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Managing Innovation Managing Innovation at Nypro, Inc. (A)at Nypro, Inc. (A)

Dongyuan ZhuDongyuan ZhuXingxing LiuXingxing Liu

Ye WangYe Wang

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AgendaAgenda

Company overview Perceived management problems/issues Alternatives Recommendation Discussion questions Reference

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Company OverviewCompany Overview

The fifth largest custom injection molder in the world, and the largest non-automotive molder.

Three divisions: Healthcare Electronics/communications Customer/industrial

Strategically aligned with customers base Building plants near customers in vital markets

Striving for uniform world-class technology at all plants. Highly decentralized organization

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Perceived management problems/issuesPerceived management problems/issues

Company facing a shifting basis of competition which was speed and variety in the future.

Lankton perceived a new market for Nypro, and was considering how and where to disseminate the revolutionary molding machine, NovaPlast, across the company.

Company having the challenge of being innovative while keeping consistent across plants.

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The alternatives of adopting NovaPlastThe alternatives of adopting NovaPlastAlternative 1: building a new plantAlternative 1: building a new plant

Strengths Most popular with senior management Engineering efficiency Centralizing development would facilitate personal oversight of

project Being done rather quickly

Weaknesses Transportation costs Against current philosophy of being decentralized No successful experience

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The alternatives of adopting NovaPlastThe alternatives of adopting NovaPlast Alternative2: scatter across the networkAlternative2: scatter across the network

Strengths Close-to-customer manufacturing particularly important in the

market segment Allows for the pontential to capture more market share Puts more engineers and marketers to work on exploiting the

NovaPlast Better technology would emerge

Weaknesses Against economy of scale philosophy Unproven technology and no clear indication of its feasibility

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The alternatives of adopting NovaPlastThe alternatives of adopting NovaPlast Alternative3: apply internal market effect, focus on Alternative3: apply internal market effect, focus on making it successful at a single plant.making it successful at a single plant. Strengths

Could be implemented rather quickly Allow for engineering/efficiency to be gathered Could evaluate how resource planning systems

interoperate Use “internal market” for innovation

Weaknesses Time consuming to deploy if research shows that the

flexibility is required in other international markets

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The alternatives of adopting NovaPlastThe alternatives of adopting NovaPlast Alternative4: not use NovaPlastAlternative4: not use NovaPlast

Strengths The niche market identified and capability allows

company to compete in market

Weakness Avoids taking advantage of the strengths,

innovation Not dealing with problem of the changing market

and competition

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RecommendationRecommendation

Go with making NovaPlast successful at a single plant.

-Less weakness

-Allows flexibility towards others Short term

-Continue with evaluation

-Continue pursuing orders

-Gather data relating to effectives and efficiency Long term

- Decide on long term deployment strategy

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Discussion questionsDiscussion questions

Is NovaPlast a disruptive or sustaining innovation for Nypro? A new-market disruption

What is Nypro’s process to implement new innovations? Following four steps

Nypro had a good process for exploiting sustaining innovation but not for the disruptions? CEO needs to stand astride the interface between

mainstream business units and new disruptive growth businesses.

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Process of implementing innovationsProcess of implementing innovations

Find the actually occurred process innovations.

Select the most important innovations which can

implement in other plants.

Find the ways to transfer the innovation from the

original team to other teams and plants.

Nypro sets up the new rules of the innovation.

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ReferenceReference

Clayton M. Christensen, Michael Overdorf. Meeting the Challenge of Disruptive Change. Harvard Business Review Article. Mar 1, 2000.

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Thank you!Thank you!

Questions?Questions?

Dongyuan, Xingxing & Ye, March 10, 2008.Dongyuan, Xingxing & Ye, March 10, 2008.