CASE STUDY –Innovations of

Hongs Belts Smart Conveyor

System Solutions in China

Submitted by
 MAY10, 2017

Table of Contents
Page
Abstract ………………………………………………………………...3
Introduction…………………………………………………………….3
Definition of Innovation………………………………………….4
Literature Review…………………………………………………….5
Types of Innovation….. ..................................................5
Objectives of the Study.………………………..…………………6
Problems of hongs belts……..……………………………………..6
Factors affecting innovation activities…………………………7
Products of Hongs Belts…………….………………………………10
Development History of Hongs Belts…………………………11
Questions…………………………………………………………………13
Conclusion……………………………………………………………….13
Recommendation…………………………………………………….14
Reference…………………………………………………………………15
Abstract
With increasing competition and quickly spreading of
knowledge, the future of many businesses depend upon their
ability to innovate. However, empirical and environmental
scan evidence shows that low technological innovativeness of
Hongs belts in China. Thus, this study examines barriers for
innovation in Hongs belts in China. The result of this study
indicates that the major barriers of introducing or expanding
technological innovation for the sampled Hongs belts in
China are: lack of
• technological and market information, inadequate
research and development, high cost of innovation,
organizational culture, size of enterprise, lack of skilled
personnel, lack of finance and absence of cooperation.
In addition, the comparative analysis indicate that,
organizational culture, size of enterprise and lack of
skilled personnel, all other factors were considered to be
an important barrier to industry level Hongs belts in
China. Similarly, all factors have statistically significant
relationship for Industry of Hongs belts in China.
Introduction

Hongs Belt was established in 1998 as a Trading Company of industrial

Belt. In a rapidly changing world, the imperative for innovation increases.
Innovation is common to all organizations‟ technology development and
management, no matter how large a company is. Innovation is widely
regarded as the most important competitive advantage that enables a
company to thrive in today's dynamic business environment. Nowadays,
it is commonly agreed that innovation is the critical path towards growth
and prosperity for countries as well as for individual firms.
It is the key to technology adoption, creation and explains the
vast difference in productivity across and within countries. And
Huang and Tsai (2011) argued that most modern economies
pursue progressive strategies and policies to develop a
responsive and dynamic in belt conveying producers in china.
This is done with potential to innovate, capability to respond
rapidly to evolving economic environments. Emerging
opportunities and threats forced companies to investigate and
invest more on innovation to decrease risk of becoming
competitiveness. In this regard, innovation is about new solution
that offers better value to customers.
Organization use innovation to confirm critical decision in
responding to technological or market challenges (Brenner, 1987;
Gomes, 1996).
The studies conducted by Freel (2005), Allocca and Kessler
(2006), and Dibrell et al. (2008) as cited in Ilker and Baki (2011)
show the increasing importance role of innovation and belt
conveying producers in the world. For sure, there are many good
reasons for paying attention to belt conveying producers. Currently
Hongs belts as a strategy towards development and creating
employment by having overall objective of the strategy of creating
and enabling environment for belt conveying producers. Having
specific objectives to “facilitate economic growth, bring equitable
development, create long-term jobs, strengthen cooperation
between Hongs Belts, provide the basis for Hongs Belts, promote
export, and balance preferential treatment between Hongs belts
and other bigger belt Producers in China.
Hence, the role of innovation as a crucial driving force of
economic development is widely acknowledged. In particular
within the business setting, innovation is often considered to be a
vital source of strategic change, by which firm generates positive
outcomes including sustained competitive advantage. Moreover,
as cited by Aminreza et al.(2011:80) Davila et al.(2006)
organized reasons why enterprises undertake innovation: to
improve quality, create new markets, expand product range,
reduce labor costs, environmental damage and energy
consumption; improve production processes and materials; and
replace products or services. For these and other reasons,
innovation has for many decades been subject to thorough
analysis and research. Likewise, firm‟s engagement in such
activities is becoming mandatory, unless they lose their market
share and customers in the future, as a result of shift in demand
of existing customers for new technology.
Therefore, innovation helps to meet the customer requirements
and enables firms to introduce technology which become one of
the most important concerns for Company's. Hence, the ability
of a company, not only to keep up with its current business
performance, but to exceed its own and its competition's
expectations are critical to survive.
Definition of innovation

