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Natures of Technology, Innovation and Management, Mgmt of Technological Innovation, Patri
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The Natures of Technology, Innovation and Management
Natures of Technology, Innovation and Management, Mgmt of Technological Innovation, Patri
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What is Management• Management is getting work done through
others.
• Management is a set of activities (including planning and decision making, organizing, leading, and controlling (directed at an organization’s resources (human, financial, physical, and information), with the aim of achieving organization’s goals in an efficient and effective manner.
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Organize
Control Motivate
Goals attained- efficiently--effectively
Input from theenvironment:- Human resources- Financial resources- Physical resources- Information resources
Management
Plan
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A Manager needs to determine
• WHAT needs to be done.
• HOW should it be done.
• WHERE should it be done.
• WHO should do it.
• WHEN should it be done.
A thinking manager asks the question WHY at each stage.
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ImproveProduct
Improvepackaging
Lengthenshelf life
Improveproductquality
Use PTFEpackaging
Use high barrier laminate
Multi-layerpackaging
Use purerraw materials
Lessadditives
High barrierlaminate
packaging
Purerraw material
Fasterdeliveries
How?How?
How?
How, HowDiagram
+
++
+
++
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Productsales
disappointing
Poorproduct
Tooexpensive
Badlypromoted
Poorquality
Poorpackaging
Poordesign
Poorimage
Lowawareness
Unproductiveprocess
Expensiveraw ma’tl
Badlytrained labor
WHY?WHY?
WHY?
Why, WhyDiagram
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Management
Strategic
Level of Management
Operational
DoingThinking
Proportion of ‘thinking’ and ‘doing’at various organizational levels
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The Power of ‘Why?’• Having watched her father snap a photograph, Dr.
Edward Land’s 3-year old daughter if she could see the results right now. Land wondered why not and, after a lot of perspiration, produced instant photography (Polaroid).
• In the 1970s, Apple asked why we couldn’t have a “computer for every man, woman and child” in the world. The result was the Apple II, the first truly mass-market computer, introduced in 1977, I.e., 4 years before IBM PC.
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• A few years later, Apple asked: “If computers are so smart, why don’t we teach them about people instead of the other way around?” The result was Mackintoshand the common computer user never had to look at C> again.
• Visit the case study on Swatch.• When why write with a ball-point pen on a paper,
we store information on the paper. Why can’t we store the information in the pen itself? Such a line of questioning could lead to the information storing-pen designs being developed by Anito and others.
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CompetitionBank of America, Boeing, Citicorp, Daimler-Benz,
Dayton-Hudson, DEC, DuPont, IBM, Pan Am, Philips, Salomon Brothers, Sears, Texas Instruments, TWA, Westinghouse, and Xerox had begun the 1980s as industry leaders. Yet, by the end of the decade, their leadership was substantially diminished owing to tides of technological, demographic and regulatory changes as well as the fact that many nontraditional competitors could come up with order-of-magnitude gains in productivity and quality.
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A quote from Finniston Report, UK, 1980
“The strengths of the advanced countries lie in inventing and exploiting new products and processes, incorporating high levels of human skill and knowledge, most of it at the leading edge of technology, and in continual incremental improvements to current products and processes through reducing production [and service] costs.”
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A quote from the second report (1999) of HKSAR Chief Executive’s Commission on
Innovation and Technology “There is strong competition [to HKSAR] from
neighboring economies for Hong Kong’s regional role in trade, finance, transportation and communications. With respect to manufacturing, Hong Kong must strive to support and further develop high-value activities. Hong Kong is also facing stiff competition from low-cost economies. A fundamental challenge is how Hong Kong should position itself in the knowledge-based, global economy of the 21st century.”
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Current slogans in HK
• Move up-market.
• Move to higher value-added products.
• Change from OEM to ODM.
• Manufacturing and business are becoming global.
• HK must become the regional “control tower”.
