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Managing Innovation at Nypro Inc (A) Case Solution

Solution Id Length Case Author Case Publisher
1048 1211 Words (5 Pages) Clayton M. Christensen, Rebecca Voorheis Harvard Business School : 696061
This solution includes: A Word File A Word File

Nypro’s top management is facing a dilemma regarding the use of NovaPlast. There are three distinct options available to the top-management as far as NovaPlast roll-out is considered. However, each of the options has distinctive benefits and trade-offs. The use of NovaPlast will enable Nypro to enjoy a number of advantages. First of all, it will allow them to target low-volume, high mix market. The features of NovaPlast will also provide benefits of quality and precision. It will also decrease lead time and cavitations. But, the biggest advantage will be in the form of cost-effectiveness. Using NovaPlast, Nypro can considerably decrease capital costs and other overheads related to production. It will also put Nypro in the category of early adopters in the product diffusion curve.

Following questions are answered in this case study solution

  1. How would you go about making the NovaPlast decision?

Case Analysis for Managing Innovation at Nypro Inc (A)

1. How would you go about making the NovaPlast decision?

With given options available, it will be most appropriate for Nypro to install two or three machines in each of its plants. This option will allow the company to enjoy a number of benefits. First of all, by distributing the installation all over the world, Nypro will considerably reduce the risk associated with the investment. Diversification of the investment will enable it to mitigate all the negative effects, which are usually associated with concentrated production. One of the biggest drawbacks associated with centralization is the increase in the lead time of production. This is due to the fact that centralized production creates a loss of man-hours. Using decentralized production, Nypro will be able to decrease lead time and will also eliminate bottlenecks and delays in production. In addition to this, decentralized production will also allow the management to overcome control and supervision problems related to the concentrated production unit. Centralized production also provides little incentive for subordinates to show initiative. This can be primarily attributed to excessive control exercised by the top-management in a centralized setting. The absence of chances to show imitative also creates dissatisfaction among the employees of the organization, who feel that there are not given adequate to show their potential. The feeling of ownership among the employees is also diminished, which creates communication barriers between shop floor workers and the top-management (Thompson & Martin, 2010, p.638).

On the other hand, Nypro can avail a number of benefits by establishing a decentralized setting of NovaPlast. First of all, such a setting will facilitate efficient communication and coordination of an organization’s pressure. It will also divide the pressure among all the plants unlike in a centralized setting, where the entire workload associated with NovaPlast was on one plant. Decentralizing NovaPlast will also enable the top-management to inculcate the sense of leadership and responsibility among all the employees of the organization. It will also enable Nypro to achieve efficiency in its operations. Efficiency will manifests in the shape of quick and better decisions. A decision will be made near the point of action by those, who are closest to the ground realities. The communication costs associated with the operation will also be reduced. Moreover, overall communication will also be improved as there will be lower levels of authority. Similarly, the threat of red-tape will also be reduced. Likewise, this decision will also facilitate Nypro’s strategic decisions of growth and diversification. As each plant will be responsible for its designated target market, the response time to meet customers’ needs will be considerably reduced. Such an advantage can go long way in creating a loyal customer base for the company. Each plant can also bring changes in the production according to changes in demand from the consumers. Nypro will also be able to polish the credentials of its diverse workforce by delegating the authority of the marketing and distributing of NovaPlast. As each plant will be responsible entirely for its territory, it will foster the spirit of imitative in the workers.

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