Innovation is the “implementation of a new or significantly

improved product (good or service), or process, a new
marketing method, or a new organizational method in business
practices, workplace organization or external relations”.
Innovation categorized into two: technological and non-
technological. Technological innovation includes product and
process innovation.
Product innovation is the “introduction of a good or service
that is new or significantly improved with respect to its
characteristics or intended uses”. This includes significant
improvements in technical specifications, components and
materials, incorporated software and other functional
characteristics.
Process innovation is the “implementation of a new or
significantly improved production or delivery method”. It
includes new or significantly improved methods for the
creation and provision of services.
This case study focuses on how Hongs Belts uses Innovation
methods to ensure how produces a quality product that gives
value to the customer & identifying various barriers of
technological innovations comparing technological innovation
barriers of Hongs belts from other belt producers in china. And
finally investigates the reason behind hongs belts are not actively
engaged in technological innovation.
 Literature Review
Innovation and its processes are perceived as a relatively new
concept by organizations, it has been subject to discussions over
several decades. The term innovation comes from Latin‟s
innovare, which means “to make something new” (Amidon, 2003,
Tidd et al., 2005). Innovation is a complex and multidimensional
phenomenon thus, Hagedoorn and Cloodt (2003) suggested that
using multiple indicators to measure innovation has the double
advantage and that a more comprehensive assessment of innovation
performance is possible. Traditionally, innovation has been
perceived as the application of new technologies or application of
formal R&D to produce new products or processes to acquire
competitive advantage. In this context Tidd et al (2001:12) viewed
innovation as a challenge to organizations; traditionally, industrial
economists break down the process of technological innovation
into a sequence consisting of three phases:
Invention (Bringing new technology to market), innovation
(the adoption of invention to particular use to provide new
solution to customers) and diffusion (imitation) (Barthwal,
2007, Mariano 2004:314-15). According OECD (2005),
“innovation is the implementation of a new or significantly
improved product, or process, a new marketing or
organizational method in business practices, workplace
organization or external relations”. However, the broad
definition of innovation can be more narrowly categorized as
the implementation of one or more types of innovations, for
instance technological or non-technological innovations.
Types of innovations

1. Product innovation: is the introduction of a good or service

that is new or significantly improved with respect to its
characteristics or intended uses. It includes significant
improvements in technical specifications, components and
materials, incorporated software, user friendliness or other
functional characteristics. New products are goods & services
that differ significantly in their characteristics or intended uses
from products previously produced by the firm. Product
innovations related to goods includes: products with
significantly reduced energy consumption, and significant
changes in products to meet environmental standards and so on.
2. Process innovation:
is the implementation of a new or significantly improved
production and/or delivery method for the creation and provision of
services. It includes significant changes in the equipment and/or in
the procedures or techniques that are employed to deliver services.
It intends to decrease unit costs of production or delivery, to
increase quality, or to produce or deliver new or significantly
improved products. Production methods involve the techniques,
equipment and software used to produce goods or services
including installation of new or improved manufacturing
technology, such as automation equipment, computerized
equipment for quality control of production and improved testing
equipment for monitoring production.
3. Marketing innovation: Is the implementation of a new
marketing method involving significant changes in product design
or packaging, product placement, product promotion and pricing
that is use of new pricing strategies to market. It‟s aimed at better
addressing customer needs, opening up new markets, or newly
positioning a firm‟s product on the market, and finally intends to
increase the firm‟s sales.
4. Organizational innovation: Is the implementation of a new
organizational method in the firm’s business practices, workplace
organization or external relations. It intended to increase a firm’s
performance by reducing administrative costs or transaction costs,
improving workplace satisfaction, reducing costs of supplies. In
business practices, it involve the implementation of new methods
for organizing routines and procedures for conduct of work,
implementation of new practices to improve learning and
knowledge sharing within the firm and other knowledge to make
more easily accessible to others.
Objectives

 Supply suitable Products which work well.

 Help Customers improve producing efficiency in short time
 Optimizing the Sorting conveyor efficiency
 Reducing the Total cost of large- scale converted through
eliminating bottlenecks in production line
 To improve knowledge of Professional Hong belts staff.
 To improve quality, create new markets, expand product
range, reduce labor costs, environmental damage and energy
consumption;
 improve production processes and materials; and replace
products or services
Problems before innovations held in Hongs Belts were;
 Many Conveyor belts cannot be easily deal with goods on
conveyor line automatically change direction & distribution
 Chaotic Product cannot be automatically organized in to rows
 Packing deviation caused by diverter power interruption
 Inaccurate position of the packaged goods on conveyors caused
blocking, poor results of bar code reading, machine halt and slow
down the production line
 People have to adjust the conveyors when packed goods transfer
slow, also causing great delay
 Obstruction leading to dead-block of conveyor line, other errors
also affect the production efficiency
 The dead-zone caused by roller stop movement will decrease
productivity & lead to downstream obstruction
 Once the power supply system was cut off, products will be
detained on the conveyor line and not be conveyed timely.
Factors affecting innovation activities:

