TO STUDY THE ROLE OF MANAGEMENT IN

INNOVATION AND IT’S IMPACT

Submitted By

Supriya Sunaji Hanumanthkari

UNDER THE GUIDANCE OF

Prof. Varsha Maheshwari

A PROJECT SUBMITTED IN PARTIAL

FULFILMENT OF MMS TO

VIDYALANKAR INSTITUTE OF
TECHNOLOGY
Wadala (East), Mumbai 400 037

April 2020
 TO STUDY THE ROLE OF MANAGEMENT IN
INNOVATION AND IT’S IMPACT

Submitted By

Supriya Sunaji Hanumanthkari

UNDER THE GUIDANCE OF

Prof. Varsha Maheshwari

A PROJECT SUBMITTED IN PARTIAL

FULFILMENT OF MMS TO

VIDYALANKAR INSTITUTE OF
TECHNOLOGY
Wadala (East), Mumbai 400 037

April 2020

Signature of Faculty Guide Head of Department

 DECLARATION

I hereby declare that this project report submitted by me to Vidyalankar

Institute of Technology, in completion of the Master in Management
Studies (MMS) under the title “To Study the role of Management in
Innovation and it’s Impact” has been accomplished under the guidance
of Prof. Varsha Maheshwari is a bonafide work undertaken by me and
it has not been submitted to any other University or institution for the
award of any other degree or diploma certificate or published any time
before.

Supriya S. Hanumanthkari
 ACKNOWLEDGEMENT

My project on title “THE ROLE OF MANAGEMENT IN INNOVATION AND

IT’S IMPACT” has been a great learning experience.

This is to acknowledge Prof. Varsha Maheshwari under whose guidance I have

been able to carry on this project effectively without any trouble. Her invaluable
advice, unwavering trust and unconditional support helped immensely in timely and
successfully completion of the project.

I am also thankful to Prof. Trupti Naik, Assistant Professor, Department of

Management Studies, for providing valuable feedback and suggestions at various
stages of the project as well as for proving personal guidance whenever needed.

I am grateful to my MMS colleagues Sheetal Dahibavkar and Abhishek Jambhale

for providing pleasant ambience, lifting me up when I was stressed out and for
continuously encouraging me throughout the course of the project. I would also like
to thank our Class Representative (CR) Miss. Zainab Vora for her constant efforts
being taken for fellow batchmates. Thanks to all my colleagues who have helped me
either directly or indirectly, I am grateful for their valuable inputs. This project would
not have been possible without their help.

Supriya Sunaji Hanumanthkari

 Master of Management Studies Department
Vidyalankar Institute of Technology, Mumbai-400037

CERTIFICATE
This is to certify that the project entitled “To Study the role of Management in
Innovation and it’s Impact” is a bona fide work carried out by Miss. Supriya Sunaji
Hanumanthkari in the Masters of Management Studies Department of Vidyalankar
Institute of Technology, Mumbai and is submitted in partial fulfillment of the requirements
for the award of the degree of Masters of Management Studies in Finance.

Prof. Varsha Maheshwari

Assistant Professor
Master of Management Studies Department
Vidyalankar Institute of Technology, Mumbai

Forwarded by:

Dr. Amit Oak

Professor and Head

Master of Management Studies Department
Vidyalankar Institute of Technology, Mumbai
Date:
EXECUTIVE SUMMARY

First part 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. It 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. It
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. It focuses on inventory
and logistics management. In inventory management, Microsoft dynamic NAV
software has been discussed with advantage and disadvantage of software in
inventory management. In logistic management, we focus on reverse logistic,
explained it with help of case study. It consists 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. It focuses on fostering continuous
innovation. It provides information for idea generation to innovation in market.
Each step has been described in detail. It contains role of knowledge management
in innovation management, which explain than how knowledge management helps
firm for innovation management. In which 3 different models is been mentioned.
We derived business platform variables and Technical platform variables with help
of 2 case studies. 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 end we conclude the whole project and mentioned the importance of the
Knowledge management and foster innovation by management for continuous
improvements.
Contents of General Management Project
Sr. no. Topic Page Nos.

1 Introduction 1
1.1 Creativity and Innovation 1
1.2 Innovation v/s Invention 1
1.3 Innovation 1
1.4 Need for innovation 2
1.5 Types of innovation 2
1.6 Globalization of innovation process 3
1.7 Contribution of various multinationals 4
in innovation
1.8 Impact of innovation on organization 5
1.9 Barriers to innovation 5
2 Objectives 7

3 Methodology 8

4 Product innovation 9

5 Process Innovation 11

6 Innovation in Inventory management 18

and logistics
7 How Management can foster 23
continuous Innovation
8 Limitation and further scope of 27
Research
9 Analysis and Conclusion 28

10 Bibliography 29
1. INTRODUCTION

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
don’t 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 Australia’s 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 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.

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Let’s 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 company's growth? In every industry, the leading companies are the
innovators. They achieved that stage by extensive innovation and market presence for years.
Meanwhile, today’s 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
company’s competitive advantage. This holds very true as long as any company 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

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1.5 KINDS OF INNOVATION
Based on the way, it is implemented Innovation can be divided into following major categories:
Major Major Radical
Effect of innovation innovation
innovation on
consumer
Minor Incremental Strategic
habits and
Innovation innovation
behaviours

Enhances Destroys
Effect of innovation on organization established firms

Incremental Innovation
Incremental innovation projects are built upon an existing knowledge and resources within an
organization. As a result of 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.
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.