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Market Leaders in 1996 [Trott 98]
• Aerospace: Boeing: Passenger aircraft
• Pharmaceuticals: Glaxo-Wellcome: Ulcer treatment drug
• Motor Cars: Mercedes, Ford: new car features
• Computers: Intel, IBM, Microsoft: hardware and software improvements respectively
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19th Century Technological Innovations [Trott 98]
• Steam Engine: James Watt: 1770-1780• Iron Boat: Isambard Kingdom Brunel: 1820-45• Locomotive: George Stephenson: 1829• Electromagnetic Induction Dynamo: Michael
Faraday: 1830-40• Electric Light Bulb: Thomas Edison and Joseph
Swan: 1879-90
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More Recent Technological Innovations [Trott 98]
• Polythene: ICI: 1930s
• Ballpoint Pen: Reynolds International Pan Company: 1945
• Float Glass Manufacturing Process: Pilkington: 1950s
• Zantac (Ulcer Treatment Drug): Glaxo: 1970s/80s
• Photocopying: Xerox: 1970s/80s
• Personal Computer: Apple Computer: 1980s
• Windows 95 Computer Operating System: Microsoft, 1980s/90s
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Some Classic Brand Names (in USA)
BudweiserIvoryCoca-ColaMaxwell HouseKodakGeneral ElectricSteinwayTitleistBellWrigleyKleenex
I.L. BeanFordFruit of the LoomJohn DeereMaytagGrape NutsLiptonJCPenneyBrooks Bros.Standard OilJeep
SearsColgateHersheyGoodrichGilletteTiconderogaWaterfordSchwinn
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Some Breakthrough Innovations that Changed Our Lives
1. Personal computer2. Microwave oven3. Photocopier4. Pocket calculator5. Fax machine6. Birth control pill7. Home VCR8. Comm. satellite9. Bar coding10. Integrated circuit
11. Automatic teller12. Answering machine13. Velcro fastener14. Touch-tone telephone15. Laser surgery16. Apollo Lunar spacecraft17. Computer disk-drive18. Organ transplanting19. Fiber-optic systems20. Disposable diaper
21. MS-DOS22. MRI23. Gene-splicing tech.24. Microsurgery25. Camcorder26. Space shuttle27. Home smoke alarm28. CAT scan29. LCD30. CAD/CAMl
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Some Exciting Recent Winners (USA)
Apple’s MateCrunchy cerealsJohn Grisham’s latestGillette’s MACH3Lego’s MindstormsThe web siteStar Wars Episode 1TitanicCisco SystemsAmazon.comBeanie BabiesGreat Harvest Bread
Sony’s Crash BandicootNetPlayDilbertWindows 98Plymouth SpiderClipfone 6300Kodak digital cameraAudible mobile playerVW’s new BeetleSenso CIC hearing aidDirect TVSki blades
Turbo Tax softwareKimberly-Clark breathable diaperGM’s EV2John Deere’s GatorGiant shreddersVans shoesElectronic tagsLincoln minivan
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Which of the following, in your opinion, is the “Finest Invention of the Last
Century”?1. Mobile Phone
2. Electrical Fridge
3. Silicon Chip
4. Television
5. Aircraft
6. Satellite
7. Rocket
8. Air-conditioner
9. Computer
10. Fiber-Optics
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"Finest Invention of the Last Century": Survey Conducted in Oct.-Dec.1999 by the Intellectually Property Department
and HK Inventors Asssociation
050010001500200025003000
Num
ber o
f vot
es
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Technology Beyond 2001• Arthur C. Clarke is a highly reputed science fiction
writer. The film, 2001 Space Odyssey, was based on his book.
• Some of his past predictions have been accurate: He identified the geocentric ‘Clarke Orbit’ for placing satellites. That’s exactly where several satellites are placed today.
• Some of hi predictions were somewhat off the mark. He had predicted manned mission to the moon in 1978. Neil Armstrong stepped on the moon in 1969.
• Here are some of his predictions for the next 99 years.
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2002 “The first commercial device producing clean, safe power by low-temperature nuclear reactions foes on the market, heralding the end of the Fossil Fuel Age.”
2003 “The motor industry is give five years to replace all fuel-burning engines with the new energy device.”
2004 “First (publicly admitted) human clone.”
2006 “Last coal mine closed.”
2009 “The first quantum generators (tapping space energy) are developed. Available in portable and household units… can produce electricity indefinitely.
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2009 “Electronic monitoring virtually phases out professional criminals.”
2012 “Aerospace planes enter commercial service.”
2015 “An inevitable by-product of the quantum generator is complete control of matter at the atomic level. Within a few years, because they are more useful, lead and copper will cost twice as much as gold.”
2016 “Existing currencies are abolished. The mega-watt-hour becomes the universal unit of exchange.”
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2020 “Artificial intelligence reaches human level. From now on there are two intelligent species on Earth.”
2021 “The first humans land on Mars.”
