Volvo's Innovation in Automation: A Strategic Approach
Verified
Added on  2023/01/18
|13
|3240
|21
AI Summary
This article discusses Volvo's innovation in automation and its strategic approach. It explores how Volvo implemented automation in production and achieved success. The article also discusses the strategic alignment and innovation strategy of Volvo.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
Name of the university Innovation and Sustainable Business Development
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Executive Summary Volvo is a Swedish MNC known for its specialization in electric vehicles, based in Gothenburg. This article provides the vision of the company about the new innovation trend, that is, Automation of work, which provide ease to the humans in executing the business, with the help of computer software and robotics. Volvo’s working with the “Design Thinking model” in Automation in Production, showed a great success, as it was able to improve its production efficiency by 25% in 2018 (Acuitymag, 2018). In order to survive in the market it is mendatory for a company to adopt the changes (innovative approach & new technology), the best way to get this done is strategic alignment. 1
Contents Executive Summary.........................................................................................................................1 Introduction......................................................................................................................................3 Concepts and Relationships.............................................................................................................3 Strategic Alignment.........................................................................................................................4 Design Thinkin in Automation in Production In Volvo..................................................................5 Organization’s Innovation Strategy.................................................................................................6 SWOT Analysis...............................................................................................................................7 Recommendation.............................................................................................................................8 Conclusion.......................................................................................................................................8 References......................................................................................................................................10 2
Introduction The Volvo Groups of manufacturer Trucks & heavy vehicles,is one of the world’s leading manufacturers of trucks, buses, construction equipment and industrial engines. Design Thinking in Artificial intelligence provides ease to the execution of business process by integrating the computer softwares with human interaction. It help in performing multiple task at a time with accuracy and it is economical than the employees, it construct responses and interact with other operating systems to perform repetitive tasks. Concepts and Relationships An organizational environment consist of various factors, which affects the Performance of the business, utilization of resource and its operations. These factor such as competitors, customers, government policies, have the power to affect the organization. In order to be successful Volvo had implemented the “Design Thinking model” in Automation in Production. It was done to provide the customer a quality product at competitive price (Hcltech, 2017).Volvo followed the five step model, with complete evaluation of each step to ensurer successful implementation of innovative trend that is “Automation in Production”. The five steps ofthemodelare:(Interaction-design,n.d.),(Engineering,2016),(Volvogroups,n.d), (Volvogroups, n.d). Empathise:- In this Volvo has tried to figure out why the operations were not running smoothely and why the customers are not getting desired satisfaction from the product. Define (the Problem):- In this they did a proper analysis of the information gathered in empathy phase, through which they got the actual problem which were higher cost of production & Wastage after which lean manufacturing was introduced in Volvo. Ideate:- After the complete analysis in the above two stages the designers come up with an idea of automation in production to reduce wastage and cost of production. Prototype:- In this the designing team come up with the innovative idea which is extension of the idea in Ideate stage, after this the development team tested it by there own to check the 3
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
