Slide 4.
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
Operations Management
Operations Management is about the control of a conversion process
from an input to an output.
Table 4.1
Operations inputs and outputs
Trott, Innovation Management and New Product Development , 5th Edition, Pearson Education Limited 2013
Slide 4.4
Operations Functions
- 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.
- 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
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 Example of design
simplification in assembly part
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
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.
Figure 4.3
The design of processes
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
Total Quality Management (TQM)
(Cont.)
(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
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.
Figure 4.5
The EFQM excellence model
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 4.18
Operation & Technology
- The most significant technology advance that has impacted on operations has
been the application of computers.
- Example: electronic data interchange (EDI)
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)
- The impact of the internet is present in all business areas such as industries and
services (e.g., education and distance learning).
- 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., paperless cheques (e-checks) between the companies.
- It can provide in USA a saving benefits with $ 2-3 billion/year.
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
Trott, Innovation Management and New Product Development , 5th Edition, Pearson Education Limited 2013
