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Published: October 22, 2013
 / Winter 2013 / Issue 73

 
 

The Global Innovation 1000: Navigating the Digital Future

For companies that undertake large, costly projects, project management tools are indispensable. Reinhold Achatz, head of corporate technology, innovation, and quality at German steelmaker ThyssenKrupp, is familiar with such projects. “Years ago, our biggest plants and system projects cost $200 million to $300 million,” he says. “Today, we are doing projects up to $1 billion. We are working on engineering at different sites with a lot of different people from different areas, and we are working with suppliers. These tools have transformed the way we work, by enabling us to manage increasingly complex efforts.”

Another highly effective productivity tool in the development phase is CAD software. CAD tools were rated lower in terms of usage, but that’s because they have a limited audience—these tools are much more commonly needed at companies in heavily engineering-oriented industries. Companies in both the auto and aerospace and defense industries use them extensively; fully two-thirds of our respondents from those industries reported using CAD software, compared with just 25 percent of companies overall (we’ll comment more about industry-specific usage of digital tools later on).

One company that has made effective use of CAD software to do 3D digital modeling is Electric Boat, a company with one product and one customer: It builds one nuclear submarine every year for the U.S. Navy, at a price tag of around $2 billion. Most of Electric Boat’s submarine engineering and design work is paid for directly under its contract with the Department of Defense—in early 2013, for instance, the company was awarded $1.8 billion to begin design work on the next generation of nuclear subs. The company’s own R&D work is performed by a small innovation group that investigates new technologies for designing and building the finished product.

For many years, the company built wooden mock-ups of submarines it was designing to make sure the ship could be built as proposed. But the Virginia-class submarines Electric Boat is building today were the first designed almost entirely digitally. “What you see now when you walk through our manufacturing space,” explains Mark Bennett, the company’s R&D program manager, “are 3D isometric pictures that come off of our digital [CAD] database. That’s what tradesmen work from. They’re not solely relying on notes on 2D paper drawings the way they used to. We use the database to laser mark on the steel where plates will attach, and provide detail on how big the welds need to be.” The digital files are also used in the company’s electronic visualization rooms. “We can project 3D models of the submarine,” Bennett says, “and that allows us to examine various spaces jointly with our customer.” Electric Boat is now investigating the use of those 3D models to generate holograms of the inside of a submarine to improve understanding of the submarine’s design and layout.

Rapid prototyping tools such as 3D printing are used by 34 percent of our survey respondents, and they are also ranked as the most effective productivity tools in the ideation phase (and in fact were ranked as more effective than any market and customer insight enabler at this stage). The R&D team at Philips Lighting, for example, now uses 3D printing to make mock-ups of its lighting fixtures to share new concepts both internally and with customers. In the past, such mock-ups took a great deal of time to produce. Now, says Esmeijer, “we can make a mock-up that people can look at and physically touch. They can make suggestions and corrections, and we can make another one in an hour.”

Finally, collaborative environments—tools such as messaging, video, file sharing, and Webinars—are used by 45 percent of our respondents, and indeed are critical at many companies with far-flung teams. However, our survey results show that the efficacy of collaboration tools is moderate. Their relatively modest effectiveness may be attributable to the logistical challenges of connecting people in different time zones around the world. Key to success is sufficient investment in training and design standards, without which the benefits of collaborative environments are illusory. For example, insufficient investment is one of the major barriers to successful engineering offshoring. But for those companies that have mastered their use, these tools can be a powerful means of bringing people together at the development phase.

 
 
 
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Resources

  1. Barry Jaruzelski and Kevin Dehoff, “The Customer Connection: The Global Innovation 1000,” s+b, Winter 2007: Companies need to align their innovation model to their corporate strategy and listen to their customers.
  2. Barry Jaruzelski and Kevin Dehoff, “The Global Innovation 1000: How the Top Innovators Keep Winning,” s+b, Winter 2010: Highly innovative companies consistently outperform because they are good at the right things, not at everything.
  3. Barry Jaruzelski, John Loehr, and Richard Holman, “The Global Innovation 1000: Making Ideas Work,” s+b, Winter 2012: How successful innovators bring clarity to the early stages of innovation.
  4. Barry Jaruzelski and Matthew Le Merle, “The Culture of Innovation: What Makes San Francisco Bay Area Companies Different?” Booz & Company white paper, Mar. 23, 2012: Booz & Company and the Bay Area Council Economic Institute identify the strategic, cultural, and organizational attributes that have led to the sustained success of the San Francisco region.
  5. Alice Rawsthorn, “Catching Up to 3D Printing,” New York Times, July 21, 2013: The current state of digital manufacturing.
  6. Jeff Schumacher, Simon MacGibbon, and Sean Collins, “Don’t Reengineer. Reimagine.s+b, Summer 2013: How your business can realize its digital potential, from the team at Booz Digital (booz.com/digital/).
  7. Booz & Company’s Global Innovation 1000 study microsite.
  8. Booz & Company’s online innovation strategy profiler: Evaluate your company’s R&D strategy and the capabilities it requires.
  9. For more thought leadership on this topic, see the s+b website at: strategy-business.com/innovation.
 
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