INNOVATION IN-PROCESS PLANT - A CASE-STUDY OF ETHYLENE

Successful companies in arty industry recognize the importance of invo lving customers and suppliers in the design and development of product s and services. When complex product and process technologies are invo lved, these relationships create a network of companies and industries , each of which is a potential source for technological innovation. At the same time, however, such interrelationships further complicate th e already challenging task of analyzing the evolving nature and source s of innovation. Using ethylene manufacture as a case study, Peter Hut cheson, Alan Pearson, and Derrick Ball present a three-stage model of innovation. The model provides a framework for understanding the evolu tion of technological innovation in ethylene manufacturing, as well as the changing roles of the equipment suppliers, the process plant supp liers, and the operating companies througout this evolution. The appli cability of this approach to other sectors of the chemical processing industry is also evaluated. In much the same way that a product's life cycle can be traced through distinct phases of creation, growth, matu rity, and decline, technological innovation progresses through three m ain phases: uncoordinated, segmental, and systemic. The progression th rough these three phases is marked by changes in the relative levels o f product and process innovation activity. In this three-stage model, innovative activity progresses from an extreme of high product and low process innovation during the uncoordinated phase, through the segmen tal period of low product and high process innovation, to the low prod uct and medium process innovation levels of the systemic phase. In oth er words, as the industry matures, the focus of innovative activity gr adually shifts from the product to the process. As illustrated by the example of ethylene manufacturing, companies operating in an industry that has reached the systemic stage will find little or no scope for i nnovation in the end product or the core manufacturing technolagies. I n such a mature market, the product is a commodity item, and the funda mentals of the manufacturing process are well known. At this stage, th e at quest for productivity improvements focuses on cost reductions fr om task structuring and specialization, task integration, and automati on. As such, equipment manufacturers play an increasingly important ro le in refining existing technologies and improving equipment reliabili ty and capabilities. Such efforts are facilitated by close cooperation with the operating companies, which can contribute process expertise that the equipment manufacturers might otherwise lack.