IMPLEMENTATION OF ORGANIZATIONAL INNOVATION
Organizational Innovation is defined as [i]the adoption of an idea or behavior that is new to the organization. It refers to novel methods in which tasks can be systematized and goals achieved to support and advance competitive benefits. It includes customer interactions, employee output and performance, and knowledge management. At the center of organizational innovation is change, either transform or improve a product or outright change of product, service or process. It [ii]requires a culture of innovation that supports new ideas, processes and generally new ways of doing business.
Today, customers are now looking for a keen buying experience when purchasing a product or availing of services. It is in this aspect that Hewlett Packard, better known as HP, bases their business strategies. Hewlett Packard concentrates on satisfying customer needs by improving on their products and its peripheral support, from designing, producing or manufacturing, distribution of finished products, to troubleshooting and repair services and support. They do these by generating a more resilient and adaptable supply chain, improving customer relationships through customer satisfaction, and by omitting system, process and relationship inefficiencies in their organization. Above all, they sustain an organizational environment that fosters constant innovation and improvement by encouraging ideas and severing organizational obstacles.
To lower manufacturing costs, 1983 CEO John Young called for a company-wide evaluation of existing processes. Managers conducted seminars to impart to other HP division their best practices and thereby shorten their return on investment. At a printed circuit assembly division, their manager dared his team to save on cycle time by redesigning their assembly area. The result is that, from a twelve-day cycle time, his team was able to reduce it to two hours which is tantamount to savings of millions of dollars.
Another organizational innovation to actualize greater cost benefit and to be more price competitive in the market is combining the assembly of PC boards to only a few sites worldwide
In the 1950s, Hewlett Packard was the very first company to put into practice cash and profit sharing to further motivate its employees. This can be acquired through HP’s stock purchase plans.
In the 1960s, instead of having several research centers in multiple countries, they instead centralized their research facility. They also were the first to initiate decentralized decision-making and work hours that are adaptable and flexible.
In the 1980s, they adapted the just-in-time concept in their manufacturing process and used TGRDC as requirements in their choice of supplier. TGRDC stands for technology, quality, responsiveness, delivery and cost). They added an additional R for regulatory and E for environment.
Today, through the development of its worldwide direct-delivery network logistic program, it has further decreased the supply chain’s expenditures by minimizing freight and handling costs.
The sudden increase of demand in consumer electronics necessitated HP to increase its flexibility and manufacture low-cost products at high quality and volume. HP started outsourcing packaging, warehousing, and other peripheral activities.
HP observed that implementing changes in design that employs localization in its distribution centers generates in its inventory investment a reduction of up to eighteen percent. This reduces the effect of inaccurate or imprecise forecasting. To allow delaying configuration and localization until such time that an order is actually existing, it has redesigned the processes involved in its deskjet printers. In so doing, HP was able to save millions of dollars due to minimized cost of shipping and decreased safety stocks.
In analyzing its order fulfillment architecture, it found out that it has systems and interfaces of greater than one thousand. Each was for a single business transaction and data could not be shared. As a consequence, business customers found it difficult to transact with HP as HP cannot provide even a single quotation, invoice, or delivery.
As a solution, a common architecture was implemented. It includes the specific requirements of business entities, along with the common factor among HP users. It was able to produce fulfillment of business orders, consumer direct order and bulk replenishments as well as areas of support and services.
[i] www.bsos.umd.edu
[ii] Eznearticles.com
Credit:ivythesis.typepad.com
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