet technological standards, economic imperatives, customer needs and government regulations.
At first glance, many of these trends may seem all too familiar and fail to inspire any creative thinking. But long-range consequences to innovation strategies are linked to
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each of these megatrends. Take the aging society. It is likely to have a powerful effect on fashion cycles, technology penetration and even societal ideals. In ten years, the average customer will be significantly older than today and will have a very different set of needs. In order to succeed, technologies must be both easy to use and easy to understand by older consumers.
The ongoing specialization in engineering and manufacturing will cause technological product differentiation among manufacturers to continuously decrease. As a result, the value proposition in the automotive industry will continue to move downstream, with even larger amounts of production and of R&D shifting to suppliers. Modularization is a necessary technique to better control the increasing complexity of cars. Car manufacturers will focus their innovation efforts on module interfaces and on modules brand-defining features (for example, security for Volvo, comfort for Mercedes-Benz, reliability for Toyota), and will outsource the safety issues to suppliers. Overcapacities in all manufacturing areas will continue to exert enormous cost pressures on the industry.
At the same time, raw materials prices will become increasingly volatile, making flexible pricing a necessity. While the polarization in wealth distribution will not lead to a collapse of the middle, it will support the success of low-cost cars as the vehicle segment with the fastest growth worldwide. Toyota was the first to recognize the chances of new low-cost designs as an enabler to new materials, methods of production and design principles. Such cost innovations will become a major R&D focus driving the industry beyond 2015.
4.3.1 Cars for aging population: In the majority of markets, the average new-car buyer is 40 years old. By 2015, that age is expected to increase by four years. Developing cars for this target group does not mean building old-age cars. It means equipping cars with design and handling features that the target group will find useful, exciting and desirable without sacrificing the models overall statement. A car designed for an older target group might feature:
Ergonomically designed boarding, loading and seating solutions.

