1 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) PROCESS INNOVATION CAPABILITIES AND ORGANIZATIONAL PERFORMANCE: CASE STUDY OF DEVELOPING NOVEL PRODUCTION PROCESS MUJAHED KHALID Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia DILEEP KUMAR, M. Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia ABSTRACT This case study has been conducted for the purpose of examining the innovative abilities of internal research and development. An empirical technological procedure advancement analysis has been introduced that concentrates on the issues encountered the business sectors of a Saudi irm and the performance of organizational performance. What is revealed in this case study is that the abilities of process Innovation have an important positive impact upon the organization. Lastly, the empirical study has been given including discussions and conclusions. The study provides insight into Process Innovation Capabilities and Organizational Performance, in a self-governing organization in Riyadh, Saudi Arabia. Keywords: Innovation, Technological Innovation Capability, Organizational Performance, Production Process INTRODUCTION The signiicance of innovation capability in ofering brand new innovations is well known to everyone nowadays; since the focus of many organizations was on their innovation abilities in its rival more than that on their cost-efective or physical resources to generate modern innovations. Process innovation Capability is one of the main elements in innovation capabilities, which depend on it (Ho, 2011; Aberejo, 2009). As procedure innovations take place as normal in a producing company, technological innovation can be further reined to technological product and procedure innovation. Technological process innovation of a irm is one that has carried out importantly technologically enhanced techniques during the time under review (Garcia-Muina, 2007; Guan and Chen, 2010). Additionally, within the ield of production industry; technological procedure innovation abilities are deemed as the basis of enhancing performance at manufacturing plants and play a main role in reinforcing their performance (Chen, 2009, Liu, Baskaran, and Li, S. (2009). Technical procedure innovations are characterized by being more eicient or productive oriented reforms. Consequently, the expectations of process innovations exist for having beter performance in productivity. This case study deals with the innovation capability issue practically technological process innovation capability and the relationship between the organization’s innovation capabilities and its performance (Osman, Ba-Mardouf, Al-Washmi, Al-Shail, Al-Otaibi and Al-Wadie, 2004),. This case study is conducted for the purpose of showing empirically that the technological process innovation capability has an important efect on performance. Moreover, a situation of nano-iltration pre-treatment as a novel technological procedure innovation which developed through R&D center is ofered to basically show the important efect of this technique innovation on the regular water manufacturing plant performance for an organization in Saudi Arabia (Zahrani, Ajlan, and Jardan, 1993). Relying on this study, how the innovation capability enhanced the organization which was recovering from major issues impacting its outcomes will be disclosed. To make sure the conidentiality of the data of the irm, the irm’s name has been changed to avoid impacting the company’s management (Hassan, 1998). BACKGROUND OF COMPANY Al Soud International, is a self-governing organization established in 1974 with headquarter situated in Riyadh, Saudi Arabia. The company is involved in the operation and maintenance of desalination and power creation plants and the regular water transmiting systems. The company, through more than 30 ideal company plants in the Eastern and West-coast of the country, is the main water desalinated and electrical power provider throughout Saudi Arabia with an everyday capacity of 3,000,000 cubic meters of safe and clean water (1,095,000,000 cubic meters of safe and clean water annually). Approximately, half of the 6,400,000 cubic meters used by the Kingdom’s 27 million people. Moreover, the 98 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) organization with its staf and employees of 11,000 employees, most of them were engineers in the plants is deemed the desalinated marketleader. The aim of the company is to meet Saudi Arabia’s water requirements which are growing. Expectation for the company to pioneer the sea water desalination growth and transmiting while its mission is to fulill the kingdom’s desalination water need and participate in cost-efective and social growth through efective cost-efective commitment in human and physical source resources. The main purpose of the organization as mentioned in its bylaws approved by royal decree was help natural water resources by means of sea water desalination along with electrical power creation centered on technological and cost-efective conditions. Through its R&D middle, the organization is also involved in analysis and growth activities related to the growth and improvement of desalination technologies to experience the master ideal plans of the organization. The R&D center together with the Engineering Divisions, in Eastern and Western Shorelines cooperated in many important used research projects. These used research projects continued the improvement of position growth performance. R&D center has done several research projects to be able to cope the main complications knowledgeable the company’s segments basically feature divisions. The key speciic challenge encountering the organization in the near future was decommissioning of existing