Collaborative Innovation in Manufacturing

By Muhammad Faraz Mubarak & Richard Evans

Collaborative innovation represents a paradigm shift from traditional, inward-looking research and development to more open and collaborative strategies. This article introduces the mechanisms, benefits, challenges, use cases, and future directions for collaborative innovation in the manufacturing industry.

Figure 1: Collaborative innovation efforts being undertaken in manufacturing (Image created by DALL-E)

Introduction

Collaborative innovation has emerged as a key driver of competitive advantage and technological advancement. This approach involves stakeholders (e.g., suppliers, customers, academic institutions, and even competitors) collaboratively working together to foster innovation and growth. This trend is gaining momentum in the manufacturing industry as organizations recognize the value of pooling resources, knowledge, and skills to accelerate development activities and address complex industrial challenges.

Mechanisms

Collaborative innovation can take various forms which can have a low (or even free) or high cost. One of the primary mechanisms used by manufacturers is joint Research and Development (R&D) projects, where organizations partner with external entities to obtain mutual benefits; for example, through the hiring of industry-sponsored PhD students, manufacturers can solve complex challenges that typically require significant time and technical knowledge in an area. A study by Rocha et al. [1] highlighted that joint R&D initiatives have led to significant innovation in manufacturing activities, including automation and robotics. Another mechanism is innovation networks, which involves informal collaboration between organizations, often within the same industry, to share knowledge and best practices. Such networks foster a culture of continuous improvement. In Figure 2, some of the various forms of collaborative innovation are compared in terms of their associated costs and time requirements, ranging from low to high and short to long-term.

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Figure 2: Time and cost requirements of collaborative innovation forms

Although Figure 2 presents a variety of collaborative innovation activities and maps them against their associated cost and time requirements, readers should bear in mind that a comprehensive assessment must be completed before implementation to ensure that the activity aligns with their organization’s strategic innovation objectives. For example, joint ventures, which are often high-cost and require long-term commitment, may be strategically beneficial despite their resource requirements e.g., a medium-tech electronic components manufacturer aiming to break into the high-tech sector may lack the required expertise in manufacturing high-tech components. However, by forming a joint venture with an entity possessing such expertise, the manufacturer can absorb high upfront costs and embrace a prolonged timeline in exchange for critical technical knowledge and market entry capabilities. This alliance, albeit expensive, could push the manufacturer into a leading position within the sector, thereby justifying their investment.

Benefits

First and foremost, collaborative innovation allows manufacturers to share and receive resources and risks. As Verdugo-Cedeño et al. [2] established, collaborative projects can significantly reduce the financial and operational risks associated with innovation activities. Moreover, collaborative innovation leads to the cross-pollination of ideas, fostering creativity and leading to more groundbreaking innovations. Activities such as joint projects between organizations and universities, and crowdsourcing competitions, capture diverse perspectives which can lead to unique solutions that might not emerge in a more homogenous environment. The speed of innovation is another critical benefit. In this context, collaborations can leverage digital platforms, which can dramatically shorten development cycles and time-to-market. For example, Haier, a Chinese home appliances and consumer electronics manufacturer, established long-term collaborative partnerships with its technology suppliers to improve product innovation outcomes [3].

Challenges

Despite its inherent benefits, collaborative innovation is not without challenges. Intellectual property (IP) management is a significant concern. A study by Xing et al. [4] highlighted the complexities of navigating IP rights in joint ventures and the importance of establishing clear, mutually beneficial agreements. Furthermore, aligning the goals, cultures, and strategies of partner organizations can be a major challenge. The strategies for clear communication and strong leadership to align the diverse interests and expectations of partners are needed. Another challenge is the management of confidential information and trust. As outlined by Mubarak and Petraite [5], maintaining confidentiality while sharing critical information is a delicate balance that requires robust legal frameworks and mutual trust.

