Open Innovation and Case Study
Abstract
Kennametal Inc. is a 72 year old company founded in 1938 who employs 14,000 people with operations in 60 countries around the world. The company reports $2.3 billion dollars in annual revenue as the premier provider of tools, engineered components, and advanced materials utilized in manufacturing and construction. The company is comprised of three divisions; Advanced Materials Solutions, Metalworking Solutions Group and J&L Industrial Supply. Its’ customer base is as broad as it is wide with no one customer representing more than 3 percent of total revenue. In an effort to increase its’ presence and service delivery Kennametal Inc. markets its products and service via large network through multiple channels including direct sales, marketing, the Internet, integrated supply programs and a plethora of industrial distributors. The case study evaluates the innovative processes Kennametal employs as it relates to three distinct company goals in its operations which is split in half between the Western and Eastern hemispheres; 1) getting its operations closer to its customers in the Asia Pacific region, 2) to become a business of complete solutions and 3) achieving operational excellence which includes increasing sales by 40% (www.kennametal.com), customer service excellence, becoming an employer of choice. The methods Kennametal employs towards an innovation strategy is presented in this study.
Corporate executives and leadership are faced everyday with challenges in meeting revenue goals, efficiency in operations, continuously improving service delivery to their customers, attracting and maintaining a pool of the best talent, new customer acquisition and other operational objectives. More and more organizations are finding benefit to using the method of innovation to meet those and other objectives, all of which are intricately interrelated. In previous work, researchers outlined a five-step strategy toward achieving open innovation (Chesbrough, 2009).
Kennametal Inc. is a 72 year old company founded in 1938 who employs 14,000 people with operations in 60 countries around the world. The company reports $2.3 billion dollars in annual revenue as the premier provider of tools, engineered components, and advanced materials utilized in manufacturing and construction. The company is comprised of three divisions; Advanced Materials Solutions, Metalworking Solutions Group and J&L Industrial Supply. Its’ customer base is as broad as it is wide with no one customer representing more than 3 percent of total revenue. In an effort to increase its’ presence and service delivery Kennametal Inc. markets its products and service via large network through multiple channels including direct sales, marketing, the Internet, integrated supply programs and a plethora of industrial distributors. The case study evaluates the innovative processes Kennametal employs as it relates to three distinct company goals in its operations which is split in half between the Western and Eastern hemispheres; 1) getting its operations closer to its customers in the Asia Pacific region, 2) to become a business of complete solutions and 3) achieving operational excellence which includes increasing sales by 40% (www.kennametal.com), customer service excellence, becoming an employer of choice. The methods Kennametal employs towards an innovation strategy is presented in this study.
Corporate executives and leadership are faced everyday with challenges in meeting revenue goals, efficiency in operations, continuously improving service delivery to their customers, attracting and maintaining a pool of the best talent, new customer acquisition and other operational objectives. More and more organizations are finding benefit to using the method of innovation to meet those and other objectives, all of which are intricately interrelated. In previous work, researchers outlined a five-step strategy toward achieving open innovation (Chesbrough, 2009).
References: Andersen, B. (2004). If 'intellectual property rights ' is the answer, what is the question? Revisiting the patent controversies. Economics of Innovation & New Technology, 13(5), 417-442. Doi: 10.1080/1043859042000188692. Bughin, J., Chui, M., & Johnson, B. (2008). The next step in open innovation. McKinsey Quarterly, (4), 112-122. Retrieved from Business Source Complete database. Chesbrough, H., & Garman, A. (2009). How Open Innovation Can Help You Cope in Lean Times. Harvard Business Review, 87(12), 68-76. Retrieved from Business Source Complete database. Daft, Richard L. (2010) Organizational Theory and Design, Tenth Edition. Mason, OH: South-Western Cengage Learning. Kennametal Inc. (2006) Innovation: Putting Ideas into Action Kennametal Case Study, 121-134. Retrieved from Business Source Complete database. Profile of the Profession-Key Findings. Boston College Center for Corporate Citizenship. 2010. Retrieved from http://www.bcccc.net/index.cfm?pageId=2199 http://www.kennametal.com/en-US/company_profile_main.jhtml