Process Innovation

Brown et al. (2005) proposed that “there is a need to view operations management as part of a fluid, interactive, mutually beneficial series of relationships between raw materials and the end customer”. Conceptualizing operations management for the process industries in such a broad manner pinpoints the significant importance of the complex process and value chains in this cluster of industries (Tottie and Lager, 1995). Whilst early integrative development of product and production technology is desirable in other manufacturing industries (Bruch and Bellgran, 2014), the integrative perspective on raw materials, process technology, and products needs to be given much stronger consideration in process-industrial product and process innovation (Hullova et al., 2016, Lager, 2017). The intimate coupling between products and related production process technology (Frishammar et al., 2013) thus makes the development of non-assembled products, in reality, the development of new or improved process technology (Hullova et al., 2019); “the process is the product” (Rousselle, 2012). Whilst product innovation must always start and finish with the customers, process development is a more in-house affair. According to the Oslo Manual (OECD, 2005), process development can be defined as follows:

Process development (process innovation) is the implementation of new or significantly improved production or delivery methods. This includes significant changes in techniques, equipment and/or software.

The Oslo Manual further states that, “with respect to goods, the distinction is clear”. The customer for process innovation is thus primarily an internal customer, and the following slightly modified extended complementary definition underline these ideas:

Process development could be defined as development mainly driven by internal production objectives. Such objectives may be reduction of production costs, higher production yields, improvement of production intensities, environment-friendly production, etc. (Lager, 2002). In many sectors of the Process Industries, process development is mainly prompted by the needs of production (internal customer). Another internal customer to process development is the company’s own product development (Lager, 2010).

In a study of process innovation in the process industries (Lager, 2010), 40 percent of total company R&D expenditure, as an arithmetical average for all companies, was spent on process development.

Process Innovation Management Capabilities

In perusing corporate process innovation management capabilities not only in the perspective of cost reduction and as a sub-process to product innovation, but through the lens of digitalization and sustainability as well, it is evident that an enhanced management of process innovation stands out as a vital management capability. In the following, a number of areas of Process Innovation Management have been listed:

Process innovation strategies (Chesbrough and Appleyard, 2007, Chiaroni et al., 2010, Larsson and Bergfors, 2006, Leker et al., 2018):

  • How to design a Process Innovation strategy and manage portfolio balancing of process innovation projects of different degrees of newness in a process-industrial context?
  • Revisiting the “S-curve” concept and process innovation road-mapping methodology for strategic process innovation.

Structural organizational and cultural aspects on process innovation (Bergfors and Lager, 2011, Hofstede, 1993, Schein, 2009):

  • Exploring new or improved innovation management capabilities and knowledge areas in response to process-industrial digitalization and sustainability challenges.
  • How to foster a sustainable company innovation culture in “production-oriented” process-industrial operational environments?

The process innovation work process (Lager, 2000, Lim et al., 2006, Pisano, 1997):

  • How to develop and design a company process innovation work process for non-assembled products?
  • How to develop a company “tool-box” of methodologies and best practices as supportive instruments for an enhanced process innovation work process?

Collaboration with equipment and raw material suppliers (Aylen, 2013, Lager et al., 2015, Rönnberg Sjödin et al., 2011):

  • Open production as “wall-to-wall” raw material supplier integration and equipment supplier integration in company production process systems.

Inter- and intra- technology transfer (Lager and Frishammar, 2012, Lager and Hassan-Beck, 2020, Lessing and Leker, 2006, Malik, 2002):

  • Managing intra- and inter-firm collaboration and technology transfer as supporting mechanisms in digitalization and sectoral convergences.

Measuring process innovation performance (Chiesa et al., 2009, Lager and Hörte, 2005, Schumann et al., 1995):

  • In search of success factors and key performance indicators, and a follow-up system for enhanced future process innovation performance.

blinab consulting activities in the area of Management of Process Innovation

Fostering such corporate process innovation management capabilities will most likely be of importance and possibly a prerequisite for successful digitalized sustainable process innovation in a process-industrial context.

A one-day in-house seminar in Managing Process Innovation in the Process Industries

Such a seminar is a “stand-alone activity”, but it can also be the first step in the use of blinab services in the development or reconfiguration of a corporate process innovation work process.

Revitalize and redesign the corporate process innovation work process

During the assistance of a number of companies in different sectors of the process industries in their development of a “unique” process innovation work process, blinab has established a well-proven model and working practice for corporate work process development, implementation, and operational use. The novel “structural process model” is nowadays deployed as a template for the first stage (A) of work process configuration.

A. Develop and design of a Structural Process Map adapted to company operational and specific product/market conditions
In “process mapping” the first activity is usually to construct a structural process map that identifies the customers for the work process output and the suppliers of the process input. For companies in the process industries the generic “structural process model” serve this purpose. In this map, selected gates (decision points) are delineated and supplementary information about decision groups is clarified. Associated checklists must then be developed defining the criteria for decisions at each gate.

B. Expand the Structural Process Map into an explanatory Cross-functional Process Map and a guiding framework for intra- and – inter technology transfer
The structural process map should afterwards be further developed into a cross-organizational process map, identifying both internal and external interactions during work process execution. Such maps can be developed in Microsoft “Power-point” or “Excel” programs.

C. Take an organizational perspective on work process implementation, and develop a Mini-guide to facilitate company proper use of the work process
A formal work process should be a living document and the structural process maps and checklists must be supplemented with a work process description. Such a work process description shall in an overarching manner integrate all information in the process maps and checklists. It is important to find a proper balance between the necessary time and resources needed to answer the different checklists and efficient project work. Do not make the checklists too complicated in the early phases and allow a certain maturity time within the organization. A work process description is usually in the format of 10-15 A4 pages and will gradually evolve and expand into a proper ”mini-guide” and an image of company best-practice in the topical area. The mini-guide will advise the user how to deploy the work process as a supporting instrument for successful product innovation.

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