PROCESS INNOVATION

4.5.2009

Process innovation is one of the most actively implemented methods of innovation currently used by businesses and organizations. An introduction of this important method of innovation is presented in this article. Formerly known as process redesign, process innovation is defined by the OECD in the OSLO Manual as:

A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.

"The implementation of a new or significantly improved production… method" involves the development of a new way to produce a product using a newly developed machine, a new method such as 3D CAD modeling for new product development or the use of new technology like 3D rapid prototyping as part of the process or for developing new products.

As Davenport^* describes, process innovation is not about incremental improvements of 5-10%, but improvements of 50-100%. By combining process with the component of innovation, companies and organizations are able to unleash enormous potential. Much of the Japanese business success that culminated in the 1980's and 1990's has been attributed to their application of process innovation.

The delivery methods are associated with the physical movement of the product from the factory floor to the end user, such as the processes of a manufacturer. This includes any system that is implemented in improving the delivery of the product to the customer and end-user such as inventory control systems, IT systems and any equipment related to the task.

^* Davenport, Thomas H. Process Innovation - Reengineering Work Through Information Technology. Harvard Business Press, 1993. ISBN 0875843662, 9780875843667

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