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Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.1
Chapter 4
Innovation and operations management
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.2
Learning objectives
Recognise the importance of innovation in operations management
Recognise the importance of design in the process of making and delivering a product or service
Appreciate that the nature of design is context dependent
Recognise that much innovation is not patentable
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.3
Table 4.1 Operations inputs and outputs
Operations Management
Operations Management is about the control of a conversion process
from an input to an output.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.4
- Operation functions include the elements of design, planning and control
and improvements.
- To complete this process of operation it needs to added three important
dimensions: Customers (as a part for this process), information from
customers (complaints, market research) and the physical and business
environment.
Operations Functions
- The quality of design and management within operations is thus seen as
an essential part of innovation management
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.5
Figure 4.1 The operations managers role Source: Adapted from Operations Management, 4th edn (Slack, N. et al., 2004), Pearson Education Limited.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.6
The nature of design and innovation in the context of operations
Design requirements
- The objective of design is to meet the needs and expectations of customers.
Therefore, good design starts and ends with the customer.
- Working with marketing, the product and service designer a specification for the
product and service.
- There are three important aspects needed to identify the specifications process:
1- a concept the expected benefits the customer is buying. 2- a package of component product- that provides those benefits in the
concept.
3- the process- is the relationship between the component product and service
by which the design fulfils its concept
Example: Fast-food restaurant (McDonalds)
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.7
Figure 4.2 Example of design
simplification in assembly part
The nature of design and innovation in the context of operations (Cont.)
Design Simplification
- If the product is simple to make and manufacture. Therefore:
1- the required quality management procedures will be less complex.
2- Easy to understand the process of production and operations.
- As a results of simplification: it will be a fewer rejects during the manufacturing
process and less chance that a substandard product reaches the customer.
Figure 4.2 Design simplification
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.8
Blood glucose monitor (old) Blood glucose monitor (improved)
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.9
Figure 4.7 Innovation as an operations process itself
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.10
Table 4.4 Innovation measures
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.11
Figure 4.3 The design of processes
Process Design and Innovation
- The important of innovation within process design is related to:
1- The design of the layout of the facility that providing goods or services.
2- Encourage the employee to make an innovation in the process design.
3- The important of technology in process design (e.g. use the conveyor to transfer
the materials between workstations in a factory).
- The below figure illustrates the relationship between elements of process design
in both sectors manufacturing and service.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.12
Process Design and Innovation (Cont.)
- In the service sector the process design parameters of minimizing the flow of
information . For example:
- Customers may be made part of the process as in carrying their own luggage
at airport
- The clear signs and directions
- Easy to understand routes through the operation
- Understandable forms and
- Approachable staff
- All of the above mentioned points are an good example of well-designed
service system.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.13
Innovation in the management of the operations process
Quality circles and process improvement teams:
- A quality circle (QC) is a small group of voluntary workers who meet regularly to
discuss problems and determine possible solutions.
- Members of the quality circles are giving training in quality controls and evaluation
techniques.
- An idea coming from a member of QC is far likely to be adopted than the idea
imposed from above.
- Quality circles can be a rich source of innovation solutions to problems and
cost saving and patent applications may follow.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.14
Innovation in the management of the operations process
Total Quality Management (TQM):
- An effective system for integrating the quality development, quality maintenance
and quality improvement efforts of a various groups in an organization so to
enable production and service at the most economical levels which allows for full
customer satisfaction.
- TQM philosophy stresses the following points:
1- Meeting the needs & expectations of the customers.
2- covering all the parts of the organization
3- everyone in the organization is included
4- investigating all costs related to quality
5- developing systems & procedures with support quality improvements.
6- developing a continuous process of improvements.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.15
Innovation in the management of the operations process (Cont.)
Total Quality Management (TQM) (Cont.):
- TQM with its continuous improvement, employee involvement and process
ownership has shown itself to be an effective policy in managing organization .
- The process ownership very important factor in TQM.
Quality function deployment (QFD) :
- Is a structured approach to this problem that relates the voice of the customer to
every stage of the design and delivering process. It is focusing on:
- Promotes better understanding of customer demanding
- Understanding of design interactions
- Focuses the design effort
- Involves operations in the process at earliest possible moment
ISO 9000 approach & standard
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.16
Example of Innovation
(Airbump side protector in Citroen 4 car)
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.17
Figure 4.5 The EFQM excellence model Source: Adapted from Operations Management, 4th edn (Slack, N. et al., 2004), Pearson Education Limited.
European Foundation for Quality Management (EFQM) Excellence Model:
- It focuses on the:
The managing & controlling the input/output transformation process by the
enablers in order to achieve the key performance results as showed in below
figure.
- EFQM Excellence model also embeds innovation & learning in the performance
of the organization.
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.18
- The most significant technology advance that has impacted on operations has
been the application of computers.
- Example: electronic data interchange (EDI)
Operation & Technology
Just-in-time (JIT) technique
- The first phase in computer applications is electronic commerce (E-commerce).
- The second phase in computer applications is the Web; it was the very rapid
publication of product information on the Web (Example: web pages of company
such as General Motors Corporation) .
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.19
Operation & Technology (Cont.)
- The final phase in computer applications is auctions where companies publish
their requirements on the Internet. (Example, E-bay- internet auction house)
- A common feature of global business forecasts is that the business-to-business
e-commerce (B2B).
- It is predicted that the B2B will be substantially larger than Business to
consumer E-commerce (B2C).
- B2B e-commerce substantial saving purchase & admiration costs (e.g., paper-
less cheques (e-checks) between the companies.
- It can provide in USA a saving benefits with $ 2-3 billion/year.
- The impact of the internet is present in all business areas such as industries and
services (e.g., education and distance learning).
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.20
Conclusion
- The quality of design and management within operations is thus seen as an
essential part of innovation management
- Equally effective research and development (R&D) requires close links with the
production operations.
- Understanding the basics of good design, perhaps by keeping things simple and looking at your products and services as your customers receive them, will help
deliver a continual stream of new product and service improvements
- Many new product ideas are based on existing products and may be developed
from within the production or service operations function
Trott, Innovation Management and New Product Development, 5th Edition, Pearson Education Limited 2013
Slide 4.21
Case Study