Manufacturing enterprises are in an unprecedented information era now. The
explosion of the information data and the dynamic change of the market demand
force manufacturing enterprises to bring in advanced Information Technologies
(IT) and Information Systems (IS) to improve their product and service. Meanwhile,
traditional process innovation in manufacturing is facing a revolution in the
circumstances of informatization. The informatization in manufacturing enterprises
means the enterprising use of advanced computer technology, communication technology,
automation technology and modern management methods to enhance and optimize
the whole operation process including R and D, production, management, business,
etc., (Huai-Li et al., 2004; Fu
and Bi, 2009; Zhang et al., 2011). According
to other references, the process innovation includes changes or improvements
in process techniques, equipment or process management (OECD,
2005; Utterback and Abernathy, 1975).
The informatization and the process innovation are closely related. From one
hand, informatization applications such as IT and IS could provide a favorable
environment and operation platform for the process innovation in manufacturing
enterprises. The introduction of advanced information technologies could trigger
the formation of new process technologies and modern process management modes.
On the other hand, process innovation cannot be separated from informatization.
The digitization and intellectualization need for realizing the novel process
innovation has impacts on the informatizations development and application
as well. A positive interaction between informatization and process innovation
contributes to the overall performance of manufacturing enterprises and the
mismatch between the two will lead to the productivity paradox. In this research,
the manufacturing enterprise informatization was divided into R and D Informatization
(RI), Production Informatization (PI), Management Informatization (MI) and Business
Informatization (BI). And the process innovation is divided into Process Technology
Innovation (PTI), Process Equipment Innovation (PEI) and Process Management
The impacts of information technology or information systems on innovation
have been studied by researchers. However, few studies has pay attention on
the two-way interaction between the informatization and process innovation from
a systematic perspective.
|| Basic information of the 4 selected companies including their
history, location, product and other information
|Considering that the four companies in this research do not
want to reveal their name, the four selected companies in this research
are labeled as Telecom A, Appliances B, General equipment C, Equipment D
Therefore, this study explores the two-way relationship between the informatization
and process innovation based on the data from six manufacturing enterprises
in China and seeks to open the black box of the relation through cross-case
MATERIALS AND METHODS
The case study research is selected for this study to assess the real-life
phenomena. As multi-case design allows for cross-case comparison (Eisenhardt,
1989), 4 manufacturing enterprises were selected in this research. Qualitative
data which were gathered primarily through face-to-face interviews, was mainly
used. The contact people include production managers, R and D personnel and
top management team member, so, that data could be obtained from different perspectives.
Before face-to-face interview, websites, annual reports, patents and other available
resources of each case were carefully collected and analyzed. Telephone conversations
and emails were also conducted to replenish the interview contents after the
Basic enterprise information of the 4 cases including the companies name,
history, location, product and other information are highlighted in Table
1. According to Table 1. all the four cases in this study
have been set up for a long periodand have good revenue with their products.
HOW INFORMATIZATION AFFECT PROCESS INNOVATION IN THE MANUFACTURING ENTERPRISES
R and D informatizations effect on the process innovation: R and D informatization
contains the use of cloud computing, Computer Aided Design (CAD), Computer Aided
Process Planning (CAPP), Product Data Management (PDM), Virtual Reality Technique
(VRT), etc., in the R and D department or design department.
RIs effect on PTI: The cloud computing which changes the way industries
and enterprises do their businesses in that dynamically scalable and virtualized
resources are provided as a service over the Internet, serves better when exploring
innovation knowledge (Xu, 2012). The Telecom A has
already applied cloud computing in its R and D activities. In order to be competitive,
enterprises in manufacturing industries have to respond rapidly to dynamically
changing market demands as well as unforeseen events (Wang
et al., 2012). In order to adapt to the market change and improve
design accuracy, both Appliances B and General equipment C adopted digital design
software and systems such as C-Mold, PRO/E, etc.
RIs effect on PEI: According to the informants of Telecom A, RI
tools such as PDM and VRT could reduce uncertainty risks (e.g., hardware equipment
breakdown). The integrated R and D and design systems (e.g., PRO/E) also assure
the maneuverability and stability of the equipment improvement program in case
B and C. With the help of Cimatron, UGIIand NC programming system, case B optimized
its R and D structureand realized the real-time synchronization of equipment
information and its virtual condition.
RIs effect on PMI: RIs functions are significant in the
R and D and design department, while the PMI are mainly used in the production
process. However, the effect of RI on PMI cannot be denied as the virtualization
tools such as virtual reality technique can simulate the probability of new
PMI. Telecom A created a cloud service platform to help develop TD-SCDMA, UMTS
from different leveland the platform has played an important role in forming
a new process innovation mode.
Production informatizations effect on the process innovation:
Researchers have examined a wide range of advanced manufacturing technologies
including Computer Aided Manufacturing (CAM) and Computer Numerically Controlled
(CNC) machines as potential sources of process innovation (Nair
and Swink, 2007).