flaws. The concept on which the team work were Automated driving, electromobility and connected vehicles. Test:- After the rigorous testing of the idea in Prototype stage, the designing team tested the final output in this stage to check the requirement of redefining the problem if any & understanding the requirement of the customer from there perspective. Nowadays, the competition is at its zenith, innovation is the only way to have an edge over the competitors. In order to ensure its existence in market, it is mendatory for a company to come up with a new product or service, which require proper knowledge & experience. Structure of the organization entirely depends on the innovation it makes in the process, hierarchy or matrices. Innovation must be made by keeping in mind the internal and external factore that affect business operations. It must be communicated properly, so that the employess can easily adapt the change and it could be implemented to various activities (Hbr, 2018). When a new idea comes to the mind, it must be evaluated by the value capture strategy to ensure customer gain along with appreciation in profits (Hcltech, 2017).Innovation is a two way process, as the change in one factor requires a change in other factors Every organization has its USP that makes it competitive and allow it to sustain in market, such as human resources, invisible assets, core competences, organizational capability, technological etc., so that they can fill the market gaps with worthwhile offerings. Technology development and transaction capabilities are equal weights of a scale, which are required to make innovation effective, these factors help in figuring out the new insights or knowledge that can provide solution to the existing problem. In order to maximize the profit the firm must strategically implement innovation with its operations (Farooq,S, Cheng,Y, Matthiesen, R, V, Johansen, J, & Brien, C, 2017). Strategic Alignment To achieve the mission, it is significant for all the organizations to come up with new strategies or revise the existing ones overtimes. In order have the maximum output from the strategy the organisations align them with the senior leaders of the hierarchy. The alignment helps the top officials in effective implementation of new strategies, as they have the knowledge of how to 4
bring the strategy into action. It help the organization in enhancing its operations, so that no opportunity is missed out. Strategic alignment handover desired results as required. (Valuebasedmanagement, n.d.). R&D professionals act as a boon in the strategic alignment, as they share their vision, how the strategy should be implemented to get the best possible output. R&D professionals look over all the challenge that a strategic alignment will have to face. This pro active approvch allow them to implement the change with with pisotive impact (Rodgers,P ,A, Innella, G, & Bremner, C, 2017). Organisations start working on the opportunities as soon as the R&D professional makes the comparison between traditional approach and the change. Organisation stay one step ahead thought designing process, that allows the professionals to frame certain programs that makes technology user friendly. An effective alignment ensure systematic and smooth operation of the company. This provide ease of switching from one strategy to another to stay ahead of change rather than lacking behind and wasting time trying to catch-up with it(Waste360, 2015). Design Thinkin in Automation in Production InVolvo According to a report, “Design Thinking” inAutomation in Productionhas proved to be a boon for Volvo (Hbr, 2018).Automation is being used by the company over labour efficiency, this has minimised the wastage and increased the accuracy in production(Waste360, 2015).The innovative thinking and competitive advantage of the organization are the reasons that have kept on increasing the company scale. The process of automation is very risky and complex, but still the company has maintained it in a appreciable manner. Volvo is working with a large number of ABB robots, which work in each department such as stamping, paint, and welding(ABB Robotics, 2014). The use of robots has minimized the level of defects and improved the quality of output(Acuitymag, 2018). In case of Volvo according to the statstics, the cost of automation has shown positive correlation With the quality of the output. This shows that the process of automation was implemented with the integration of strategy, which has allowed Volvo to attain the desired outcome. It has been seen in past few years that a lot of companies had to accept failure who have tried automation in there work & only a few succceded. Volvo being one of the successors in automation has put itself a step ahead of its competitors (Engineering, 2016). 5
