The challenge of innovating and developing new, profitable products and markets is not new. All manufacturers want to be able to deliver the right product, at the right time, at the right price and quality. However, in today’s rapidly evolving market, organizations are finding it increasingly difficult to manage this process.
The reason for this can be traced to drivers like shorter product life cycles (which mean shorter innovation cycles for new products); increasing product complexity due to consumer demand for more individualized or tailored products; ever-changing, geographically independent, and industry-specific compliance requirements; and globalization (which involves managing not only global demands and pricing trends, but also geographically dispersed manufacturing teams).
These drivers mean that now more than ever, companies must be able to run smarter, faster, and simpler so that they are able to rapidly innovate and launch new products, while still meeting regulatory compliance and quality requirements. In fact, an Aberdeen Group survey of product development companies revealed that 61% of respondents chose “need to launch products quickly” as a top point of pressure.1 That’s where the idea of sustainable innovation comes in.
Sustainable innovation, a key part of the idea-to-performance approach, focuses on improving the processes associated with ideation, innovation, product design, and development, as well as the exchange of data with manufacturing and other downstream activities.
The Challenges That Inhibit Innovation
To improve time-to-market, as well as quality and margins, organizations are continuously revisiting the business processes around new product introductions and taking steps to optimize them and eliminate non-value-adding activities. However, even armed with more streamlined processes, there are still several challenges that prevent these companies from reaching their full potential. These include:
- Organizational silos: Most departments work within their own boundaries, with minimum communication with other stakeholders.
- Heterogeneous IT landscapes: IT landscapes have evolved over time, and can be comprised of software solutions from multiple vendors. Managing these environments can be a challenge, and ensuring integration among them can be even more difficult.
- Product complexity and an influx of data: Consumers are demanding increasingly tailored products that drive product structure complexity. In addition, with information about consumer demands and signals coming in through multiple channels, and with companies tracking the details about the performance of their products, there’s no shortage of rich data. The difficulty comes with trying to manage that data and filter out the key insights it contains.
These challenges all contribute to the biggest one of all: limited visibility. They each inhibit the idea of a holistic enterprise perspective. Remaining in silos means that departments don’t have insights into the workings of other groups, which limits their ability to collaborate. The integration limits of heterogeneous IT landscapes means that few people have full visibility of the end-to-end manufacturing process. And with so much data and no easy way to put it into context, decision makers either have to make their decisions based on incomplete data, which can introduce risks, or slow their decision-making processes, which, in turn, slows the time to market.
Poor visibility also means that operational workers may not have easy access to crucial information, like compliance requirements. The risk here is obvious. The fallout from product recalls in various industries, such as Toyota Motor’s recall and settlement for unintended vehicle acceleration,2 shows the detrimental financial penalties and less tangible, but equally important, erosion of brand value that can result from a failure to adhere to sustainable, compliant practices.
In short, the lack of visibility severely hampers companies’ efforts to run smarter, faster, and simpler. To overcome these barriers and achieve their sustainable innovation goals, organizations need to break down their silos, integrate their systems, and make sure they can provide clear, up-to-date information.
Enable Sustainable Innovation Best Practices
In the previous section, I talked about how heterogeneous IT environments limit the kind of integration needed to enable sustainable innovation. To mitigate this, companies should adopt a common platform that will support all of the processes and information related to manufacturing. The ideal enterprise software platform should enable:
- Project visibility: Visibility of product development projects at a portfolio level, along with key performance indicators (KPIs)
- Process visibility: Visibility into end-to-end processes to ensure transparency and give a clear picture of all related information
- Embedded compliance: Integrated compliance checks in the development stage to ensure the success of a product in global markets
- Status monitoring: The ability to monitor a project’s status in one central location to ensure that any update is available anytime, anywhere, in real time to all stakeholders
- Issues visibility: Visibility into any issues affecting projects through a collaborative platform to increase awareness and provide a higher chance of resolution
SAP’s platform provides these capabilities with an enterprise-wide platform approach that enables an end-to-end product innovation process. In addition, SAP’s range of manufacturing solutions easily integrate to make sure the processes they enable are seamless and streamlined (see the “SAP Customers Speak Out on the Importance of Integrated Solutions” sidebar). These solutions include:
- SAP Portfolio and Project Management, which allows users to view and analyze the company’s portfolio, define KPIs and score them in a transparent way, and initiate projects with budget allocation as part of planning. During execution, users can also update and monitor status, effort, timelines, budget, and resource availability on a continuous basis within a context analytics dashboard (see Figure 1).
