Technology and Operations

wildlifeplaincityΔιαχείριση

6 Νοε 2013 (πριν από 3 χρόνια και 9 μήνες)

60 εμφανίσεις

Technology and Operations

Henry C. Co

Technology and Operations Management,

California Polytechnic and State University

Invention, Innovation, and
Diffusion

Latin
Innovare



to make
something new

Industrial innovation includes the technical
design, manufacturing, management and
commercial activities involved in the
marketing
of a
new (or improved) product.



Chris Freeman, The Economics of Industrial Innovation

Innovation is the specific tool of entrepreneurs,
the means by which they exploit change as an
opportunity for a different business or service




Peter
Drucker
, Innovation and Entrepreneurship

Companies achieve competitive advantage
through acts of
innovation





Michael Porter, The Competitive Advantage of Nations


Invention and Innovation


Idea Generation + Problem
-
Solving


Invention.


Invention + Implementation


Innovation.


12
-
20% of inventions results in successful innovation.


Innovation + Diffusion


Economic Value.

5

Question


Who
invented the vacuum
cleaner
?

Click on picture to learn about the history of the vacuum cleaner.

Answer


J. Murray Spengler

invented
the vacuum cleaner originally
called an ‘electric suction
sweeper.’


It was
W. H. Hoover

who had a
good idea of how to market and
sell the product.

7





Click on picture to read more about Hoover.

Question


Who invented the sewing
machine?

Click on picture to find out the answer.

Answer

9





Elias Howe produced the world’s first
sewing machine.

Isaac Singer

stole the patent and
built a successful business from it
(Singer later was forced to pay Howe a
royalty on all machines made).

Q. Who invented the telegraph?

Answer



Samuel Morse only invented
the telegraph code, all the other
inventions came from others.


Morse combined marketing and
political skills to secure state
funding for development work,
and to spread the concept of
communication over vast
distances on the continent of
America.


11

Commercialization and Diffusion


Invention to Innovation (commercialization)



Innovation to wide
-
spread use (diffusion)

12

Innovation vs. Invention


Vacuum Cleaner


Inventor


J Murray Spengler


Marketer


W H Hoover


Sewing Machine


Inventor


Elias Howe


Marketer


Isaac Singer



Windows


Inventor


Xerox


Marketer


Apple


MS
-
DOS


Inventor


Tim Paterson


Marketer


Bill Gates


13

Invention is only the first step in a long process in bringing a
good idea to widespread and effective use.

Diffusion of Technology

When was the Internet invented?

When was fax
-
machine technology
invented?

When was the Internet invented?

ARPAnet, the predecessor to the modern Internet was
developed in 1969 by DOD.












26 computers hooked up to the ARPANET by 1971;
around 1,000 computers by 1984.

Now a large, growing, connection of over 10,000
networks and 30+ million users in over 60 countries.

NUA Survey: As of February 2002, 544.2 million on
-
line.

15

When was
fax

technology invented?

What was the purpose of the fax machine?

Why did it take so long for the fax machine to diffuse?

Why has the fax machine been so successful lately?


16

What are some characteristics that help
explain success and failure of innovations?

1.
Perceived Attributes

2.
Relative advantage

3.
Compatibility

4.
Complexity

5.
Trialability


6.
Observability


Very slow


Hand operated telegraph
and telephone system


Missing network or critical
mass.


Faster and cheaper to fax
than to mail a letter
(especially overnight).


More reliable to fax than to
mail.


Clearer message than phone
call


Leaves paper trail.


More convenient than phone
call given different time
zones.


Beginning

Later ...

Relative Advantage

18


Stand alone invention in
systemic technology


Compatible with
telegraphs (cumbersome)


Telegraphs not as widely
spread as phones later.


Compatible with copiers


Compatible with phones


Compatible with
scanners.


Beginning

Later ...

Compatibility

19


Assistance needed


Transmission by
telegraph or radio
-
wave.


As easy to use as the
phone


As easy to use as a
photocopier.


Beginning

Later ...

Complexity

20


Very expensive to adopt


User has to be convinced
of adopting the fax
machine before investing
so much money


No critical mass to try out
using the fax machine.


Rent, try, buy


Special trial offers
(supported by phone
companies)


Gifts to certain groups
(schools, universities).


Beginning

Later ...

Trialability

21


Hardly anybody used it,
no observation possible.


Early adopters spread the
use


Students learn about it in
schools


Everybody has it
(business cards).


Beginning

Later ...

