A new approach to the evaluation of process innovations

A technological change should be evaluated as early as possible in its development in order to minimize the chance of investing in an innovation that does not subsequently prove to be economically feasible. In this paper a method is presented for conducting an evaluation while the innovation is still in a conceptual stage of development. To do this, the production process is analyzed in detail and each individual element of the process that might be altered by the innovation is noted. All other elements of the process are ignored. Baseline data on the current performance of the process are collected. Performance of the innovation is estimated as a multiple or fraction of the baseline data for the altered elements. A value-weighted productivity index is used to compare the innovation with the current process.Sensitivity analysis can be performed on the productivity index to find those components of the current production process that are most responsive to change. Used in this way, this method of analysis can become a “driver” for R & D by exposing the parts of the current process that have the greatest potential for contribution to improvement of the productivity index.This method is illustrated in some detail for the case of one conceptual process improvement, laser-assisted machining — for cutting hard-to-machine metals.