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Visual aids for better night and rain vision. Easy-to-use functions even for complicated devices. Timeless design features. Speed and special attention recommendation displays. Side and rear-view cameras. Customized mobility services.
4.3.2 Cars for Megacities: In 2015, 40 percent of the world population will live in cities with more than one million residents, 17 percent will live in megacities with more than five million residents. The cruising speed in these cities will average not more than six miles per hour while the typical driver will use his or her car three hours a day. Car design for this environment will take a very different approach from that of current vehicles. Some new focal points will be:
Easy switching between relaxation and driving positions. Emphasis on passenger entertainment and information systems. Automation of stop-and-go traffic situations. Concealment of passengers from outside viewers. Protection of passengers from attacks. Effective smog protection and air conditioning. Nearly zero emissions.
4.4 A CASE STUDY ON THE CANON MINI COPIERNEW PRODUCT DEVELOPMENT AND INFORMATION CREATION Canon was founded in 1933 with the aim of developing and manufacturing a 35 mm camera. After World War II the company once again began to manufacture cameras. Throughout the 1950s the company grew rapidly, developing a series of new single reflex cameras. By the early 1960s, however, it became evident that Canon would have to diversify into new areas to maintain its growth. Thus, in the 1960s Canon began to diversify into office machinery through the development of electronic calculators and copying machines.
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In the mid-1970s, though, Canon ran into severe difficulties as demand for existing products declined precipitously and Canon was forced to retreat from the low-priced calculator market. In 1975 Canon had to suspend its dividend paymentsa radical step of a Japanese firm. In the words Canon was experiencing a managerial crisis. Top management lacked coherence and direction; the company's inflexible corporate structure made it impossible to deal effectively with diversification, and insufficient attention had been paid to the rationalization of production. Or, as the new President, Ryusaburo Kaku has put it, Canon was like a ship that constantly changes course and goes nowhere.
After a wrenching organizational restructuring Canon once again prospered, with an average annual growth rate of over 20% from 1975 to 1985. Canon was wellequipped to undertake difficult product development projects as it had accumulated a large and diverse technical staff of over 3,000 engineers, consisting of mechanical engineers (30%), electronics engineers (30%), physicists (17%), chemists (10%), and computer-related and other fields (13%). The electronics engineers had been hired in earlier relatively unsuccessful efforts to enter the synchro-reader and electronic calculator fields. The accumulation and interaction of personnel with these diverse technical capabilities provided an environment that induced the creative tension which is necessary to lead to synthesis and new information creation. An evidence of its successful technology development is the fact that in l988 Canon filed more patents in the U.S. than any other company.
Canon does not separate technical personnel into departments according to discipline so there is much greater mixing of research personnel (for the importance of this method of organizing the innovation process, see Florida and Kenney (1990). This heightens the possibility of new concepts and ideas emerging serendipitously. For further discussion of Japanese strength in hybrid technologies, see, for example, Kodama accelerate information creation Canon has had a policy of hiring mid-career personnel from other firms to create counter-cultures or diversity within Canon to increase the potential for new information creation.
In fall 1970 Canon began internal development of a plain paper copier (PPC) technology. In the early days diversification into PPCs was opposed by many in the
company, some going so far as to advocate discontinuation of the entire effort, recommending instead that Canon concentrate on its camera industry. But in 1969 Canon introduced a PPC that used completely original technology and did not violate any of Xerox's over 600 patents. By 1982, however, demand for PPC was leveling off market saturation appeared to be complete. Rather than view the market as mature, though, Canon began a process of re-conceptualizing the entire PPC market. Canon came to think of the copier market not in terms of firms (i.e., does the firm have a copier), but rather in terms of individual. With this new perspective the market appeared for larger. If small offices could use a copier, so might small businesses, and perhaps even home use would become prevalent. Further, large firms which had already purchased a PPC might also be interested in purchasing a desk-side model. Apparently, there would be an enormous market for a small copier.
A small copier (Mini Copier or MC) would require very different characteristics from traditional PPCs. Obviously, the copier must produce clear copies, and be lightweight and compact (less than 50 pounds). More problematic was that the MC might be used only rarely and thus the cost of regular servicing would be exorbitant on a per copy basis. Because of this, the MC must require either extremely simple maintenance or none at all. Moreover, the initial price must be no more than 200,000 yen (approximately $1,000 at that time). These constraints imposed a heavy burden on the design team. Initially, a feasibility study team was formed to examine what would be necessary to actualize an MC.
This team would form the core of the entire project and had an average age of 28. The 14-member team consisted of eight people from R&D, three from production, two from marketing, and one from product design. The fundamental contradiction the team faced was managing the inverse relationship between reliability and cost. That is, when reliability was improved the costs of production increased, but when costs were reduced service requirements increased. Managing Director Mitarai named this objective Cost-Reliability Improvement. To resolve this contradiction the development staff would have to create a new concept of how a copier operated. This objective was so challenging that internally it was referred to as aiming a Canon Revolution. To achieve this objective, joint efforts by Design and Production Engineering were indispensable.
The crux of the problem was clearly outlined by research on the causes of copy machine troubles. The researchers discovered that 90 percent of the problems occurred around the drum. The conventional method of addressing this problem was to seek methods of improving the durability of the drums and cleaners. As long as this was the goal, however, it was impossible to escape the contradiction between major cost savings and reliability improvement. Thus, what was necessary was a major concept change, that is, a synthesis of the contradiction through the creation of a new concept.
To solve the problem the members of the feasibility team engaged in heated arguments at several spontaneously organized "camp" sessions. Camp sessions are gatherings of project teams outside the workplace to brainstorm new solutions. They are frequently used by Japanese corporations during product development efforts. In this case the camp session provided an opportunity for the feasibility team to invite people from other parts of Canon to discuss how to overcome the contradiction.
The new concept that emerged from the camp session was that the entire drum should be a module that could be discarded after making a certain number of copies. With this the copier would be essentially maintenance-free. Whereas in conventional copiers the drum was a component with open-ended operating life which would certainly fail and then need to be repaired, the team created an entirely new way of thinking about the drum. It was
Re-conceptualized as a cartridge with a limited but known life-expectancy. This made it necessary to develop a disposable photo receptor, disposable development apparatus, and an instant toner-fuserall within the target cost.
When many task force members said it was impossible to produce the drum inexpensively, the feasibility team leader, Hiroshi Tanaka, had some disposable cans of beer purchased and told them to drink the beer. Then he engaged the members in an argument about how much the beer can cost and what made it so inexpensive. The disposable beer can resembled the copier drum because it would be disposable. The conceptual linking of the drum and beer can provided the taskforce members many insights into methods of manufacturing the drum at a lower cost. This opening up of
new understandings revolutionized product development and added substantially to the firm's capability. Hiroshi Nitanda, manager of First Design Department of Reprographic Products, explains it this way (Nitanda, 1984) The idea of packaging the drum and surrounding components as a cartridge revealed to us a great number of things. First of all, as everything is brought together, the structure can be simplified and only a very small number of essential parts are needed. So, high precision design becomes possible by combination in design. The product becomes less messy. Also, the key module becomes quite compact as the release mechanisms between units are no longer needed. So, low cost as well as high reliability will be achieved at the same time.
Moreover, with a cartridge, the toner seal is opened only after reaching the customer. This meant the plant is required to develop a production process without imaging inspection. This led to better efficiency. The big breakthrough on the cartridge then led to a cascade of other improve73 meets in the chain reaction-style well described by Usher (1954). After this the design conception and a feasibility model was advanced by another early stage design team. When these were completed the corporation decided to develop the MC.
It was clear from the beginning that the development of the MC would require all of the talents in the firm, so a task force was formed to actualize the MC. At Canon task forces are independent organizations whose team members are appointed by the company president. With the exception of the tremendously successful AE-1 camera task force, this task force would be the second largest horizontal development organization Canon had ever formed (approximately 300 persons). It was also the first such massive effort by the Reprographic Products Group. Tanaka, director of Reprographic Products Development Center, was appointed as the chief of the task force. Its advisor was Keizo Yamaji, Managing Director of Reprographic Products Division.
A system also was organized for constant communication with the leaders of related internal organizations such as Hajime Mitarai, managing director for Research and Development; Teruo Yamanouchi, director of Corporate Technical Planning and
Operations Center; and Kazoo Naito, director of Production Engineering Research Center. The importance attached to this effort was indicated by the symbolic assignment of chiefs of related departments to the MC task force and the appointment of active key corporate personnel as leaders. This appointment made these personnel responsible for the project's success and thus also project champions. Further, the project slogan became the "development" of the AE-1 of copiers. This helped create a commitment among corporate personnel and was a powerful rallying point because Canon's employees considered the AE- 1 the company's greatest product development success.
From the planning stage the task force included Quality Assessment and Cost Assessment groups. Because of the projected usage pattern for the MC, the Quality Assessment group decided the repair frequency of television sets was the relevant goal and proceeded to collect exhaustive information related to television sets. With this information as a target, the group began the task of setting all quality standards for charging, exposure, development, cleaning and fusing. Similarly, the Cost Assessment group was working on cost and quality allocation for achieving a sales price of 200,000 yen. This was the first time in Canons history that a task force had ever gone so far in the planning process. A Market Task group was also created, consisting of copier sales representatives from around the world to study marketing ideas. Finally, the Soft Task group was to examine the software aspects such as color copying and other possible uses.
As a rule, teams of representatives from development-related groups and production engineering-related groups held a managing committee meeting once a week to decide all issues. This task-force system greatly contributed to a reduction of the time from development planning to completion of the product. Kei Saito (1984), deputy general manager of the Advanced Technology Development Department of the Reprographic Products Development Center, recalled: In any company good products are created when production engineering and design become fused for their development. I believe there were tangible and intangible cost
reductions. By becoming one with Production Engineering, one can propose uniform parts design or assembly in one direction, how something should be assembled and in what sequence, or that one should do this or that if possible, when attempting to automate production, for example. If we (in product design) are by ourselves, it is easy to prepare drawings, and do what we like without thinking that far ahead. So, our discussions with Production Engineering people and working to accommodate their various requests in our own ways resulted in both tangible and intangible cost reductions. Of course, such fusions are not simple, and Design and Production Engineering often participated in outspoken arguments. These led to major synergistic effects, however, reducing costs and speeding product development.
The new technologies that were developed for the cartridge then became a part of the corporation's knowledge base and later would be applied to other products, such as laser printers and facsimile machines. In this sense the MC innovation process became continuous and spread throughout Canon. The knowledge generated in the development of the MC became part of the Canon's competitive strength.
To lower price, new design technologies were invented which facilitated miniaturization, weight reduction, adjustment-less assembly, and automated assembly. The assembly line was automated by the installation of automated inspection machinery and the actual production process was designed in coordination with parts and material suppliers. Thus, further skills were created that carried over to other office automation products such as microfilm readers, laser printers, word processors and typewriters.
The development of the MC taught the product development and manufacturing technology sections how to better cooperate. Further, the manufacturing technology section which had previously concentrated only on cameras began to focus on the rationalization of copier manufacturing. The total contribution of the MC in Canons sales increased from 24% in 1979 to over 35% in 1987, underlining the importance of this line. By 1987, 74% of Canons revenues would come from its Business Machines Division, whereas 15 years earlier nearly all of Canon's revenues were from cameras.
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CHAPTER:- 5 PROCESS INNOVATION
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5.1 INTRODUCTION We do not wish to underestimate the importance of process innovation. By investing in new plant and equipment, firms can gain in terms of productivity, material utilization, quality or reliability. They can even gain the capacity to manufacture new products which would otherwise have lain outside their reach.
It has often been pointed out that process innovation may be particularly helpful or suitable for small firms, since by this means they can share in advanced technology developed by larger firms. The adoption of a proven process technology may also have the advantages of low risk and short-term payback.
The limitation of depending upon investments in process innovation, however, is that any competitor can easily follow suit, removing the initial advantage gained from the investment. Whereas new products tend to put a firm ahead of its competitors, investment in available process technology merely brings a firm up to standard. From the viewpoint of regional development, nevertheless, it is important that the process technology used by local industry should be up to an adequate standard, since otherwise the region will cease to be competitive with other regions where investment in up-to-date technology is higher.
For the purposes of our study, a particular interest is how investment in process technology relates to product innovation. Some advocates of investment in process innovation have seen it as an alternative to product innovation, especially if it permits existing products to be made at lower cost. The reverse is also possible: if products can be given a new lease of life through modifications made at low cost, this may be preferred to investment in sophisticated and costly equipment. Finally, it could be that investment in new production equipment goes hand-in-hand with product development.
This might take place simply because innovative firms are likely to innovate in numerous ways. Or, similar technical expertise may be needed both to introduce new equipment and to develop new products: this could be particularly true where the same technology, such as that of microelectronics, was involved in both. Or again, firms diversifying their product ranges may need new equipment to be able to make
the different types of products. We are also, of course, particularly interested in how the regions differ in their use of new process technology.
5.2 VARIOUS LEVEL OF PROCESS INNOVATION Process innovation can and should happen at various levels within the organization as no organization can depend solely upon innovation occurring at one level only. Successful organizations have an innovation process working its way through all levels of the organization.
Figure no. 2: Various levels of process innovation (Source: Process innovation, By John Jeston & John Nelis, consultants, touch point, Business process services, Sydney, Australia.)
5.2.1 Redesign of Industry Value Chain 5.2.1.1 Customer Self Service Booking travel tickets online has drastically changed the travel industry. More and more customers book online, which provides two main benefits: firstly, customers have more control; and, secondly, it provides a more optimal process, not just because the customer enters the required information, but it also ensures that there is a higher level of data integrity.
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5.2.1.2 Customer-to-customer interactions Customers do not only exchange ideas, information, and opinions; they are also able to purchase and sell goods and services, for example, on eBay. This forces organizations to refocus its attention on the value that it provides to customers and the relationship between the organization and their customers. Many organizations make use of customer forums or user groups for feedback.
5.2.2 Redesign of Business 5.2.2.1 Processes developed around customer wishes A car insurance company representative who visits customers at a location convenient for the customer, offering on-the-spot assessments and providing the customer the choice between getting the damage repaired or providing immediate payment to enable the customer to arrange for the repairs is fundamentally a different process from insurance companies where the customer has to visit a pre-designated repairer. This company was successful by fundamentally redesigning their business rather than making marginal changes; and by ensuring that customer wishes, value proposition, and their business processes were all aligned.
5.2.2.2 Flexibility is the process rather than the exception Dell is a great example that undermines the commonly held idea that a reduction of customer choice leads to more efficient processes. If you ensure that customer choice (or, in other words, flexibility) is embedded in the process, it is possible to achieve very competitive flexible customer focused processes. This sounds simple, but many organizations still struggle with this concept: A white-good manufacturer produces fridges with various options. Only after a detailed activity based costing does he realize that the additional revenue for a few minor options (e.g., a few extra lights and buttons) does not cover the additional costs such as, additional handling costs, storage costs. and reduced economies of scale. Conclusion: If you do not build flexibility into your process, your true cost of flexibility might outweigh the benefits.
5.2.3 Redesign of Processes 5.2.3.1 Use of real-time and geographical information. The logistics industry has been able to improve its processes significantly: RFID (Radio Frequency Identification) technology is a cheap way to track goods. The use of
real time information provides not just the current status, but also the predicted future status. For example, the industry can assess what SLA penalties will be levied without any pro-active correction action and what is the optimal action to ensure that the SLA penalty will either be removed or reduced to a minimum, e.g., through re-routing of the route. Furthermore, these options provide the customer with the ability to track or trace their products real-time, at the same time reducing workload for the call center, which previously would have had to answer calls from customers seeking this information.
5.2.3.2 Workflow management and document management Many companies still rely too much on paper-based files, making it difficult to assess and track information. Companies have reported improving efficiency of up to 300% by using these technologies. A European bank faced increasing processing times; these caused the organization to enter a negative spiral: Longer processing times caused an increase in customer inquiries about the status of their transaction, resulting in more time spent answering these queries and less time in processing, which had the effect of causing even more delay. An integrated workflow management and document management system ensured that the processes became faster, more predictable, independent of individuals (e.g., sickness and holidays), and the answering of queries could be completed in real time, saving significant time and effort.
5.2.4 Improvement of Sub-processes 5.2.4.1 Avoid having one standard process for a variety of situations A mortgage company was able to reduce the processing time for 95% of its mortgages from 3 weeks to 3 days by separating the odd 5% that require substantial additional checking from the main stream straight-through processing, which could be done by an automated solution.
5.2.4.2 Mobile communication It allows employees and customers to access time-critical, location-based information. Utility companies use mobile devices for a wide range of applications providing real-time details about customers through access to the back office. Sales staff is able to process on-site quotations and process orders with instant and built-in validation as
to whether the order is complete and correct and that the required resources are available. Our research has shown that up to 40% of orders contain errors where forms are incomplete (not all fields filled), inconsistent (fields contradicting each other or where a proposed configuration is impossible) or incorrect information (e.g., wrong address).
5.2.5 Biggest Challenge of All Many initiatives are not aligned with the organizations strategy. Successful organizations have a close interaction between organization strategy and the business initiatives supporting the strategy. Porter has argued that many organizations talk strategy, but have not followed through with the implications of the strategy. It didn't make the hard choices required to actually implement a specific strategy, and hence, it did not create the highly integrated business processes that are very difficult for rivals to duplicate.
Many organizations fail in obtaining the benefits of their initiatives. The main cause is that true business process innovation requires a variety of skills business knowledge, process thinking, IT literacy, people change management capability, project management skills, and, last but not least, excellent stakeholder management. Many organizations embark on this journey without a clear approach (way forward) and get lost on the way. All these three challenges relate to management. Thus, management must be both more open to process innovation and they must actively encourage innovation to show the way forward.