Observability

22

Communication Channels


Mass media


Beginning: no


Later: yes


From expensive office equipment to personal home use
equipment marketed everywhere.


Face
-
to
-
face contact: yes.


Networks: Business people (what’s your fax number?).

23

Major Stages in the Innovation
Process


Invention (
Creation of Knowledge
)
: Acquisition of new knowledge


Innovation (
Transformation of Knowledge
)
: Application of new knowledge


Diffusion (
Utilization of Knowledge
)
: Acceptance and adoption of new
knowledge

Three Major Stages of the
Innovations Process

25

Life
-
Cycle Phases of the
Technological Innovation Process

26

Patterns of Innovation


Technological performance often follows an S
-
shaped curve

Performance

Effort

(funds)

Physical limit of technology

Foster,
Innovation: The Attackers Advantage,
Summit Books, 1986

Performance

Effort (funds)

Physical limit of technology

Foster,
Innovation: The Attackers Advantage,
Summit Books, 1986

Successive Tech Innovations

Product v. Process Innovation

The
Model T


For 4 years, Ford developed, produced, and sold
five different engines (2
-
6 cylinders) in a factory of
trade craftsmen working with GP machines.


Out of this experience came a dominant design,
the Model T.


Within 15 years, 2 million engines of this single
design were produced each year in a mass
-
production facility. During that period, there were
incremental (no fundamental) innovation in
product.

29

Product v. Process Innovation


The fluid
-
pattern stage


During the early stages of the product’s life cycle, the level of prototype
innovation is high. This is because firms modify, change, and update the
product in an effort to establish a dominant design.


The transitional
-
pattern stage


Once a dominant design is established, emphasis shifts to process
innovations in order to provide the capability to mass
-
produce the product.
This typically requires a shift from GP to specialized equipment. During this
period, the level of product innovation falls dramatically.


The specific
-
pattern stage


At this stage, incremental process innovations further specialize the
production process to reduce cost, enhance quality, and make further
improvements. This leaves firms with a rigid process and an aging product
(highly inflexible, difficult to adapt to environmental changes).

30

Innovation and Development

31

Windows of Opportunity

Life
Span of the Computer


First generations (1950s) of IBM computers had a
useful market life of more than a decade.


IBM 360 (mid 1960s), IBM maintained its dominant
market position until the arrival of minicomputers.
Then companies like Digital, Data General, etc.,
started challenging IBM from the low end of the
business.


Useful market life of computers shrank from 10
years to 8 years, then only 5 years, then 3, and 2.


Desktop PCs and laptops: useful market life
dropped to less than a year.

32

The Classic Product Cash Flow


Window of opportunity: the period in which the new product faces
no or low 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.




33

The High
-
Tech Product Cash Flow

Project
A, which was introduced before the competition came up with an
equivalent or better product, has been able to generate a positive cumulative
cash flow, 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 flow.

34

Case Studies


The Case of the PowerPC


Somerset, a joint venture by IBM, Apple, and Motorola in 1991 to
develop the PowerPC.


“Time May Have Passed the PowerPC” (Business Week, 4, March
1996), Ira Sager wrote:


As it is, Somerset hasn’t even come close to its goal of posing a serious
challenge to Intel Corp.’s dominance in microprocessors … Somerset fell
behind schedule on more powerful versions of the PowerPC chip …
“Three years ago, they had it in their hands,” says Jon Rubinstein,
president of Firepower Systems Inc., one of the few companies outside
the Somerset trio to use the PowerPC … But technical difficulties, internal
bickering, and management upheavals delayed successor chips by 18
months. Says Sun CEO Scott G. McNealy: “The PowerPC is on really
shaky ground.”


The case of the vanishing need


“Stacker” to double the hard disk space.

35


Market needs create new
product opportunities
which in turn stimulate
R&D to determine if a
solution is possible


Market Need


Marketing


R&D


Production


Problem: Find new
technology to fit need!


New discovery triggering
a sequence of events


R&D


Production


Marketing


Market
Need


Some innovations may
have no market
potential.


Problem: Find or create
a market!



Market Pull

Technology Push

Market Pull v. Technology Push

36










The slope of technological trajectory is steeper than the slope of the
trajectories of customer need.


Disruptive Technology that under
-
performs what key customer
demand today may improve to squarely address what those same
customers demand tomorrow.

Disruptive v. Sustaining Technology

37


Hard technology refers to
equipment and devices
that perform a variety of
tasks in the creation and
delivery of goods and
services.