Use Cases

Collaborative innovation can enhance various areas of manufacturing. For example, joint initiatives in R&D can foster product and process innovations, enabling organizations to share the burden of costs and risks with partners. In procurement, collaborative efforts can capitalize on economies of scale for better pricing and supply chain resilience. Likewise, collaboration in production optimization allows manufacturers to harness collective intelligence to apply smart manufacturing techniques, enhancing operational flexibility. By pooling expertise in robotics and automation, organizations can improve precision and efficiency. Similarly, collaborative energy management initiatives can lead to cost-effective and environmentally friendly practices. Through collaborative training programs, workforces can become better prepared to handle advanced manufacturing technologies. Finally, collaborative compliance ensures that regulations are met more effectively, benefiting from shared expertise in navigating complex legal issues.

Future Directions

The future of collaborative innovation in the manufacturing industry is intrinsically linked to technological advancements brought about by digital transformation initiatives. Emerging technologies, such as Artificial Intelligence (AI), the Internet of Things (IoT), Cyber Physical Systems (CPS), and advanced analytics, are expected to play a significant role in enhancing collaborative efforts. Ghobakhloo et al. [6] predicts that AI-driven platforms will become central to managing and facilitating collaborative innovation processes, in future. Additionally, the rise of digital twins and advanced simulation technologies is likely to revolutionize collaborative product development, enabling more efficient collaboration, reducing the need for physical prototypes, and expediting the innovation process.

Digging Deeper:

[1] C. F. Rocha, C. O. Quandt, F. Deschamps, and S. Philbin, “R&D collaboration strategies for industry 4.0 implementation: A case study in Brazil,” J. Eng. Technol. Manage., vol. 63, pp. 1-14, 2022.
[2] M. Verdugo-Cedeño, S. Jaiswal, V. Ojanen, L. Hannola, and A. Mikkola, “Simulation-based digital twins enabling smart services for machine operations: An industry 5.0 approach,” Int. J. Hum.–Comput. Interact., pp. 1-17, 2023.
[3] F. Wei, N. Feng, B. Shi, and R. D. Evans, “Collaborative Innovation Performance within Platform-based Innovation Ecosystems: Identifying Relational Strategies with fsQCA,” IEEE Trans. Eng. Manage., Early Access, 2023.
[4] Y. Xing, Y. Liu, and P. Davies, “Servitization innovation: a systematic review, integrative framework, and future research directions,” Technovation, vol. 122, pp. 1-15, 2023.
[5] M. F. Mubarak and M. Petraite, “Industry 4.0 technologies, digital trust and technological orientation: What matters in open innovation?” Technol. Forecast. Soc. Change, vol. 161, pp. 1-10, 2020.
[6] M. Ghobakhloo, M. Iranmanesh, M. F. Mubarak, M. Mubarik, A. Rejeb, and M. Nilashi, “Identifying industry 5.0 contributions to sustainable development: A strategy roadmap for delivering sustainability values,” Sustain. Prod. Consum., vol. 33, pp. 716-737, 2022.


About the Authors

Muhammad Faraz Mubarak is a Research fellow with the Knowledge and Innovation Systems Lab at Dalhousie University, Canada. His research interests include Industry 4.0/5.0, collaborative innovation, and technological learning in innovation networks. He has authored numerous papers in peer-reviewed journals such as Technological Forecasting and Social Change, Technology in Society, and Sustainable Production and Consumption. He can be reached at m.mubarak@dal.ca or on LinkedIn.

Richard Evans is Director of the Knowledge and Innovation Systems Lab, Co-Director of the College of Digital Transformation, and Associate Professor in Digital Innovation at Dalhousie University, Canada. His research interests include Digital Innovation, Engineering Management, and Social Product Development. He has authored numerous papers in peer-reviewed journals such as the British Journal of Management, IEEE Transactions on Engineering Management, Technological Forecasting and Social Change, and the Journal of Business Research. He can be reached at R.Evans@dal.ca or on LinkedIn.


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