product innovation


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product innovation

the improvement of existing products or the development of new products. Product innovation involves considerable expense in financing the generation of ideas, product design, development and testing, and since a high proportion of new products fail to secure customer acceptance it involves a high degree of risk. See RESEARCH AND DEVELOPMENT, NEW-PRODUCT DEVELOPMENT.

The conversion process for transforming inputs such as materials, labour and capital into goods and services.

In the case of goods, production processes may be divided into three broad categories:

  1. process production involves the continuous production of a good in bulk often by chemical means, for example petrochemicals. Process production is used whenever raw materials in liquid or gaseous form need to be blended, heated or distilled, and the flow of these materials is facilitated by using pipelines which connect the various production stages;
  2. mass production involves the PRODUCTION-LINE OR ASSEMBLY-LINE production in very large numbers of goods such as motor cars or domestic appliances using PRODUCT-FOCUSED LAYOUTS. Mass production is used wherever demand for a product is sufficiently large and the product sufficiently standardized to justify laying out a specialized production line or assembly line for it in order to achieve the cost savings associated with ECONOMIES OF SCALE;
  3. batch production involves the manufacturing of similar goods together in batches and is used where demand is insufficient or the product cannot be standardized to enable mass production to be used. In batch production, batches of a product are subjected to a series of processes such as machining, drilling and grinding in work stations specializing in these processes, with machines generally being reset after each batch, ready to process the next batch (see PROCESS-FOCUSED LAYOUT).

In addition, a number of hybrid production systems such as CELLULAR MANUFACTURING and FLEXIBLE MANUFACTURING SYSTEMS combine various features of mass production and batch production methods, using AUTOMATION to facilitate the low-cost production of a variety of low-volume components or products. See LEAN MANUFACTURING, JUST-IN-TIME (JIT) SYSTEM.

Mass production and batch production are generally undertaken for STOCK and customer orders are met by drawing on this stock. Alternatively, the firm may manufacture to individual customer orders rather than for stock, that is, engage in jobbing production. See VALUE ADDED.

References in periodicals archive ?
In this section, we explore how a firm's nationality moderates the impact of different types of geographical technological collaboration on product innovation novelty.
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Procter & Gamble (P&G), one of the largest household products makers, said it has won seven coveted product innovation awards at the 'Product of the Year Gulf 2014' awards ceremony held in Dubai.
To celebrate 10 years at the forefront of product innovation in the UK, this year's Product of the Year consumer survey also challenged consumers to identify what futuristic household products the public will be buying in 10 years' time, resulting in interesting findings:
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This paper seeks to explain how green core competencies of the firm influences green innovation (includes green product innovation and green process innovation) and green image.
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General Mills remains focused on serving food people love through category-leading new product innovation that aligns with key consumer trends including continued interest in snacking, taste and convenience.
The Product Innovation Facility is led by senior underwriters from Tokio Marine Kiln, Beazley, MS Amlin, Talbot, Liberty Specialty Markets, Hiscox, Ascot, Chubb, Chaucer, Brit, Antares and Apollo.
Known as The Product Innovation Facility, the effort will include [pounds sterling]53m ($62.3 million) of capacity.
(TSX Venture: GOTO.P) has entered into a letter of intent to acquire all of the issued and outstanding securities of Florida-based product innovation and consumer branding firm Garyn Angel Enterprises Inc.

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