1. Economic: excessive perceived risks; cost too high; lack of

appropriate sources of finance; and pay-off period of innovation
too long.
2. Business: insufficient innovation potential (R&D, design);
shortage of skilled staff; lack of information on technology and on
markets; innovation expenditure hard to control; resistance to
change in the firm; deficiencies in the availability of external
services; and lack of opportunities for co-operation.
3. Other reasons: lack of technological opportunity; lack of
infrastructure; no need to innovate due to earlier innovations;
weakness of property rights; legislation, norms, regulations,
standards, taxation; and customers unresponsive to new
technology.
Empirical Studies Related With Barriers to Innovation

1. Internal and External barriers

Barriers to innovation can be classified in different ways
and different typologies e.g. origin, source. A useful
classification of barriers is made by Piatier (1984); he
classifies company‟s internal and external barriers.
Hadjimanolis (2003) admits that external barriers have their
origin in the surrounding environment and cannot be
influenced. However, a company can influence internal
ones.barriers existing on „‟ individual‟‟ or
„‟organizational‟‟ level: ability barriers; knowledge
barriers; functional barriers; intentional barriers and
affective barriers. He pointed internal barriers have to be
perceived to be more important than the external ones. They
are easier to identify and deal with.
2. Relation between innovation and barrier to innovation
This part deal with various studies conducted by researchers, to
establish linkage and endeavors to show that the independent
variable that is barrier to innovation causes a great impact on
innovation. Many of the major obstacles to innovations in
developing countries are related to the institutional environment:
government authorizations, procurement, technical norms and
standards, competition, customs, industry university relations,
finance and banking, intellectual and other property rights, without
counting those obstacles of a more informal nature.
Following were the nine (lack of finance, high cost of innovation,
lack of skilled personnel, inadequate R&D, size of enterprise, lack
of cooperation, lack of technological and market information and
organizational culture) were identified barriers for innovation from
literature are discussed.
Lack of Finance
Extensive investigation is made on the literature studying the
importance of external financial resources (Hewitt, 2006).
Particularly, studies of hongs Belts consistently stress that the
lack of finance is one of the most important constraint to
innovation (Silva et al., 2007; Lim and Shyamala 2007). Some
common results emerge from these studies.
High cost of innovation
The study made by Canepa and Stoneman (2008) find that cost
of innovation was major important barriers to innovation.
Similarly, Tourigny and Le (2004) found that the high cost of
innovation is likely to be perceived as an important hampering
factor by large firms as compared to small ones.
Similarly, the study of Aminreza et al.,(2011), Silva et al.,
(2007), and Lim and Shyamala (2007) revealed that cost of
innovation as restrain factors for innovation.
Lack of skill personnel
Many of these smaller organizations lack managerial and
technical skills, which inhibit their effectiveness as well as
competitiveness in new technology adoption and retention.
Improving these skills within Hongs Belts is therefore, very
important not only for the firm but for an economy as a whole
(Jones & Tilley, 2003). Hence, personnel as high impediments to
develop or introduce new or significantly improved technological
innovation.

Inadequate Research & Development

Usually, empirical evidence showed or used that, research and
development as a proxy variable for innovation. Putting case that
used as proxy, when it comes to R&D and innovation, assuming
that the effort to innovate draws from the capacity that firms have
to invest in R&D, and then this type of investment is expected to
be more financially constrained than investment in physical
capital.
Size of Enterprise
A great deal of research has addressed the relationship between
firm size and innovation (Schumpeter, 1942) and he argued that
large firms are more innovative than small firms. According to the
Schumpeterian arguments large firms are better placed to develop
and exploit new technologies as a result of larger availability of
resources, better appropriable conditions and greater ability to
benefit from scale economies.
Lack of Cooperation
It is becoming more and more difficult to maintain a competitive
advantage through internal R&D because of the fast changing
environment and the increase of knowledge dissemination and
expansion via www. Nowadays large multinational companies are
looking to generate knowledge externally through acquisitions,
venture capital investments, collaborations or knowledge
spillovers
(Kang & Kang, 2009). Todtling et al.,(2009) showed importance
of innovation, that advanced or radical innovations are drawn on
new scientific knowledge, generated in universities and research
organizations, while incremental innovations take place more in
interaction with partners from the business sector and others.
Lack of technological and market information
Information is power to the enterprises. The presence of
information technologies in organizations has expanded
significantly to a point where there is no organization that can
function without these tools. Besides, with this expansion, the
success of every organization depends largely on how well it uses
information technology to manage its information and knowledge
resources (Cascio, 2001).
Organizational Culture