5.3 TQM & PROCESS INNOVATION: The emergence of total quality management (TQM) has been one of the major developments in management practice. Despite mixed results, in general, TQM has been credited with providing a competitive advantage for organizations that implement it properly. Essentially, TQM has been widely accepted as a management model that, if implemented successfully, provides a competitive advantage for companies through quality.
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However, after more than a decade of being heralded as a competitive advantage, substantial gains in quality performance across the board mean that quality is no longer a differentiator and hence has begun to lose its value to other sources of competitive advantage, most notably, innovation.
But TQM, as a management model and practice, is still a suitable resource for competing in the future. The underlying reason is a premise suggesting that managing innovation is fundamentally different from managing quality.
In this regard, Prajogo and Sohal (2001) have discussed the two competing perspectives concerning the relationship between TQM and innovation.
A group of scholars has underscored the value of maintaining TQM in the future as well as its positive link with innovation. Zairi (1994), for example, argues that the arrival of TQM as a philosophy of modern competitiveness has to some extent brought improvement in the areas of innovation practices. He further maintains that TQM has also given organizations the impetus and commitment required for establishing a climate of never-ending innovation. Similarly, Flynn (1994) argues that TQM and product innovation share a common ground in terms of organizational infrastructure, including product development process, cross-functional teamwork, and supplier relationship, and therefore should be compatible to each other.
On the other hand, a number of scholars and researchers have articulated the incompatibility of TQM with innovation, particularly in relation to the continuous improvement and customer focus principles. Harari (1993), for example, strongly argues that by emphasizing incremental improvement, companies could lead people to work on unambitious goals and produce solutions which are not novel.
Supporting this argument, Samaha (1996) also holds that by emphasizing incremental change, the concept of continuous improvement could lead people to focus on maintaining the existing process. In this way, the companies would not only ignore the potential of adopting breakthrough innovation, but also they would be led to work continually on processes that are fundamentally flawed. In conjunction with this, TQM also promotes standardization with the purpose being to achieve a high level of
quality. Standardization, to certain degree, could inhibit innovation because it tends to reduce ambiguity of any task that is necessary to enforce innovation (Morgan, 1993).
5.4 A CASE STUDY OF BOI & HP The Bank of India has a long heritage of prudence and caution as one of the five largest banks in India. It was founded in 1906 and continued as a privately owned bank until 1969 when it was nationalized. Beginning with one office in Mumbai, and 50 employees, the Bank of India was the first Indian Bank to open a branch outside the country, starting with London in 1946. From this humble beginning, the bank has blossomed into a global institution with over 3,000 domestic branches and 28 offices in 15 countries which account for more than 20% of the Banks total business.
The Bank of India has always been in the forefront of innovation whilst maintaining traditional values and ethics in service and trust. It was among the first nationalized banks to establish a fully computerized branch and ATM facility at its Mahalaxmi branch in Mumbai back in 1989. It was also a founding member of SWIFT1, to foster Indias participation in the international financial community, and a pioneer in the introduction of the Health Code System in 1982 for evaluating and rating credit risk.
When India opened its financial markets to outside competitors in 1991, the Bank of India focused on fine-tuning its internal systems and introducing technology. In 2002, when the government started focusing on technology as a platform and enabler, the Bank of India realized it needed a game-changing strategy and technology infrastructure upgradeespecially to win and retain younger customers who were willing to pay for anywhere, anytime banking capabilities.
The Bank of India decided to leapfrog the competition with a next-generation core banking solution, tied together with a new centralized data center and information management warehouse. The Bank of India believed this comprehensive solution would provide its growing branch network with the multi-channel, intra-branch connectivity backed by the integrated, consolidated view of customers it required for more effective up-selling, cross-selling and customer service.
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Following a long and methodical planning process, the Bank of India issued a detailed Request for Proposal (RFP). After careful evaluation of more than 20 proposals from major IT solutions providers, the Bank of India selected HP as its business transformation partner. Bank of Indias three pronged strategy required HP to play multiple roleshardware and software supplier, consulting and implementation partner and finally business process outsourcer (BPO), with HP chosen to run the banks data center and help desk.
HP was selected for the strength and quality of its RFP response along with the low investment and total operating costs. HP was also able to distinguish itself with its deep banking expertise, financial strength and stability, recognized leadership in technology and partnerships with industry leaders like Oracle, Cisco and Infosys. HP provided a solid team with demonstrated experience in integrating and managing large-scale projects, a truly collaborative approach and a single point of accountability for the whole project.
Today, the Bank of India has a flexible and scalable architecture designed to meet the needs of changing market dynamics and differentiate the Bank of India from competition, while enabling it to aggressively compete with new private sector banks and providing state-of-the-art capabilities, channels and products. With HPs help, the Bank of India is realizing phenomenal success234% ROI over five years. Combining core banking, business continuity and information management, the Bank of India has doubled its revenue, and tripled its profits with 12% fewer employees, all made possible by efficiencies from the HP partnership where IT is now driving the banks strategy.
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CHAPTER:- 6 INNOVATION IN INVENTORY MANAGEMENT AND LOGISTICS
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6.1 INVENTORY MANAGEMENT Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods.
The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.
Balancing these competing requirements leads to optimal inventory levels, which is an on -going process as the business needs shift and react to the wider environment. Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status. Handles all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances.
Also may include ABC analysis, lot tracking, cycle counting support etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs.
Most manufacturing organizations usually divide their "goods for sale" inventory into
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6.1.1 Raw materials: Materials and components scheduled for use in making a
product. 6.1.2 Work in process WIP: Materials and components that have begun their transformation to finished goods. 6.1.3Finished goods: Goods ready for sale to customers. 6.1.4 Goods for resale: Returned goods that are salable.
6.2 INVENTORY MANAGEMENT SOFTWARE Inventory management software is a computer-based system for tracking product levels, orders, sales and deliveries.[1] It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid product overstock and outages. It is a tool for organizing inventory data that before was generally stored in hard-copy form or in Microsoft Excel spreadsheets.
6.2.1 Purpose Companies often use inventory management software to reduce their carrying costs. The software is used to track products and parts as they are transported from a vendor to a warehouse, between warehouses, and finally to a retail location or directly to a customer. Inventory management software is used for a variety of purposes, including: Maintaining a balance between too much and too little inventory. Tracking inventory as it is transported between locations. Receiving items into a warehouse or other location. Picking, packing and shipping items from a warehouse. Keeping track of product sales and inventory levels. Cutting down on product obsolescence and spoilage.
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6.2.2 Components Inventory management software is made up of several components, all working together to create a cohesive inventory control system. These components include (in alphabetical order):
6.2.2.1 Asset tracking When a product is in a warehouse or store, it can be tracked via its barcode and/or other tracking criteria, such as serial number, lot number or revision number.
6.2.2.2 Bar-coding Barcodes are the means whereby data on products and orders is inputted into inventory management software. A barcode reader is required to read barcodes and look up information on the products they represent.
6.2.2.3 Order management Once products reach a certain low level, a companys inventory management system can be programmed to tell managers to reorder that product. This helps companies avoid running out of products or tying up too much capital in inventory.
6.2.2.4 Service management Companies that are primarily service-oriented rather than product-oriented can use inventory management software to track the cost of the materials they use to provide services, such as cleaning supplies. This way, they can attach prices to their services that reflect the total cost of performing them.
6.2.3 Advantages There are several advantages to using inventory management software in a business setting.
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6.2.3.1 Cost savings In many cases, a companys inventory represents one of its largest investments, along with its workforce and locations. Inventory management software helps companies cut expenses by minimizing the amount of unnecessary parts and products in storage. It also helps companies keep lost sales to a minimum by having enough stock on hand to meet demand.
6.2.3.2 Warehouse organization Inventory management software can help distributors, wholesalers, manufacturers and retailers optimize their warehouses. If certain products are often sold together or are more popular than others, those products can be grouped together or placed near the delivery area to speed up the process of picking, packing and shipping to customers.
6.2.3.3 Updated data Up-to-date data on inventory conditions and levels is also advantage inventory management software gives companies. Company executives can usually access the software through a mobile device, laptop or PC to check current inventory numbers.
6.2.3.4 Time savings With the aid of restricted user rights, company managers can allow many employees to assist in inventory management. They can grant employees enough information access to receive products, make orders, transfer products and do other tasks without compromising company security. This can speed up the inventory-management process and save managers time.
6.2.4 Disadvantages The main disadvantages of inventory management software are its cost and complexity.
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6.2.4.1 Expense Cost can be a major disadvantage of inventory management software. Many large companies, such as Polo Ralph Lauren, Macys,Nordstromand Wal-Mart, use
inventory management software, but small businesses can find it difficult to afford it. Barcode readers and other hardware can compound this problem by adding even more cost to companies. The advantage of allowing multiple employees to perform inventory-management tasks is tempered by the cost of additional barcode readers.
6.2.4.2 Complexity Inventory management software is not necessarily simple or easy to learn. A companys management team must dedicate a certain amount of time to learning a new system, including its software and hardware, in order to put it to use. Most inventory management software includes training manuals and other information available to users. Despite its apparent complexity, inventory management software offers a degree of stability to companies. For example, if an IT employee in charge of the system leaves the company, a replacement can be comparatively inexpensive to train compared to if the company used multiple programs to store inventory data.
6.3 Inventory Management in Microsoft Dynamics NAV Increased automation and item tracking capabilities help you improve inventory accuracy and better match the goods you have on hand with customer demand.
6.3.1 Benefits Help reduce purchasing and inventory costs. Connect inventory control, purchasing, and sales order processing with demand planning and help reduce costs, improve cash flow, and help ensure that you have the right stock available when you need it. Gain visibility into inventory processes. Effectively balance availability with demand and track items and their possible expiration dates throughout the supply chain to help minimize on-hand inventory, optimize replenishment, and increase warehouse efficiency.
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Improve customer satisfaction. Make more accurate order promises and intelligent last-minute exceptions with access to up-to-date inventory information. Respond quickly and knowledgably to customer queries for improved customer service.
Reduce time to market. With integrated order, inventory, and distribution processes, as well as item tracking capabilities, your business can reduce manual data entry and get your goods to market fast.Quickly identify discrepancies in your inventory by comparing actual quantities withsystem records.
6.3.2 Features Sr. No. 1 Inventory costing Understand item costs throughout your warehouse and production processes, including inventory, work-in-process (WIP), and cost of goods sold (COGS), to help efficiently manage sales and purchase prices and line discounts with customers and vendors. Break down costs according to categories such as materials, capacity, subcontracting, and overhead. Tighten control of closing processes, improve batch-job costing, and streamline reconciliation with the general ledger. 2 Automated Data Collection System (ADCS) 3 Help increase the accuracy and efficiency of your warehouse managementpicking and putting away of items, physical inventory counts, and moving items from bin to binwith ADCS. Feature Description
Radio frequency Comply more easily with customer or supply chain identification (RFID) enablement mandates for RFID.
Order processing
Provide customers with accurate item availability and deliver on time with support for available-to-promise (ATP)
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and capable-to-promise (CTP) insight. 5 Returns management Process returned inventory and account for additional costs. Automatically organize credit memos, replacement goods, returns to vendors, and partial or combined return of shipments or receipts. Exact cost reversal helps increase inventory accuracy. 6 Item tracking Trace lot or serial numbers to quickly determine where items were purchased, processed, or sold. Help eliminate waste due to expiration of goods with support for first expired/first out (FIFO) handling. 7 Item substitution Offer customers alternative items when those they want are out of stock, or if the alternatives can be provided less expensively with a higher profit margin. 8 Item crossreferences 9 Internal pick/put-away Identify what your customers want by cross-referencing any customer code, internal code, or vendor code. Pick or put away items and debit or credit inventory records independently of purchase receipts, sales, or other source documents to help maintain accurate inventory records even when you access items for testing, display purposes, or other internal or operational needs. 10 Multiple locations and responsibility centers 11 Location transfers Manage items individually per location. By grouping items into stock keeping units, items can be described and managed individually per locationincluding replenishment methods, safety stock, and costs. 12 Stock keeping units Handle inventory across multiple locations from one database to gain a complete, real time business overview and create manageable cost and profit centers. 13 Warehouse management Help reduce costs through effective warehouse processes such as directed pick and put-away and automatic bin Provide customers who request non-stock items with immediate quotes. Automatically create non-stock items and process them in the same way you process stock items.
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system 14 Cycle counting
replenishment. Determine the counting frequency per item or stock keeping unit to help increase inventory accuracy and meet shipping deadlines.
15
Business notifications
Generate e-mail messages to alert your people, suppliers, or partners to changes in critical inventory levels, order status, or replenishment needs.
Table no. 2: Features of Inventory management software- Microsoft NAV (Source: www.microsoftdynamicnav.com)
6.4 INNOVATION IN LOGISTICS 6.4.1 What is Logistics? Logistics is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies and information necessary to meet those needs and wants; optimizing the good-or service-producing network to fulfil customer request; utilising the network to fulfil the customer request in the timely manner.
6.4.2 What is 3rd party (3PL) Logistics? Essentially, third party Logistics firm may be defined as external supplier that performs all part of companys logistics services.
6.4.3 What is Reverse Logistics? The process of moving or transporting goods from their final destination for the purpose of capturing value or for proper disposal.
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6.4.4 What is close loop supply chain? Designed and managed to explicitly consider both forward and reverse flows activities in a supply chain.
Now days Reverse logistics is one of the major problems for the any company. However DCL is the great e.g. of providing the reverse and closed loop supply chain services to companies and helps to save the big money for companies. Case describes about the Innovation in logistics through use of IT and tracking the accurate information of goods and place where it should be delivered. Innovation in logistics can be best defined by Reverse logistics. Now days big companies like Coca-Cola is saving good amount of money through efficient logistic system.
6.4.5 About DCL Despite the fact that returns have become a fact of life, most managers think that their current supply chain systems can handle product returns efficiently. Unfortunately, as Companies ramp up their sales and shipments, the sheer volume of returns and potential disposition options overwhelms their infrastructure, making it impossible for them to handle the task efficiently. With returns approaching 20% of outgoing shipments, managing reverse logistics can be the difference between profitability and loss.
Receiving, inspecting and doing something profitable with all of these returns is no easy routine. Returns are a fact of life, and should be given the same management priority as marketing, manufacturing, distribution and customer service. A good reverse logistics system not only improves corporate bottom line, but it can also improve customer trust and confidence critical in todays tough business climate.
In 2000, Symantec Corporation acquired Axent Technologies, an electronics company that specialized in enterprise class products and services for Network and Internet Security markets. Symantecs customers range from small companies to Fortune 500
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large multinationals spread over 36 countries. As part of a strategy to offer the same level of service as their existing software products, Symantec incorporated DCL and its Supply Chain Management Services as a key part of their integration strategy for all Axent products.
Founded in 1984, DCL has emerged as the leading provider of next-generation Supply Chain Services. More than a logistics company, DCL is a trusted business partner who reduces operating costs and improves end-customer service via a full menu of order entry/processing, call centres, warehousing, final assembly, fulfilment, and returns management. DCLs advanced IT infrastructure is Internet-enabled for complete integration with enterprise-level business systems; its customizable solutions enable companies of all sizes to focus on their core competencies. DCL currently serves some of the best-known names in the high-tech and healthcare fields.
Symantec recognized long ago that it wanted to sit above the supply chain, composing and monitoring its daily performance, rather than sitting in the middle handling physical goods. The company warranted that its supply chain partner, DCL, not only provide operations but also provide visibility across the entire supply chain for all activities, giving them full access to information about their customers, issues and product dispositions.
This allowed Symantec to focus on its core competencies product development and marketing not supply chain management. With the original emphasis on software distribution, reverse logistics did not play a critical role in supply chain logistics, but the addition of the Axent hardware line warranted a fresh look at the entire process. Symantec realized that they needed to keep a tight limit on returned goods and their disposition if they were to be competitive in the marketplace.
Internet Security is a very competitive marketplace where end users demand reliable equipment but also with no down time. There is enormous pressure for a rapid response time and for a quick turnaround of all customer requests including a provision to provide replacement hardware under certain contractual conditions. Furthermore, the cost of the hardware warrants that proper disposition is made of the
incoming hardware whether it is fixed and put back in the inventory or, disassembled for spare parts. Either way, speed, accuracy, and communications are key elements that have to be addressed during the entire process. DCL developed a RMA process to accommodate Symantecs new operating realities. The following flow chart process maps the new DCL reverse logistics process and IT infrastructure to maximize the operating efficiencies of the entire process while providing full visibility within all functional departments in Symantec. E-factory - DCLs web-based IT system provides secure, comprehensive and timely information to all phases in the supply chain - customer material, manufacturing and fulfilment. This IT system played a vital role in designing the new E-factory R5 process at DCL. Since reverse logistics includes a number of processes such as RMAs, warranty tracking, and vendor returns, the IT design had to be robust enough to handle the new business rules imposed by Symantec while being nimble enough to allow for quick disposition of the inventory. Credit authorization, normally a customer service activity, also had to be triggered at the warehouse or distribution centre to speed up the overall process. With the new E-factory R5 process at DCL, Symantec was able to quickly integrate the new hardware product lines efficiently into their overall distribution strategy.
Some unique characteristics of the E-factory R5 process include tracking of actual manufacturing and shipping data for all returned goods, ability to distinguish warranty status and make disposition decisions on a real time basis, ability to track returned equipment to the original hardware manufacturer and, complete inventory management to assure that proper customer credit is issued. Because returns are so labour-intensive, the success of any returns program is going to be dependent upon the ability of the people working to make quick and accurate decisions.
DCL recognized that with an improved process and a unique IT infrastructure reverse logistics can be looked in a new light not just a reality of doing business, but a powerful tool to improve customer trust and confidence while managing the corporate bottom line.
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6.4.6 DCLS Reverse Logistic System

