In today's process manufacturing environment, innovation is viewed as critical to sustainable growth and profitability. While open innovation is regarded as the answer, few companies can effectively measure the return on R&D investment, have acceptable product success rates, achieve acceptable promotional effectiveness, or have visibility into their compliance risks or operational readiness for new product launches.
Sustained Growth and Profitability
Through Lean Product Lifecycle
Management (PLM)
white paperRisks and Readiness Issues: Executive SummaryIn today's process manufacturing environment, innovation is viewed as critical to sustainable growth andprofitability. While open innovation is regarded as the answer, few companies can effectively measure thereturn on R&D investment, have acceptable product success rates, achieve acceptable promotional effective-ness, or have visibility into their compliance risks or operational readiness for new product launches. In theGMA's Insomnia in the Corner Office whitepaper, finding sources of sustainable growth, consolidation andpower of retailers, and increasing regulations were the top CPG CEO issues. Recent chemical surveys high-light rising input costs, sustainable growth and increasing regulations are critical issues. A recent study byA.D. Little rates "enhanced innovation abilities" higher than cost cutting, mergers or alliances as the bestprofitability and growth lever among European companies.
While open innovation is a hot topic, capitalizing on the opportunity requires a holistic strategy - not justincreased collaboration. Companies must have repeatable, compliant and responsive business processes,global information infrastructure that provides a single source of the truth, alignment across departmentalsilos and solutions that evolve without coding. With holistic strategy and supporting infrastructure, compa-nies can consistently minimize the time to scale, improve product success rates and promotional effective-ness, and enjoy sustainable and profitable growth.
With open innovation providing unlimited opportunities, where should you start? To identify the best openinnovation opportunity and deliver top and bottom line benefits companies must first focus on the needs oftheir customer, continually minimize time to scale, eliminate waste, drive out costs and improve. These arecore concepts of a Lean strategy. This whitepaper will describe how Lean PLM can leverage Lean conceptswith integrated compliance, continual improvement without coding, and other PLM best practices toincrease the return on R&D investments and provide sustainable and profitable growth for process manufacturers.
Lean Concepts Compliment PLM Best Practices, Drive Top and Bottom Line GrowthA core component of Lean is focusing on your customer. For many Process manufacturers, they must needto focus on the consumer or customer, retailer and distribution. To achieve this, collaborating with aspects ofthe value chain, validating constraints and compliance early and often, continually optimizing portfolio man-agement opportunities, managing knowledge and intellectual property, integrating to the extended enterprisesystems, engraining governance into processes and continually improving without coding are standard PLMbest practices. These PLM best practices will allow you to continually minimize time to scale, eliminatewaste, drive out costs and improve.
Focusing on the Customer and/or Channel NeedsThe reality is that most companies try to focus on their customer or channel needs. Unfortunately, internalbusiness model obstacles or departmental focus dilute the best of intentions by focusing on their own goals.In the hope that some requests will lead to sales, the sales organization submits as many sample or newproduct requests as possible. Marketing is often measured on the number of new products launched. If anidea is promising, product managers are quickly promoted and never see the long term impact. If neithergroup is responsible for the long term profitability of the portfolio, R&D wastes time and resources chasingproducts that will not have long term staying power, retailer and customers get disenfranchised and brandequity is diluted.
2 |To drive growth and profitability, companies need to focus on the customer and must identify their uniquevalue propositions for customers and align these with their channel. For instance, if a company sells value-based milk, this large private label dairy manufacturing capability should steer to an organization with nointernal dairy manufacturing. If you add value through innovative packaging or drive business throughnational brand pull, either retailer could be a good partner. Defining your critical-to-customer, critical-to-retailer and critical-to-quality characteristics is an important first step. With these critica... [download for more]