The culture of enterprises might have influence on the

innovation performance of the firm. Tushman and O‟Reilly
(1997) pointed out those successful organizations have the
capacity to absorb innovation into the organizational culture and
management processes and that organizational culture lies at the
heart of organizational innovation. On the other hand, Martins
and Terblanche (2003) explain that, a culture supportive of
creativity encourages members of enterprises to think innovative
ways of representing problems and finding solutions.
Products of Hongs Belts

 Spiral Modular belt

 Flat-top radius Modular Belt
 Universal Ball Belt
 Vacuum Lifting Modular Belt
 Lifting Modular Belt with flights and sidewall
 Heavy duty belt
 Easy Clean Modular Belt
Raw Materials Used for Manufacturing Hongs Belts is:
-Polypropylene and Acetal for belt
-POM, PP, Ceramics, Chromium-plating steel are selectable
for the balls which are totally satisfy customer needs for
transportation Purpose.
Products of Hongs Belt: Conveying Solutions used for:

 Fish Processing – which is used in fish processing factory

 Cartons Packing- in a meat processing factory, to
transport packages which finish packing to the warehouse
for cold storage.
 Classifying and Counting of Chicken Legs- used in both
sides of the selection conveyors with electronic platform
scale in the food processing factory, as the transporting
buffer area after weight grading.
 Mangos Packing- used in classified packing of all kind of
fruit such as mango, papaya, guava etc. the procedure is
transporting the agricultural products in plastic basket.
 Oolong Tea – which used for a famous beverages
production factory for the cooling and accumulation of
beverage in aluminum foil packing, the belt width is
3000mm.
 Plastic products-which is used in a compression shaping
factory for transporting the PE plastic containers after
compression shaping and deckle edge of surplus material after
cutting.
 Meat industry- which is used in a meat processing factory
that produced for exporting. It adopted Hongs belt modular
belts in all transporting procedure.
 Shoetrees- used in shoetree injection factory for transporting
the plastic products with high temperature after injection
shaping. They choose HONGSBELT modular belt.
 Smoked Meat- used in smoked food factory for transporting
smoked food. In the procedure of making smoked food, it will
produce some pigments after caramel carbonization.
Through farther Innovation using Research and Development and
cooperation with Elgi ultra industries Limited HONGSBELTS
produce new type of Conveyor belts. Thus are:

 Innovative product of heat-resistant conveyor mesh

 Innovative product of plate top chain spiral conveyor
 Innovative product of anti-flammability plastic modular B
 Innovation product for the solutions of food safety conveying
 Innovation product of roller types of modular conveyor belt
 Innovation product of Crispening tracking curved modular con
 Innovation product of spiral conveyor belt
Development History of Hongsbelts:
 The Company was first establishes in 1998 as trading
company of industrial belts
 Hongsbelts first processing workshop of industrial belt in
2000, as well as setting the biggest ware house in Shenzhen
 Established a semi-finished products workshop in 2002;
mould workshop and injection workshop were set in the same
year.
 In2003 set its own brand Hongs belts, overseas sales
department were set for global promotion and sales in the
same year.
 Annual sales Volume exceeded ten million in 2004, and
attended SINO Corrugeted and launched self-developed
products modular plastic conveyor belt, which solved several
problems of traditional roller conveyors.
 In2005 launched its own researched products- roller top
modular conveyor belt, which achieve the sorting in tire
industry, and also achieve the intelligent production together
with electronic control.
 In2006 there were more than 60 types of modular conveyor
belts and 120 types of plastic chains; products with free
combination of different colors and models up to 300 kinds
which can satisfy different requirements in the field of
conveying.
 The Formal establishment of its equipment Division in 2007
and put forward its slogan: Innovation, making conveying
becomes better. In this year the first set of plate top curved
in china is launched in Hongs belts, which is widely used in
beverage, printing, food, logistics industry.
 Industrial Park of Hongsbelts was established in 2008,
covering a building area of 10000 square meters, achieved
the industrialization of manufacturing and sales of industrial
belt.
 Hongs belts Got ISO9001:2008 certification also made
achievement on the research of material properties, the
temperature range under conventional transmission -70-320
degree centigrade.
 Hongs belts Football team was found in 2010 with goal that
improving the company social awareness, showing enterprise
presence & enhancing the cohesion of the staff.
 In 2011assembling workshop of smart conveyors was set, which is
aimed at supplying compressive technique support to the
customers by showing new types of modular belt in those
conveyors. Also in 2011universal ball belts is developed
successfully, which can satisfy the requirements of sorting system
well in the whole logistic industry.
 Always insists on the principle of independent R & D of new
products, and have gained more than 80 utility model patents of
transmission belt and conveyor belt till now, some of them are
 Constant innovation on service help Hongs belts accumulating
a lot of partners, including china food machinery corporation,
Honhai group/Foxconn,Gxkc, the JDB group, BYD, DOYOO
Group, Guangdong postal sorting , HAN’S LASER, Coca-cola,
Golden-laser,Shineway Group, Tech-long, Jinluo, youngsun
pack, Double star tyre, yf-metal, kaituo,mesnac,
justu,baichuan, SF-express,wantwant, yeshu beverage, TING
HSIN, newamstar,Jinyipack,Shangyu xinye, pepsi,
SONGCHUAN Group etc..
 In the past 15 years, Hongsbelt employees adhere to the spirit
of enterprise- efficiency, excellence, service, dedication; stick
to the principle of people-oriented and scientific development,
continue to bring the internationalization strategy, brand
strategy and capital operation strategy to to force, which
achieves the sustained, steady and harmonious development.
Questions

