The role of innovation for the future of Swiss industrial SME The role of innovation for the future of Swiss industrial SME Laboratoire de gestion et procédés de production M. Pouly

Content Content of the presentation q MANU FUTURE : the future of manufacturing in Europe q Where does innovation take place in industrial SME q The “brakes” of innovation q Removing the brakes

MANUFUTURE The future of manufacturing in Europe Strengths European industry is modern and competitive in many respects. Most sectors have made significant efforts to upgrade their production infrastructures and integrate new forms of organization A long lasting industrial culture exists, with large European networks linking suppliers, manufacturers, services and user companies Europe has taken on board the sustainable development dimension. Significant investment in environmental protection, clean technologies and environment friendly production processes have led to new manufacturing and consumption paradigms.

MANUFUTURE The future of manufacturing in Europe Weaknesses Productivity growth in European manufacturing industry as a whole has been below US levels in recent years; Increases in ICT and new technology spending over years seems not yet to be translated into productivity gains The Commission’s competitiveness reports of 2001 and 2002 have identified insufficient innovative activity and weak diffusion of new technologies as key determinants for low productivity growth Enterprises in Europe are clearly not investing enough in R&D

MANUFUTURE The future of manufacturing in Europe “Innovation alone will not secure the future of the enterprises of the manufacturing branch, they will also have to adapt themselves to the evolution of the markets”  Centralized production Actual marketsFuture markets Future products New business models and new technologies  Actual products Distributed production for a global market  Technological leadership

Content Content of the presentation q MANU FUTURE : the future of manufacturing in Europe q Where does innovation take place in industrial SME q The “brakes” of innovation q Removing the brakes

Where does innovation take place ? Innovation for Swiss industrial SME q Development of new products or services (87%) q Improvement of internal business processes (85%) q Redesign of existing products (75%) q Improvement of business processes within the supply chain (63%) q IT is an important tool to support innovative business processes “ For the SME, the increase of productivity and the reduction of costs are more important than the increase of market shares for the next 5 years” Source : IPLnet survey 2004

Example of an innovative IT supported business process Classical method for the purchase of screws and bolts Inventory managed as C-class articles in the ERP Inventory managed as C-class articles in the ERP Purchase proposals issued at the reorder points Purchase proposals issued at the reorder points Issue an order for the different positions Issue an order for the different positions Check the delivery schedules Check the delivery schedules Check the incoming goods Check the incoming goods Transfer the goods to the workshops Transfer the goods to the workshops  Risk of missing parts  Important costs (~200 Euros per order position)

Example of an innovative IT supported business process Vendor based inventory for screws and bolts Screws and bolts in cases placed on balances Screws and bolts in cases placed on balances Weighing system linked by modem to the vendor’s server Weighing system linked by modem to the vendor’s server Automatic refill by the vendor driven by the needs Automatic refill by the vendor driven by the needs  No purchase costs and no missing parts  From supplier of low cost goods to logistic solution provider provider

Content Content of the presentation q MANU FUTURE : the future of manufacturing in Europe q Where does innovation take place in industrial SME q The “brakes” of innovation q Removing the brakes

The « brakes » of innovation Innovation “brakes” u Too long realization time (68%) u Lack of human resources (55%) u R&D project management problems (55%) u Lack of innovation spirit within the company (49%) u Lack of knowledge of the customer’s needs (47%) Source : IPLnet survey 2004

Content Content of the presentation q MANU FUTURE : the future of the European industry q Where does innovation take place in industrial SME q The “brakes” of innovation q Removing the brakes

Removing the brakes  Too long realization time and lack of human resources To share ressources to develop new machine elements develop new services develop innovative collaborative business processes (Sales, After Sales, Purchases etc. reduce production costs Machine Innovation Network A new research project with 10 enterprises

Removing the brakes q R&D project management problems q Lack of innovation spirit within the company q Lack of knowledge of the customer’s needs Train engineers in the management of technology during the master curriculum for the young ones during post-grade formation as continuous education for the “old” ones

Conclusions  Transform research results (knowledge) into products  Increase productivity through ICT  Holistic production systems based on humans, technique and organization

Conclusions Thank you for your attention !