plants in coming next years. Moreover, the organization had to get rid of some of its costs of operation of its plants because of the huge cost-operational commitment opportunities required in plant projects. The operational costs of the company unit’s were the main monitory challenges. Furthermore, the growing gap between water need and the quantity provided in the most important cities due to the quick growth of their people and in per-capita consumption was one of the obvious central complications. The company knowledgeable serious efective restrictions were impressive in reducing the water manufacturing and enhancing plants operational costs. The following part of this case implies the importance of these issues. DILEMMA OF THE COMPANY’S STRATEGIC BUSINESS UNITS The ideal company unit’s plants of the company faced several problems due to operational restrictions. The operational restrictions which were IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) 99 reasons of plants troubleshooting produced various position growth restrictions and had obvious outcomes of the performance as well as of water growth units. Although the present budget and innovation abilities lack exist, the R&D of the organization had to make ideal speciic procedure innovation to control these problems. Below table. 1 shows the important issues confronted by the organization plants in places of operational performance, growth, and cost and promotion situation before Saline Water Desalination Research Institute developed a novel technological innovation which resulted in improving plant’s capacity. Table 1 Demonstrates the important issues exist in the company’s plants Problems Discretion Areas Operation eiciency Production Level Operation is limited to speciic operation circumstances: 1. The plant operation has the lowest normal water restoration rate. 2. The plant operation confronted issues in the seawater desalination consumption such as measuring, fouling such as biofouling, great power and substances requirement as well as deterioration of the desalination equipment. As a result of these main issues the plant performance considerably decreased. 3. It tends to require comprehensive pretreatment, especially if the feed is taken from an open sea seawater intake. 1. The plant’s development capabilities could not reach to full load. 2. Input seawater reduced and lack in plant performance as mentioned above. 3. Moreover, due to the company plants useful lives were nearly obtained up to the end the plants had poor eiciency. 4. The company plants managed with old and inefective operation system with to manufacture water. (Continued) 100 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) Areas Problems Discretion Financial conditions Finding ways to decrease operating expenses is typically a priority for the company. It has to save its great expense due to the large investments required to build new strategic business unit projects. The company device’s functional expenses established the main monitory diiculties. The major causes of improving plant functional expenses were because of process complication and the seawater intake function which is recognized by having: 1. High degree of hardness 2. Varying levels of turbidity and microorganism content 3. High total dissolves salt at normal operating conditions. 4. Also great power and substances consuming, less pants’ resource usage, and low development which led to the plant’s function price increase to inquired level Marketing situation 1. Increasing market share is one of the most important goals of the company to be obtained through improving its development potential and decreasing the comprehensive plants functional expense. 2. The lack in the water development potentiality to the company clients runs the company to diiculties in meeting their clients’ total requirement on time. 3. Because of this promotion circumstance, the most apparent stakeholder groups put demands for liability management on the company. 4. The capability of the company could not accomplish its target business stage due to less everyday water development. The performance of the company has announced efects on these places because of the main issues in speciic means of growing plants. IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) 101 THE PROBLEM STATEMENT The problem statement of this study was that ‘the efect of technological innovation abilities of the water manufacturing plants is on its performance through making a novel ideal solution’. THE COMPANY’S CRITERIA OF ALTERNATIVE OPTIONS TO STRATEGIC SOLUTION The company’s decision makers had recognized the issues and accordingly formed various appropriate criteria alternatives to choose for them that support to solve these serious issues. Details of the three alternative options criteria are explained in table 2. The management required to decide which option of these alternative proposals should be taken. The irst alternative of these choices was to sign a contract agreement with the main plant producers. Depending on this contract agreement, the producers of the plants would analysis the plant design conditions and suggest new modiication to get over these issues. This project option was eliminated due to the outstanding cost of the agreement and the longer length to get the result. The second alternative choice was to authorize their analysis activities with worldwide company corporations which have R&D centers with advanced abilities. To be able to keep the initiative and speciic authority, the company’s option makers desired to strengthen the company’s in-house analysis features and maintain its competitive advantages. Moreover to the point that innovative abilities depend