The Hindu Business Line : Innovation goes beyond new product development: Report

(From left) Dr J.J. Irani, Director, Tata Sons Ltd, with Mr Arun Maira, Chairman, Boston Consulting Group, India, and Mr Jamshyd N. Godrej, past CII President, & CMD, Godrej & Boyce Mfg Co Ltd, in Mumbai on Tuesday. - Paul Noronha

Mumbai Dec. 13

, SOME years ago, when the market for steel was re-regulated, Tata Steel felt the need for a structure to accelerate the pace of change. And thus emerged its integrated improvement programme, called ASPIRE, acronym for Aspiration Initiatives to Retail Excellence. Under ASPIRE, the company is estimated to have saved about Rs 150 crore in 2002.

Hoshin Kanri is a forum used by Gujarat Co-operative Milk Marketing Federation to evaluate the previous year's efforts in monitoring innovation. Twice a year, key employees meet at the forum to discuss and chalk out plans in terms of `Hoshins' that are precise and measurable. This helps the federation to market its portfolio of 56 products across 14 categories with 2.41 million stakeholders (producer members).

These are the two examples of Indian manufacturing companies going in for innovations that were highlighted in a report on Manufacturing Innovation, jointly brought out by the Confederation of Indian Industry and Boston Consulting Group. The report was presented at the CII Manufacturing Summit here on Tuesday.

Innovation extends beyond new product development, the report pointed out. And examples on this score include Tata Indica, Scorpio, the one-lakh car in the product category, shampoo sachets (packaging category), Eureka Forbes'direct to home sales (distribution), Toyota car production (process), and low-cost airlines (business model).

The report concluded that Indian manufacturing companies are increasingly focusing their attention on innovation both in the product as well as in the process fronts and, as a result, spends on innovations are likely to see sharp increases in the future.

The report pointed out that Indian companies are the most active innovators as compared to their counterparts in the major Rapidly Developing Economies (RDEs). This is indicated by the fact that India filed 1,018 US patents between 1999 and 2003, followed by Russia with 1,000, China with 980, South Africa with 566 and Brazil with 525.

Releasing the report to the media, Mr Jamshyd N. Godrej, Chairman of CII Manufacturing Summit and CMD of Godrej & Boyce Mfg Co Ltd, said 70 per cent of the Indian executives surveyed had stated that their companies would increase spending on innovation in 2006.

About 82 per cent of the executives felt that generating organic growth through innovation has become essential for success in their industry, according to the report.