Customer call centre
Email to DCL
Customer
Issue credit
DCLCustomer Svc RMA within DCL
Predefined business rules
Initial shipment of replacement of product new or refurbished
Complete visibility of inventory status
Receiving Original product
Inspection Warranty check & legality check
Disposition Rules by customer redefined
Destroy and document
Disassemble and return part to inventory
Remarks as new and refurbished
Test and repackage
Return to vendor
Keep track and unit back to vendor
Figure no. 3: DCLs reverse logistic system (Source: Optimized supply chain solutions, A case study on RMA solution, By Rogers & Tibben Lembke)
CHAPTER:- 7 INNOVATION IN HUMAN RESOURCES MANAGEMENT
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7.1 What is HR? Human resources department will provide best services in terms of manpower to balance organizational needs to fulfill companys overall vision.
HR department provides quality HR services to attract, develop, motivate and retain a diverse workforce within a supportive work environment to achieve companys overall objectives.
7.2 Objectives of HR: Recruitment and selection of high caliber candidates according to organizational needs to achieve overall objectives. Retention of potential candidates and planning for mobilization / demobilization in association with line Project Managers. Enhance the Human Resource organizational capability and performance of the Organization through development and management of organizational structure, people, policy and process. Maintaining Remunerations and benefits as per industry norms. Decreasing the Training cost for the Company by identifying original training needs. Motivating employees to generate suggestions for the betterment of organization. Formulation of competent Performance Appraisal System and identification / implementation of compensation schemes to motivate the employees to get the job done with best practices.
Sr. No. 01
Key result area
Key performing area
Key performance Indicator
Recruitment / Selection
Recruitment
Reduce average time taken to fill vacancy. Reduce recruit. average cost per
Selection
Finalize the selection as early as possible for each individual
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position. 02 Performance appraisal / Compensation Performance appraisal Compensation 03 Skills enhancement Training 04 Work place management Work environment Formulate competent
performance appraisal system. 100% timely completion of appraisal. Ensure transparent evaluation. Introduce new compensation scheme for high performance. Maintain salaries as per
industry norms. Reduce overtime payments. Identify training need &
arrange training program. Reduce training cost. Create friendly work
environment
05
Work force planning
Demand & Supply Manpower availability
Ensure timely mobilizing / demobilizing manpower. Ensure manpower available for existing and forthcoming projects.
06
Conflict management
Solution
Minimize conflict rate and transparent the solution.
Table no. 3: Activities in HR department (Source: Human capital trends and innovations, August 2009, PEW centre on the states, sponsored by PEW charitable trust.)
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7.3 NEED OF INNOVATION IN HUMAN RECOURSE MANAGEMENT Innovative people should have diverse capabilities like the ability to view the technology both in terms of the market requirements as well as that of the shop floor or laboratory. Innovation pre-supposes basic creative critical thinking skills. This is important as it enables one to express oneself cogently. Innovation in humans, therefore, calls for multifarious capabilities, some of which are shown in Fig.
Figure No.4: Characteristics of individuals for innovation (Source: Managing change and innovation, ch-7, Prentice hall, 2001)
Coming to innovation leaders: "What distinguishes leaders from laggards, and greatness from mediocrity, is the ability to uniquely imagine what could be". Innovation leaders, having foresight and intuitive capabilities, are indispensable for seeing through an innovation cycle from concept creation to success. In any innovation process, a leader needs to set appropriate milestones, monitor the progress, liaison with the top management for resources, cooperate actively in the actual development, give advice when necessary and offer constant encouragement.
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7.4 INNOVATION IN HRM
7.4.1 E-HRM: E-HRM is a way of implementing HR strategies, policies, and practices in organizations through a conscious and directed support of and/or with the full use of web-technology-based channels. The word implementing in this context has a broad meaning, such as making something work, putting something into practice, or having something realized. E-HRM, therefore, is a concept - a way of doing HRM.
7.4.2 The state of HRM in an organization Organizations do not start with nothing when they step out onto the E-HRM road. For a start there will be certain implicit or explicit HRM policy assumptions and practices already in use. Further, every management decision contains some HRM component. Beer et al. speak about HRM policy choices. The set of HRM policy choices within an organization can be categorized into one of the three types distinguished by Beer et al. the bureaucratic policy, the market policy, and the clan policy. From the existing state of the HRM in an organization (the frame of reference), the individuals and groups involved (the stakeholders) make choices with regard to E-HRM. As these are made within a certain context, the choices are purpose driven.
7.4.3 E-HRM goals What goals drive stakeholders when deciding about e-HRM? Based upon a scan of professionally-oriented and academic journals, we can draw conclusions about the reasons or goals of organizations making steps towards e-HRM.
1. Improving the strategic orientation of HRM 2. Cost reduction/efficiency gains 3. Client service improvement/facilitating management and employees.
7.4.4 CLAN (Centre Led Action Networks) Approach CLAN organizational model was launched in 1991 and is still the approach preferred by high-performing 'group' companies who want to enjoy the best of two worlds: autonomous business units within the group, and an across-the-group connection
which ensures that the whole is greater than the sum of the parts. In the CLAN model, action takes place in the businesses whilst networking between them is driven from the centre.
CLAN's attraction is that it provides a powerful and more stable, yet still flexible, alternative to centralized or de-centralized management of key business functions. Traditionally, a company structure is likened to a pyramid. Solid this may be, but one side of the business cannot see across to the other, and the stones at the bottom cannot see where the top is pointing. We prefer the imagery of the light, transparent connected structure.
But CLANs are not always the right solution. There are occasions when autocratic top-down leadership is essential, for example in a time of corporate crisis. Likewise it is unlikely to be the right choice in a company that is so intent upon task that it ignores the 'processes' whereby people work together.
7.4.5 Types of E-HRM E-HRM is not a specific stage in the development of HRM, but a choice for an approach to HRM. Wright and Dyer (2000) distinguish three areas of HRM where organizations can choose to offer HR services face-to-face or through an electronic means: transactional HRM, traditional HRM, and transformational HRM. Lepak and Snell (1998) make a similar distinction, namely operational HRM, relational HRM and transformational HRM.
7.4.6 E-HRM outcomes We assume, based upon Beer et al.s ideas about the expected results or outcomes of HRM, that E-HRM also aim to achieve a certain set of outcomes. All HRM activities, and therefore also all E-HRM activities, will implicitly or explicitly be directed towards these overall outcomes. Beer et al. (1984) distinguish four possibilities: high commitment, high competence, cost effectiveness, and higher congruence.
These outcomes, in turn, may change the state of HRM in an organization, or through individuals and/or groups within an organization actually result in a new HRM state.
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This closes the circle. With the addition of the E-HRM outcomes, the building blocks have been identified that are needed to finalize our E-HRM model (see Figure):
Figure No.5: Summery of E HRM (Source: E HRM: innovation or irritation, An explorative empirical study in 5 large companies on web based HRM, By- Huub Ruel, Utrecht school of governance) 7.4.7 Consequences for the HRM department The literature seems to clear: e-HRM will not leave HR departments untouched. Less administrative tasks for the HR department and therefore less administrative positions, more focus on the strategic goals of the organization and therefore an HRM staff consisting mainly of thinkers; this is, in essence, what HR departments can expect or are already facing and experiencing. From our definition of, and approach to, e-HRM the following can be concluded about the consequences of e-HRM for the HR department.
E-HRM will assume an active role for line management and employees in implementing HRM strategies, policies, and practices. In terms of the more operational and information processing work, such as administration, registration and
information distribution, there will be less demand for HR people. This seems most logical for organizations with an operational e-HRM approach. However, also with a relational e-HRM approach dominating, a smaller HR staff will be necessary if line management and employees pick up and use the HRM instruments provided by the HR intranet. There will still be HR experience necessary for the renewal of instruments and to prepare them for easy intranet-based use. Finally, with a more transformational e-HRM approach, strategic HRM expertise will be necessary in order to formulate adequate strategic HRM plans. The scarce empirical studies on this topic suggest that an investment in e-HRM seems to result in companies reducing the number of HRM employees. Based on the earlier arguments, it is likely that this concerns primarily the operational/administrative HRM workers.
At the tactical and strategic levels, HRM staff will remain necessary, but will see a shift in their expertise from face-to-face skills towards intranet and internet activities. In other words, the web-dimension will be added to the toolkit of HRM professionals.
7.4.8 Conclusion: Based upon the research of (HuubRul Utrecht School of Governance, Tanya Bondarouk University of Twente, Jan KeesLooise University of Twente) draw conclusions regarding the followingthree topics: (1) e-HRM goals in the companies, (2) types of e-HRM, and (3) e-HRMoutcomes.
7.4.8.1 E-HRM goals First of all, the three types of goals identified in our research model (efficiency/cost reduction; improving client service; improving HRs strategic orientation) were all observed in the case studies. What seems to be new is that, especially in the international companies included in our study, a main goal for introducing e-HRM is the standardization and harmonization of HR policies and practices across all parts of the company. This was explained by the initiators in the companies as being necessary in order to strengthen the companys image as a global entity, not just an internationally dispersed one.
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7.4.8.2 Types of E-HRM Secondly, we found that there is a gap between e-HRM in a technical sense (the available functionality) and the real use made of web-based HRM tools by employees, line managements, and HR. That means that, technically, e-HRM can have the intention of having a transformational (highly advanced) nature, but in practice (real use of tools) it can be of an operational nature (basic personal data management and use as an information source). What has shown up clearly is that a company with HRM policies and practices that are of the bureaucratic type cannot just jump to a transformational type of e-HRM: other stages have to be gone through first. The cases in this study clearly suggest that it is impossible to jump immediately to a transformational type of e-HRM without first going through operational and relational e-HRM stages.
7.4.8.3 E-HRM outcomes Thirdly, the overall realized outcomes of e- HRM in the companies studied were primarily a reduction of costs, mainly due to reducing the administrative burden; an improvement in client satisfaction with HR services; and an improvement in the perceived quality of communication within the organization. Changes, let alone improvements, in the competences and commitment of the workforce were very limited. Alongside these main conclusions, we observed a number of additional aspects: Firstly, e-HRM seems to be providing an important push: to put HR responsibility in the hands of the line manager. The introduction of e-HRM is accompanied by the decentralization of HR tasks and by the harmonization and standardization of HR processes. For the HR department, introducing e-HRM shows itself to be a push- factor for changing HRM within an organization: from a bureaucratic approach towards a market/clan approach.
Turning to the employees, the introduction of e-HRM brings changes in the way they experience HRM in their company and in the HR tools and instruments they get offered. They acquire the opportunity to get updated in terms of organizational dynamics, take part in online discussions, and choose their career path. However, not all employees are willing to accept full responsibility for their personal career development through the available web-based HR tools. Some (and the case studies
suggest a specific group) require their managers to come up with career development initiatives. Interestingly, in those companies that had an industrial nature, PC availability in all corners of the company and the PC skills of employees was found to be a crucial element in successful switching to e-HRM. Employees in the plants or factory (unlike those in offices) tended not have access, or at best only limited access, to online HR tools because of a lack of PCs or because of cost considerations. Perhaps one can speak of a cyber-division at the organizational level? The implementation of e-HRM in international and global companies seems to be difficult in the sense that it is hard to convince the local HRM departments to contribute and to collaborate because it is difficult to make the advantages of e-HRM visible and tangible to them in the first place. To make local HRM professionals change their way of working is difficult. When implementing e-HRM globally it can be difficult to get the support of the relatively small components of the company.
When implementing e-HRM on a global scale it is not easy to make e-HRM appear advantageous on a local scale. That makes it hard to get local HRM professionals enthusiastic. Guaranteeing the security and confidentiality of input data is an important issue for employees in order that they should feel safe when using webbased HR tools. Our final observation is that employees and line managers mindsets need to be changed: they have to realize and accept the usefulness of web-based HR tools. They generally feel that they lack the time and space needed to work quietly and thoughtfully with web-based HR tools and so, if there is no real need, they will not do it.
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CHAPTER:- 8 HOW MANAGEMENT CAN FOSTER CONTINEOUS INNOVATION
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8.1 HOW IDEAS GET TRANSFORMED INTO INNOVATION
No distance is too far and no dream is too large because the cycle of life keeps changing. Certainly, changes bring improved lifestyle and technological progress, consecutively to keep the momentum of improvements one has to really appreciate innovation. But where does the innovation come from? An apple in Newtons head sparked to deliver an Idea, which plays a vital role in everyones life till today. Innovation can be considered to be as creativity, i.e., to create new ideas and knowledge creation. However it goes beyond idea generation to putting those ideas into action. So it is important to evaluate the ideas in order to yield good innovation. An idea that is developed and put into action creates innovation.
8.2 IDEA GENERATION PROCESS The idea generation process is nothing but the whole process from thinking to action, i.e., from the generation of first ideas to the final innovative result. Understanding these phases will helps us to review the ways of combining and creating knowledge that can relate to reality. The idea generation process and thereby innovations are strongly connected to peoples attitudes. People and organizations have to exceed what is pre-defined in their functions.
8.2.1 Organization role on innovation In this section, let us discuss about the strategies and tactics that organizations need to follow in order to gain advantage from idea generation process. Important skills that organizations need for idea generation and Innovation are
The long term vision, The ability to identify or even anticipate market tendencies The will and ability to gather and integrate the process. The ability to take risk (Calculated risk) Internal co-operation between the different functional department The external cooperation, with public investigation, with consulting services.
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8.3 PHASES OF IDEA There are many theories about the individual phases of ideas; different authors postulate different number of phases in the idea generation process. They divide innovation process as a sequential three phases. Idea Generation Idea Conversion Idea Diffusion Idea Assessment
Idea generation Idea conversion Idea diffusion Idea assesment

