Global Logistics and Supply Chain Strategies - August 2008 - (Page 35) to optimize performance for the company as a whole as opposed to rewarding functional excellence. “I have to say, that is something that’s easier to do on paper than in reality,” she notes. One of the advantages of having a chief innovation officer is that it prompts thinking about how to drive innovation into every role and responsibility in the organization, says McNerney. “You want everyone to feel that they have a part in introducing innovation in their environment.” CIOs or their equivalent currently seem to be focusing on “how to feed the product development engine and make sure that the company’s investments in product development are paying off,” says Blanter. This includes finding new ways to collect and process ideas, which is leading more companies to move toward open innovation. Open innovation is a strategy whereby companies actively invite ideas from outside the enterprise, including from suppliers and customers. The concept is being adopted by such leading companies as IBM, Lily and Procter & Gamble. “I am not aware of any company that is doing everything by itself anymore,” says Thalbauer. “All companies are going through this transformation to building and being part of networks, which means they need to be able to collaborate.” Asking end consumers directly for input and ideas is particularly important for innovative companies, he says. “That’s the only way to ensure that you are bringing the right products to market.” This observation also is borne out by Booz-Allen-Hamilton’s global innovation survey. Participating companies that emphasize direct customer engagement reported three times higher operating income growth, 65 percent higher total shareholder return and two times greater return on assets than companies less focused on customer feedback. “Companies can spend the most money, hire the best engineers, develop the best technology, and conduct the best market research. But unless their research and development efforts are driven by a thorough understanding of what their customers want, their performance may well fall short — at least compared to that of their more customer-driven competitors,” write report authors Barry Jarulzelski and Kevin Dehoff. Technology In addition to process, innovation needs the support of integrated technology solutions. The central technology for new product development is PLM. “PLM provides a complete way of managing product information across the product’s lifecycle,” says Blanter. “It provides one version of the truth as a product develops and enables this product information to be shared. The PLM infrastructure allows companies to bridge functional silos a little easier, at least from a data and process perspective, and enables them to tap into their own knowledge a lot more efficiently. From that perspective, it clearly is an enabler of innovation.” However, he adds, it must be used in conjunction with process. Alone, “it is a necessary but insufficient set of tools.” PLM vendors have done a good job of listening to customers and developing solutions that make it easier “to tie together the whole product development process and link it to customer needs,” says Kavanaugh. Customer needs management “is a big GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES 35 http://www.bp.com/epcareers
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