Production Innovation: “Those who control their processes better withstand external pressure”
Geopolitical tensions, technological disruption,and a tight labor market. For you as a European manufacturing or production company, these are challenging times. Our Director Joris Ceyssens and Flanders Make CEO Grisha Lobbestael share their insights on potential solutions in the Industrial Automation podcast. The episode is in Dutch, but this article zooms in on one of the topics from that conversation: the tandem of product and production innovation.
Joris Ceyssens (VINTIV): “Product innovation cannot exist without production innovation. Making your product with standard machines carries a certain risk. Mind you, there’s nothing wrong with standard machines for certain processes. But standard means your competitor also has access to that technology. And that means you are producing in the exact same way.”
“Which in turn means you won’t win on your production method. And then you automatically end up with costs as the differentiating factor. That is where the shoe pinches in many European countries—on the one hand due to rising hourly wages and on the other due to a tight labor market.”
“How do you protect your company against those external factors? By getting more grip on your own production process. If you are in control of your production, you are in a stronger position. A custom machine safeguards all the knowledge you possess.”
“It is tempting to focus solely on the product. But the winning companies combine both product and production innovation.”
Grisha Lobbestael, CEO Flanders Make
So companies that want to be future-proof must invest on both fronts? Both product and production innovation?
Grisha Lobbestael (Flanders Make): “That’s right. But I understand it’s tempting to focus on your product. We see many companies making that reflex. Product innovation is visible faster than production innovation. Improving your existing products or launching new ones is fun for your customers. And product innovation also translates into revenue faster.”
“But making a truly innovative product with outdated processes? That’s not going to work. Production innovation has a direct impact on productivity, quality, flexibility, lead time… The true winners combine both. They develop better products and continuously improve the way they design, produce, and maintain products. This is not an either-or story, but a both-and story.”
“IP is the lever. It is the IP that determines how much you actually retain from product innovation.”
Joris Ceyssens, Director VINTIV
Is there a difference in agility and resilience between companies that invest on both fronts and those that don’t?
Grisha Lobbestael (Flanders Make): “Certainly. Companies active on both fronts can react much faster to changes. They can launch new products faster, produce more efficiently, switch more easily during demand fluctuations and handle staff shortages much better.”
“In times of crisis, you clearly see which companies have invested in product and production innovation. Think back to the COVID period, for instance. Back then, companies were challenged to redefine their product and position, or to quickly switch and adapt. That succeeds much faster and better when your processes are fully optimized.”
Joris Ceyssens (VINTIV): “A new product indeed creates added value in the short term. But for me, the question is: How much of that value do you still have left after 5 years? And that’s where the IP issue comes into play. IP is the lever. It ensures you actually retain something from that innovation in the product field. Safeguard that knowledge in a custom solution and keep your knowledge in-house. That way, you will be better equipped to respond to external challenges.”