Figure No.6: Phases of ides
8.3.1 Idea Generation A good start is half of the work. Similarly a good start for an innovation/innovative product is GOOD IDEAS. But where do these good ideas come from? People who make difference in an organization are the key resource of idea generation process. So the fragments of ideas that come across the organization will influence in generating a creative idea.
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For the idea generation phase, the financial, practical, physical limitation and other business parameters are not considered, this is to ease seamless flow of ideas and to encourage out of box thinking.
8.3.1.1 Sources of ideas: Besides depending on the internal sources, organizations need to be open to gain information from external sources for idea generation. This could be from customers, end users, competitors, universities, independent entrepreneurs, investors, inventors, scientists and suppliers who play a vital role.
8.3.2 Idea Conversion Now we have lots of good ideas, but how are we utilize it? This is handled by this phase. The main objective of this phase is to filter out ideas, so that only feasible and refined ideas are selected.
Refined ideas are the ones identified to be financially successful and technically viable. It doesnt mean that ideas are simply put away, but it is in this phase ideas are turned into revenue generating products, services and processes.
Typical methodology that could be used in this phase is brainstorming, to analyze the feasibility and problems. The possible problems might vary from one company to the other. It has to be noted the tight budgets, conventional thinking and strict funding criteria caused many novel ideas to shut down.
Involving people with differences (can be based on lingual, cultural, geographical, ethnic etc.,) can be used in such brainstorming discussions. Because this gives room to ask as many weird and challenging questions about the ideas, which involve peoples educational, professional and cultural diversity.
The generation of high number of ideas depends on the tools & techniques that an organization adapts. Consequently, this helps to avoid strangling the innovation process for lack of ideas.
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8.3.2.1 Market surveys Market surveys can be done through interviews, through panels or by monitoring the evolution of a set of demographical, economical and consumption indicators as well as others.
8.3.2.2 Benchmarking Benchmarking is an important tool for competition analysis. Benchmarking is an ongoing process of measuring and improving business practices against the companies that can be identified as the best worldwide. It emphasizes the importance of improving, rather than maintaining the status quo.
8.3.2.3 Collecting Ideas from a. Employees: The collection of employees ideas can be done through a specific program or through more informal methods in smaller groups. Through series of continuous meetings, employees propose several ideas and the bossed have to approve or reject them right there on the spot. These programs are successful as they allow people to have a safe place to share ideas without any kind of restriction.
b. Suppliers: In business terms, competitive suppliers usually have a better knowledge of what they are selling and how the client can obtain better benefits. When suppliers are experts on their area, they may even present solutions for the companys specific needs. So collecting ideas from the suppliers is very important.
c. Customers: Customers are the important source of proposals concerning changes in products and services. Building relationship with clients is also an important criterion as it creates a strong information source. However getting inputs/feedback from the end customers is not easy.
8.3.2.4 Co-operation Co-operation with institutions like universities and industrial associations help the organization to have new ideas through co-operation settlements/agreements. Where organization gets and provides inputs. Member organizations participate and form an ideal source for development of innovative ideas.
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8.3.2.5 Brainstorming Brainstorming is a widely used technique, in which a group of people were put together and discuss their ideas that they can think of, even if apparently foolish. The important thumb rule of this technique is not to criticize ideas presented until the discussion ends. An advantage of this method is the fact that the association of several ideas can trigger new ones.
8.3.3 Idea Diffusion In this phase we diffuse products and practices. Organizations must get the relevant constituencies within the organization to support and spread the new products, business and practices across desirable geographic locations, channels and customer groups.
This phase is particularly important for the large companies who have their divisions in many geographical locations. So the biggest question that, what is the impact of diffusing of ideas within the organization? One possible negative upshot could be leaking of your idea to the competitors.
The company P&G first launched Pampers diapers in Germany, and then it developed ideas to establish the product in France. However it has taken long time to do so, P&G can able to launch its product only after five years. Meanwhile, Colgate Palmolive sensed that idea and launched its line of diapers in France two years before to P&Gs launch.
This is a typical example of improper diffusion of ideas. Idea specification is important in case there are several ideas to change a given product, service or process. Idea specification consists of choosing the idea that will have better advantages in being applied or combine existing ideas, to find a solution that is superior to each idea by itself. There are several tool and techniques for idea selection process,
8.3.3.1 Feasibility Analysis: Feasibility analysis is a preliminary study undertaken to determine a projects viability, which helps to ensure the successful completion of specific project goals and objectives. In addition, feasibility analysis gives a clear picture, if an existing
system is worth upgrading or not. Feasibility analysis can be done in two perspectives, technical perspective and business perspective. However feasibility analysis can be done in many kinds.
In the technical point of view, the feasibility study is carried out to check if it is possible to implement the idea at an acceptable cost. This involves questions such as whether the technology needed for the system exists, how difficult it will be to build, and whether the organization has prior experience using that technology in the business perspective.
The feasibility study is conducted to check the factors affecting the commercial viability of the business. Also to ensure the cost-effectiveness of the proposed system i.e. if the benefits of the new idea do not outweigh the costs, then it is not worth going ahead.
8.3.3.2 Financial and Risk Analysis In a financial analysis, there is an attempt to project all the predictable revenue in relation to the predictable costs. Then it is applied financial calculation to evaluate the processs profitability towards a value. From the comparison between the ideas profitability and the risk associated to the same, a decision can be made about the idea. With a raising number of ideas analyzed and processed there is a better understanding of the risk level of several types of ideas and the costs each one brings. The study of this technique is strongly supported by a wide bibliography related to the economical and financial areas.
8.3.4 Idea Assessment The word Assessment in this context refers to Metric and Measurement of Ideas. Idea Measurement is a simplified & quantified observation of ideas. Idea Metric is a comparative measure of the performance of the ideas and product or process.
By using metrics we can find the deviation i.e., what is planned against what is achieved? Idea Assessment is very important to any organizations to monitor the trends in the actual effort spent on Idea generation process. This helps to understand
where does company stand and find areas of improvements. It also helps to re-plan or alter the ideas so that it is more technically viable.
The outcomes of innovative activity need to be tracked and measure to determine fully the impact of innovation on the economy. This is on a macro level, simply means to evaluate the variations. Considering companies at a micro level, it is indeed important that Idea Assessment need not be made with the variations but also from customers (internal & external) survey and feedbacks.
In order to gain advantage of sustainable innovation, we need to evaluate the ideas and organizations need to have some metric in place to access the progress. Metrics can be customized by the managers to keep track on innovation success in their companies. These metrics can help senior executives assess their companys innovativeness and hence combat the insidious strategy decay that often afflicts a companys business. The organizations strategies can be decayed mainly by four reasons.
Over time they get replicated and they lose their distinctiveness and, therefore, their power to produce above-average returns. Strategies also get exhausted as markets become saturated. Customers get bored, or optimization programs reach the point of diminishing returns. Finally, strategies get eviscerated. Customers or suppliers become so powerful that they can dictate much lower prices than before.
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CHAPTER:- 9 ROLE OF KNOWLEDGE MANAGEMENT IN INNOVATION MANAGEMENT
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9.1 What is Knowledge management? It refers to the set of business processes develop in the organization to create, store, transfer and apply Knowledge. Knowledge is an important part for the Innovation Management. Knowledge residing in the minds of the employees that has not been documented called tacit knowledge. Knowledge has been documented is called explicit knowledge.
9.2 IMPORTANT DIMENSION OF KNOWLEDGE 9.2.1 Knowledge is a firms asset Knowledge is an Intangible Asset. The transformation of data into useful informational and knowledge requires organizational resources. Knowledge is not subjects to the law of diminishing returns as per physical assets, but instead experiences network effects as its value increases as more people share it.
9.2.2 Knowledge has different forms Knowledge can be either implicit or explicit (codified). Knowledge involves Knowhow, craft and skill. Knowledge involves knowing how to follow the procedure. Knowledge involves knowing why, not simply when, things happen (causality).
9.2.3
Knowledge has a location
Knowledge is a cognitive event involves mental models and maps of individuals. There is a both social and individual basis of knowledge. Knowledge is sticky (hard to move), situated (enmeshed in firms culture), and contextual (work only in certain situations).
9.2.4
Knowledge is situational
Knowledge is confidential: Knowing when to apply procedure is just as important as knowing the procedure. Knowledge is related to the context: You must know how to use certain tool and under what circumstances.
9.3 ROLE OF THE KNOWLEDGE MANAGEMENT IN INNOVATION MANAGEMENT 9.3.1 Knowledge management assists in creating tools, platforms and processes for tacit knowledge creation, sharing and leverage in the organization, which plays an important role in the innovation process Knowledge management provides a focus in the organization on the value of tacit knowledge and assists in creating the environment for tacit knowledge creation, sharing and leverage to take place. An example would be through creation of communities of practice around areas of innovation that requires attention in the organization. Knowledge could also provide other platforms and processes for tacit knowledge sharing, such as breakfast briefings. Knowledge management can also facilitate tacit knowledge transfer across organizational and inter-organizational boundaries through ensuring that experts with relevant expert knowledge have opportunities to share their tacit knowledge through collaboration. Knowledge management can also assist in identifying stocks of available tacit knowledge.
9.3.2 Knowledge management assists in converting tacit knowledge to explicit knowledge It can provide both the platforms as well as the processes to ensure that tacit knowledge becomes explicit. Examples of codification platforms include discussion databases or online collaborative communities of practice. An example of a process to codify tacit knowledge to explicit knowledge is the capturing of tacit knowledge at tacit knowledge sharing events such as breakfast briefings into an electronic form where the knowledge can be organized and retrieved for later use. This adds a lot of value to the organization as it is known what knowledge is available, and it is retrievable for future re-use.
9.3.3 Knowledge management facilitates collaboration in the innovation process Knowledge management allows collaboration across functional boundaries within organizations, but also across organizational boundaries through online collaboration forums as well as organizational tools and platforms such as intranets and extranets. These collaboration forums are extremely valuable as they ensure the codification of knowledge utilized as input to the innovation process, but also generated as output of
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the innovation process. It provides accessibility to the knowledge and provides identification of collaborators in the knowledge sharing and innovation process, thus building up a reference of expertise and where it resides in the organization. It also ensures that knowledge external to the organization relevant to the organizations innovation processes is available and accessible.
9.3.4 Knowledge management ensures the availability and accessibility of both tacit and explicit knowledge used in the innovation process using knowledge organization and retrieval skills and tools, such as taxonomies: It allows the organization and retrieval knowledge in a structured way according to the unique structures and value chain of the organization. It also provides search facilities and tools (e.g. Autonomy and others) to enable staff to search for knowledge required in the innovation process. It provides a unique corporate structure to the corporate knowledge base. It can also make tacit knowledge more accessible through directories that identify individuals areas of expertise in the organization.
9.3.5 Knowledge management ensures the flow of knowledge used in the innovation process: Through the provision of collaboration forums and knowledge management processes, knowledge required for the innovation process can flow easily across functional boundaries as well as across organizational boundaries to facilitate internal and external collaboration. Creation of a knowledge sharing culture, which is an essential part of any knowledge management program, also stimulates knowledge flow, which is beneficial for innovation.
9.3.6 Knowledge management provides platforms, tools and processes to ensure integration of an organizations knowledge base Through knowledge management structures such as taxonomies, knowledge management can ensure the integration of the corporate knowledge base. This enables staff members to have an integrated view of what knowledge is available, where it can be accessed, and also what the gaps in the knowledge base are. This is extremely important in the innovation process to ensure that knowledge as resource is utilized to its maximum benefit and to ensure that knowledge is not recreated in the innovation process.
9.3.7 Knowledge management assists in identifying gaps in the knowledge base and provides processes to fill the gaps in order to aid innovation Through the structured provision of access to knowledge, knowledge management provides an overview of what is available in the organization. This allows the organization to understand in which areas knowledge is lacking and to systematically build the knowledge base in these areas. The organization may do this through the innovation program itself if the gaps are in strategic areas, but it may also do it through knowledge management processes or operational business processes.
9.3.8 Knowledge management assists in building competencies required in the innovation process Through knowledge accessibility and knowledge flow, staff members are able to increase their skills levels and knowledge both formally and informally. An increase in skills can improve the quality of innovation. The flow of knowledge across functional boundaries ensures that a wider base of knowledge is available to employees than only the knowledge they use in their day-to-day activities. Employees therefore have a wider frame of reference of the context in which they work and will therefore be able to innovate more efficiently. Knowledge management also provides a culture of knowledge sharing and accessibility of knowledge, creating an environment conducive to skills and competency building, which aids innovation.
9.3.9 Knowledge management provides organizational context to the body of knowledge in the organization: Every organizations corporate memory is unique. The structures provided to organize and retrieve knowledge from the corporate knowledge base will therefore be providing a unique context to each particular organizational knowledge base. Provision of organizational context is critical in the innovation process, as innovation in the organization also takes place within a very specific business context. Knowledge management assists in identifying and understanding this organizational context.
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9.3.10 Knowledge management assists in steady growth of the knowledge base through gathering and capturing of explicit and tacit knowledge: It also assists specifically in addressing gaps in the knowledge base through specific acquisition of knowledge in those areas where gaps exist, or through knowledge creation and innovation itself. This in turn feeds the innovation process through creation of a much broader knowledge base that is available as resource for the innovation process. The tacit knowledge base also grows through building of skills due to the availability of knowledge.
9.3.11 Knowledge management provides a knowledge-driven culture within which innovations can be incubated: Knowledge sharing is enhanced by a culture where the role of knowledge, knowledge management, innovation and creative thinking is encouraged. Most knowledge management programs have a strong knowledge culture element through which an organizational culture of knowledge generation and sharing is emphasized. This benefits innovation programs as it provides knowledge as resource, but it also provides a culture within which innovation, creativity and learning through mistakes are encouraged and valued.
9.4 KNOWLEDGE IN CONTEXT TO LEAD INNOVATION 9.4.1 In-sourcing innovation-related customer knowledge Recently, a new understanding has begun to take shape. Instead of nurtured only inhouse, innovation-related knowledge can also be in-sourced from the outside and combine with internal skills and expertise. The spread and subsequent ubiquity of the internet has breathed new life into the use of technology as a device to capture market information and knowledge. Companies have made use of it to facilitate interactions between them and their customers. They have, over a period of time upgraded their technological interface with their customers, such as setting u web-based communities, to gain an insight into customers behavior computer-mediated environments Invaluable though this form of knowledge may be, it is still limited to technology-mediated forms data, information, numbers and figures all of which
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need to be contextualized, interpreted and absorbed by internal resources. But these processes have proved difficult to be achieved in many companies. Although the reconfiguration of such information through sorting, adding categorizing, categorizing, re-contextualizing and combining with internal
information may lead to a generation of new ideas and knowledge, thereby uncovering explicit and latent customer needs and wants, the process still has its limitations in that it takes place many steps removed from the customers tacit dimension, and abstraction from their feelings and emotions. In the past, companies have used their sales force as a channel to capture part of this sticky information and knowledge. Today, information technology media are often used for capturing and diffusing explicit knowledge and information. However face-to-face interactions and the sharing of context and perspectives is still the preferred way to capture tacit knowledge. The increased reliance on technology as an interface with customers has led companies to realize that their knowledge of the customers is not on par with customers changing and fluid needs and wants.
9.4.2 Outsourcing innovation to intermediaries Assuming that it would be too costly to capture customer information and knowledge that is tacit, idiosyncratic, subtle or difficult to articulate, companies are resorting the more conventional approaches whenever possible. For example, they have started to outsource some of their innovation-related knowledge to the external suppliers of information, knowledge brokers and innovation intermediaries who are closer to customers in the distribution channels. In fact, innovation-related knowledge can be bought from information intermediaries, knowledge brokers and innovation mediators who are able to enter into a deeper and more intimate relationship with customers.
The rise of knowledge intermediaries can be explained by their superior ability to organize communities of consumers, users and scientists from all over the world and to elicit from them tacit insights and contextual knowledge that producers and manufacturers are unable to obtain. Customers feel more at ease with such intermediaries, for these can be viewed as more neutral than the so-called greedy
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companies. However, there is more to this than just financial incentives. Scientists engage in these challenges for intellectual reasons as well. Innovation intermediaries fulfill two main functions. From the seeker companies perspective, they are a cost effective, convenient and speedy way of tapping scientific knowledge knowledge that transcends the boundaries of organizations and nations.
They allow a company to expand its R&D capacity without increasing its size and incurring supplementary costs, since all payment is contingent upon satisfactory solutions. Furthermore, as scientists participating in the challenge may be versed in different fields of expertise and may not come from one nation or one continent, the synergy of different approaches and perspectives may be a creative way to solve problems that would otherwise prove hard to solve.
The increase in the various forms of innovation intermediaries can be accounted for in terms of the increase in the mobility of knowledge as the result of the mobility of workers, who spill out ideas from companies R&D departments. Combined with the growing availability of private venture capitalists which have helped finance new players to commercialize ideas spilled outside the silos of corporate research labs, innovation tends to migrate towards the open model. Furthermore, tight connections and intensive communications between the company and its external sources of innovative ideas through new information technologies reduce the cost of transaction and interaction.
9.4.3 Outsourcing innovation to customers Another approach increasingly used by companies is to outsource innovation-related tasks to customers by involving them in the new product development process. Innovation is farmed out to customers because of the immobility of their knowledge.
It seems easier and less costly to push innovation to where tacit knowledge resides, rather than to attempt to extract it, bring it to the firm and use it as an input in innovation processes. Involving the customer in the innovation process would reduce the risk of failure and speed up product cycles. For example, customers of computer and electronic equipment (C&EE) are increasingly putting pressures on their suppliers to design more and more complex and sophisticated solutions to their business
problems. Given that customers are not in a position to thoroughly spell out to their suppliers in explicit forms what they are seeking, they enter into various forms of partnerships, in which they work together with the aim of uncovering or defining problems for which solutions are required. This view suggests that neither a push nor a pull approach is called for. Instead, what is needed is an interactive and relational approach between customers and suppliers. The role of C&EE suppliers is changing from product providers to solutions providers. Solution-based businesses may either develop the solutions internally or in-source them from outside partners. The solution components should be architecturally compliant, i.e. easily integrated using industry standard technology in order for them to be streamlined and integrated with the rest of a systems components with minimum friction. It is a challenge for solutions providers to build the required competencies and organizational adjustments to meet the needs of customers and to establish an effective environment based on a close relationship with them an environment that locks both sides into a mutually advantageous longterm commitment.
Solutions to the problems are created jointly in a process of negotiation and conversation between the suppliers and the customers. Farming out parts of the innovation process to customers also implies that firms.
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Fig No: 7 Effect of Knowledge Management in Innovation (Source: www.emeraldinsight.com/0263-5577.htm). This chart is model of effect of Knowledge management in innovation of the product and process. This charts shows the effect of KM (Knowledge management) characteristics, KM capability and organization learning on KM capability.
9.5.1 Knowledge characteristics: If knowledge is complex, it will raise the cost of acquiring or exploiting a firms knowledge and thus reduce efficiency organizational leaning because of the difficulties in accessing individuals knowledge. On the contrary, modularity and explicitly will increase the levels of organization learning. Modularity follows a new model for managing knowledge that leads to the focus of learning activities in the firm.
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9.5.2 Organization learning: Complex knowledge is slow to transfer and thus more difficult to apply and convert. Complexity of knowledge increases an understanding of the form that knowledge takes and the ways by which knowledge that enhances rather than destroys exciting knowledge. In other words, modularity decomposes knowledge into specific retinues that helps employees implement operation activities and then promotes the companies KM capability. Similarly, the more tacit the companys knowledge, the less employee companys knowledge, the less employees can communicate with their peers.
9.5.3 Knowledge integration Firms have always had some process to synthesize their experience and integrate it with knowledge. Knowledge integration helps the firm create condition under which multiple employees can integrate their knowledge through system and
communication. However, integration has been viewed as depended upon the characteristics or the knowledge or technology manipulated. The four mechanisms are rules and directives, sequencing, routines and group problem solving and decision making for knowledge integration related to characteristics of knowledge.
9.5.4 Knowledge capabilities 9.5.4.1 Influences of knowledge characteristics, organizational learning and knowledge integration on KM capability A wide range of dimensions is used to characterize different types of knowledge. Knowledge classified into two categories: explicit knowledge and tacit knowledge. It is suggested that the knowledge characteristics of complexity and tacitness will affect the performance. Complexity is usually defined as the increase of difficulty in comprehending how an organization functions or produces some outcomes.
Tacitness is the nature of knowledge, which derives from an inability to articulate the principles that influence the performance. Propose that modularity represents the standard interface specification which allows the separation of the production processes. Furthermore, most papers claim that explicitness, complexity and
