Managing Innovation at Nypro Inc. (A) Harvard Case Solution & Analysis

Introduction

Nypro offers a variety of range in the plastic production processes and works as a supplier to the leading companies across the globe. Being a vertically integrated company; they have positioned themselves as the leader in the plastic manufacturing industry. They mainly deal in precision custom injection and molded plastic parts. Their main target market comprises of healthcare and packaging industry and they try to capture some additional markets through their strategic companies. Mr. Gordon Lankton owns a majority of shares and currently working as the President of the Nypro. While having a factory visit, he came across a molding machine prototype, which changes the mold in a minute with the help of technicians as compared to the Nestal machine; however, Nypro’s conventional machines took hours for such conversion. Mr. Gordon realized that this machine can help them in building the future for Nypro.

NovaPlast can play a revolutionary role for the Nypro’s long term vision as it can easily mold an extensive mix of relatively low degree precision parts without incurring a huge cost. He started thinking that how the implementation of the NovaPlast should take place in the 21 plant present across the world. Nypro’s three major sales divisions were healthcare that generates 46.7% sales, consumer/industrial, which possesses 32.2% of sales; followed by communications/electronics, which gives a sales figure of 21%. They have been found quiet established from financial perspectives and in the year 1994 they had revenue of $165,983,000, which gave them a profit figure of around $10,826,000. These exceptional statistics resulted in the 9th record consecutive performance for Nypro. Mr. Gordon joined the company back in 1962 as the general manager and kept his focus on following a strategy of introducing the new technology, which would help them in building the sustainable competitive advantage. One of the secrets for Nypro’s success is their aggressive growth strategies, which also encourages the internal competition within the organization. Nypro kept itself busy in introducing the new technology and continued to stick to their aggressive growth strategy.

How does the internal market for innovation at Nypro function?

To enhance the growth strategy and to introduce the empowerment in the innovation process, they employed an aggressive internal rivalry within the organization. They are strictly against competition among the peers and even against the past performances. There constant and excellent innovation was a result of each group’s efforts, which motivated them to be among the best. One of best things that helps them in springing up is the appreciation of great and workable ideas, which don’t leave any space for weakness. Nypro wasn’t actually familiar with the product innovation because at least the initial level industry does not require differentiations and Nypro decided to target the specific market segment by searching clients, who were in a position of giving them large scale jobs. They accelerated themselves in the area of production processes with the help of different plants, who were competing internally in reducing the operating cost by delivering the best value product to their customers. In the plant design phase, examples of innovations like clean room, visual factory, product development along with quality and information system can be seen easily, which are for sure playing a very important role.

For the internal market innovation process, the most vital factor is the Nypro’s de-centralized location strategy. The sovereignty of plant managers that actually combined with company-wide information of groundbreaking procedural improvements resulted in quick adoption of better procedures throughout the company in a way that one could term it as a natural course. Since, the nature of their organizational environment is quiet aggressive and competitive; therefore, no plant had an encouragement to resist progressive and a value added change.

How does Lankton manage the process?

Nypro’s CEO, Gordan Lankton successfully managed the market on both internal and external level so as to gain market share in the industry. Gordan was a firm believer of implementing aggressive business strategies and always practiced it while designing the strategies. His approach impacts the organization in a very significant manner; he was able to motivate the employees professionally for the sake of organization’s best interest. Knowledge sharing in the organization was one of the major responsibilities of the Nypro’s management and the President himself. They had to bring all the efforts to ensure the best performance regarding the information practices within the organization. On a quarterly basis, Lankon advised the management to ensure the excellent performance statistics in the organization, and then the forecasted results were compared with the actual results in the meetings in order to increase the overall performance standards. As Lankton’s strategy proved to be vital for the organization; therefore, each department of the organization worked smoothly and on constant basis.

The role of the board members was one of the noticeable contributions in creating the awareness of the innovation process. Multiple experiences helped a lot in facilitating the general managers. Organization facilitated in promoting the products and .....................

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Nypro is a leading injection molder in the world of precision plastic parts, working global network of 21 plants. Nypro is a strategy for each plant have identical capabilities because its customers are global companies with global sources of demand. The case describes how Nypro manages product and process innovation in the global network of the plant. "Hide
by Clayton M. Christensen, Rebecca Voorheis Source: HBS Premier Case Collection 14 pages. Publication Date: September 22, 1995. Prod. #: 696061-PDF-ENG

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