Ten Different Types of Innovation (cont.) 4

A. Configuration (focus on the innermost workings of an enterprise and its business systems -  last of 4 types)

4. Process (focus on core competencies, activities and operations that produce an organisation's products and services)

Using the following tactics:

- lean production (reduce waste and costs throughout the system)

- process and production standardisation (reduce cost, errors and complexity by using common products, processes, procedures, policies, etc )

- predictive analytics (models past performance data as a basis for predict future outcomes to design and price offerings accordingly)

- outsourcing (get others to perform repetitive tasks or challenging work for you, especially if not a core competence)

- flexible manufacturing (have a production system that can rapidly react to changes & can still operate efficiently)

- localisation (adapt an offering, process or experience to target a specific group of people or region)

- intellectual property (IP) (use a proprietary process to commercialise ideas in ways that others cannot duplicate)

- logistics systems (manage the flow of goods, information and other resources from point of origin to point of use)

- on-demand production (produce items after an order has been received to avoid carrying costs of inventory)

- process automation (apply tools and infrastructure to manage routine activities in order to free-up staff for other tasks)

- process efficiency (create or produce more while using less in terms of resources like materials, energy consumption, time, money, etc)

- strategic design (employ a purposeful approach that manifests itself consistently across offerings, brands, experiences, etc)

- user-generated (encourage users to work in creating & curating the content in your offerings), etc

NB The above tactics can be used individually or in combination

Indicators of success are when the organisation 

- has unique competencies that are delivering its products and services

- variable costs or working capital which is considerably lower than competitors' and/or industry norms

- possess a cluster of patents around a particular technology, methodology or process

Some examples include

- Zara

(...the company uses an integrated and efficient production system design, production, logistics and distribution, which drives short turnaround times and allows store managers to keep stock at a minimum. Its designers can quickly review production issues and respond to changing fashion trends. Meanwhile, suppliers and distributors are carefully located around the world to promote efficiencies, while Zara's internal logistics system is set up so that the time between when orders are received at distribution centres and when merchandise is actually delivered to stores is as short as possible. Employees process a non-stop flow of information from stores that conveys shoppers' desires and demands...... using its supply chain to its advantage, as it maximises inventory churn and allows the company to respond to emerging trends briskly..."

Larry Keeley et al, 2013

- Hindustan Unilever

"...Product traditionally sold in large bottles or multi-use packs were disaggregated and sold in small, single use sachets. This catered to the large portion of Indian population without the means or the inclination to purchase goods in large quantities..."

Larry Keeley et al, 2013

- Toyota (its lean production system reduced waste by

"...driving astonishingly efficient and continual product and process improvements throughout the company..."

Larry Keeley et al, 2013)

- IKEA (developed

"...flat-packed furniture with no variation by region or country. Its products included the same hardware and instructions regardless of where they were purchased, and helped to streamline the company's internal production processes..."

Larry Keeley et al, 2013)

 

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