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modularity are the main dimensions of knowledge characteristics. We believe that based on the operation patterns of our sample firms, all in the technology manufacturing industry, these three factors can be representative of the main dimensions of knowledge characteristics. Organizational learning is hard to achieve, especially for the sharing of tacit knowledge. The key elements that enable learning are channels of communication which encourage individuals to make use of enquiry rather than rely on otherwise Inaccessible tacit knowledge. Certain attributes of knowledge play a key role in the knowledge creation process When knowledge can be accessed explicitly, such as in the form of language, shared meaning, or mutual cognition of the knowledge domain, it is likely more efficient for a firm to share, apply and convert the knowledge. Contends that the more complex, tacit and systemic knowledge is, the more difficult it will be to acquire and exploit it. Therefore, the lower the complexity of the knowledge or the higher the modularity and explicitness, the more firms will enhance their KM capability.
By using modularity of knowledge, integration of newly developed components into the existing knowledge system becomes easier. It seems to suggest that modular knowledge is regarded as routines that are helpful for efficient and flexible integration of KM within the organization. In addition, explicit knowledge also contributes to knowledge integration. The tacitness of some knowledge is difficult for the possessor to explain and communicate. When specialized knowledge must be reduced to general knowledge in order to facilitate communication, it is inevitable that substantial information will be lost. Thus, higher levels of knowledge complexity result in more difficulties that a company may encounter in the knowledge integration process.
9.5.4.2 Influences of organizational learning, knowledge integration and KM capability on innovation Organizational learning activities provide an improved understanding of the whole organization and create open communications with minimum defensiveness. Organizational learning gets people to contribute to the organizational knowledge base. Through organizational learning, the employees have more chances to interact
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with each other so that KM capability consisting of acquiring, conversion and dissemination of existing knowledge can be achieved.
The operative learning of the organization reinforces existing knowledge and the sharing of it throughout the organization. Learning organization in a dynamic environment will enhance the quality and quantity of information transfer and knowledge accumulation. Firms learning capability will enhance knowledge application and creation. Thus, it seems to suggest that a firms organizational learning will influence its KM capability.
Through a spiral of organizational learning activities, firms capture and use knowledge by means of KM processes to foster innovation. Organizational learning emphasizes expertise development and decentralizes bureaucracy to support initiative and creativity. For this reason, innovation is the by-product of a learning organization. Thus, organizational learning has an impact on a firms innovation. A firm with better organizational learning has greater capability to develop products or process innovation. An excellent learning environment in an organization will leverage the use of all resources, including the activities that accompany market orientation and innovation.
Continuous orientation toward organizational learning will improve the efficiency and effectiveness of a firms innovative activities. Organizational design needs to access, and integrate transfer knowledge among members of an organization. Knowledge integration helps firms to combine internal and external knowledge through communication and systems integration. Knowledge as integrated within the organization in order to create KM capability. He proposes that most organizational capabilities require the integration of knowledge from a number of individuals. Firms competitiveness depends on its capacity to integrate knowledge in an effective manner. Without effective knowledge integration, the firm needs to spend more time and resources administering and guarding information, thus impeding innovation. The wider the scope of knowledge that is integrated, the greater the diversity of the individuals involved.
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Diversity resulting from knowledge and information helps individuals in the organization communicate with each other and stimulates more ideas. Furth when a firm has the ability to acquire knowledge and integrate existing knowledge with new knowledge, the firm should be good at producing process or product innovations. Firms capability for reconfiguring existing knowledge is a way of promoting continuous innovation. KM capability is defined as the ability of firms in the acquisition, conversion and application of knowledge. Knowledge will not be able to promote innovation if it cannot be shared or distributed to the relevant people. By the assistance of information technology such as intranets, data systems, or non-information technology tools such as brainstorming sessions and research collaboration, firms can exploit knowledge within the organization. Thus, firms can increase innovation through the application of knowledge. By conversion process, firms can share, assimilate and improve innovation performance via transforming tacit knowledge into codified or explicit knowledge. Thus, firms can promote their KM ability and create more innovation.
9.5.4.3 The influences of KM strategy on organizational learning and KM capability Organizational learning is the process by which firms can detect problems and provide solutions. Knowledge from internal and external learning activities has become a strategic process that facilitates the acquisition and deployment of an organizations stock and flow of knowledge. Different knowledge bases and different strategies in developing and deploying knowledge result in performance differences between firms. However, while the importance of creating, managing and transferring knowledge have been recognized by firms, most have not been able to transform this into an effective KM strategy. Thus, it is a big challenge for firms to establish a suitable knowledge strategy that improves organizational learning and further creates superior KM capability. Firms with human oriented KM strategy will have a better attitude toward learning and innovation, because the sense of care gives rise to trust and empathy, which can encourage organization members to communicate and cooperate better. It is argued that, within a culture of care, individuals may have more favorable perceptions of KM activities.
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9.5.4.4 The influence of KM strategy on knowledge integration and KM capability In a highly competitive market, firms need to simultaneously realign organizational structure and strategy so that a more unique, flexible, and firm specific configuration could provide significant effects on KM capability. Firms having capability to integrate existing knowledge into new architectural knowledge can provide a platform for carrying out new product-market combinations. Firms can integrate knowledge through three major dimensions: efficiency, scope and flexibility. Context in which a firm operates determines the type of integration process which is required. In other words, a contingency fit is required to typologies of KM strategy and types of knowledge integration to achieve better KM capability and innovation. System oriented KM strategy will enhance knowledge integration and KM capability for explicit knowledge.
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9.6 INFLUENCE OF KNOWLEDGE MANAGEMENT IN COMPEVTITIVENESS AND INNOVATION:
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Figure No 8: Influence of Knowledge Management in competitiveness and innovation (Source: Alberta Carmeiro, Journal of knowledge management, Volume. 4, Number.2, 20) The influence of KM on management decisions effectiveness should be considered to support and also provide insight into how knowledge workers can contribute to obtain better results. However, management must consider that knowledge is not a simple and unique entity. The commitment to generate new discoveries and a more demanding understanding is not enough. The organizations need to look for the knowledge that is able to add value. Value adding knowledge is very different to an information mix.
This mix can be important, but first it is necessary to find out how the markets perceive the presence of value. These considerations can be taken as a guideline for KM.
There are perhaps an unlimited number of factors that can define management attitudes regarding the role of intellectual capital into organizations' life. Some managers evaluate significantly this capital as a very important resource that should be used to obtain adequate profits. Therefore this capital should be constantly improved.
As can be seen in Figure, a conceptual model of KM is proposed. It emphasizes that innovation and competitiveness can be a function of the KM. This model takes into account numerous determinants (determinant factors) of the relationships among various fields. The top portion of the model shows the most common factors that usually define management's attitudes and deals with the following questions: How important is intellectual capital? How does management evaluate knowledge development? Is training one of the important aspects to be planned? Is knowledge considered as a strategic tool? Are managers prepared to motivate knowledge development?
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Are managers able to stimulate the potential capacities of their knowledge workers?
KM has to deal with two domains: 1. Personal characteristics of each knowledge worker; 2. Factors that affect personal development.
The most common factors that affect initially the personal characteristics of a knowledge worker are education level, attitudes and values, innovativeness and creativity. Innovativeness is an important factor for supporting innovative efforts and it contributes also to define the personality. However, it is not enough to desire new products or new processes. In fact, an innovation that an enterprise presents into the market may be also due to the creativity of its knowledge workers.
Personal development is directly related to professional experience. Any personal experience may be an information source and a learning situation. As a result from a personal or a managerial decision, training courses may contribute to reawaken previously acquired knowledge and to facilitate the access to a higher knowledge level. The development of each knowledge worker has its own dynamics, which is related with personal objectives. The more demanding the objectives are the more the learning efforts should be intensified. Nowadays, learning processes and knowledge updating procedures depend on information technology. Moreover, it has a decisive role on knowledge development because competitive advantage can only be maintained by the use of information for innovation.
Nowadays, managers have to decide whether they want to obtain better results from their knowledge workers or they prefer to lose the creative power that they possess in their minds and their professional experience. Managers' attention must be focused on personal development. To obtain an effective knowledge level, investment in knowledge development is needed. Managers should improve their ability to motivate knowledge workers to attain higher knowledge levels, because the arousal of this set of intellectual needs may be caused by external stimuli. Motivations should be
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intensified, because they should impel knowledge workers to increase their knowledge levels.
This movement will be decisive in terms of innovation and can contribute to a stronger competitiveness. Even when no innovation is possible, an improved knowledge of the market and competitors can lead to more competitive movements. The technical capacities of a modern information technology will help this motivational scheme. Companies have to find ways to reach knowledge workers' involvement. A person's level of involvement plays a role in how much effort is used to learn new subjects or to deepen knowledge. Moreover, this involvement is an adequate condition for information sharing among knowledge workers. Adding IT, creativity and knowledge leads to a particularly potent combination.
Managers can obtain impressive results in what concerns the companies' abilities to innovate if they are able to develop the stimulation of innovative proposals through motivational methods and adequate rewards. The same can be said in what concerns key success factors: managers should practice frequently the stimulation of competitive efforts, provided through utilization of both existing and new technologies. This conceptual model intends to interpret the relationship between KM, innovation, and competitiveness. It may contribute to an integrated understanding of the knowledge development process and its influences into the domains where management efforts should be focused.
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9.7. NETWORKING PROCESS OF CONTINEOUS INNOVATION BASED ON KNOWLEDGE MANAGEMENT:
Figure No.9: Networking process of Continuous innovation based on innovation (Source: Jing Xu, Remy Houssin, Emmanuel Caillaud and Mickae l Gardoni, Journal of knowledge management,Vol.14.No4,2010)
Due to the multifaceted nature of knowledge and innovation, the relationships between innovation and KM are complex and should be investigated from the view of systems thinking. Based on our proposition about the additional phase of internalization for innovation, a networking process of continuous innovation is presented below by integrating the KM process into it. Then the detailed functioning of internalization phase is discussed through the lens of KM. The networking process provides a global but simplified view of the interactions between KM activities and innovation.
Innovating in a continuous manner is necessary for sustaining the advantage. The capabilities of continuous innovation are closely associated with the knowledge management systems and processes in a company. Considering the intensive iterations and feedbacks during innovation process, we propose that the continuous innovation should be a networking process for better communication and cooperation in a dynamic environment.
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By summarizing the basic common phases in the reviewed innovation processes, we include four basic phases in the networking process of innovation such as idea generation, research and development, prototyping and manufacturing, and marketing, sales and diffusion. Based on our previous analyses of innovation process, the activities after the phase of commercialization are scarcely mentioned but important for continuous innovation. Thus a phase of internalization is introduced into the networking process from the perspective of lifecycle, as illustrated in Figure.9
In the networking process, the common phases and the additional phase of internalization interact with each other and communicate with the knowledge bases through KM process. The common phases can keep the compatibility with existing best practices of innovation, while the internalization phase parallel to the common phases provides a powerful conduit for integrating the KM process into innovation. Then the functioning of internalization phase is discussed.
Despite that knowledge is a key component for continuous innovation, the deliberate KM in order to support innovation has still not found its ways into all companies. That is partially because of the absence of a way to integrate KM process into innovation. Since there are increasing requirements to integrate the KM process into business process, including the process of innovation, the phase of internalization can provide a platform for carrying out the activities of KM. This platform will facilitate the interactions and iterations in innovation and KM. In previous research, this phase has been performed in an implicit way such as market research, capitalization of experience, community of practice and so on.
Owing to the changing customer needs, extensive competition and rapid technological change, innovation is extremely dependent on the availability of internal and external knowledge. Through the additional phase of internalization, innovation process can exchange rapidly knowledge and information with internal and external knowledge bases. The feedbacks from customers, the responses from competitors, best practices, errors and lessons learned about the innovation project will be capitalized so as to be transferred to and assimilated by the stakeholders. By this way, the capabilities of the continuous innovation can be improved.
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The internalization phase makes the networking process of innovation more flat and concurrent. The iterations and feedbacks can be rapidly transmitted to the right place and the right person. Organizational learning in double loop can emerge and a learning network can be built on this platform. The requirements of the latter phases in innovation can be better considered in its early phases. This phase will increase the shared common understanding during the innovation process and improve the knowledge level in the knowledge bases. Furthermore, the sparks and impulses of new ideas are conceived and matured for continuous innovation. With the phase of internalization continuously providing seeds for more innovation, the continuous innovation can become a propeller of companies.
To summarize, we conclude that five phases exist in the continuous innovation process, which are idea generation, research and development, implementation (prototype and manufacturing), commercialization (marketing, sales, diffusion), and internalization (analysis, reflection, synthesis). The intensive interactions between the networking process of innovation and knowledge bases reflect the necessity of the integration of KM process in innovation. The additional phase of internalization provides a suitable platform for this requirement. In the following, the mechanisms of KM for innovation are expounded.
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CHAPTER:- 10 THE BUSINESS PLATFORM VARIABLES THAT INFLUENCE THE INNOVATION MANAGEMENT.
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Technology platform variables and Business platform variables helps in managing the innovation and measures the whole organisation performance related to the profitability and technological Innovation.
10.1 What are Technology platform variables? These variables are concerned with the mechanism of technology, which has influence on the development of continuing innovations. The study allows the understanding of the way innovator builds up a technological capability to gain a competitive advantage.
10.2 What are Business platform variables? These variables are concerned with business capabilities, which have a great impact on the profitability and advantage in new follow on businesses. The study allows an understanding of the factors that help an innovator gain a sustainable competitive advantage.
10.3 Case on Windows operating system for PC [Source: The use of strategies in managing technological innovation, Jarunee Wonglimpiyarat, European Journal of Innovation Management, Volume 7 Number 3 2004 229-250]
The attempt to compete for potential platform creation began when Xerox and Apple launched Xerox Star and Apple Lisa. By tying the operating system to their own hardware, Xerox and Apple expected to command a high price and establish proprietary business platforms. However, the price they set was regarded by the customers as too expensive (Xerox Star $16,595 and Apple Lisa $10,000 comparing to a standalone PC $2,000). Moreover, as Xerox Star and Apple Lisa ran as a closed system, this prevented software development firms from writing application programmes.
Thus, the machines of Xerox and Apple were not seen as valuable for the customers to purchase. The result was that both Xerox and Apple failed to establish a business platform even though they were early movers in the PC Windows operating system market and might have established their technologies as standard. Apple in its launch
of Macintosh continued the strategy of not licensing MacOS to Original Equipment Manufacturer (OEM) hardware suppliers. In other words, Apple thought superior Macintosh technology would make it the industry standard, allowing Apple to gain proprietary benefits. However, Apple did not realise that Microsoft was a close follower who was ready to launch the Microsoft Windows which had similar characteristics to MacOS and would reduce the point of differentiation of Apples Graphical User Interface (GUI) that Apple intended to use for gaining superior benefits (Apple Macintosh was launched in 1984; Microsoft Windows was launched in 1985).
The strategy of not licensing also showed that Apple overlooked the importance of speed in using other PC manufacturers distribution capabilit y to bring the innovation to market. As a result, the MacOS failed to take off as quickly as Microsoft Windows. The strategy of not licensing constrained the growth in the installed base of Apple machines, lowered Apples capability to compete and limited the potential to create a business platform. Among the competitors launching the innovation of Windows operating system for PC (Microsoft, IBM, Apple, Xerox), only Microsoft could create technology platform and business platform. The development of Microsofts Windows created a technology platform in terms of generating further related software products including scalable operating systems for intelligent devices, PCs and servers, software development tools and internet and intranet software and technologies.
Microsoft also created its business platform by pursuing a low-cost licensing strategy to license its Windows via OEM arrangements with the PC manufacturers. Microsoft business platform was reinforced by a product bundling strategy to include software applications running on its operating system in the OEM deal which further increased the value of Microsoft Windows to PC users, increased the demand for its products and reduced the scope for competing suppliers. The distribution strength of global PC manufacturers and the value of application programmes running on Microsoft Windows enabled Microsoft Windows to reach wide adoption and become a de facto standard. The wide adoption and the de facto standard of Microsoft Windows operating system then served as a strong business platform that helped Microsoft to successfully launch subsequent Windows products such as Windows 95, 97, 98, 2000,
Windows NT, Windows CE, Windows ME, and Windows Media and enter the new businesses such as the Internet browser, Web TV business, and computer game.
Although IBM had a great presence in the mainframe computer business and operating systems since the 1960s, IBM lost the opportunity to extend its competitive position into operating system for PCs. The launch of IBM OS/2, although technically superior to Windows 3.1 and Windows 95, could not compete with Microsoft Windows. This is because IBM OS/2 was a closed system, not offered with other PCs and was seen as too complicated and unwieldy for the customers. Thus IBM failed to establish its OS/2 as standard operating system although IBM had a strong distribution capability. IBMs aim of developing an operating system business platform creation was unsuccessful. From the study, it can be seen that the way that innovators launched successive Windows products to match their competitors within a few years suggests that technology can quickly be caught up.
Taking into account the competitive position among innovators, it is worth noting that Microsoft enjoyed platform advantage through ownership of over 90 per cent of PC customers.
Microsoft developed platform advantage from its control over the technology platform, business platform and de facto standard for operating systems. However, Microsofts business platform is vulnerable to erosion by state regulation rather than from competitors reacting to Microsofts anticompetitive software bundling and predatory pricing of software. Microsofts declining share price was a result of legal action by the US authorities against Microsofts anti competitive behaviour in the market for PC operating systems and software.
To remain competitiveness in the software business, Microsoft aggressively upgraded its technology platform and business platform by purchasing/acquiring the software firms, e.g. Forethought, Fox Software and Visio Corp. Microsofts market capitalisation and high market to- book ratio reflects its platform ownership. The overall financial performance of Microsoft compared with those in the PC-operating system market demonstrates the competitive advantage of Microsoft in the operating
system market the progress of Windows operating system for PC innovation as a result of innovators using strategies in managing innovation. The outer circle represents the total revenue pool of innovation. The inner circle represents the size of market share of individual innovator. In the innovation process, Apple MacOS and Microsoft Windows were the major competing Windows operating systems. However, the use of the low price licensing strategy by Microsoft enabled it to achieve adoption for a variety of manufacturers and hence to create.
10.3.1 Technology platform analysis: Windows operating system for PC Technology platform variables Description.
1. High performance relative to existing practices in several dimensions of performance: Multithreading the running of programs simultaneously; memory protection the control of the areas of read/write of programs so that programs cannot interfere with each other; operating system based on the capacity of microprocessor technology, e.g. from Intels X86 series to MHz series. 2. Variety of continuing applications: Microsoft Windows 95, 97, 98, Windows NT, Windows 2000, Windows ME, Microsoft.Net, Windows.Net, WebTV product with each application focusing on different markets 3. Intermediary serving multiple value chains: Windows operating system to serve PC and variety of devices 4. Subject to obsolescence from new technology: Linux operating system and Suns Java technology as a possible Windows NT alternative for the network operating system; Symbian as a possible Windows CE alternative for the hand-held markets. 5. Mostly single ownership: GUI Windows product by Microsoft, Apple, IBM 6. Controls channel of supply to customers: Microsoft controls channel of supplying Windows operating system through PC makers by pursuing the low price licensing strategy 7. Utilising numerically intensive analytic processing: This applies in particular for the information highway.
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10.3.2 Business platform analysis: Windows-operating system for PC Business platform variables Description:
1. High performance in several dimensions of services: Microsoft Windows with different versions according to different markets, e.g. server market, desktop market, hand-held market 2. 2. Variety of continuing markets: Microsofts Windows for Smart Cards, mobile phones, computer game, Internet, Web TV business 3. Consolidating multiple value chains: Acquisitions of/investments in
technology firms in many areas, e.g. Internet, mobile telecommunications, browser 4. Subject to obsolescence from new channel: Smart phones, Web phones, internet kiosks, mobile phones and other specialised access devices as new delivery channels 5. Often complex collaborative ownership: None 6. Controls channels of distribution to customers: Microsoft Windows controls the delivery channel of PCs through the channels of global PC manufacturers 7. Utilising data-intensive analytic processing: None
8. Firm-specific competencies: Monopoly power of Microsoft over Windows for the PCs 9. Extensive scale, scope and experience: Microsofts scale economies from its largest software operation and a number of acquisitions virtual standards. The self-reinforcing effect was evident in that the pursuit of low price licensing strategy to the PC manufacturers led to the growing installed base of PCs running Microsoft Windows operating system.
A larger installed base of the Wintel machines led to a greater availability of software applications. In turn, this increased the value of Microsoft Windows to PC users and increased the demand for its products. Microsoft gained the largest market share (the internal benefits represented by the size of the circle). Microsofts benefits from exploiting non collaborative innovation were high relative to the total benefits. In other words, Microsoft Windows becomes a de facto standard established from Microsofts non-collaboration approach
Microsofts ability to establish its technology as industry standards then allows it to control the delivery channels, own the customers and enjoy a continuing advantage (the main benefits from owning the customers can be seen in terms of the largest market share of Microsoft in the Windows operating system for PC market). Thus, Microsoft did not see collaboration as important.
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The innovation process of Windows-operating system for PC
Figure no 10 The innovation process of windows operating system for PCs

