Introduction
The notion that innovation is essential to a firmâs competitiveness, growth, and survival is well-supported (Giacosa 2012; Tidd et al. 2001). Multiple disciplines have approached innovation; thus, the conceptual boundaries of innovation are not clearly distinguishable. Yet, the core essence of innovation, according to OâSullivan and Dooley (2008, p. 5) is âmaking changes, large and small, radical and incremental, to products, processes, and services that results in the introduction of something new for the organization that adds value to customers and contributes to the knowledge of the organization.â Something new can be created at any time in all areas of the economy. Thus, innovation encompasses new products or services, new processes, and new organization structures or administrative systems (Damanpour and Gopalakrishnan 2001; Tidd and Bessant 2009).
Process innovation is a new or significantly improved way of doing things in a business that typically increases production levels and decreases costs. Such innovation might come in the form of new processes or techniques, new equipment, or new software. A classic example of process innovation is the invention of the first moving assembly line by Henry Ford. This process innovation not only simplified vehicle assembly but shortened the time necessary to produce a single vehicle. The increase in the competitiveness of Japanese firms since the 1980s is also often ascribed to manufacturing process innovations such as Just-in-Time, Kanban system (Bhoovaraghavan et al. 1996), integration and parallel development1 (Rothwell 1994). The introduction of new technologyâfor instance, new machines and equipmentâis the traditional way of achieving greater efficiency when manufacturing a product (Vicente-Lorente and ZĂșñiga-Vicente 2012).
Process innovation is not only taking place in manufacturing but also occurs in business, as new processes continue to improve service and administrative operations (Khazanchi et al. 2007). In the dynamic global fashion industry, the ability to reconfigure organizational processes through technological and administrative innovations is equally significant.
The major benefits of process innovation include enhanced organizational efficiency and responsiveness (Damanpour and Gopalakrishnan 2001). Unlike product innovation, process innovation typically occurs internally, is not visible to external entities, and is thus less likely to be copied by others. Therefore, it is increasingly seen as an important source of competitiveness and organizational renewal (Hatch and Mowery 1998; Keupp et al. 2012; Reichstein and Salter 2006). Yet, much of the theoretical and empirical innovation studies are directed toward product innovation; the âwhat, why, and howâ aspects of process innovation are relatively under-studied (Keupp et al. 2012). Discussion of process innovation in the area of administrative or business support is particularly limited. Studies of how global fashion brands are innovating their manufacturing or business processes are extremely scarce. In order to generate an initial understanding of process innovation in global fashion brand management, this chapter begins with introduction of the concept and scope of process innovation. Subsequently, the characteristics of process innovation, as opposed to product innovation, will be delineated. Within the boundary of the global fashion industry, process innovation will be illustrated at various stages of the supply chain using actual examples.
The Concept and Characteristics of Process Innovation
Unlike product innovation, which is targeted toward new product offerings or improvements to existing products and commercial activities, process innovations âis focused on the introduction or a new operating method, or improving an existing method in the production, commercial, administrative and managerial area, or generating a new way of using a production factor in order to increase production efficiency in terms of cost, quality and serviceâ (Giacosa 2014, p. 112). The focus of product innovation is making changes in the things (products/services) which an organization offers. In contrast, process innovation involves changes in the way in which things (products/services) are created and delivered, which includes creating and improving methods and developments in the processes or systems (Oke et al. 2007). Its aim is to improve effectiveness and efficiency (e.g., reducing costs and time) in production and organizational processes, which enables firms to become more competitive (Raymond and St-Pierre 2010). Process innovation is in the middle, connecting inputs and outputs efficiently (Murat Ar and Baki 2011). In this way, product and process innovations are mutually supportive and intertwined within a firmâs innovation process and value chain (Raymond and St-Pierre 2010), jointly creating a positive performance for businesses (Damanpour and Gopalakrishnan 2001; Piening and Salge 2015; Reichstein and Salter 2006). For instance, when Prada began manufacturing its iconic trousers using a high-performance fabric, this was made possible because of their investment in the process of developing the fabric (Giacosa 2014). Product innovation can also influence a companyâs processes because the new product may require modifications of the companyâs process map (Brusa 2012) at both the production and sales levels.
Process innovation can be narrowly viewed as new changes in the manufacturing process, such as developments in the processes, systems, and reengineering activities undertaken to develop new products. For example, to improve the manufacture of new products, plant systems, technologies, and operational practices may be upgraded, modified, or replaced with new and advanced processes (Oke et al. 2007). However, much of the literature supports a broader scope of process innovation, encompassing production and service, as well as administrative improvements (Khazanchi et al. 2007). Organizational processes such as the sequencing of work routines and information flow can also be enha...