The Surprising Effectiveness of “Assembly Line” Innovation

New research shows that Chinese companies are industrializing innovation in surprising — and surprisingly effective — ways.

According to Peter J. Williamson and Eden Yin, both of University of Cambridge’s Judge Business School, this industrializing of innovation is improving speed and cost by applying lessons from an aspect of manufacturing that seems antithetical to innovation: the production line.

“The classic image of innovation, especially early-stage R&D, is of an inventor or a small team brainstorming and experimenting with new ideas,” write Williamson and Yin in “Accelerated Innovation: The New Challenge From China,” in the Summer 2014 issue of MIT Sloan Management Review.

“Large-scale and tightly defined processes are generally seen as inhospitable to creativity and innovation,” they continue. In some industries, such as pharmaceuticals and IT, research and development can involve thousands of scientists and engineers. But generally, the authors note, “core R&D activities nonetheless typically revolve around a set (perhaps a large set) of relatively small teams.”

In researching 23 Chinese companies, the authors found that many Chinese companies are upending this conventional view of development. According to their research:

• These companies are “pushing the boundaries of systemization and scale to a whole new level in their efforts to accelerate innovation.”
• They do this by working to “leverage the potential of a large pool of competent but often unexceptional technicians and engineers.”
• These companies’ approach is “to divide the innovation process into a large number of small steps and then assign teams to work on each stage.”
• The goal: get this “assembly line” to “accelerate the process and deliver results quickly.”

The authors cite the example of WuXi AppTec, a pharmaceutical, biopharmaceutical and medical-device outsourcing company with operations in both China and the United States, which has embraced a staged approach for its drug development.

The company began its work on a new drug for the treatment of chronic hepatitis C by dividing the R&D process into a series of eight steps. Dozens of people were assigned to each step. Specialized staff handled the more complex steps, while “R&D workers,” graduates of trade colleges, were assigned to other stages.

The big advantage of the new process is speed. “This highly industrialized approach has enabled WuXi AppTec to complete projects two to five times faster than comparable projects using conventional approaches that the company benchmarked in the United States,” write Williamson and Yin.

Industrializing the R&D process is just one way that Chinese companies are modeling what the authors term accelerated innovation. These companies are also “rapidly incorporating user feedback into new designs to drive down the learning curve faster and restructuring their organizations to speed up problem solving.”

The challenge to companies that compete with these Chinese innovators should not be underestimated. “These developments have potentially huge implications for how companies should think about global competition and whether they need to rethink and reengineer their established innovation and product development processes,” the authors conclude.

For further details, including how companies are applying “simultaneous” or “concurrent” engineering instead of following a sequential “waterfall” process and how R&D teams are cycling through “launch-test-improve” cycles rapidly enough to “transform the customer experience,” read the full article.