The section Smart Innovation can be subdivided into three categories: Open Innova-tion, Connected Lifecycle Innovation and Integrative Development of Products, Pro-cesses and Production Systems. The concept of Connected Lifecycle Innovation takes production cycle data of the product as a basis for the innovation process, whereas the concept of Open Innovation concentrates on the creation and distribution of ideas and innovations across organizational boundaries. The concept of Integrative Development of Products, Processes and Production Systems is going even one step further and follows the idea of involving the innovation process in every single step along the value chain of a product, starting from the idea of the production and the delivery to the customer to be able to learn and create new innovations based on the assessment of the current situation. The idea of Integrative Development causes also the cross-departmental connection through the innovation process and leads to a bet-ter understanding of potential across the whole organization. Moreover, it promotes the intense communication and idea exchange throughout the firm (Bechtold, Kern, Lauenstein, & Bernhofer, 2014, p. 9).
One goal of Smart Innovation is the reduction of uncertainty in the innovation pro-cess through the market acceptance of the products. This can be measured with the key performance indicator fit-to-market to understand if a product has the credentials to survive on a competitive market. The second goal of Smart Innovation is the con-stant improvement of the effectivity of the innovation process, which means to get a certain balance into the innovation creation throughout the year. Innovation is not supposed to be a coincidental occurrence but can be achieved with precise planning and structured processes. A good indicator for this particular goal is the time-to-market and cost-to-time-to-market key figure. The one key figure explains how long it takes for an idea or innovation to be placed on the market and what exact time is needed for this process. By knowing this key figure, the processes can be optimized and new goals can be set to achieve a lower rate of the time-to-market index. The other key figure is giving notice about the costs which accrued during the process of innovation and helps to understand the main cost drivers to be able to reduce costs and make the process more efficient (Bechtold, Kern, Lauenstein, & Bernhofer, 2014, p. 10).
3.2.1 Open Innovation
The continuously growing competitive constraints caused by globalization and short-er product lifecycles forces companies to innovate their products, processes, produc-tion systems and organizaproduc-tion in shorter cycles and with more attenproduc-tion to effectivity and efficiency of the innovation (Bechtold, Kern, Lauenstein, & Bernhofer, 2014, p.
12). This makes innovating, on the one hand, an essential factor of staying competi-tive but, on the other hand, a very important department for the company to focus on.
To reduce uncertainties already in an early stage of the innovation process, a compa-ny needs to acquire two different kinds of basic information, namely (Gassmann &
Enkel, Open Innovation - Die Öffnung des Innovationsprozesses erhöht das Innovationspotenzial, 2006, p. 132):
• Need Information: Information about customer needs as well as market needs which means, in other words, that the companies need detailed infor-mation about preferences on the market, wishes of the customers, satisfaction factors of the customers and buying motive of the current and potential cus-tomers of the companies.
• Solution Information: Technical possibilities and potential to be able to transfer the needs and wishes of the current and potential customers of the company into a physical product or service product which can be accepted by the client.
One way to overcome this dilemma is the opening of the innovation process and the strategic usage of the environment which serves as leverage effect for the individual innovation process. In this concept, the market is not only seen as a source of Need Information but also a source of Solution Information (Chesbrough, 2002, p. 12).
Such cooperative innovation activities are not explicitly a result of the implementa-tion of Industry 4.0 (Thomke, 2003, p. 25). Already in the year 1995, the proporimplementa-tion of knowhow input from the environment for the innovation creation had already ris-en from around 35% to 64% (Gassmann & Enkel, Opris-en Innovation - Die Öffnung des Innovationsprozesses erhöht das Innovationspotenzial, 2006, p. 132; Conway, 1995, p. 327). With the help of Industry 4.0, it will be continuously easier to use in-formation for open innovation from the environment and to integrate this inin-formation into the innovation process for the future, especially because complex Need Infor-mation and Solution InforInfor-mation in form of big data can be acquired and analyzed in
real-time through the help of Industry 4.0 techniques. The identification of Lead Us-ers who have detailed knowledge about the usage of the products and a creative po-tential to influence the further development of the product in a positive way is crucial for the companies but also a challenge (Bartl, 2008, p. 20). With the help of Lead Users the companies can discover chances to develop new customer oriented solu-tions and also detect potential risks for new innovasolu-tions. Not only Lead Users are a form of Open Innovation but also cooperative alliances with suppliers, partners, uni-versities and authorities. The following core processes divide the area of Open Inno-vation into three categories (Gassmann & Ellen, 2004, p. 22)
1. Outside-in-Process: This process enriches the internal knowledge of the company through both external knowledge of customers, suppliers or partners and active transfer of technologies out of other companies and universities.