on the capability to apply inner knowledge and on in-house R&D eforts, the company also excluded this option. Ater discussing the third alternative with R&D center management, plants management and engineering divisions, the top management of the organization had selected the ideal alternative which was assigning the process to the organization R&D middle. The third option was the appropriate one with respect to the company’s criteria alternative options (see as table 2). This diferent overcame all disadvantages of the other available choices. The company’s inner R&D center was the less expensive proposal to adopt as well as the smallest threat regarding maintaining industry authority and competitive advantages. Moreover, the organization through this option allowed to apply inner knowledge and on in-house R&D eforts. Although the project schedule length of 102 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) the third choice was not the shortest among the other projects, the option was the irst classiication in criteria matrix of alternative options and so that it was chosen. The following table shows the three alternative choices standard. Table 2 Demonstrates the company’s criteria matrix of alternative options Project Options Alternative criteria options Options Category Total Investment required Project Timeline Duration Maintaining market leadership The plant manufacturers High Investment LongDuration Medium Risk Third- Option International consultancy R&D centers Medium Investment ShortDuration High Risk Second- Option The company’s internal R&D center Low Investment MediumDuration Low Risk First- Option As soon as the management had made the decision to determine this task to the company R&D center to be able to tackle the situation, the expert team connections were recognized to apply the action option. THE STRATEGIC SOLUTIONS THROUGH TECHNOLOGICAL PROCESS INNOVATION CAPABILITIES OF INTERNAL R&D CENTER Relying on the acceptance of the company’s decision makers, the R&D center together with the Engineering Departments, in both Shorelines locations prepared eicient team connections for carrying out a used analysis research. The main purpose of the project was to analyze and search the major causes of these issues which confronted the plants to be able to make a new technological procedure innovation to develop the plant performance. The project teamwork irst began their assignment by studying the reason behind the above issues. The team found that both the outstanding IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) 103 staf of irmness and outstanding inish melt sodium placed limits on product the regular water recovery. The team also discovered that the position with its current procedure tends to degrade its performance due to the presence of huge turbidity which must be to remove. Using of antiscalants in preventing range formation and coagulation-iltration procedure do not remove the very outstanding contaminants which made the important issues. The project team connections focused their studies on this critical place. Ater several trial and ield works, the team had developed speciic procedure advancement. The speciic procedure advancement was a novel nanoiltration for the regular water growth position techniques to remove very outstanding contaminants from sea regular water (Hassan, Farooque and Al-Amodi, 1999). Through this important advancement procedure, the sea regular water feed prior to its entry to the water manufacturing plants is originally pretreated by the nanoiltration cells aspect procedure. The new nanoiltration cells aspect pretreatment overcomes the important issues knowledgeable by the various traditional water manufacturing plant’s procedures. From initial outcomes, it can be seen that not only position operate performance was signiicantly enhanced but also growth quantity was enhanced and efective cost was signiicantly decreased. The performance stage was the important stage to make sure and evaluate the pilot studies. THE IMPLEMENTING OF THE NEW SIGNIFICANTLY PROCESS INNOVATION All practical works were done irst on a pilot plant range in the company’s R&D center with originally low growth prospective of the team. The pre-treatment device in this brand-new advancement includes seawater system, double media ilter followed by a good sand ilter, outstanding cartridge ilter and feed tank. The nanoiltration device includes the underhand pump and three nanoiltration modules arranged in series, each containing two expert nanoiltration cells aspect elements in the demonstration device. The next step was scaled up from the pilot plant range to demonstration units. Based on the outcomes acquired from both pilot and demonstration plants, the project teamwork had acceptance from top management of the organization to apply the new procedure design and operate of the nanoiltration design by the conversion procedure at an actual size of the regular water growth position (Hassan et. al., 2002). In performance 104 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) stage, the project team connections transferred the efective system to an experienced growth plant ater creating and applying eiciently the process at the cause and demonstration position stages at the company’s R&D center. The next step has ofered the new maximum procedure design to various plants. Use of this importantly reinforced procedure was used in other manufacturing plants eiciently by the organization project teamwork and resulted in eventually to get over important issues confronted the organization plants. Production plant performance was enhanced to more than 40% compared with former times because of transforming these plants to new