CIMdata PLM Industry Summary Online Archive
03 November 2004
Financial News
Leading Companies Improve
Product Innovation With SAP
Kimberly-Clark Corporation and Kaeser Kompressoren Enhance Ability to Introduce
Innovative New Products
SAP announced that major SAP
customers including Kimberly-Clark Corporation, and Kaeser Kompressoren
will drive product innovation and help bring new products to market more
quickly by implementing SAP's framework for new product development and
introduction (NPDI). SAP's NPDI framework draws key functionalities from
SAP's enterprise resource planning and business suite solutions as well
as its new breed of composite applications.
According to a March 2004 Deloitte Research study titled "Mastering
Innovation," manufacturers now rank new products as their primary
source of revenue growth. However, studies show that more than 75 percent
of new consumer goods product launches fail and less than one-third of
manufacturers believe that their NPDI process is under control. Recognizing
this business need, SAP has drawn together best-practice functionalities
to help companies introduce their products more efficiently and at lower
cost.
SAP's NPDI framework improves the management and execution of the entire
NPDI process, from opportunity to market launch. The framework comprises
five basic capabilities: product innovation management, project management,
product development, production and distribution ramp-up as well as marketing
capabilities. Product innovation management capabilities help companies
more readily identify market opportunities, generate ideas and concepts,
and select the most promising projects to pursue. Project management capabilities
help keep NPDI projects on schedule and make optimal use of valuable human
and financial resources. Product development capabilities simplify the
process of transforming concepts into fully defined products. Production
and distribution ramp-up capabilities help ensure that new products are
optimally introduced into the supply chain and manufacturing processes
while marketing capabilities help ensure that these are synchronized with
the market launch.
Together with SAP, Kaeser Kompressoren is establishing an innovation process
that will support the successful design and global marketability of its
products, services and complete systems for the generation, treatment
and delivery of compressed air.
"A critical aspect of our product development processes is efficiently
managing the flow of ideas from our operations across multiple countries
and turning these into reality," said Falko Lameter, chief information
officer, Kaeser Kompressoren. "At the same time, we're facing increasingly
shorter product life cycles and more specific local needs, demanding the
highest level of speed, effectiveness and market insight across this global
innovation process. With SAP, we've gained a platform that builds on our
existing IT investment and delivers powerful new capabilities to more
cost-effectively develop and market the products and services that are
in the highest demand by our customers around the world."
Recently identified as a leading innovator in a report published in Business
Week magazine, global manufacturer of health and hygiene products Kimberly-Clark
places its focus on product innovation.
"Cost leadership does not sustain competitive advantage -- continuous
innovation does," said Cheryl A. Perkins, senior vice president and
chief technical officer, Kimberly-Clark. "In response to shortening
product lifecycles, Kimberly-Clark is collaborating with SAP to introduce
improved capabilities for idea and portfolio management which will increase
speed-to-market for strategically important new products."
SAP's framework leverages functionality from mySAP™ ERP and other
mySAP™ Business Suite solutions as well as SAP xApps™ packaged
composite applications, all powered by the SAP NetWeaver™ platform.
SAP xApp™ Product Definition (SAP xPD) and SAP xApp™ Resource
and Portfolio Management (SAP xRPM) will allow companies to identify opportunities
and generate ideas and concepts while managing their development portfolio
within the context of business strategy and resource constraints.
Business intelligence capabilities support NPDI, enabling management to
gain visibility into key operational and cost metrics. SAP's NPDI framework
also leverages role-based portals.
"Business pressure to improve product innovation is pushing investment
in higher order applications," cites an AMR Research Alert by Kevin
O'Marah on September 28, 2004. "Those vendors that have taken the
time to build enough domain expertise and process understanding ... will
be the winners." O'Marah notes that SAP is "ahead of the game,"
and SAP's support for the NPDI process "incorporates extensive customer
input and builds on the ERP backbone."
"On the one hand it has become increasingly important for companies
to be able to quickly turn innovation into viable products, but it is
of at least equal importance that they be able to efficiently launch new
products into a global market," said Claus Heinrich, member of the
executive board, SAP AG. "mySAP Business Suite solutions and SAP
xApps powered by SAP NetWeaver enable companies to run an end-to-end NPDI
process to achieve a significant impact to a company's business by driving
time-to-value, time-to-market and time-to-volume."
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