- SAP Product Lifecycle Management (SAP PLM), where users can manage all product data related to development, including versioning, workflow approvals, change management, and integration to 3D computer-aided design (CAD) tools. SAP PLM delivers insights through side-panel analytics to enable better decision making. The engineering bill of materials (EBOM) and manufacturing bill of materials (MBOM) synchronizing feature ensures that engineering and manufacturing work on the same product data. Product data structures to support discrete and process industries are included (recipe, specification, formulation, and more).
- SAP 3D Visual Enterprise, which provides access to 3D content for all downstream users in planning, procurement, manufacturing, maintenance, service, and more. This not only makes understanding the finished product much simpler, but also helps make assembly, maintenance, and service faster.
- SAP Manufacturing, which takes product information authored in SAP PLM for use in creating high-level manufacturing and detailed-level production plans.
- Embedded product compliance solutions from SAP (planned enterprise-to-enterprise solutions that are currently in development), which help streamline and automate product compliance, embedding compliance in the design process and driving speed without risk.
SAP HANA is also a strong enabler of sustainable innovation, helping companies run smarter. By providing the analytics companies need to assess market trends and product performance, SAP HANA ensures that the imagine, design, and plan processes are running on real-time insights.
||The intuitive user interface of SAP Portfolio and Project Management allows users to easily see data related to their projects
The Sustainable Innovation Ideal
With tools in place to support sustainable innovation, organizations are better able to make fact-based decisions throughout a product’s life cycle, understand the impact of decisions on downstream processes, and gain an appreciation of any potential risks that their actions might introduce.
Above all, sustainable innovation improves visibility, which not only makes running sustainable innovation processes much simpler, but also helps companies run smarter. For instance, managers will no longer have to make guesses or scramble for pertinent information. Instead, the up-to-date information they need to make the most informed decisions possible will be readily available, enabling them to quickly and easily answer questions about which development projects are happening and which are in the queue, the status of each of these projects, and the major issues and risks involved with each.
At the operational level, increased visibility and access to real-time information means that workers can more easily see, track, and manage multiple design iterations, delivery deadlines, and quality, cost, and compliance requirements. This kind of visibility also helps break down silos and encourages collaboration across the business. In addition, sustainable innovation — specifically the EBOM and MBOM synchronization capability in SAP PLM — ensures that the need for a constant data exchange is considered in the design criteria of a project. This is important because exchanging data is not a one-time occurrence within a linear process. In many organizations, this is an iterative exchange of complex structured and unstructured data. Most importantly, all of these improvements enable companies to run faster, helping them to speed up the new product introduction process, without adding risk, to bring new innovations to market more quickly.
Idea to performance provides a holistic process view of the life cycle of a product, and sustainable innovation is the front end of this process. There are many challenges that organizations deal with in the new product introduction space, but with a common, integrated platform and the right tools and processes to enable a company to run smarter, faster, and simpler, enterprises can become more connected, greatly improve their visibility, and achieve true innovation. To learn more, visit www54.sap.com/solution/lob/r-and-d.html.
Graham Conlon (firstname.lastname@example.org) is the Global Vice President of SAP PLM Solution Management and is responsible for solution and go-to-market strategy for the SAP PLM portfolio. Graham holds a degree in electrical and electronic engineering and later studied business at Henley Management College. Graham held various senior engineering and operations management roles before joining SAP in 2000.
1 Aberdeen Group, “Product Development Single Source of Truth: Integrating PLM and ERP” (March 2012). [back]
2 The New York Times, “Toyota Agrees to Settle Lawsuit Tied to Accelerations” by Bill Vlasic (December 26, 2012). [back]