Nypro Inc (A) Anwers To Case Questions

1. Discuss the most salient points in the evolution of Nypro, Inc. and relate this to the company's future goals. Do you see any barriers or inconsistencies?

It is important first to understand the direction that the company wishes to undertake before identifying the more salient points in the evolution of Nypro, Inc. The company aims to maintain a sustainable growth in profits and revenues. It also aims to "enhance its customer focus and serviceability by being the customer's local source for customer injection worldwide". Extra research would yield the company's mission statement as: To be the best in the world at providing integrated and innovative plastics solutions, from design to delivery, creating value for our customers, employees and communities. As the case implies, before 1995, Nypro's strategy is focused on providing integrated and innovative plastics solutions to the world's leading companies, implemented by the premier global team of employees.

1) Change of focus: Under Lankton's direction in 1962, Nypro shifted its focus from small-scale customers to technologically driving clients with large-scale needs. It resulted to a drop from 700 to less than a hundred customers in 1995. However, let us note that this particular approach skewed the company's focus to bigger clients and hence, strategy and competitiveness were also aligned in this direction. Unserved markets, however, may results due to the limited customer base. These markets, although ignored by Nypro, can be capitalized on by competitors when demand for smaller, more commoditized services increase.

2) Shifting basis of competition: In relation to the first item (change in focus), Nypro was competing at the top of an over served market (and competitors were catching up) in 1995. Lankton sensed a shift to commoditization as customer demand seemed to focus more on delivery time to market and less on high precision of design.

3) Decentralized location strategy and project teams. To keep up with technological progress and remain a market leader, Nypro Inc maintained a company structure that is anchored heavily on internal competition in its decentralized 21 plants worldwide, with project teams being formed in the early development stage and dissolved into Continuous Improvement Teams (CIT) afterwards to oversee the production to market phase. The CIT spread across all subsidiaries and encouraged closer integration between Nypro and its customers in the process. Higher quality, cost savings, stronger supplier relationships, and more revenues can be generated in the process.

4) Internal Market for Innovation: In relation to item # 3 (company structure), the internal market for innovation at Nypro is facilitated through competition. Nypro managers believe innovation is the result of competition. Product development teams are formed and are pitted against other teams in the same plant and other plants. The CIT team is charged with the task of helping the customer achieve its goals of getting a commercially successful product to market, inking a long-term contract with the customer, and improving margins, revenues, profits, quality and cycle time. Each team keeps a close eye on the teams in other plants, so when a good idea or innovation appears, all the teams quickly adapt it.

5) Rewards and Incentives. Using stock programs for valuable employees ensures retention of employees and encouraged high performance, as this was anchored in tenure, pay level, and performance rating, with the latter having the biggest weight. Company strategies can also be aligned with the stock program scheme to push for more growth initiatives.

6) Product to Process. Due to customer molding and the need to accommodate the custom-made orders of each plant in each area, Nypro's focus shifted from product technology top process technology. This customization hence proves to be a challenge in integrating common systems within the organization as well because needs of a plant might be different from the other's. While the shift to process technology supports the company's thrust for further efficiency and improvement, it also proves to be a challenge in innovation.

2. How do you view the "internal competition" being fostered at Nypro? Does this contribute to or deter innovation?

Nypro has an organizational structure that facilitated aggressive internal competition. Its successes and apparent valuable contribution to company's results and innovation pursuits is largely attributed to the leadership of George Lankton--- who imbibes the competitive spirit and eventually trickled this down to the project teams and location managers. Nypro's internal competition supports the company's innovation thrust for the following reasons:

1) High performance standards. Internal competitions competition brought to fore a very high awareness and constant focus to performance statistics. These performance statistics are compared within groups within the same plant and vis-a-vis those of other plants. Understandably, teams would want to attain the best scores or performance ratings as possible within the organization without compromising company values and objectives.

2) Because performance evaluation utilized the element of competition, groups and individuals are motivated to contribute to overall company innovation and improvement because of expectations of incentives (stock programs, internal company recognition, etc).

3) Customer focus and continuous improvement. Nypro's plant and CIT teams will be able to contribute further to long term company growth and profitability and come out with processes to solve production problems for the customers The team knows that its key result areas in order to be retained as a viable team are geared towards improving the total processes as a whole (in line with process technology focus of innovation). For example, the CIT teams' KRAs are helping the customer achieve its goals of getting a commercially successful product to market, inking a long-term contract with the customer, and improving margins, revenues, profits, quality and cycle time. Hence, customer focus becomes ingrained in performance and innovation pursuits.

4) Reservoir of ideas. Employees become the source and the market of ideas within the corporation, which, if proven to be successful on a large scale basis (e.g. adapted by several plants), can be adapted as a corporate strategy. This way, innovation and improvement is not restricted to upper management, but also comes from employees who were closely involved with the actual processes and products.

5) Identification of drivers of success.. Each team keeps a close eye on the teams in other plants, so when a good idea or innovation appears,