 Did your Hongs Belts Company introduce technological

innovation?
 What type of technological innovation do introduces?
 Why are not hongs Belts introducing and/or expand
technological innovation?
 What is meant by Innovations? Describe two ways in which
Hongs Belts at Hongsbelts leads to more efficient use of
resources.
Conclusion

The following conclusion was pointed out from the finding of the
study:
Hongs Belts are better introducing technological innovation from
other producers of same company in china
Factors constraining innovation is the main reason for Hongs belts
not innovate or actively engaging in technological innovation.
Hongs Belts have loss confidence on the benefit of technological
innovation and de motivated to engage on innovation due to
absence of support and access to loan.
 Information is power for Hongs belts to cope up in this dynamic
environment and to overcome competitive restrain factors.
Company’s unable to learn what is going on outside the firms
regarding new technologies and its dynamic environment as a
result of Absence of information technology, and the shift in
demand of potential customers for new technology introduction
so; Lack of technological and market information is obstacle for
Hongs Belts industry and specific technological
innovation.Compnys are unable to access new finding which
enable to do radical technological innovation as a result of no
engagement on R&D, and also difficult to imitate technology
actively and gain competitive advantage well in creating and
adding values thus, inadequate R&D is barrier for Hongs Belts
industry & specific technological innovation.
 Company’s at industry and specific level is unable to have necessary
resources and a capability which is critical to engage on
technological innovation, due to cost to own external competency
hence, High Cost of innovation is a major obstacle for Hongs belts
at industry & specific technological innovation. By and large
innovation idea is created from people mind and those organizations
govern the collection of peoples, resources and values they have.
So, enterprises culture aren‟t encouraging employees to devote time
on new ideas and employees are not updated with best practices
regarding innovation thus, Organizational Culture is obstacle for
Hongs Belts at industry technological innovation.
 Due to fast changing environment and increase of knowledge
dissemination, it‟s difficult to Hongs belts to maintain
competitive advantage through internal capability. Since, The
Company have no cooperation with universities, institution and
research organization they can‟t access expertises from outside
related to technological innovation. Therefore, lack of
cooperation is barrier for Hongs Belts at industry level
technological innovation.
Recommendation

Hongs Belts Industry level; Access up to date technology

information and materials by having web gadget access, reading
technological journals, creating information integration and
partnership with technological institution & vocational schools and
with others in line with the shift in demand of customers of new
technology like producing heavy Belts which is used in crushers &
Cement industries. Engaged on radical innovation by having
organized R&D offices and equipped staff and be able to use new
finding of R&D.Hongs Belts believe that anybody in the enterprises
could have a potential to innovate, encourage empowerment &
synergies of resources, share best practices to employees in line
with playing of significant role by managers or owners in spending
time to listen employee ideas, and use possible opportunity to
promote Hongs belts technological innovation.
Hence, hongs belts specific should have adequate
number of trained personnel for technological innovation
by in reaching the potential of existing employees
through upgrading their knowledge or hiring new
employee. Hongs belts should enhance engagement on
technological innovation by assigning internal funds for
technological innovation in line with increasing capital
and turnover of the enterprises.