Pan Pacific Symposium Conference Proceedings

Disruptive Innovation Pulls Manufacturing Out of the Box

Authors: Herbert J. Neuhaus, Ph.D. and Charles, E. Bauer, Ph.D.
Company: TechLead Corporation
Date Published: 2/11/2014   Conference: Pan Pacific Symposium

Abstract: The term disruptive innovation, coined by Clayton Christensen, refers to an innovation that redefines the value chain and goes on to disrupt an existing market displacing an earlier technology. Conventional wisdom dictates that incumbent competitors fail in the face of disruptive innovation because they cannot adjust quickly enough to keep up. In reality, however, well-managed firms generally adapt abruptly when sufficient value attaches to reconfiguring the existing value chain and manufacturing operations. In other words, constructive integration of existing infrastructure and forward thinking innovation can propel incumbents to greater success when all the stake holders understand the benefits of the innovation.

This paper analyzes two examples of disruptive innovations stimulating out-of-the-box thinking in electronics packaging. In the first case, Tektronix realized that stationary equipment created an artificial sensitivity to product change-over. In short, the machine that took the most time to reprogram, the wire-bonder, idled the entire manufacturing line during product change-overs. Making the wire-bonders portable (by adding wheels) enabled a substantial increase in productivity with reduced capital investment because the manufacturing line no longer waited for wire-bonder reconfiguration.

In the second example, the authors analyze how embedded chip packaging disrupts the existing value chain. Embedded packaging technologies re-order the conventional flow of operations. Logistics disruptions, significantly limited rework, and yield management concerns force a completely new manufacturing model. For example, who in the value chain absorbs the cost of devices in assemblies with defective interconnects built over the device?

Finally, the authors show how new manufacturing roles and responsibilities can effectively address the challenges of disruptive innovations.

Key Words: 

Disruptive Innovation, Embedded packaging, supply chain restructuring

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