Frugal engineering as the latest managerial fad?

‘Frugal engineering’ predates the term ‘frugal innovation’. It describes (in the same way that ‘reverse engineering’ describes itself) the norms of engineering practice in Indian companies designed to lower the cost of product development and manufacturing. Carlos Ghosn, the Chief Executive Officer of Nissan and Renault, is usually attributed with the first use of the term (Radjou et al., 2012). In mainstream management circles, frugal engineering was highlighted by The Economist (2010a, 2010b).

Frugal innovation has arisen not from the writings of academics or experts but out of management responses to unique economic, social and competitive challenges faced by firms in developing countries. There are no generally accepted guidelines or simple rules that can be universally followed in order to materialize any perceived or promised results. Frugal innovation, as it stands, seems to be complex, multifaceted and can be interpreted and applied in a number of ways in different firms (Kar, 2012).

While it was in the management practitioners’ literature that the concept of frugal innovation was originally defined, this has been followed by the research concerns of the academic community. The practitioners’ conception may continue to remain dominant but for organizations to imitate effectively or to adopt frugal innovation strategies, academic research is needed to help define its full potential as well as to understand its limitations. Towards the end of the twentieth century, ‘lean’ processes based on eliminating waste (for example, lean engineering and just-in-time manufacturing) originating in Japan's Toyota Production System (TPS) was widely adopted by other firms.

The legacy of lean practices

Lean manufacturing is emerging as the dominant paradigm for the design and operation of current manufacturing facilities. The term ‘lean’ is usually understood to be associated with the operational aspect of a manufacturing enterprise, including processes associated with the supply of materials, component production, the delivery of products and customer service. However, lean thinking can also be applied outside manufacturing operations, although examples of this (such as applications in service-based enterprises) are relatively rare.

Knowledge-based activities such as design, new product introduction (NPI), engineering and product development (PD) are areas within an enterprise where the potential benefits from the adoption of lean engineering principles may be significant.