The Business of Winning Innovation: An Exclusive Blog Series
- by Kerrie Foy
"The
Business of Winning Innovation” is a series of articles authored by Oracle
Agile PLM experts on what it takes to make innovation a successful and
lucrative competitive advantage. Our
customers have proven Agile PLM applications to be enormously flexible and comprehensive,
so we’ve launched this article series to showcase some of the most fascinating,
value-packed use cases.
In
this article by Keith Colonna, we kick-off
the series by taking a look at the science side of innovation within the
Consumer Products industry and how PLM can help companies innovate faster,
cheaper, smarter. This article will review how innovation has become the lifeline
for growth within consumer products companies and how certain companies are “winning”
by creating a competitive advantage for themselves by taking a more
enterprise-wide,systematic approach to “innovation”.
Managing
the Science of Innovation within the Consumer Products Industry
By: Keith Colonna, Value Chain Solution Manager,
Oracle
The consumer products (CP) industry is very mature and
competitive. Most companies within this industry have saturated North America (NA)
with their products thus maximizing their NA growth potential. Future growth is
expected to come from either expansion outside of North America and/or by way
of new ideas and products. Innovation plays an integral role in both of these
strategies, whether you’re innovating business processes or the products
themselves, and may cause several challenges for the typical CP company,
Becoming more innovative is both an art and a science. Most
CP companies are very good at the art of coming up with new innovative ideas,
but many struggle with perfecting the science aspect that involves the best
practice processes that help companies quickly turn ideas into sellable
products and services.
Symptoms
and Causes of Business Pain
Struggles associated with the
science of innovation show up in a variety of ways, like:
· Establishing and storing innovative product ideas
and data
· Funneling these ideas to the chosen few
· Time to market cycle time and on-time launch
rates
· Success rates, or how often the best idea
gets chosen
· Imperfect decision making (i.e. the ability
to kill projects that are not projected to be winners)
· Achieving financial goals
· Return on R&D investment
· Communicating internally and externally as
more outsource partners are added globally
· Knowing your new product pipeline and project status
These challenges (and
others) can be consolidated into three root causes:
A
lack of visibility
Poor
data with limited access
The inability to
truly collaborate enterprise-wide throughout your extended value chain
Choose
the Right Remedy
Product Lifecycle Management (PLM) solutions are uniquely
designed to help companies solve these types challenges and their root causes. However, PLM solutions can vary widely in
terms of configurability, functionality, time-to-value, etc. Business leaders should evaluate PLM solution
in terms of their own business drivers and long-term vision to determine the
right fit. Many of these solutions are
point solutions that can help you cure only one or two business pains in the
short term. Others have been designed to serve other industries with different
needs. Then there are those solutions
that demo well but are owned by companies that are either unable or unwilling
to continuously improve their solution to stay abreast of the ever changing
needs of the CP industry to grow through innovation.
What
the Right PLM Solution Should Do for You
Based on more than twenty years working in the CP
industry, I recommend investing in a single solution that can help you solve
all of the issues associated with the science of innovation in a totally
integrated fashion. By integration I mean the (1) integration of the all of the
processes associated with the development, maintenance and delivery of your
product data, and (2) the integration, or harmonization of this product data
with other downstream sources, like ERP, product catalogues and the GS1 Global
Data Synchronization Network (or GDSN, which is now a CP industry requirement
for doing business with most retailers).
The right PLM solution should help you:
Increase
Revenue. A best practice PLM solution should help
a company grow its revenues by consolidating product development
cycle-time and helping companies get new and improved products to market
sooner. PLM should also eliminate many of the root causes for a product
being returned, refused and/or reclaimed (which takes away from top-line
growth) by creating an enterprise-wide, collaborative, workflow-driven
environment.
Reduce
Costs. A strong PLM solution should help shave many unnecessary
costs that companies typically take for granted. Rationalizing SKU’s,
components (ingredients and packaging) and suppliers is a major
opportunity at most companies that PLM should help address. A natural
outcome of this rationalization is lower direct material spend and a reduction
of inventory. Another cost cutting opportunity comes with PLM when it
helps companies avoid certain costs associated with process inefficiencies
that lead to scrap, rework, excess and obsolete inventory, poor end of
life administration, higher cost of quality and regulatory and increased
expediting.
Mitigate
Risk. Risks are
the hardest to quantify but can be the most costly to a company. Food
safety, recalls, line shutdowns, customer dissatisfaction and, worst of
all, the potential tarnishing of your brands are a few of the debilitating
risks that CP companies deal with on a daily basis. These risks are so uniquely severe that
they require an enterprise PLM solution specifically designed for the CP
industry that safeguards product information and processes while still
allowing the art of innovation to flourish.
Many CP companies have already created a winning
advantage by leveraging a single, best practice PLM solution to establish an
enterprise-wide, systematic approach to innovation.
Oracle’s
Answer for the Consumer Products Industry
Oracle is dedicated to solving the growth and innovation
challenges facing the CP industry. Oracle’s Agile Product Lifecycle Management for Process solution was
originally developed with and for CP companies and is driven by a specialized development
staff solely focused on maintaining and continuously improving the solution per
the latest industry requirements. Agile PLM for Process helps CP companies
handle all of the processes associated with managing the science of the
innovation process, including: specification management, new product
development/project and portfolio management, formulation optimization,
supplier management, and quality and regulatory compliance to name a few.
And as I mentioned earlier, integration is absolutely
critical. Many Oracle CP customers, both
with Oracle ERP systems and non-Oracle ERP systems, report benefits from
Oracle’s Agile PLM for Process. In future articles we will explain in greater
detail how both existing Oracle
customers (like Gallo, Smuckers, Land-O-Lakes and Starbucks) and new Oracle customers (like ConAgra,
Tyson, McDonalds and Heinz) have all realized the benefits of Agile PLM for
Process and its integration to their ERP systems.
More
to Come
Stay tuned for more articles in our blog series “The
Business of Winning Innovation.” While we will also feature articles focused on
other industries, look forward to more on how Agile PLM for Process addresses
innovation challenges facing the CP industry. Additional topics include: Innovation Data
Management (IDM), New Product Development (NPD), Product Quality Management
(PQM), Menu Management,Private Label Management, and more! .
Watch this video
for more info about Agile PLM for Process