PIs effect on PTI: Most PTI are used to produce new product. Telecom
A redesigned its production system with the help of Fraunhofer-Gesellschaft
in German to online-monitor, control and diagnose the application of its process
technology. The information systems, such as Computer Integrated Manufacturing
Systems (CIMS) and Manufacturing Execution System (MES), were put into use in
Appliances B since, 2000. Such production informatization was found to be effective
in improving the process technology innovation in real time. Similar situation
also occurs in case C-case D.
PIs effect on PEI: Case B, C and D are better in adopting PI to
improve PEI. Take Equipment D for instance, PI systems such as CAPP improved
the processing efficiency of the X shaped blade of the water turbine to 79%
with a weight error no more than 2.1%. The CIMS in Equipment D combines the
production data management, quality plan and control and other subsystems comprehensively,
forming an integrative development of both product designand equipment/tool
improvement. Besides, Equipment D also rechecked the components of the water
turbine with PI means.
PIs effect on PMI: The PMI plays an important role in the manufacturing
departmentand PI systems are closely related to PMI. The Integrated Supply Chain
Management (ISCM) was applied by Telecom A in the optimization of the process
Management informatizations effect on the process innovation:
Management informatization includes the use of Transaction Processing System
(TPS), Decision Support System (DSS), Office Automation (OA), Enterprise Resource
Planning (ERP), etc.
MIs effect on PTI: MI can influence the procedure of PTI by controlling
and sharing the ideas and R and D information. Desktop cloud, an upgraded cloud
computing mode, has been implemented by Telecom A since, 2009. The knowledge
sharing and communicating through the desktop cloud affects Telecom As
R and D on process technology to some extent. The use of MI reduces resources
and protects innovation data effectively.
MIs effect on PEI: Compared with Telecom A, Appliances Bs
cloud computing ability is still in developing. With integrated supply chain
management platform, Appliances B employs unified management through encoding
information on resources such as staff, product, equipment, storage, etc. Equipment
information, including the norms, parameters, processing cycle and depreciation,
can be processed by the management information systemand be used to work out
an optimum equipment innovation plan. Unexpected equipment shut down can be
quickly responded by the IS functions of message passing and response as well.
MIs effect on PMI: By using management information system, Equipment
D is able to make multi-objective optimization decision and real-time management
on manufacturing equipments. With Digital Electric-Hydraulic (DEH) control system,
Equipment D simplified the debugging work of a motorand prolonged the motors
Based on the above analysis and discussion, management informatization has
played an important role for the long-run market performance in manufacturing
Business informatizations effect on the process innovation: IT
and IS used in BI mainly include Supplier Relationship Management (SRM), Customer
Relationship Management (CRM), Supply Chain Management (SCM), etc.
BIs effect on PTI: It is widely believed that the establishment
of interoperability of the IS of organizations with those of its collaborators
(e.g., customers, suppliersand business partners) can generate significant business
value and learn how their customers use their products and services (Awazu
et al., 2009; Loukis and Charalabidis, 2013).
Appliances B invites suppliers to join in its front end design through its business
network platform. And the appliance Bs R and D network over the world
accelerated the speed of its cooperative research and development in the field
of refrigeration technique, integrated circuit, etc. For better process technology,
General equipment C built a business cooperation platform to unite its suppliers,
final users and cooperative partner (e.g., Hitachiand GE). Mechanical positioning
monitoring technology is applied in General equipment Cs product based
on the software engineering, Web service, the Internet of Thingsand characteristics
of the mechanical products to monitor the operational situation and its location.
BIs effect on PEI: The operation of manufacturing enterprises
is not separated from outside; it interacts with the exterior environment (Bi
et al., 2012). The four cases all built their own integrated networked
platforms. In case D, the enterprise builds a platform for the collaborative
design and manufacturing of the power-generation equipment. And the platform
of D also integrates the related business application systems with data resources.
Besides, Equipment D also implements the collaborative equipment redesign with
its partners and the implementation improves the power-generating equipment
on the advice of its partners.
BIs effect on PMI: Kaufmann and Todtling
(2001) and Becker and Dietz (2004) pointed out
the importance of R and D cooperation. In their viewpoint, the construction
of interorganizational networks is of great significance for the process innovation
in manufacturing industries. The situation in the four cases agrees with their
findings. Though the EB, CRMand SCM have little apparent direct effect on PMI,
the information of case A-case D has shown the fact as follows: BI can affect
the process management after digesting and absorbing the information and ideas
that gathered from clients, suppliersand dealers.
The analyses presented above shows that BIs effects on process innovation
are mostly indirect.