10.4 : Plain paper copier machine of Xerox [Jarunee Wonglimpiyarat, European Journal of Innovation Management, Volume 7 Number 3 2004 229-250 243]
The process of platform creation in the plain paper copier market began in the early years of the Xerox copier. The development of Xerox copier created a technology platform of xerography/ electro photography in that the underlying technology was capable of driving a variety of imaging applications including printer, copier, fax and scanner which could be created using common parts and technologies.
The launch of the model 914 enabled Xerox to create a business platform. The model 914 which was easier to use than the existing copying machines using different technologies created a strong demand for Xeroxs copier. The demand for Xeroxs copier can be seen from the 15 per cent annual growth in terms of copying volume in the 1960s. The combination of capabilities in terms of the product feature, the strength of Xeroxs brand and sales force served as a strong business platform that helped Xerox enjoy a competitive advantage in terms of uninterrupted sales growth and profits through the 1960s. In the year 1965, Xeroxs sales growth was 10 times higher than the first year sales (962 per cent increase). In 1969, Xeroxs profit increased by 600 per cent from$23 million in 1963 to $161 million. Further, Xeroxs business platform enabled it to enter the new businesses such as PC, Office of the future (office automation), plug-and-play products, internet business, insurance and financial services. In the late 1970s, the technology platform of Xerox began to erode when most of its patents expired. Japanese competitors entered the fray to compete with the price which was 25 per cent below the cost of Xerox copier. As a result of Xeroxs technology platform of xerography/ electro photography being matched by the liquid toner technology of the Japanese firms, the market share of Xerox was reduced from over 94 per cent in 1970 to 41 per cent in the early 1980s. The way that Xeroxs technology platform was destroyed thus demonstrates that technology could not be permanently monopolised and could provide only temporary competitive advantage (Xerox copier was launched in 1960 and matched in the late
1970s). The business platform of Xerox was also undermined as a result of strong competition from the Japanese copiers (stated above). The falling market share during the 1970s-1980s indicated that Xeroxs business platform was eroded. Although Xerox had brand strength and the capabilities of PARC [3] that enabled it to enter new businesses (stated above), Xerox was slow to bring the new products to commercialisation.
Thus Xerox could not fully exploit its business platform capabilities to subsequent advantage. The competition in the plain paper copier market increased in the 1990s as non-traditional competitors in the printer business like Hewlett- Packard took printed pages away from the copier business. The Japanese copiers, e.g. Canon, Ricoh, and Konica also continued to take the share in the copier business. The situation became worse when Xeroxs attempt to reorganise its sales force backfired. Xerox kept losing market share and was in a state of near collapse. The falling business platform is reflected in Xeroxs stock price plunge. Xeroxs market value was 8 times lower than that of Hewlett-Packard and not much larger than the Japanese competitors.
The market to book value and operating profit of Xerox were dwarfed by the major rivals like Hewlett-Packard and Canon. The market share of only 25.8 per cent in the late 1990s comparing to the share of 90 per cent-100 per cent in the 1970s indicates that Xerox is much less competitive than before and charts the erosion of its business platform. From the study, Xerox built a technology platform as well as business platform but could not maintain them to enjoy continued platform advantage. As the market is now moving towards the digital copier and networked solutions, there are many competitors who are ready to compete in the light of this new opportunity. Canon, a rival of Xerox, is a pioneer in digital and colour copiers.
Hewlett-Packard also competes in the digital market with its high-speed digital electronic copier and printer. These are indications of increased competition in the copier market. Xerox strategy to rival Canon or Hewlett-Packard and rebuild its platform with its strategy of document processing has attracted little confidence in the market. Figure gives an overview of the progress of plain paper copier innovation as a result of innovators using strategies in managing innovation. The circle represents the total revenue pool of innovation in the plain paper copier market. Xerox
had the dominant market share during the 1960s-1970s because its superior copier protected by the strong patent and the aggressive direct selling enabled Xerox to develop a new market.
In other words, Xerox could get rid of competing copiers (alternative copiers with different technologies) with the launch of its superior one-touch copier (copier model 914). Also, Xerox initiated the concept of leasing which not only allowed it to remove technology risk for customers but also gave it an extremely strong position in the marketplace. In the early 1970s, Xerox controlled the plain paper copier market with 100 per cent market share. The largest market share could best be adjudged as the internal benefits. Xerox was satisfied with its internal benefits and therefore did not see collaboration as important.
10.4.1 Technology platform analysis: Plain paper copier 1. High performance relative to existing practices in several dimensions of performance: Colour printing dye-sublimation for continuous-tone, photographic-quality output; high-density optical storage for encoding pictorial information capacity; photoreceptor for laser printing digitization technology for faster and sharper printing. 2. Variety of continuing applications: Electro photography as a photo conducting imaging platform towards electronic copier, duplicator, scanner, printer, facsimile. 3. Intermediary serving multiple value chains: None 4. Subject to obsolescence from new technology: Selenium-coated drums replaced by photoreceptor (imaging medium); xerographic technology (powder technology) replaced by liquid toner technology; analogue technology will be replaced by digital electronic and networking technology 5. Mostly single ownership: Xerox, Canon, Ricoh, Sharp, Minolta
6. Controls channel of supply to customers: None 7. Utilising numerically intensive analytic processing: None
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Figure No: 11: The innovation process of plan paper machine of Xerox
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Business platform analysis plain paper copier: 1. High performance in several dimension of service: The document product for different market segment, production publishing solution, document outsourcing the networked office and small/home office market. 2. Variety of continuing market: Xeroxs expansion into PC business, office of the future, insurance and financial services, plug-and-play products, Internet business
3. Consolidating multiple value chains: Joint ventures and acquisitions in related area, e.g. colour printing, software tools, fax system, networked equipment.
4. Subject to obsolescence from new channel: None 5. Often complex collaborative ownership: None 6. Controls channels of distribution to customers: None 7. Utilising data-intensive analytic processing: None 8. Firm-specific competencies: Patented technology of xerography (up to 1970s); powerful brand synonymous with copying process.
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CHAPTER:- 11 LIMITATION AND FURTHER SCOPE OF RESEARCH
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In this project we have used only secondary data. Our project is lack of primary data. Today in the era of cut through competition, most of the organizations want to reduce lead time for their new or innovative product. So it leads to Globalization of innovation process in which innovation process is divided in several steps and work on each single step done at the same time in different parts of the world. It also enhances local adaption of product, because it enables customization. So interested candidates will go for the more depth of Globalization of innovation process
There are mainly 2 types of innovation; Incremental & Radical innovation. Both innovations require different types of resources, technology support, and management. So in future He/ She may identify and study different resources, technology support, and management which will be required for both type of innovation separately.
In product innovation we have mentioned 4 major forces that affect performance of innovative product. But we are sure that there are many other forces that affect the performance. It will be interesting topic for further research. Process innovation is too complex process, so limitation is that, it is somewhat more technical, so technical person have good scope in process innovation.
By practising TQM, 5R, 5S, Lean manufacturing system, JIT system, 6-sigma, almost production excellence has been achieved. If we talk about India, because of poor infrastructure, logistic will remain darker side of management. So lot of work has been required to improve logistic system.
Some companies like Apple, Microsoft, GE are excellent to attract and retain innovative workforce, while on another side some innovative project failed with only the reason of stability of innovative workforce. So various HR tactics which can identify, motivate, retain innovative people. It may be an interesting topic for researcher.
Up to now, idea diffusion phase has been proved to be more risky for organizations. So interested candidates may find reason for that and also find our precaution which has been required at idea diffusion phase.
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At last from case studies, we have identified 9 various business platforms which will be useful during innovation for obtaining excellence performance. These 9 variables may increase over the time as business became more complex.
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CHAPTER: - 12 CONCLUSION
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Knowledge management
Foster of continuous innovation by management
Product
Process
Inventory management and Logistics
Human resource management
Business platform variables and Technical platform variables
Innovation management
Fig no. 13: Conclusion
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As per our objective and figure13 we started with different innovation in product, process, inventory management & logistics and human resource management. We studied the different types of innovation and innovation management techniques and tools. We also went through for some case studies in the same and conclude that continuous innovation in the activities of the organization is necessary as well as management of the same is necessary for that knowledge management of the organization had to play a crucial role. Knowledge is an asset for any organization. Knowledge management helps any organization to achieve a competitive advantage through innovation. So in that we conclude that knowledge management is playing a key role in innovation management. As mentioned in the figure no.13 management role in fostering continuous innovation is important. In that we discussed about the idea generation model. For the storage and implementation of that idea KM is very crucial. Continuous foster by the management helps the organization for continuous innovation in product, process, inventory management & logistics and HRM. Continuous innovation is measured on two variables. These variables are also the mechanism of continuous and successful innovation management. In that part we included two cases and measures companies innovation on that variables. A company have to introduce incremental as well as radical innovation in any part of the business activities according to mechanism of the given variables.
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CHAPTER: - 13 BIBLIOGRAPHY
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INTRODUCTION Study on importance of innovation management in organization, By- Sheikh Taiha, Lovely Professional University. Why, What & How of Innovation management, By- Gary Hamel, Harvard business review, Febuary 2006. The discipline of Innovation, By- Peter F. Drucker, Harvard business review, August 2002. Creativity is not enough, By- Theodore Levitt, Harvard business review, august 2002. Mapping your innovation strategy, By- Scott D. Anthony, Harvard business review, May 2006 Managing for creativity, By- Rechard Florida & Jim goodnight, Harvard business review, July august 2005.
PRODUCT INNOVATION Successful product innovation, A collection of our best, By- Robert G. Cooper & Scott J. Edgett. Maximum productivity in product innovation, By- Dr. Robert G. Cooper & Dr. Scott J. Edgett, product development institute INC and Stategate international. Innovation management methods & tools for sustainable product service system, By- Ahmad Abdalla, South Westphalia, University of Applied sciences, soest, Germany. Successful product innovation, A collection our best, By- Robert G. Cooper & Scott J. Edgelt, stage gate international. A measurement scale for product innovation performance, By- Joaquin Alegre, Dept of management, University of Valencia, Spain. Product innovation & management in small enterprise, By- Dennis A Pitta, University of Baltimore, Marryland, USA. Product innovation management in 2010, product development INC and stage gate international.
PROCESS INNOVATION Process innovation, By John Jeston & John Nelis, consultants, touch point, Business process services, Sydney, Australia. TQM and process innovation, By- Angel R. Martinez Lorente, University of Manchester, UK, Frank Dewhurst, University of Murcia, Spain. Transitioning from TQM to total innovation management, By- Danniel I Prajogo, school of management, Deakin university, Australia.
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INNOVATION IN INVENTORY MANAGEMENT & LOGISTIC www.microsoftdynamicnav.com Enterprise resource planning & organizational innovation- A management prospective, By Rodney Mcadam and Alan Galloway, school of business organization and management, UK. Optimized supply chain solution. Going backward: Reverse logistics trend and practices by Rogers and Tibben-lembke.
Book: John J. Coyle, C. John Langley Jr., Brian J. Gibson, Robert A. Novack, Edward J. Bardi, A Logistics approach to supply chain management( Indian edition, Cengage Learning, pp no: 38-64, 93-106, 439-447)
INNOVATION IN HR
Human capital trends and innovations, August 2009, PEW centre on the states, sponsored by PEW charitable trust. E HRM: innovation or irritation, An explorative empirical study in 5 large companies on web based HRM, By- Huub Ruel, Utrecht school of governance Innovation in HR, Vol-26, No.-1, Winter-2000, A publication of organizational resources counsellors INC. Innovation and leadership, Vol-24, No.-5, 2008, Emerald group publishing Ltd. Managing change and innovation, ch-7, Prentice hall, 2001.
http://www.russill.com/Clan.htm
HOW MANAGEMENT CAN FOSTER CONTINEOUS INNOVATION A leaders guide to radical management of continuous innovation, Vol-38, No.4, 2010, Emerald publishing Ltd. 7 strategies to sustained innovation, By- Dr. Robert Karlsberg & Dr. Jane Adier. How to turn innovation into discipline, By- Robert B. Tuckle. Innovation: creating best practices of tomorrow, By- Paul Sloane. An integrated approach to managing innovation, A white paper, project leader international Ltd. Mapping your innovation strategy, By- Scott D. Anthony Technology & innovation, A working paper, July 2007, IIM- Banglore
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ROLE OF KNOWLEDG MANAGEMENT
MANAGEMENT
IN
INNOVATION
How does KM influence the innovation and competitiveness by Alberto Carneiro. KM and innovation performance by Bengt-A ke Lundvall and Peter Nielsen Aalborg University, Aalborg, Denmark. www.emeraldinsight.com/0143-7720.htm Macro process of knowledge management for continuous innovation by Jing Xu, Remy Houssin, Emmanuel Caillaud and Mickaei Gardoni Fostering innovation and knowledge creation: the role of management context by Nekane Aramburu, Josune Saenz and Olga Rivera The role of knowledge management in innovation by Marina du Plessis Supporting Innovation with Knowledge Management by Marjan Leber, Andrej Polajnar, Petja Pizmoht, and Iztok Palcic, University of Maribor Slovenia.
Book: Kenneth C. Laudon, Jane P. Laudon by Management Information System(10e, Pearson prentice Hall, Page No. 462-500)
BUSINESS PLATFORM VARIABLES THAT INFLUENCE INNOVATION MANAGEMENT The use of strategies in managing technological innovation by Jarunee Wonglimpiyarat. http://www.zaipul.com www.emeraldinsight.com/1061-0421.htm
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INNOVATION MANAGEMENT

