Innovative and Functional Products

Marshall Fisher advises a framework for assuring that supply chain design is appropriate for two different product types. The types, functional and innovative, are different by virtue of the nature of product demand. Functional products, as the name implies, are the staples of life — toothpaste, groceries, and commodities of all kinds. Competition is fierce for these products and margins are thin, but the demand is constant and 

Inception Disruptive innovation, in which entrepreneurial managers from many functions promote the product to early adopters Application innovation, where marketing finds new wavs to use the product and extends the market to these users Product innovation, in which engineering generates new versions with better performance, more features, or lower cost 

Growth Process innovation, in which operations managers improve the efficiency and effectiveness of delivery processes Experiential innovation bv customer service that enhances base product features Marketing innovation bv marketing to add extended product features 

Maturity Business model innovation carried out bv the CEO that changes the value proposition (Gillette s focus on blades, not razors), or the company s role in the value chain, or both Structural innovation — also carried out bv the CEO — that capitalizes on disruptions in mature markets such as deregulation in the airline and banking industries 

Innovative products, on the other hand, are differentiated in the market. They have advanced technological features or styling. They carry higher margins — but demand is difficult to forecast and life cycles are shorter than for functional products. Examples include this year s latest apparel fashions and automobiles with novel features, such as GIS locator systems and cameras for rearward viewing. For those who are not certain which products fall into which category, Fisher offers a guide, summarized in Table 5.3, to separate the functional product from the innovative. 

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TABLE 5.3 Differences between Innovative and Functional Products... 

Figure 5.3 maps the product life cycle with innovative and functional products. The four-quadrant grid shows each life-cycle phase, starting from the upper right. The top quadrants are the domain of innovative products, while functional products populate the bottom two quadrants. 

Section 5.1.3 described the differences between innovative and functional products, which are compared in Table 5.3. A requisite to linking the supply chain with the customer is recognizing the difference between the two types. 

A case study for a company we refer to as Acme illustrates how to construct an activity system for innovative and functional products. Acme had long manufactured a widely used line of aircraft fasteners, a product category in which Acme was a pioneer and technical leader. In fact, many of Acme s competitors were licensees of its technology. 

Section 5.1.3 describes the differences between innovative and functional products. One observation is that similar products, like automobiles, may be different. An example is a Taurus being a functional product while a fashionable new convertible is an innovative one. The supply chains for these products should be different. The differences may not be so much in the physical flow, but in the decisions regarding inventory and availability of product. Because the products cater to different segments, they are likely to produce different margins and require different inventory economics. 

In the past, the sports industrywide approach to product manufacturing had minimal consideration for its environmental and social impact. However, many c(Misumers are now becoming more aware of sustainability issues and are interested to know under what conditions their textiles were manufactured, while, at the same time, they want to benefit from innovation and functionality. Unfortunately, as green washing is prevalent, research with end users indicates that they expect more transparent and clear information in this area. 

The ID function involves a great deal more than appearance design. The designer is often called on to create the very concept of the product. In doing so, they will consider the utility, cost, innovation and human engineering aspects of the proposed product that relates to its basic appeal to the end-user. 

Van Trijp, J.C.M. and Steenkamp, J.E.B.M., Consumer-oriented new product development principles and practice, in Innovation of Food Production Systems, Jongen, W.M.E. and Meulenberg, M.T.G., Eds., Wageningen Pers, Wageningen, 1998, 37. Luning, P.A. and Marcehs, W. 1., A food quality management functions model. Trends Food Sci. Technol., 18, 159, 2007. 

In general, the larger corporations respond to TSCA demands much as they would to any other demand presented to them. There have been additional resources added the additional costs will be expressed in the cost of products and services provided by the corporation. With smaller companies, the general result has been to add the TSCA burdens to existing personnel, particularly in technical/research and development functions. The final result in these smaller companies may be less innovation and productivity. In the smallest companies, the burdens have fallen on the few managers whose time in general management functions is reduced. Less productivity may be the result here. 

This involves the engineering of food powder ingredient particles that can maintain ingredient stability and functionality, that do not present dust formation problems, that do not present difficult handling and transport problems, and can be readily rehydrated to deliver their required functional performance in a wet formulation. The major limitation to this type of approach is the low value of food powders and the low cost driven nature of food powder product that stunts this type of innovation. On the other hand, particle engineering is the key to the higher added value of food powders, e g. by producing products with excellent instant properties. 

Flavors constitute perhaps the largest technically functional group of substances and additives used in food. Flavors really cannot be separated from food. This paper will discuss the regulatory toxicology aspects of food safety, with emphasis on the use of flavors in food, and in particular with the recent innovations of flavor product development. 

Turning to fine fragrances for inspiration has several advantages for the perfumer. Of all branches of perfumery, fine fragrance perfumery is most directly tied to fashion and life style. Innovations in tune with the spirit of the time first turn up here. Moreover it is often desirable to lend functional products an aura of luxury and elegance. What could be more effective in conveying such an aura than a note reminiscent of a popular fine fragrance ... 

Whereas the catalytic hydrosilylation of alkynes was one of the first methods of controlled reduction and functionalization of alkynes, the ruthenium-catalyzed hydroamination of alkynes has emerged only recently, but represents a potential for the selective access to amines and nitrogen-containing heterocydes. It is also noteworthy that, in parallel, the ruthenium activation of inert C-H bonds allowing alkyne insertion and C-C bond formation also represents innovative aspects that warrant future development. Among catalytic additions to alkynes for the production of useful products, the next decade will clearly witness an increasing role for ruthenium-vinylidenes in activation processes, and also for the development of ruthenium-catalyzed hydroamination and C-H bond activation. 

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