2. Inside-out-Process: This process supports the external commercialization of the products and is aimed at bringing the products with license agreements widely on the market so that innovations are driven by many licensing part-ners and different stakeholders to the product. This process uses the full re-sources of the market instead of just the research budget and manpower of one company.
3. Coupled-Process: This process contains a linkage between integration and externalization of knowledge for the purpose of the joint development in alli-ances, joint ventures and innovation networks, where a balance of reciprocity is the key driver of success.
3.2.2 Connected Lifecycle Innovation
Innovation potential can be discovered and used not only through the opening of the innovation process for the environment like in the above mentioned Open Innovation concept but also through the data which is collected along the product lifecycle. The product lifecycle is divided into four categories: concepts, product design, manufac-turing, service support and disposal. The data from each category will be analyzed with the help of intelligent analytic tools which are specially designed for the innova-tion process (Bechtold, Kern, Lauenstein, & Bernhofer, 2014, p. 11).
The central role for the successful implementation of Connected Lifecycle Innova-tion is the barrier-free data accessibility of the product lifecycle management (PLM) system, with the result that product relevant data from the Enterprise Resource Plan-ning (ERP) system and the Manufacturing Execution (MES) system are constantly available in the PLM system (Fache, Lange, & Gertz, 2014, p. 11).
Figure 8: Categories of the Product Lifecycle Management (Eversheim & Schuh, 2015, p. 55)
Outside of the company, the Connected Lifecycle Innovation enables the creation of a 360 degree profile of a specific customer. The customer behavior can be tracked in a passive way with the help of mobile data and in an active way through customer feedback. The data security of the customer and the final acceptance by the client should always be kept in mind (Bechtold, Kern, Lauenstein, & Bernhofer, 2014, p.
12).
The Connected Lifecycle Innovation is gaining importance with the implementation of mass customization. The customized mass production supplies the company with an enormous amount of customer data and information about customer needs and wishes which are hardly ascertainable through classical market research methods.
The concept of mass customization is giving companies a new instrument of recent
Concepts
Product Design
Manufacturing Service
Support
Disposal
market developments and, therefore, supports companies in the innovation process once more (Bechtold, Kern, Lauenstein, & Bernhofer, 2014, p. 12).
3.2.3 Integrative Development of Products, Processes and Production Systems The set goal of the Integrative Development of Products, Processes and Production Systems is the interdisciplinary cooperation, starting from the development of a product until the creation of the fitting production system to create new innovations in a team. In this concept, all aspects need to be looked at in interplay for the design and continuous improvement with regards to the market cycle (Dorst, 2015, p. 25;
Tröger, 2013).
The whole process of the integrative development stretches from the product or busi-ness idea to the batch production of the product. The development process can be categorized into four iterative cycles (Gausemeier, Czaja, & Dülme, 2015, p. 31):
1. Strategic Planning: The department for strategic planning involves the tasks of finding potential, finding products, business modelling and planning as well as product conceptualizing.
2. Product Development / Virtual Product Development: The product devel-opment involves the tasks of the detailed conceptualizing of the new product across all specialized fields. For this matter, all fields work out their profes-sional part of the product to combine it with each other for the first draft of the product. Through the help of Industry 4.0 the modelling of future prod-ucts can be shifted completely to the virtual world, which enables companies to adapt the product features to certain circumstances easier and quicker.
3. Service Development: The service development is a key factor for the devel-opment of a new product since the customer wants not only the physical product but also an appropriate service for it. This helps to connect the cus-tomer to the product and the company. The main tasks are the conceptualiz-ing of services, the plannconceptualiz-ing of services and the integration of services into the product concept.
4. Production System Development / Digital Factory: The main goal of the production system development are the tasks of an integrative view on
plan-ning the workflow, planplan-ning the working appliances, planplan-ning the working place and planning the production logic with the focus on the planning of ma-terial flow and resource planning.
The integrative conceptualizing of products and production systems is closing the gap between the requirements catalogue and the specialized techniques of the indi-vidual fields (Gausemeier, Czaja, & Dülme, 2015, p. 34).