nanoiltration operation. The operational performance of the plants which changed to new operating techniques also amounted to new levels. Water recovery quantity of these growth units atained to 56% from 28% evaluating with working in the traditional procedure. The above deiciencies in plants were corrected as a result of transforming growth units to new nanoiltration operation technique. The company acquired outstanding outcomes through utilizing its inner R&D center abilities which developed a new signiicantly enhanced procedure advancement. The below points summarize the fundamental outcomes acquired by the organization R&D center: • • • Comparing the plants working on the maximum new speciic procedure advancement technique to operate in regular operate technique, the inish position growth prospective was signiicantly enhanced with more than double. Although the plants were in operate for quite a while, the plants shut down to maintain and the other and cleaning walls were not required. As a result, the organization plants minimized overall efective costs through the new procedure advancement technique by reducing the downtime involved in position shutdowns and simultaneously reducing the overall average alternative quantity. The new procedure innovation allowed the company to fulill the growing need from their clients. This procedure also ensured the organization durability and response to customer need on the brief period of your power and efort. The company also enhanced its company to planned stage because due to enhancing everyday growth prospective. The following place presents a conversation in accordance with the information ofered from the above case study. IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) 105 DISCUSSION Organizations need innovation abilities to improve their performance in changing real-life company environments. The case study play a role in such business performance improvement and important issues addressing by showing the ideal aspect of creating speciic procedure advancement abilities through inner R&D center abilities. Organization improvements abilities themselves have an impact on company performance with respect to performance, lead-times, efective cost and enhancing company. This analysis has also shed light on the performance of the new efective system of an activity advancement and its outcomes on the growth plants performance in one of Saudi Arabia companies. For the purpose of utilizing the technological process innovation capabilities, the organizations have to build and obtain their inner R&D center abilities that help the business performance and ofering solutions for issues confronted the business sectors. Although the inner R&D center abilities ofered a new importantly enhanced procedure innovation which acquired a drastic success manufacturing ability and decrease the operation cost, the authors believe there are some places that need to be revised; such carrying out of enhanced procedure was only in few of manufacturing plants by the organization project team connections. Actually, the organization could improve the performance quantity by outsourcing the general procedure and keeping the core procedure. Furthermore, the organizations should not concentrate only on technological procedure innovation abilities as a main way to get over its issues but management innovation also reinforces the company development and outcomes in geting the competitive advantages through creating the organization employee’s abilities. Moreover, helping the organization motivation and reward system management outcomes in improving the company’s R&D centers staf’s performance and motivate them to acquire more result. It can see that the right option of choosing appropriate choice brings the organization to make the innovation process in its R&D centers together with the ideal segments such as growth plants management and engineering divisions. This decision makes it possible for the organization inner R&D center to get over the important issues confronted by the various traditional sea regular water plants techniques. Ater the company carrying out the project had taken quite a long time to apply for registering the technological procedure innovation patent. It should immediately register to make sure the intellectual property rights are preserved. The company’s project teamwork has not taken into account the quality of water production which might cause to the customer’s health issues in 106 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) the far or near future. The top high quality assurance plants laboratory has to monitor the water top high quality during operation with the new maximum design operation design. Moreover, the organization did not take into account the water top high quality which negatively impact marine life because of the new nanoiltration cells aspect pretreatment operation technique. SUGGESTIONS In such a highly efective and changing atmosphere, the organizations in the regular water manufacturing expert should obtain creating their R&D inner innovation abilities to not only get over the important issues confronted but also , at the same time, to improve their maintain growth competitive advantages. These abilities play an outstanding aspect to improve organizational manufacturing capacity (Alegre and Chiva, 2008). In terms of understanding the signiicance of such abilities as a source for enhancing business performance competitiveness, the speciic procedure capability growth is related to production industrial place. Although the competitive advantage maintainability connections with the efective procedure innovation activities of the company’s R&D, the organizations have to pay