In an engineering business, innovation is a core activity. It is important for its survival and can help the business remain competitive in changing markets. Innovation can take many forms. It does not simply cover new product development. Innovation can be applied to product renewal or the design of new processing technologies. It is important to understand the difference between invention and innovation. Invention involves creating something new, but it only becomes an innovation if it is a practical and marketable application.
Sheffield Forgemasters International has to meet the challenges of competition from low-cost manufacturers and suppliers. It does this by continually developing new ideas – ideas that can be developed into new products, materials and process improvements. Companies can adopt different approaches to new product development:
• a product oriented approach – a product is developed and then a market is identified for it
• a market oriented approach – a product is developed in response to an identified customer need.
A product can also be developed in response to a competitor’s product. An existing product may be enhanced through research into how to make the product better. Research can also lead to technological developments that improve the manufacture of the product or the way it is delivered to the customer.
R&D is very costly. However, it is an important investment. Money spent on R&D can secure the future of an organisation. SFIL spends between 5% and 10% of its annual profits on R&D across the company, compared to a national average of 3%, and has substantial R&D capabilities. RD26 Ltd can support projects related to the manufacture of carbon, low alloy and stainless steel grades for almost all heavy forging and casting applications. The majority of its R&D activity involves the optimisation of its manufacturing processes, material developments and the implementation of new manufacturing processes. One focus is on raising quality and reducing costs through improved methods of working. Another is on researching new materials and techniques in forging and heat treatment practices.