Global Logistics and Supply Chain Strategies - August 2008 - (Page 30) What a Bright Idea: Innovation Stems from Convergence of Design, Supply Chain Excellence BY JEAN V. MURPHY The interdependence of design and operational excellence is leading companies to realize that these competencies must come together. For that to happen, barriers between product development and supply chain management have to come down. R eliance on innovation to drive growth and boost brand equity has long been a given for technology-based industries, but market conditions now are driving more traditional sectors to compete on the basis of innovation as well. All types of companies, including “nuts and bolts” businesses that historically have cared little about innovation, are devoting more resources to product development, says Mac McGary, vice president for hightech and industrial markets at Summerland, Calif.-based QAD, an enterprise solutions vendor for mid-market companies. In some cases, this shift has been thrust upon them by events, McGary says. “The most obvious event is spiraling prices for oil and raw materials. These prices are rising faster than companies can pass on the increases, so they are trying to find ways to use less material or substitute alternative materials.” Similarly, the green movement is driving companies to develop more energy efficient and environmentally friendly products, he says. Increased global competition also is pressuring companies to be more innovative, says Alex Blanter, director of the Software, Electronics and Services group at PRTM Consulting, Waltham, Mass. “Companies have to find ways to differentiate themselves in an increasingly crowded marketplace and innovation certainly is one way,” he says. Global competition also contributes to shorter life cycles since innovative products are quickly copied by fast followers, pressuring companies to come up with more new products and shorten development cycles, Blanter says. Technology advances contribute to the trend as well. Advanced technology platforms and processes, particularly those devoted to product lifecycle management (PLM), “allow companies to take innovation maturity to a new level,” McGary says. Additionally, 3D technology “gives us the remarkable ability to see what the outcome of a design will be and to project the engineering scale or mock-up in 3D first. With 3D, instead of making a prototype, you can send a digital prototype of a product for people to look at with a 360-degree view, and even put through simulated tests, before deciding whether or not to approve it for manufacture.” Doing this digitally also speeds time to market, he notes. Renewed corporate emphasis on topline growth and lean operations plays a role as well. Mark Davis, leader of product innovation and lifecycle management consulting at Deloitte, New York, notes that many companies are looking to new products for a greater percentage of overall revenue. “Some companies are targeting as much as 30 percent from new products and the only 30 AUGUST 2008
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