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Improving product innovation at PT. Sarandi Karya Nugraha

Stek, Luuk van (2012) Improving product innovation at PT. Sarandi Karya Nugraha.

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Abstract:This report is the result of a three month research at PT. Sarandi Karya Nugraha. Sarandi is an Indonesian SME which produces medical equipment. This research aimed to explore how Sarandi can improve their product innovation. This was realized by formulating a best practice model from the literature and comparing this to the situation at Sarandi. Pilot projects were then used to find out how the organization handles changes and if certain aspects of the general theories in the literature worked in this environment. Based on both the comparison between the literature and reality, and the pilot projects, conclusions and recommendations were formulated. The first step was to review the literature on critical success factors for innovation. Subsequently the implications of being an SME and originating from an emerging economy were studied. This led to five elements. The heart of the approach is the innovation process. This has to be supported by an innovation strategy and conducted in an innovative organization. In order to overcome the disadvantages from being an SME and originating from an emerging economy, external inputs are needed to upgrade the innovation process. These external inputs can be used effective and efficient when the firm possesses sufficient absorptive capacity. By interviewing different people in the organization and by performing objective observations it was determined to what extent the success factors were used at Sarandi. This resulted in a detailed description for all elements. Two pilot projects were then started. During these projects, elements from the literature were introduced to the innovation process, in order to test how changes were adopted and if any benefits could be observed from these changes. Towards the end of the pilot projects, evaluation interviews were scheduled with the team members to capture their opinion on the changes. Based on the results from the research and the pilot projects conclusions were drawn. Table A shows on a scale from one to seven the extent to which the situation at Sarandi is in line with the literature. This shows that the way innovation is organized at Sarandi is not in line with the literature. However, based on the results of the pilot projects it can be stated that the organization is willing and capable of changing. The final conclusion was therefore that in order to improve the product innovation, Sarandi has to change their innovation process in line with the best practice model. In order to make the right changes, recommendations were formulated. Innovative Organization Innovation Strategy NPD Process External Inputs Absorptive Capacity The most important recommendations are to work in cross functional teams, limit the role of the managing director to organizational sponsor, develop an innovation strategy and increase the involvement among the employees. Besides that, Sarandi should try to seek foreign partners in order to create external inputs. Table A Some remarks can be made regarding the validity of the research. The data that were gathered from interviews were based on people’s perceptions and even though they all matched, it is not sure whether it is objective. Furthermore, in order to draw firmer conclusions on the usefulness of the model a longitudinal approach needs to be taken. This study should also include multiple companies.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
Link to this item:http://purl.utwente.nl/essays/61569
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