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