HOW PROCESS INNOVATION AFFECT INFORMATIZATION IN MANUFACTURING ENTERPRISES
Process technology innovations effect on the informatization:
PTI can be defined as the development of new product designing technology, manufacturing
technologiesand other related technologies (Nair and Swink,
PTIs effect on RI and PI: Companies can acquire innovative ideas
and technologies for new products/services at different levels of maturity and
from different types of intermediaries (Nambisan et
al., 2012). In order to enhance the accuracy and creativity of the process
technology knowledge, the selected cases strengthened the application of RI
such as CAD, CAPP, PDM, etc. Take case C for instance, uncertainty factors such
as technology uncertainty and environment uncertainty impelled General equipment
C to take in simulation technique and virtualization technology to carry out
the simulation and virtualization of the process technology. For instant information
sharing within R and D department, both General equipment C and Equipment D
applied the CIMSand combined 3D design, data, qualityand control systems. Affected
by the divergence of process technology in different manufacturing industries,
IT/IS of PI has to be adjusted in accordance with the process technology standard.
In case C, the company embedded the workshop into the PI system. Besides, Equipment
D developedaerodynamic/ hydrodynamic analysis software CFX-TASC flow according
to its needs of innovation, establishing a hydraulic design system based on
PTIs effect on MI and BI: When it comes to MI, little evidence
on how PTI affect MI has been found in the six cases as the MI systems being
used such as ERP are bought from IT ventures and are preset. Those management
IT/IS are mainly related to the decision making and enterprise operation management.
Although the effect of PTI on BI is not so obvious and direct, the cooperation
need for product innovation and PTI stimulates manufacturing enterprises
management on information and cooperation networkand helps to transform their
market and cooperation network. In case B, the demand to meet the R and D cooperation
and collect PTI ideas coming out of sources from clients, partners and competitors
has helped Appliances Bs construction of the Sales and Operations Planning
(S and OP) and Global Value System (GVS).
Consequently, the cases discussed above demonstrate that the PTI has direct
impact on RI and PIand may have indirect impact on MI and BI.
Process equipment innovations effect on the informatization: PEI
is an important part of process innovation (Nair and Swink,
2007). It typically involves the use of specific change tools, machinesand
other equipments in manufacturing.
PEIs effect on RI and PI: The duplication of equipment between
development and manufacturing facilities are all significant in improving performance
in introducing new technologies (Hatch and Mowery, 1998).
In case A, the process detection device created by Telecom A detects the main
board informationand gives feedback to Baseboard Management Controller (BMC),
forming an interaction between the informatization and process equipment. The
combination of robot equipments and manufacturing technology will trigger changes
of IT in R and D and manufacturing process. Take General equipment C for instance,
Cs equipments and tools in the robotization in modern integrated manufacturing
applications pushed the upgrade and replacement of both R and D IT and manufacturing
IT/IS. The import and improvements of the Numerical Control (NC) machines also
drive the production informatization directly.
PEIs effect on MI and BI: The normal and abnormal states of the
process equipments concern the enterprises performanceand are connected
with management activities. As for BI, although the introduction decision of
new process equipments might be influenced by market change and client demand,
the PEIs effect on BI is hard to observe.
Process management innovations effect on the informatization:
PMI includes the optimization of process management mode, the process reorganization,
|| The two-way relationship model of the informatization and
PMIs effect on RI and PI: According to the face to face interviews,
the PMIs effect on PI is more obvious than its effect on RI. As the process
management means a lot in the production department, the optimization of the
process innovation links with manufacturing information systems and the computerized
production line, therefore, the process change leads to the adjustment of the
PI systems. In order to debug the working condition of mechanical processing,
Telecom A bought an integrated management system from IBMand it accelerated
Telecom As management informatization upgrading.
PMIs effect on MI and BI: Driven by the demand of process knowledge
management, Telecom A integrated the hardware equipment with cloud management
and distributed storage engine. In case B, an effective PMI drives the combination
of Appliances Bs virtual network (linkage with users by internet) and
real network (logistics and market network), pushing the information flow, logistics
flow and capital flow. The process management requires enterprises bring in
advanced Management Information System (MIS) to achieve an automatic process
According to the above analysis and discussion, the dynamic and complicacy
characteristics of the process management improved the standard of R and D information
technology. The cross management of the process acquires the participation of
both PI and MI.
The results of the analyses above are summarized as the two-way relationship
model of the informatization and process innovation. The model can be seen in
Fig. 1 illustrates the direct or indirect relationship between
the informatization and process innovation.
This study explores how informatization and process innovation interact with
each other in manufacturing enterprises on the basis of 4 cases information.
Such research provides an overview of the two-way relationship between the informatization
construction and process innovation development. The research results can provide
instruction for managers and top management team members in manufacturing enterprises
on how to reinforce the coordination between the informatization and process
First, RI has direct interaction with PTI and PEIand has a less direct interaction
with PMI. Second, the interaction between the PI and process innovation is testified
in the case study. With the application of PI, the development of PTI, PEI and
PMI could be implemented with better effectiveness. Third, comparing with the
interaction between MI and PTI, the MI-PEI interaction and the MI-PMI interaction
are found to be relatively direct. The impact of PTI on MI in Chinese manufacturing
enterprises still needs to be strengthened. Fourth, BI has a comparatively indirect
interaction with process innovation.
Like all research, this research has its limitations. Although informatization
and process innovation showed their two-way relationship in the case study,
empirical studies based on data with large sample size are needed for further