Soft technology is the
application of the Internet,
computer software, and
information systems to
provide data, information,
and analysis and to facilitate
the accomplishment of
creating and delivering
goods and services.


Hard technology

Soft technology

Hard
and Soft Technology

Integrated Operating System (IOS)



Integrate
hard and soft technology across the
organization, allowing managers to make better decisions
and share information across the value chain.


Computer integrated manufacturing systems (CIMS),
enterprise resource planning (ERP) systems, and
customer relationship management (CRM) systems are
IOSs.

Computer
-
Integrated Manufacturing
Systems



Computer
-
integrated
manufacturing systems (CIMS)
represent the union of hardware, software, database
management, and communications to automate and
control production activities.


A robot is a programmable machine designed to handle
materials or tools in the performance of a variety of tasks.


CIMS



CAD/CAE
enables engineers to design, analyze, test,
simulate, and “manufacture” products before they
physically exist.


CAM involves computer control of the manufacturing
process.


Flexible manufacturing systems (FMS) consist of two or
more computer
-
controlled machines linked by automated
handling devices.


Enterprise Resource Planning



Enterprise
Resource Planning (ERP) systems integrate
all aspects of a business

accounting, customer
relationship management, supply chain management,
manufacturing, sales, human resources

into a unified
information system and provide more timely analysis and
reporting of sales, customer, inventory, manufacturing,
human resource, and accounting data.


Enterprise Resource Planning
(ERP)



Two
prominent vendors of ERP software are SAP and
Oracle.


ERP allows departments to share information and
communicate with each other easily.


ERP is not about software, but about changing the way
the organization and its operations are managed.


Customer Relationship
Management Systems



Customer
relationship management (CRM) is a business
strategy designed to learn more about customers’ wants,
needs, and behaviors in order to build customer
relationships and loyalty, and ultimately enhance
revenues and profits.


What is e
-
Business?

If you were asked to define business using
a single word, what would it be?

What is e
-
Business?


Application of electronic network technology to relevant
business processes.


Replacement of paper
-
based, human
-
agent based or
telephone
-
based personal transaction.

46

E
-
business is not e
-
commerce


E
-
commerce involves exchanges among customers,
business partners and the vendor. For example, a
supplier interacts with a manufacturer, customer interacts
with sales representatives and shipment providers
interact with distributors.


E
-
Business includes


External
-
oriented processes (e
-
commerce)


Internal processes like production, inventory
management, product development, risk management,
finance, strategy development, knowledge
management and human resources.


47

Andrew
Bartel
, vice president and research leader of e
-
commerce trends

Giga Information Group, Inc.

Andrew Bartel, vice president and research leader of e
-
commerce trends

Giga Information Group, Inc.

EC1: Enterprise Management

Product Development

Logistics and Supply-Chain
Support

Human Resource Mgmt.

Training and Conferencing

Manufacturing Mgmt.

Accounting

Financial Planning
EC5: Linking with Suppliers

Product
Sourcing

Product Information Collection

Purchase Process Mgmt.

Supplier Mgmt.

Account Payable Mgmt.
EC4: Linking with Distributors
/Retailers

Market Response

Inventory Replenishment

Product Information
Distribution

Order Fulfillment

Account Receivable Mgmt.

Parts Services and Contract
Mgmt.
EC3: Interface
with
Consumers

Web Marketing

E Shopping

Information &On-Line Services

Entertainment on Demand

Trading in E Markets

Customer Services & Sales
Mgmt.

Market Intelligence, Consumer
Information Gathering

Security

Digital Payment

E. Banking

Legal Issues

E. Market Formation

Human/Computer Interface

National/Global Information
Infrastructure
EC2: Global EC Infrastructure

Source: E
-
Commerce:
State of the Art (Shaw)

Enterprise
Intranet
Electronic
Storefront
Information
Dissemination
Customer
Services
Business
Intelligence
Internet
Extranet
Logistics
Provider
Distributors
Suppliers
Financial
Srvices

Knowledge
Management

Internal
Communication

Project
Management

Source: E
-
Commerce: State of the Art (Shaw)

Technology in Value
Chains


Four
major types of business relationships:


B2B: Business to Business


B2C: Business to Customer


C2C: Customer to Customer


G2C: Government to Customer


Electronic transaction capability allows all parts of the
value chain to immediately know and react to changes in
demand and supply.


e
-
Business Changes …


Information flows


Internal and external processes


Relationships


Power

BUT, it does not change need for …


Quality products


Excellent service


Cost effective delivery


Valued relationship

e
-
Business

52