3 -Innovation-Transformation.pdf

7/24/2019 3 -Innovation-Transformation.pdf

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Inputtransformedresources

MaterialsInformationCustomers

Facilities Staff

Input transformresources

Input Output

Goods

andServices

Design Improvement

Planningand Control

OPERATIONSMANAGEMENT

OPERATIONSSTRATEGY

Operations

strategy

The operationscompetitive role

and position

Operations strategicobjectives


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!

Understandobjectives and

context

Analyzesituation

Determineoptions

Evaluateand choose

Implement

Observe

ProblemSolving inCase StudyAnalysis

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Review

Operations Strategy and Competitiveness


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#

Corporate Strategy

Operations Strategy

ManufactureStrategy

ServiceStrategy

Execution

Monitoring K P IRiskManagement

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Example:Distinctive competencies of Japanese manufacturing

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Low labor cost strategy shortly after the war;

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Scale-based strategy high productivity and low unit cost;

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Focused factory strategy specialization for higher quality;

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Flexible factory strategy high quality with increased variety;

! Lean production reducing all waste


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Policy Type

Policy Area

Strategic Choices

Process

Span of process

Automation

Process flow

Job specialization

Supervision

Make or buy

Handmade or machine made

Flexible or hard automation

Project, batch, line, or continuous

Highly decentralized or centralized

Quality Systems

Approach

TrainingSuppliers

Prevention or inspection

Technical or managerial trainingSelected on quality or cost

Capacity

Facility size

Location

Investment

One large or several small facilities

Near markets, low cost, or foreign

Permanent or temporary

Inventory

Amount Distr.

Control Systems

High levels or low levels of inventory

Centralized or decentralized warehouses

Control in great detail or less detail

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Strategy A

Strategy B

Business Strategy

Product Imitator

Product Innovator

Marketconditions

Price sensitiveMature marketHigh volumeStandardization

Product features-sensitiveEmerging market

Low volumeCustomized products

Operationmission

Emphasiz e low cost formature products

Emphasize flexibility to introducenew products

Distinctivecompetenceoperations

Low cost through superiorprocess technology andvertical integration

Fast and reliable new productintroduction through productteams and flexible automation

Operationspolicies

Superior processes

Dedicated automationSlow reaction to changeEconomy of scaleWorkforce involvement

Superior products

Flexible automationFast reaction to changesEconomies of scopeUse product development teams

Marketingstrategies

Mass distribution

Repeat salesMaximizing of salesopportunitiesNational salesforce

Selective distribution

New-market developmentProduct designSales made through agents

Financestrategies

Low riskLow profit margin

Higher riskHigher profit margins

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INNOVATION ANDMANAGING THE RENEWAL

OF THE BUSINESS


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01

234 &56.5,.7 ,3. 6$899: 8#.$5.-;

J. Murray Spenglerinvented the vacuum

cleaner originally called an electric suction

sweeper. But it was W. H. Hooverwho had a

good idea of how to market and sell the

product.


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234 &56.5,.7 ,3.

Elias Howeproduced the worlds first

sewing machine but it wasIsaac

Singerwho stole the patent and built a

successful business from it (Singer later

was forced to pay Howe a royalty on

all machines made).


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Organizational Perspective:

The adoption of an idea or behavior, whether a system,

policy, program, device, process, product or service, that is new to

the adopting organization

Customer Perspective:

The transformation of knowledge into new products,

processes, and services involves more than just science and

technology. It involves discerning and meeting the needs of the

customers

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Technology Push

Need Pull

Coupling Model

Integrated Model

SIN Model


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Technology

Knowledge of how to do things.

The system by which a society satisfies its needs and desires.

Capability that a firm needs to provide its customers the good and/or

services the firm proposes to offer, now and in the future.

Innovation

A business process which brought inventions to commercial use.

Commercial Use.


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Management of Innovationis the creation and

development of new ideas.

Management of Technologyis the acquisition and

application of existing innovations (diffusion).

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Idea Generation + Problem-Solving !Invention.

Invention + Implementation !Innovation.

12-20% of inventions results in successful innovation.

Innovation + Diffusion !Economic Value.

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I own a 7-Eleven for three years now and would not consider a second one. I was lucky

that I got my store under 120k including all the fees. I am also lucky that I was able to

recover my fees before big RaceTrac came and another direct 7-Eleven competition. 7-Eleven

franchise do not care about franchisees. This is a 50/50 split partnership of your gross

profit therefore 7-Eleven will only look out for their best interest. If you pay more than

$150k in the total fees to get this store, you are not making a wise move. There is no

equity in this business, you will not be able to get anything if you decide to sale. This is a

24/7 business that means 24/7 headache. Headache from staffing to getting calls all the

time. If you are looking to buy 50hr a week job that pays $50k a year with no

benefits, this is a business for you. If you are planning become a millionaire, its not

possible anymore. 7-Eleven used to be a good franchise when they did gas profit splits,

maintenance costs were low, there weren't many 7-Elevens. 7-Eleven's current strategy is to

put 7-Eleven in every corner. They are buying out exxon chains to tetco chains so if there isany gas station competition, most likely they will be 7-Eleven. 7-Eleven is the biggest

competition. Right now there are eight 7-Eleven on the same road as my 7-Eleven in 5

miles distance. Also, if your daily sale is $3000 or less, you will not make money. You

are better off opening a beer and wine store and set your own hours than this business.

