Process Innovation: The Forgotten Innovation Gem

13th Aug 2021
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What immediately springs to mind when you think of innovation: The invention of the electric car? The iPhone? Any type of smart tech?

More and more companies are investing time and money into the development of new, ground-breaking innovative products and services in an attempt to increase their competitiveness, boost their bottom line and keep their customers loyal.

But constant product innovation is making it harder and harder for companies, especially smaller ones with less budget and fewer resources, to keep up and sustain their market position.

Is there another way?

Yes.

Through process innovation.

What is process innovation?   

Process innovation is an improved way of doing things across the entire supply chain including management, to expand efficiency in terms of cost, quality, and service.” – SpringerLink

Process innovation is where a company invests in R&D to develop or improve its production, organisation and delivery processes to improve efficiency and enhance performance.

It could be that an organisation invests in new technology or software to shave two minutes off a manufacturing process so that they can produce more products in less time. Or, it could be that they create a brand-new process for evaluating new suppliers so that they can rest assured that their quality and control standards will be met each time. 

Process innovation can help organisations operate more efficiently and effectively and serve their customers better. It keeps them competitive, it keeps their profit margin healthy and it keeps their customers happy.

So why is process innovation often forgotten in favour of product innovation?  

Why is process innovation the forgotten innovation gem?

Product innovations are loud and visible. They have the potential to revolutionise industries, change lives and go down in history.

Process innovation often slips by unnoticed.

Process innovation plods away behind the scenes, quietly improving a company’s performance and increasing its competitiveness. Its innovations won’t always be seen by the outside world, but they will always be felt: An improved performance, better quality and consistent delivery makes process innovation a quiet but radical game-changer for organisations.

Let’s find out more about the benefits of process innovation.

The benefits of process innovation

Although it’s often underutilised, process innovation is the least risky form of innovation because it usually aims to minimise costs, rather than drive revenue. This makes it critical for continuous organisational improvements and long-term corporate success.

For instance, innovative processes can improve efficiency. They enable companies to cut seconds off their manufacturing processes so they can produce more products, at a faster rate, for less money.  

Process innovations can also result in better, more consistent product quality and service levels. For example, changing the way a company gets products from the warehouse to its customers, or using new software to develop new products mean that process innovations can boost supply chain performance and optimise product development.

So, as you can see, the benefits of process innovation are twofold: Customers benefit from improved quality, added value and better service, and the organisation’s internal employees and stakeholders benefit from enhanced performance and more efficient ways of working. 

But it’s always easier to understand a concept if you can see it in action.

Examples of process innovation

One of the biggest, most famous examples of process innovation is Henry Ford’s invention of the world’s first moving car assembly line. His innovative process improvement shortened the time it took to produce a single vehicle from 12 hours to 90 minutes.

But process innovation doesn’t have to be as ground-breaking or as drastic. It could simply be the introduction of a new piece of equipment to an existing production process that speeds production up by 50%, therefore saving the organization time and money.

Or, perhaps it involves automating mundane, paper-based admin processes such as filing R&D tax relief claims. If organisations radicalise their existing tax claim processes by using a self-service portal like Tax Cloud to file their R&D claims, it’ll take them less time, cost them less money and help them secure the maximum amount of R&D tax relief that they’re entitled to.

But, more on Tax Cloud later. It’s all well and good knowing the benefits of process innovation, but how do you actively do it?

How to create and deliver process innovations

Technology, robotics, and artificial intelligence (AI) are all obvious ways to create new or improve existing processes. You can collect real-time data, optimise deliveries, and reduce production time with these new systems and software solutions.

But it’s generating innovative process ideas that can be difficult:  What can you create? What can you improve? Where do you even start?

Start by building a culture of innovation

Encourage innovative thinking amongst your employees by building a culture of innovation. A culture that promotes bold, unconventional and creative thinking, but that’s completely blame-free. One that actively encourages dissatisfaction and embraces diversity. This type of environment will foster radical thoughts and allow ideas to flow freely. It will make employees feel involved and want to proactively work hard to turn those innovative process ideas into reality.

Always set innovation goals

If you don’t set process innovation targets or goals, employees will have no incentive to think up and deliver new or improved processes. Even something as simple as ‘improve process efficiency by 8% in a year’ will motivate the team and give them something tangible to work towards.

Don’t be afraid to take risks

There’s always a risk that a new approach, method or process won’t work. But, if you don’t take risks, you’ll never be truly innovative.

One way to alleviate the risk that comes with developing innovative processes is to take advantage of the government-funded R&D tax credit incentive. You could claim up to 33% of the costs associated with the research and development of your new or improved process. The R&D tax relief scheme can give you the financial support you need to develop your innovative ideas and also help take the sting out of the tail if an innovation doesn’t go to plan. 

If innovation will be the key to survive in today’s hyper-competitive business landscape, then process innovation is what will most likely determine the corporate champions of the future.” – Datumize

This article was brought to you by Tax Cloud

Tax Cloud is the UK’s first online R&D tax credit portal that combines self-service functionality with expert advice and guidance from leading R&D tax experts, Myriad Associates. Whether you’re looking to invest in R&D yourself, or you have clients that need to file an R&D tax claim, you can use Tax Cloud to make the process easier, quicker and cheaper whilst also guaranteeing the maximum amount of tax relief.

Find out more by visiting the website, calling them on 020 7360 4437, or dropping them a line here.