1. Innovation Process for Production Development An empirical approach
Andras Augustin FEHER
National Railway Company
CNCF ”CFR” – SA
38, Dinicu Golescu Street, Bucharest, RO , Romania

2. Innovation Process for Production Development An empirical approach
What is Innovation Process?
In studies of business innovation, the term of Innovation Process:
is used to describe the array of sources and objectives that culminate in the act of innovation
is used to describe the set of market effects that results from innovation and the obstacles that companies encounter when pursuing invasion strategies.
03/05/2007
Andras Augustin Feher

3. Innovation Process for Production Development An empirical approach
is the engine
of social and economical growth and development
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Andras Augustin Feher

4. Innovation Process for Production Development An empirical approach
Innovation process comprises several elements like a set of objectives.
New products, processes or bussines routines are designed to adress with the array of sources to internal and external environment of the company, to contribute to company development.
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Andras Augustin Feher

5. Innovation Process for Production Development An empirical approach
Benefits of Innovation Process
speeding up production process
decreasing costs
increasing the quality of the final product
new creations
a change or a deny regarding conservative value and achievement
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Andras Augustin Feher

6. Innovation Process for Production Development An empirical approach
Structure of Presentation
Innovation for Production Development
Innovation Process and Production Development
Case Study – Restructuring Romanian National Railway System
Conclusion
Andras Augustin Feher
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7. Innovation Process for Production Development An empirical approach
Innovation for
Production Development
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Andras Augustin Feher

8. Innovation Process for Production Development An empirical approach
Companies are using innovation process in order to achieve their objectives:
Reaching a new market
Maintaining existing market
Reduce unit cost
Competitive price for final product
Efficient and Effective management
Increase productivity
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Andras Augustin Feher

9. Innovation Process for Production Development An empirical approach
makes economical engine
to work!
Andras Augustin Feher
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10. Innovation Process for Production Development An empirical approach
Company resources for Innovation Process:
Internal resources
External resources
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Andras Augustin Feher

11. Innovation Process for Production Development An empirical approach
Internal resources for Innovation Process:
Research & Development Units
Production Units
Management department
Marketing department
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Andras Augustin Feher

12. Innovation Process for Production Development An empirical approach
External resources for Innovation Process:
Consumers
Suppliers
Competitors
All company contacts & connections
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Andras Augustin Feher

13. Innovation Process for Production Development An empirical approach
Other triggers for Innovation Process:
technologies and supplied products
research institutes
governmental agencies
others structures that make information widely available
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Andras Augustin Feher

14. Innovation Process for Production Development An empirical approach
Innovation strategies
are
Risky!
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Andras Augustin Feher

15. Innovation Process for Production Development An empirical approach
Risks of implementing innovation:
Financial barriers and limitations
Technical risks
Market risks
Legal aspects
Non-financial risks – people resist on change, people are not willing to take risks, existing skills may not be sufficient
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Andras Augustin Feher

16. Innovation Process for Production Development An empirical approach
Decision of implementation:
YES – it is mandatory to establish a simple, logical and rational guideline to follow during the entire process of innovation
NO – many companies choose not to develop innovation processes and strategies, even if the management understood the benefits of innovation
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Andras Augustin Feher

17. Innovation Process for Production Development An empirical approach
General Guideline for implementing an Innovation:
Choose the type of innovation process that fits to the company
Fundamental questions:
Where and how the innovation process should be started?
Companies culture will support the process of innovation?
Organisational structure support selected innovation process?
Tolerance level for risk is correctly assessed?
Management team is a conservative or an innovative one?
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Andras Augustin Feher

18. Innovation Process for Production Development An empirical approach
General Guideline for implementing an Innovation:
Scheduling innovation process
Measures for stimulating your team creativity: team building, brainstorming, smart bombing logical analysis, mapping your competition, others
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Andras Augustin Feher

19. Innovation Process for Production Development An empirical approach
and
Production Development
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Andras Augustin Feher

20. Innovation Process for Production Development An empirical approach
There are two ways for innovation process:
Creating new production units
Reengineering the existing one
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Andras Augustin Feher

21. Innovation Process for Production Development An empirical approach
Creating a new production unit it is not easy but it is not difficult also.
Everything is
NEW!
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Andras Augustin Feher

22. Innovation Process for Production Development An empirical approach
Reengineering existing production units is a challenge and the most difficult job to do. Before making changes it must be observed the total picture:
current situation analysis
business requirement definitions
legal frame and market
all the elements that can influence new objectives and goals of the company
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Andras Augustin Feher

23. Innovation Process for Production Development An empirical approach
Designing the total picture of the system will let us the possibility to create and adapt individual elements of the system.
Together, under a proper supervision, this individual elements will give us the instruments to achieve proposed objectives and goals in an efficient manner.
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Andras Augustin Feher

24. Innovation Process for Production Development An empirical approach
Innovation process can be a
continuous change or a dynamic jump
What is Kaizen?
continuous improvement on the production line and company's activity
continuous challenge for quality and productivity
voluntary activity and sharing ideas
company's culture and philosophy for management and every employee
What is Kaikaku?
total business model reform
restructure existing management schema
denying our past
jump to a new business model
another gear for our actions
total disconnection of the past from the future
dynamic jump
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Andras Augustin Feher

