Even as the current stop-and-start economic recovery drifts on, manufacturers have an opportunity to dramatically reinvent their organizations – by rethinking operations, processes and products; capturing new customers; restructuring supply and distribution networks; and reinvigorating their workforces with new leadership and skills and their facilities with equipment investments. This will be a defining moment for U.S. manufacturers – or at least for those that leverage four key opportunities for growth:
Innovating New Products and Processes Customers now expect new products with more features, at lower costs, and faster than ever – leaving manufacturers with ever-shrinking launch – and profit-windows for innovation. Even more difficult is the fact that customers now interpret “value” as extending well beyond the product itself, and as including a total package of services, support and information. And if that’s not tough enough, manufacturers must also reinvent how they deliver goods and support customers for the entire product lifecycle.
Yet despite these new demands, many manufacturers still have trouble efficiently and effectively designing and delivering new products. Only 12 percent of manufacturers commercialize more than 50 percent of their research and development (R&D) investments, and far fewer manufacturers turn R&D investments into game-changing market breakthroughs.
One common challenge for manufacturers is determining where to apply their innovation R&D. Can your company identify the risks and rewards of potential new products (market acceptance, regulatory hurdles, emerging competitive threats)? Benchmarking your new-product development processes against the best in your industry and others for skills, technologies and intellectual property can highlight your strengths (and how to capitalize on them) as well as weaknesses (improvement opportunities). In addition, you’ll find that many organizations are funding innovation this year with national, state and local incentives and credits (e.g., U.S. federal and state R&D Tax Credits allow companies to reduce their tax liability by often as much as 20% of their qualified spending to develop new and improved products, processes, and services).
It’s important to remember, too, that process innovation is every bit as important to customers as product innovation. Improving what you offer your customers while also lowering costs and eliminating waste allows delivery of new products on time, and with adequate support and information. Key areas to review include:
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