(Franchise Review)

((


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Invention-first documentation of an idea for a new device or

process with features thought useful for human purpose

Innovation- the process whereby an invention is further

researched, designed and engineered into a form suitable for the

commercial marketplace or public-sector use:

Incremental Innovation - modifications or extensions of existing

products/services for improved performance at (usually) lower

cost

Radical Innovation - achieving a brand-new functional capability

that separates this product/service from its predecessors; opens

the possibility of totally new industries

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(D

Technological performance often follows an S-shaped curve

Pe

rformance

Effort(funds)

Physical limit of technology


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A$

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Window of opportunity: the period in which the new product faces no orlow competition in the market place.

The window of opportunity for market exploitation is constantly shrinking as the

competition brings new products more and more frequently.


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AB

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Project A, which was introduced before the competition came up with anequivalent or better product, has been able to generate a positive cumulative cashflow, with a good return on investment during the R&D cycle.

Project B was introduced at a time when some competition already existed,results in a negative cumulative cash f low.


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First to Market : product available before competition

Second to Market: quickly to imitate first to market

successful products

Cost Minimization or Late to Market : enter to market

when products become fairly standardized and demanded in

large volume

Market segmentation : serving niche markets, specific needs

(G


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Which come first

Product Design or Process Design ?


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Market Pull (We Make What We Can Sell)

Technology Push (We Sell What We Can Make)

Inter-functional View

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Innovation is not a luxury but an imperative ;

it is essential for survival and growth


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Fig. (a) One firm focuses on aggregate customer needs.

(b) Multiple suppliers address individual customer needs.


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If innovation is only seen as The result can be

Being good at invention and therefore havingstrong R&D capability

Technology which fails to meet user needs and may not be accepted

The province of specialists in white coats in theR&D laboratory

Lack of involvement of others, and a lack of key knowledge andexperience input from other perspectives

Meeting customer needs and thereforeemphasizing good market research and hearingthe voice of the customer

Lack of technical progression, leading to inability to gaincompetitive edge

Technology advance Producing products which the market does not want or designingprocesses which do not meet the needs of the user and which areopposed

The province only of large firms Weak small firms with too high a dependence on large customers

Only about breakthrough changes Neglected of the potential of incremental innovation

Only associated with key individuals Failure to utilize the creativity of the remainder of employees

Only internally generated The not invented here effect, where good ideas from outside areresisted or rejected

Only externally generated Innovation becomes simply a matter of filling a shopping list ofneeds from outside

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As Engineering designed it.As Operations made it.

As Marketing interpreted it.As the Customer wanted it.

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# Almost all products follow a life-cycle curve :

# If a company does not continue to introduce new products

periodically, or at least significant improvements on existing products itwill eventually be on a going out of business curve.

#Continuing to come up with the right product for the market takes

a lot of innovation .

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To have the right product, therefore, one must:

" Predict a market need

" Envisage a product whose performance and capability will meet

that need

" Develop the product to the appropriate time scale and produce it.

" Sell the product at the right price

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Rewriting the

rules of the gameWe have to

change

Falling a sleep Weve seen it

all before

New response needed

Stable

environmentTurbulent

environment

Old response OK

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External Development Strategies

AlliancesJoint Ventures

Purchase Technology or Expertise by Acquiring the Developer

Internal Development Strategies

Migrations of Existing ProductsEnhancement to Existing Products

New Internally Developed Products

Internal Cost of Product Development Shared

Lengthy Speed of Product Development Rapid and/or Existing

High Risk of Product Development Shared

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Also known as House of Quality

Customer Attributes (Voice of the Customer)

Engineering Characteristics (Voice of the Engineer)

Tradeoffs

Competitors Comparison

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Kebutuhan dan keinginan

pelanggan

Desain teknis produk

Target karakteristik dan

spesifikasi produk

Kebutuhan proses untukpenciptaan produk

Desain teknis produk

Target karakteristik dan

spesifikasi produk

Kebutuhan proses untuk

penciptaan produk

Pengendalian kualitas untukpemeliharaan proses

Phase 1:

Perencanaan

Produk

Phase 2:

Perencanaan Parameter

dan Spesifikasi

Phase 3:

Perencanaan

Proses

Phase 4:

Perencanaan

Produksi

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Identify customer wants

Identify how the good/service will satisfy customer wants

Relate customer wants to product hows

Identify relationships between the firms hows

Develop importance ratings

Evaluate competing products

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Benefits Safe and environmentally sound products

Minimum raw material and energy waste

Product differentiation

Environmental liability reduction

Cost-effective compliance with environmental

regulations

Recognition as good corporate citizen

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Benefits:

reduced complexity of products

additional standardization of products

improved functional aspects of product improved job design and job safety

improved maintainability of the product

robust design

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Design for Manufacturing (DFM)

Terms in Value Analysis:

Objectives

Basic Function

Secondary Function

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Achieve equivalent or better performance at a lower cost while

maintaining all functional requirements defined by the customer

Does the item have any design features that are not necessary?

Can two or more parts be combined into one?

How can we cut down the weight?

Are there non-standard parts that can be eliminated?

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(c) Final design

Design for push-and-snap

assembly

(b) Revised design

One-piece base &

elimination of fasteners

(a) The original design

Assembly using

common fasteners

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Allow greater variety

Develop a series of basic product components (modules) for

later assembly

Reduces complexity and costs associated with large number of

product variations

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Methodology for product development

Positioning of innovation of product

Compliance to product development standard

Linking strategies to suppliers and consumers

Environmental consideration

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3 -Innovation-Transformation.pdf

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