atention to the efective management of inner R&D abilities. Furthermore, it is vital for the organizations to improve their R&D team’s managing abilities as well as technological abilities partially during the performance period. Companies must concentrate on both on managing and technological skills abilities as a key aspect of company’s inish result development. Finally, this analysis concentrates upon the signiicance of innovation ability in ofering a main ideal source to improve company’s eiciency through efective inter-irm collaborations of procedure innovation capability. However, future research should pay more atention to the importance of other innovation abilities like manufacture and service innovation capability, which, in reality, might impact long-term success, development, maintainable performance of the organizations. CONCLUSION This case study has put much concern about highlighting the vital signiicance of the R&D center’s role to play for the sake of developing technological process abilities and that is all for fulilling company’s performance development and overcoming the main signiicant issues. The technical procedure abilities are considered to be a valuable source IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) 107 for companies desiring to accomplish superior innovation and maintain competitive advantages. It is rightly pointed out in this co9ntext that to develop performance in such a highly efective and changing atmosphere require cost-efective commitment in formulation the company’s R&D activities which cause to efective procedure advancement result (Shera and Yang, 2005). Since the innovation enhances business performance, the organizations innovation abilities in inner R&D should concentrate on issues confronted by the strategic business sectors and be a future manufacturing development. REFERENCES Aberejo, I.O., Adegbite, S.A., Ilori, M.O., Adeniyi, A.A., & Aderemi, H.A. (2009). Technological Innovation Sources and Institutional Supports for Manufacturing Small and Medium Enterprises in Nigeria, Journal of Technology and Management & Innovation 4(2), 82-89. Alegre, J., & Chiva, R. (2008). Assessing the impact of organizational learning capability on product innovation performance: An empirical test. Technovation 28, 315–326. Al - Zahrani, S., Al - Ajlan, A.M., & Al - Jardan, A.M., (1993). Using Diferent Type of Antiscalants at the Al - Jubail Power and Desalination Plant in Saudi Arabia. Proceedings of IDA and WRPC World Conference on Desalination and Water Treatment, Yokohama, Japan, 1, 421- 431 Antonio, K.W., Lau, R.C.M., Yam., E. P.Y., & Tang, (2010). The impact of technological innovation capabilities on innovation performance: An empirical study in Hong Kong. Journal of Science and Technology Policy in China, 1(2), 163 – 186. Chen, Y.W., Yang, Z.F.S., Hu, Z., Meyer, M. & Bhatacharya, S. (2009). A patent based evaluation of technological innovation capability in eight economic regions in PR China. World Patent Information, 31, 104110. Hassan, A.M., Farooque A. M., Jamaluddin, A.T.M., Al-Amodi, A.S., Al-Soi M.AK., Al-Rubian, A.F.,Kither,N.M., Al-Tisan, I.A.R. & A. AlRowaili, (2000). A demonstration plant based on the new NF-SWRO process, Proceedings, Membranes in Drinking and Industrial Water Production, 1, 313-327, Paris France. Hassan, A.M., Farooque, A. M., Jamaluddin, A.T.M., Al-Amoudi, A.S., AlSoi, A. A. K., Al-Rubaian, A., Kither, N.M., Al-Ajlan. A.M., Al-Tisan, 108 IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) I.A.R., Al-Azzaz, A.A., Abanmy, A. Al Badawi, A. Al-Mohammadi, A.S., Al-Hajouri A.and Fallata, M.B., (2002). Conversion and Operation of the Commercial Umm Lujj SWRO Plant from a Single SWRO Desalination Process to the New Dual NF-SWRO Desalination Process, Proceedings, IDA World Congress on Desalination and Water Reuse, Bahrain. Hassan, A.M., Farooque A. M., Al-Amodi, A.S., Al-Soi M.AK., Dalvi, A..G.I., Kither,N.M. & Al-Tisan, I.A.R.,(1999). A Nano-iltration (NF) membrane pre-treatment of SWRO feed and MSF make-up (Part-II). Technical Report TR 3807/APP 96008-II. R&D Center SWCC, Al-Jubail, Saudi Arabia. Hassan, A.M., Al-Soi M.AK., Al-Amodi, A.S., Jamaluddin, A.T.M., Dalvi, A.G.I, Kither,N.M., Mustafa, G. & Al-Tissan, (1998). A two part article. A New Approach to Membrane and Thermal seawater Desalination Process Using Nanoiltration Membranes, one published in Desalination and Water Reuse Quarterly, May-June Issue 8/1, 54-59, and Second part published in Sept.-Oct. 8/2, 35-45. Ho, L. (2011). Meditation, learning, organizational innovation and performance. Industrial Management and Data Systems, 111, 113-131. Guan, J.C. & Chen, K. (2010). Measuring the innovation production process: a cross-region empirical study of China’s high-tech innovations. Technovation, 30, 348-358. Garcia-M.F.E., & Navas, L.J.E., (2007). Explaining and measuring success in new business: the efect of technological capabilities on irm results, Technovation 27, 30-46. Liu, J., Baskaran, A., & Li, S. (2009). Building technological-innovationbased strategic capabilities at irm level in China: a dynamic resourcebased-view case study. Industry & Innovation 16(4/5), 411 -434. Osman, A. H., Khalid B. M., Hamed W, Khalid S., Holayil, A. Al-Otaibi & Ali W. (2004). Modeling and simulation of multi-stage lash distillation processes. RDC Technical Report No. TR 3808/97002-II, March. Shera, P.J. & Yang, P.Y. (2005). The efects of innovative capabilities and R&D clustering on irm performance: The evidence of Taiwan’s semiconductor industry. Technovation, 25, 33–43. IPBJ Vol. 5 (Special Issues) (1), 97-109 (2013) 109 The author has requested enhancement of the downloaded file. All in-text references underlined in blue are l