Organization’s Innovation Strategy Alignment of Innovative Activities: In order to achieve the organizational goal the company must align the resources in an appropriate manner. Volvo has kept on changing its organisational structure over time to ensure the smooth flow of activities and also the change was easily adaptable. Innovation in the activities has allowed Volvo to respond quickly to the market changes. Innovation activities of all the departmentshave been carried out in a responsible manner because of which Volvo has managed to be at the top in its industry(Volvogroups, n.d.). Capabilities to Innovate: An enterprenure is the one who thinks and brings the change, whereas the organization is the one that makes this change possible by delivering the final product as per the estimated change by using these additional capabilities. The elements of innovation capabilities of the organization areoperational, transactional, developmental and management (Volvogroups, n.d.). Development capabilities of the organization involve the development of new solutions that are to be executed at the market. Operational capability of the company allows it to attain a good commercial scale of operation, so that the end result of the technology become effective. This has allowed the firm to provide a quality product at a competitive price. (Opendocs, n.d.). Transactions capability is the ability, knowledge, and routine which help in the reduction of marketing ot transactional cost of the organization. These are the significant capabilities because of which Volvo was able to capture its market, as it links the external environment to the internal environment by analyzing the market condition and need of the customers (Businesswire, 2015) Value Creation through Innovation: The basic objective of this is to provide product which value the needs of the customer. This Is what Volvo has used for its survival and flowering its business. There is a very small difference between benefits and sacrifice. In order to create value in market a product availed by the customer must fulfill all the promises that it makes(Hcltech, 2017). 6
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
SWOT Analysis SWOT Analysis is used by the organisations to analyse, that whether the innovation trend will have a positive imact on the organization or not. As it help in determining various benefits that an organization can acquire, Such asflexibility and simplicity, enhanced cycle time, employee empowerment, better control, analytics and insights, accurate and quality work and cost saving etc(Gurel, E., Tat, M., 2017) SWOT analysis of Volovo: Strength(marketing91, 2018). Diversed Product Portfolio:Volvo works through 6 diverse business portions, which gives equalization to its incomes and gives start to finish solutions, it was possible because of innovation. Solid market positions in different segments:Volvo has a main position in a significant number of its fragments universally, particularly in the commercial vehicle truck portion where it has a high piece of the pie (over 20%) in most developed countries, it was possible because of innovation. SolidResearchandDevelopment:VolvohasconcentratedfirmlyonitsResearchand Development and is putting vigorously in it. Solid R&D enables the organization to keep up a focused edge over the contenders and to remain in front of the business patterns. Weakness(marketing91, 2018). Product recall affected the brand image:Volvo has needed to review numerous items in the recent years which makes an imprint on the brand picture of Volvo. Opportunity(marketing91, 2018). Developingworldwidestreetcargosegment:Theworldwidestreetcargodivisionhas appearedinanincentivejustasvolumeintheongoingyearsbecauseoftechnological innovation. The part is required to develop over a CAGR 6% in the following 5 years 7
Developing Global Construction Industry:The construction industry has shown a significant growth in recent years. Especially in growing countries, where excessive expenditure on infrastructure is anticipated and subsequently Volvo is anticipated to benefit Threat(marketing91, 2018). Extreme competition forces pricing wars:Volvo faces stiff opposition in all of its segments which places strain on the companies to decorate product overall performance, constantly innovate and moreover set off pricing pressures. Forex fluctuations affect business:Volvo operates globally in many nations and consequently it's far vulnerable to forex fluctuations. Recommendation Volvo Design Thinking can respond more effectively to the innovation trend by following the below mentioned recommendations: Volvo should look over the following while performing its innovation activities to have enhance the existing output - External R&D profrssionals must be provided authority to make decisions, as this will allow them to have the authority to try something innovative from there end. Internal research and development should be enhanced, as it is the core team that frame the final model as per the information provided by the external R&D teams. Other significant activities (software development and testing) should be regularly looked over. b. Volvo should also move towards the additional innovation capabilities inautomation of product. As the customer needs keeps on changing frequently. c. In order to maintain the top ranking, Volvo should go for some additional work on concepts and models framework for innovation and researchto identify difference and similarities among the nations. 8