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

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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. At the same time, innovations in today‘s ―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

1.7 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).

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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).
China’s 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
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 don’t 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 don’t 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.

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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.

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.

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 .

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 machine-
manufacturing 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.

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2. OBJECTIVES

1. To Study the Innovation in followings:

• Product
• Process
• Inventory management & Logistic

2. To study how management can foster continuous Innovation.

3. To study the business platform variables and Technical platform variables that influences the
innovation management.

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3. METHODOLOGY

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 so that we are able to understand the relationship
between them.
Then we focused on the role of management in fostering innovation and then understood some
models to identify the relationship between innovation management.
We also viewed some Business variable platforms which influences the innovation process and
innovation management.

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4. PRODUCT INNOVATION

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.

FOUR MAJOR FACTORS OR FORCES DRIVE A NEW PRODUCT PERFORMANCE

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 Major factors that drive a new product performance

• 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 business‘s product innovation direction and helps to steer resource allocation and
project selection.
• 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.
• 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-ofcustomer
input, and tough Go/Kill decision points. This is a vital success driver for virtually all of the
Best Performers.
• 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 the broader picture. For example, having a great idea-to-launch
process is not sufficient – it‘s 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 business‘s new product development
productivity and performance.

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5. PROCESS INNOVATION
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.

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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.

Various levels of process innovation

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.

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.

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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.

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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 onsite 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.

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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.
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
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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

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 India’s 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 upgrade— especially to win
and retain younger customers who were willing to pay for anywhere, anytime banking
capabilities.

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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, crossselling and
customer service

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 India’s
three pronged strategy required HP to play multiple roles—hardware and software supplier,
consulting and implementation partner and finally business process outsourcer (BPO), with HP
chosen to run the banks data centre 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 HP’s help, the Bank of India is realizing phenomenal success—234% 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
bank’s strategy.

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 6. INNOVATION IN INVENTORY MANAGEMENT AND LOGISTICS
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 ongoing
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.
Also it 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
• Raw materials: Materials and components scheduled for use in making a product.
• Work in process WIP: Materials and components that have begun their transformation to
finished goods.
• Finished goods: Goods ready for sale to customers.
• Goods for resale: Returned goods that are salable.
INVENTORY MANAGEMENT SOFTWARE
Inventory management software is a computer-based system for tracking product levels, orders,
sales and deliveries. 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.

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 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.

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):
• 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.
• 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.

• Order management
Once products reach a certain low level, a company‘s 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.

• 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.
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 Advantages
There are several advantages to using inventory management software in a business setting.
• Cost savings
In many cases, a company‘s 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.
• 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.
• 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.
• 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.

Disadvantages
The main disadvantages of inventory management software are its cost and complexity.
• Expense
Cost can be a major disadvantage of inventory management software. Many large companies,
such as Polo Ralph Lauren, Macy‘s,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.
• Complexity
Inventory management software is not necessarily simple or easy to learn. A company‘s
management team must dedicate a certain amount of time to learning a new system, including

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 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.

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. 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.
• 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
with system records.

INNOVATION IN LOGISTICS
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.

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What is 3rd party (3PL) Logistics?

Essentially, third party Logistics firm may be defined as external supplier that performs all part
of company’s logistics services.

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.

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.

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 7. HOW MANAGEMENT CAN FOSTER CONTINUOUS
INNOVATION

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 Newton’s head sparked to deliver an
Idea, which plays a vital role in everyone’s 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.

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 people’s attitudes. People
and organizations have to exceed what is pre-defined in their functions.
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 organization’s
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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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.
1. Idea Generation
2. Idea Conversion
3. Idea Diffusion
4. Idea Assessment

Idea
generation

Idea
conversion

Idea
diffusion

Idea
assessment

Phases of ideas
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.
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.

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1. 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
doesn’t 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.

2. 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

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3. 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
organization’s 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 company’s innovativeness and hence combat the
insidious strategy decay that often afflicts a company’s business. The organization’s 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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8. LIMITATION AND FURTHER SCOPE OF RESEARCH

In this project we have used only secondary data. The project lacks 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 processes
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 practicing 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.
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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9. CONCLUSION

As per the objective I started with different innovation in product, process, inventory
management & logistics. I studied the different types of innovation and innovation management
techniques and tools. I 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.
Management role in fostering continuous innovation is important. In that we discussed about
the idea generation model. The storage and implementation of that idea is very crucial.
Continuous foster by the management helps the organization for continuous innovation in
product, process, inventory management & logistics.
Continuous innovation is measured on two variables. These variables are also the mechanism
of continuous and successful innovation management. 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.
Also, to promote its Make in India campaign with job creation at its core, the government is
considering allowing 100% foreign direct investment (FDI) in the multi-brand retail – as long
as the products are made in India. However, the final decision is yet to be taken. If the
government allows 100% FDI in multi-brand retail, the domestic industry is expected to get a
further boost.
With the GST being consumption-based tax regime, retail industry would now come under
focus of the Indian states. Overall, on a broader level, the GST it is has a positive impact on the
retail industry in India.

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 BIBLIOGRAPHY

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.

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