Guided by Dr. Tejash Pujara

In partial fulfillment of the requirements of Tolani Institute of Management Studies, Adipur

For the award of the degree of Post Graduate Diploma in Management

Tolani Institute of Management Studies Adipur- 370 025 March 2011

Tolani Institute of Management Studies, Adipur

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Sr. No. 01 02 Types of innovation

Features of Inventory management software- Microsoft dynamic NAV

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Networking process of continuous innovation based on knowledge management

111 115 121

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Sr. No. Abbreviations 01 02 03 04 05 06 07 08 KM IM DCL ROI FDI PPP SMEs MC

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LIST OF CASE STUDIES

Page No. 32 35 49 60 105 112

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Conceptual studies are always observed during the project study. It

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Bharat A. Lalwani (09054)

Rajkumar D. Patel (09078)

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Major Effect of innovation on consumer habits and behaviors Minor

Major innovation Incremental innovation Enhances

Radical innovation Strategic innovation Destroys

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CHAPTER:- 4 PRODUCT INNOVATION

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4.2 FOUR MAJOR FACTORS OR FORCES DRIVE A NEW PRODUCT PERFORMANCE

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Ergonomically designed boarding, loading and seating solutions.

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CHAPTER:- 5 PROCESS INNOVATION

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CHAPTER:- 6 INNOVATION IN INVENTORY MANAGEMENT AND LOGISTICS

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