Conclusion Strategic alignment provide ample amount of opportunities to the business organization, as it allowed Volvo to go beyond its boundaries. The automation in production has helped Volvo in reducing the wastage and allowed it to provide fully automated products to the customers, which wasnotpossiblewithmanualforce.ThishasresultedinCustomerretention,customer satisfaction, gaining competitive advantage. In order to have long term result, an organization must have a long term vision which should be integrated with a strategy. The strategic blend of traditional and modern approach helped the organization to understand the problems and helped them to come up with new impactful solution that is automation in production. This has helped in the growth of the company. 9
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
References ABB Robotics, (2014),Painting and sealing innovation with Volvo, Accessed 15 April, 2019, Online, From:https://www.youtube.com/watch?v=97KLjusbP2Y Acuitymag, (2018),Could RPA be the tool you really need, Accessed 15 April, 2019, From: https://www.acuitymag.com/technology/could-rpa-be-the-tool-you-really-need Businesswire, (2015),Volvo Completes the Acquisition of 45% of Dongfeng Commercial Vehicles, Accessed 15 April, 2019, From: https://www.businesswire.com/news/home/20150105005486/en/Volvo-Completes- Acquisition-45-Dongfeng-Commercial-Vehicles Engineering, (2016),Volvo Cars, CEVT and “Platform Thinking” in Automotive Product Development, Accessed 15 April, 2019, From: https://www.engineering.com/PLMERP/ArticleID/12617/Volvo-Cars-CEVT-and- Platform-Thinking-in-Automotive-Product-Development.aspx Farooq,S, Cheng,Y, Matthiesen, R, V, Johansen, J, & Brien, C, (2017), Management of automation and advanced manufacturing technology (AAMT) in the context of global manufacturing,International Journal of Production Research, vol. 55, no. 5, pp.1455- 1458,Accessed 15 April, 2019, From:DOI: 10.1080/00207543.2017.1296205 Gurel, E., Tat, M., (2017),The Journal of International Social Research, vol. 10, no.51, Accessed 15 April, 2019, From:Issn: 1307-9581, Doi Number: http://dx.doi.org/10.17719/jisr.2017.1832 Hbr, (2018),Why Design Thinking Works, Accessed 15 April, 2019, From: https://hbr.org/2018/09/why-design-thinking-works Hcltech, (2017),Design Thinking: Putting customer and customer experience at the core of product innovation, Accessed 15 April, 2019, From: https://www.hcltech.com/blogs/ghrao/design-thinking-putting-customer-and-customer- experience-core-product-innovation 10
Interaction-design, (n.d.),5 Stages in the Design Thinking Process, Accessed 15 April, 2019, From:https://www.interaction-design.org/literature/article/5-stages-in-the-design- thinking-process Jeanne, (2014), “Innovative ways companies are using design thinking”, Strategy & Leadership, Vol. 42 Issue: 2, pp.40-45,https://doi.org/10.1108/SL-01-2014-0004 marketing91, (2018),SWOT Analysis of Volvo, Accessed 15 April, 2019, From: https://www.marketing91.com/swot-analysis-volvo/ Opendocs, (n.d.),Innovation Capabilities and Directions of Development, Accessed 15 April, 2019, From:https://opendocs.ids.ac.uk/opendocs/handle/123456789/2457 Rodgers,P ,A, Innella, G, & Bremner, C, (2017), Paradoxes in Design Thinking,The Design Journal, vol.20 no.1, pp. S4444-S4458,Accessed 15 April, 2019, From:DOI: 10.1080/14606925.2017.1352941 Rodrigues,L, C, (2018),International Journal of Innovation, vol. 6, no. 2, pp. 1-5,Accessed 15 April, 2019, From: e-ISSN: 2318-9975 Theguardian, (n.d.),Descent of the machines-Volvo's robot mining trucks get rolling, Accessed 15 April, 2019, From:https://www.theguardian.com/technology/2016/may/26/volvo- driverless-mining-trucks-descent-machines Uxdesign, (2018),Why Design Thinking is failing and what we should be doing differently, Accessed 15 April, 2019, From:https://uxdesign.cc/why-design-thinking-is-failing-and- what-we-should-be-doing-differently-c8842f843b44 Waste360, (2015),Volvo’s Robots Take Aim at the Waste & Recycling Industry, Accessed 15 April, 2019, From:https://www.waste360.com/automation/volvo-s-robots-take-aim- waste-recycling-industry Volvogroups, (n.d),Automation,Accessed 15 April, 2019, From: https://www.volvogroup.com/en-en/innovation/automation.html 11
Volvogroups, (n.d),Volvo drives the development of automation forward, Accessed 15 April, 2019, From:https://www.volvogroup.com/en-en/news/2018/jun/volvo-drives-the- development-of-automation-forward.html Volvogroups, (n.d), What we do, Accessed 15 April, 2019, From: https://www.volvogroup.com/en-en/what-we-do.html Volvogroups, (n.d), Innovation, Accessed 15 April, 2019, From: https://www.volvogroup.com/en-en/innovation.html Valuebasedmanagement, (n.d.),Aligning business and IT strategy, Accessed 15 April, 2019, From: http://www.valuebasedmanagement.net/methods_venkatraman_strategic_alignment.html 12