Open Innovation: Manufacturers' Idea Factories
By Guest Contributor Many manufacturers are taking advantage of open innovation to develop new products and grow revenues, as GovPro.com's Mike Keating highlights in this Expert's Corner. Open Innovation (OI) is a process in which internal and external ideas and technologies are brought into a manufacturer's own innovation and R&D efforts through submission portals, customer and user crowdsourcing, social media, technology matchmakers and other means. A survey from London-based PA Consulting Group shows OI is capturing the attention of a high proportion of manufacturers, and that businesses are seeing benefits from it. For example, Hallmark Cards partnered with Cleveland-based NineSigma, an OI service provider, to develop a line of technology-enabled greeting cards for its next generation of consumers. "Scanning the globe to find new innovation solutions requires a costly use of time and resources," Tom Esselman, Innovation Exploration Leader at Hallmark, says. "NineSigma accelerated the product development process and helped us bring more unique items to market. That helped us to win at the retail level — these activities contributed to our best year ever since 2007." Hallmark developed its new technology-enabled line, called augmented-reality greeting cards, in short order, according to Kevin Stark, Director of Technology Solutions at NineSigma. "The focus was to help Hallmark scout for experts who could connect the physical to the digital world. There was one particular expert in Germany who really popped as an augmented reality specialist," Stark says. "From the time we scoped the project to the time that Hallmark had something on the retail shelf was about 10 months. We scoped it, we got our results after about 2.5 months, and Hallmark started working with the augmented reality expert after about four months elapsed time." A variety of manufacturing industries can use OI in their R&D efforts, according to Tim Bernstein, chief operating officer at Needham, Mass.-based yet2.com. His firm brings technology buyers and sellers together and helps clients acquire intellectual property (IP), access technology solutions and realize a return on their IP investments. "Certainly, medical devices are a huge area of opportunity," Bernstein says. "We are [also] seeing a lot of interest in sectors like industrial automation, where manufacturing executives have been operating their production lines in a certain way for a long time."
Bernstein sees OI providing new production solutions with enhancements in control and sensing systems. The solutions, Bernstein says, "offer the ability to almost go to a per-part basis on quality control over a manufacturer's systems." Manufacturers need to tackle multiple OI projects simultaneously to see positive results, Gunjan Bagla, director of the Open Innovation Practice at Cerritos, Calif.-based Amritt, Inc., notes. "When getting started, it is helpful to work on two to four small OI projects at the same time and learn quickly from successes and failures," Bagla explains. "This is better than starting with one large project. Even if that project is a grand success, you don't know for sure if you got lucky or if there are lessons to be applied to future projects." Amritt, a consulting company that helps senior executives with global innovation, recently assisted a mechanical equipment manufacturer that needed to incorporate biomaterials into its processes to boost its competitive edge in the U.S. market. Amritt scouted for and found a series of biomaterials experts in Asia, some of whom had already developed licensable IP, for the equipment maker. Some manufacturers are learning how to effectively involve their customers and end users in product development efforts, a move that sometimes leads to game-changing products and services that meet newly identified needs. Yamaha Corp., for instance, uses its Motifator website to listen to, observe and engage its synthesizer and electronic piano customers in their own environment, Nicholas Webb, author of The Innovation Playbook and the newly released The Digital Innovation Playbook, reports. "The manufacturing industry has traditionally lagged behind other sectors in integrating their social media and internet platforms to create a space for listening to customers," Cheryl Perkins, founder of Neenah, Wis.-based innovation consultancy Innovationedge, says. Perkins notes that while the technology is fairly easy to master, listening is often the hardest part. "Using social media tools like Twitter, Facebook and LinkedIn, manufacturers can create an environment that fosters collaborative conversations among customers, suppliers and consumers that can forever change their relationships with their stakeholders," Perkins says. 2011 is a great time for manufacturers to leverage open innovation in their R&D efforts, Perkins adds. "OI can help fill a robust pipeline of new solutions and business opportunities from internal sources as well as external partners."