Innovating in Manufacturing

June 19, 2021

As the years go by and companies rise and fall, a lot of time has been spent trying to make sense of the progress of these companies. What did the successful do to achieve new heights? The answer is innovation.

Major corporations like Ford, Toyota, Starbucks, or Apple have innovation as the start of their success. And their continued success depends on the drive to innovate.

But this leaves us asking the following: What do you define as innovation? For many a floundering enterprise, the decision-makers see “innovation” as coming up with a new idea for a new product. Standard R and D stuff. This is part of it, of course. But if everyone is running the same “make a new product for a market segment”, where is your competitive advantage? Doing the same as everyone else can keep you in the running, but innovation sets you ahead of the pack.

Becoming an Innovator

Being an innovator is more than just being the first to market with a new product, especially since being the first doesn’t mean you stay there. Innovating in business entails a wide view of the multiple dimensions of your business.

The above listed companies are all examples of companies that are market leaders because they innovate:

  • Ford emerged as a market leader in part due to the innovation of the specialization of workers on the production line and how it increased production while lowering prices.
  • Toyota emerged as a market leader in part due to the innovation that is the Toyota Production system and how it increased quality while cutting waste and associated costs
  • Starbucks emerged as a market leader in part due to the innovation of a more customer-centric coffee shop experience and how it increased sales while charging more than the competition
  • Apple emerged as a market leader in part due to the innovation of a more user-friendly computer and how it increased adoption and usage

These companies continue to succeed in a market that rushes to copy them by continuing their innovation methods, such as:

  • Ford constantly revises their automotive line-up in an effort to capture new demographics and technology
  • Toyota added hybrid cars to their line-up for eco-conscious consumers
  • Starbucks started offering more value-add services, like free Wi-Fi, and broadened their drink and food menu
  • Apple introduced the world to iTunes, the iPod, and many other devices that are in use today

Defining Innovation

First off, innovation for a company is about adding value for customers, which add value to the company. When it comes to adding value, research shows that company innovations can be broken down into 12 separate, but associated dimensions. In a paper published in Spring 2006 by MIT Sloan, these innovation dimensions were defined as a way to better understand how a company innovates and where it can look to innovate in a way that gives that company a leap over their competitors.

The innovation dimensions were then placed onto a map, labelled the “Innovation Radar”:

As you can see, the 12 dimensions are:

Non-Stop Innovation

Innovation can happen on one dimension but business success comes from touching on multiple points of the innovation radar.

Most established companies get into a “This is just how we’ve always done things” innovation rut. They focus on one or two dimensions and forget to let the benefits cascade down to the other dimensions.

By identifying often neglected areas of innovation in your industry, you can find a distinct advantage that opens up the other dimensions of the radar. Advantages that leave your competitors struggling to catch up for months or years.

Take Mancor, as an example:

  1. It had a strong reputation as a dependable parts maker but it needed better processes. One of the main helps here was implementing OnRamp ERP.
  2. Better processes lead to improvements on the supply chain and customer experience.
  3. This led to more customers and Mancor supplying more offerings.
  4. Adding customers required innovations in networking and a need to increase presence with more shops and a streamlined organization structure.
  5. The new decision-makers added better customer solutions which required a smarter base platform and new value capture methods.

As you can see, starting with one successful innovation, like OnRamp’s ERP system, you can open the floodgates of success. This will help you build your business into a market leader.

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