Editor's Page -- Searching For Innovation's Source

Jan. 14, 2005
Where will manufacturers find their next big breakthrough?

When most people talk about innovation, they're generally talking about high-cost, "high-technology" breakthroughs -- the latest computer chip, a new bio-engineered material or a hot new category-defining product such as the iPod.

Yet for the broader-based manufacturing sector, the source of innovation is much more varied. It must be. By definition, we can't all lead the latest and greatest technological advance. We can't stop manufacturing what we now manufacture and switch to building cardiac stents as quickly and easily as shareholders can buy and sell stocks. But that doesn't mean we can't all be innovators. Rather it means that many manufacturers must find other sources of innovation -- and to do that they need to define innovation differently.

First, manufacturing companies must lead the way in breaking down the misperception that "high technology" is a separate, exclusive manufacturing sector. The "high-technology" sector in fact is a moving target that included at one time or another the steam engine, the internal combustion engine and the search engine. Further, walk into most manufacturing companies today, and you'll find the latest "high-tech" machine tools networked with the latest "high-tech" information systems churning out products that were developed within the last year and that are stuffed with "high-tech" features. Steel is a mature industry, but there's nothing low-tech about making steel. From another perspective, information technology and the Internet, the "high-technology" of the '90s, are now fast becoming as ordinary as the telephone and fax machine. The cell phone and PDA -- onetime breakthrough products -- are commodities. These products will continue to be updated with the latest technologies, as all other "high-tech" products before them have. But they will never again be considered "high-technology."

Second, manufacturing executives must realize that innovation ferments in the business suite and in the back office and on the production floor, as well as the R&D lab. Perhaps the best-known example is Dell Computer Corp., which prides itself not in developing the leading edge PC or printer technology, but on executing innovative supply chain integration and distribution strategy. Its real innovation is the business model.

Meanwhile in marketing, the latest innovation is as low-tech as you can get: Companies are using word-of-mouth -- getting real people to tell other people how much they liked a new product. Yes, I know it's consumer markets that are employing the strategy, but it's not a big leap to envision a word-of-mouth campaign on the trade show floor, during networking events at conferences or in online chat rooms. On the plant floor, among other things, manufacturers are working with machine tool makers to customize production equipment to suit their particular needs. Also, innovative production processes enable one-of-a-kind customer solutions, such as custom manufacturing and special delivery agreements.

Purists will probably argue that I'm overstating the case. They'll insist that true innovation derives from technological advances, and that I'm talking about something else entirely. Perhaps, but such thinking has left many manufacturers -- especially those in mature sectors -- thinking they can't reap the benefits of this supposedly elusive and expensive thing called innovation.

So unless we want to be locked out of the future, we need a broader definition of innovation. We must shift our resources, rethink our business strategies and -- most importantly -- realign our thinking to find and employ innovation throughout our companies.

Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.

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