25. Innovation Process for Production Development An empirical approach
When it has to be redesigned economical, social, political and administrative structures it is better to start with a radical reform, to disconnect totally the past from the future, and after the success of reform to start appling kaizen for a continuous improvement.
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Andras Augustin Feher

26. Innovation Process for Production Development An empirical approach
Case Study – Restructuring Romanian National Railway System
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Andras Augustin Feher

27. Innovation Process for Production Development An empirical approach
EU Directive 91/440
Infrastructure and Operation Business separation
Open access for all railway operators
Privatisation of railway activities
Management independence
Financial independence
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Andras Augustin Feher

28. Innovation Process for Production Development An empirical approach
SNCFR
Romanian National Railway Infrastructure Company
CNCF “CFR” SA
Romanian National
Railway Freight
Company
SNTFM
“CFR Marfă” SA
Romanian National
Railway Passenger
Company
SNTFC
“CFR Călători” SA
Romanian
National
Railway
Management
Company
“SMF” SA
Romanian
National
Railway Assets
Administration
Company
“SAAF” SA
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Andras Augustin Feher

29. Innovation Process for Production Development An empirical approach
Dividing railway system on activity basis opened a door to performance and generated a massive personnel reduction.
Infrastructure Company is no longer dependent only on National Railway Passenger Company, National Railway Freight Company and state budget money.
There are also private railway operators that are using national railway infrastructure.
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Andras Augustin Feher

30. Innovation Process for Production Development An empirical approach
CFR SA started to improve the quality of services provided to railway operators by rehabilitation of main transport corridors:
IV-th transportation corridor crosses Romania from west (Romanian – Hungarian border) to east (Constanţa harbour)
IX – th transportation corridor crosses Romania from south to north
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Andras Augustin Feher

31. Innovation Process for Production Development An empirical approach
The rehabilitation process of railway infrastructure on this corridor is financed by:
non-refundable EU funds (ISPA, PHARE)
grants and loans from international organisations (JBIC, EBRD, WB, others)
own resources from state budget
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Andras Augustin Feher

32. Innovation Process for Production Development An empirical approach
One type of activity
International grand's
Non-refundable EU funds
Massive personnel reduction
Determined
changes in organisational structures of Romanian National Railway Infrastructure Company – CNCF “CFR” SA and a new management approach
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Andras Augustin Feher

33. Innovation Process for Production Development An empirical approach
What are the benefits of innovation in “CFR” SA?
On certain sections of the railway, operational speed of trains increased
Safety measures on rehabilitated sections are now more reliable
Maintenance is less expensive on rehabilitated lines
Traffic control is almost entirely coordinated with computers and powerful software's
People started to understand that without changing mentality no progress will be made
People started to understand that accepting no challenge, will no attend a higher level of welfare for themselves
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Andras Augustin Feher

34. Innovation Process for Production Development An empirical approach
Conclusion
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Andras Augustin Feher

35. Innovation Process for Production Development An empirical approach
Innovation process is the engine of social and economical growth and development.
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Andras Augustin Feher

36. Innovation Process for Production Development An empirical approach
It includes benefits but in the same time economical, social, political or administrative structures are taking risks in order to implement innovations.
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Andras Augustin Feher

37. Innovation Process for Production Development An empirical approach
Benefits of innovation process?
Speeding up processes
Decreasing costs
Increasing the quality of the final output
New creations
A change or a deny regarding conservative value and achievement
03/05/2007
Andras Augustin Feher

38. Innovation Process for Production Development An empirical approach
Risks of innovation process?
Financial barriers and limitations
Technical risks
Market risks
Legal aspects
Non-financial risks – people resist on change, people are not willing to take risks, existing skills may not be sufficient
03/05/2007
Andras Augustin Feher

39. Innovation Process for Production Development An empirical approach
Risks of innovation process?
Financial barriers and limitations
Technical risks
Market risks
Legal aspects
Non-financial risks – people resist on change, people are not willing to take risks, existing skills may not be sufficient
03/05/2007
Andras Augustin Feher

40. Innovation Process for Production Development An empirical approach
The biggest and a continuous challenge is changing people mentality.
Innovation is instinctively regarded like an enemy, like a potential danger to loose jobs.
But people started to understand that without this, no progress will be made. People started to understand that accepting no challenge, will no attend a higher level of welfare for themselves.
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Andras Augustin Feher

41. Innovation Process for Production Development An empirical approach
We have to decide
if we are taking
a decision for innovation
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Andras Augustin Feher

42. Innovation Process for Production Development An empirical approach
There still are many things to improve.
There still are many processes to innovate.
Innovation process in economical, social, political or administrative structures is not happening over the night.
Small benefits are already visible and bigger part of benefits can be seen only in time.
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Andras Augustin Feher

43. Innovation Process for Production Development An empirical approach
To implement innovation process we need:
Determination
Commitment
Political will
Effort
Patience and
Kokorozashi management
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Andras Augustin Feher

44. Innovation Process for Production Development An empirical approach
can not be done
without people
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Andras Augustin Feher

45. Innovation Process for Production Development An empirical approach
Innovation process must be done
with people
and
for the people
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Andras Augustin Feher

46. Innovation Process for Production Development An empirical approach
Thank You!
Andras Augustin FEHER
National Railway Company CNCF ”CFR” – SA
Internal Audit Unit for Foreign Projects – ISPA
38, Dinicu Golescu Street, Bucharest, RO , Romania
03/05/2007
Andras Augustin Feher