2025 “ Neurological research finally leads to an understanding of all the senses, and direct input becomes possible, bypassing ears, eyes, skin, etc. The result is the metal Braincap. Anyone wearing this close-fitting helmet can enter a whole new universe of experience, real or imaginary.” The Braincap is a boon to doctors, who can experience their patients’ symptoms (suitably attenuated).
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Braincap “also revolutionises the legal profession, as deliberate lying is now impossible.”
2040 “The Universal Replicator, based on nanotechnology, is perfected: any object, however complex, can be created given the necessary raw materials. Diamonds or gourmet meals can, literally, be made from dirt.
As a result, agriculture and industry are phased out along with work. There is an explosion in the arts, entertainment and education. Hunter-gather societies are deliberately recreated, with huge areas of the planet allowed to revert to their natural state.
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2045 “The totally self-contained mobile home … is perfected. Any additional carbon needed for food synthesis is obtained by extracting carbon dioxide from the atmosphere.”
2050 “Bored in this era, millions decide to use cryonic suspension to emigrate into the future in search of adventure.”
2090 “Burning of fossil fuels is resumed to replace carbon dioxide ‘mined’ from the air to try to postpone the next Ice Age by promoting flobal warming.”
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2095 “The development of a Space Drive a propulsion system reacting against the structure of space-time makes the rocket obsolete and permits velocities close to that of light. Human explorers set off to nearby star systems.”
2100 “History begins …”
[Arthur C. Clarke, “Beyond 2001,” Reader’s Digest, Reader’s Digest Association Far East Ltd., pp. 100-104, February 2001]
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0%
20%
40%
60%
80%
100%
Transistor Radios 10%
1955 1960 1965 1970 1975 1980
Black & White TVs 20%
Color TVs 45%
Calculators & StereoComponents 60%
Citizen’sbrandradios 80%
VTRs 90%How increasing original technologyaffected Japan’s Market Share
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Definition of Technology
Technology can be defined as the assembly of hardware and software means and tools used by human beings to achieve socioeconomic goals.
• From the dawn of civilization, man has used technology. The plow, the wheel, and the chariot are just a few ancient examples.
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• Use of technology is one important discriminator between mankind and other animals. Man is tool-using animal.
• Technology refers to the ways in which people use discoveries to satisfy needs and desires and to alter environment to improve lives.
• Technology involves the use of tools, machines, techniques, and sources of power to make work easier and more productive. Hence understanding technology is a part of IE.
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Science and Technology
“Science is the discovery and understanding of nature [Betz 98].
Many modern technologies such as nuclear power and space flight depend upon science and the applications of scientific knowledge and principles. Each advance in pure science creates new opportunities for the development of new designs and ways of making things to be used in daily life. Technology provides science with new and more accurate instruments for investigations and research.
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It was not until the 19th century that technology truly was based on science and inventors began to build on the works of scientists.
Thomas Edison built on the early experiments of Faraday and Henry in the invention of the first practical system of electric lighting. Edison carried on his invention until he found the carbon filament or the electric light bulb in a research laboratory he started in Menlo Park, New Jersey. This was the first true modern technological research.
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Technological Innovation
“Technological innovation is the invention of new technology and the development and introduction into the marketplace of products, processes, or services based on the new technology [Betz 98]”
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High Technology or High TechScientific technology involving the
production or use of advanced or sophisticated devices and techniques.
• Till recently hi-tec was identified with the fields of electronics and computers.
• Today it encompasses biotechnology, aerospace, communications, software, etc.
• Fastest growing segment of industry today.
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August 9, 1995, is a date investors are not likely to forget. That is the day Netscape Communications Corporation, a maker of Internet software, went public. Netscape’s stock, offered at U$28 a share, soared to nearly US$75 before ending its first trading day at a less stratospheric US$58, making multimillionaires of its founders and insiders.
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Products with high-technology embedded in them may be said to be technological products. They are a part of “an emerging industrial value-adding structure that supplies functionality around a new basic technology system [Betz 98].” Currently, the computer represents the new basic technology sweeping the industrial world. Many modern products use embedded computers (computer-on-a-chip) to provide functionalities hitherto attained exclusively by mechanical means. One may also exploit the ability of a computer to be programmed at will to add new functionalities. For instance, we can create ‘smart’ products by programming the computer on the basis of fuzzy logic, or by making the computer behave like an artificial neural net. Thus computer technology offers an opportunity for endless product innovation. [P.K. Venuvinod and Hongyi Sun ,
Technological Product Innovation:An Educational Perspective from Hong Kong]
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Impact of Technology on Society
Science can alter the following aspects of society:
• Power structure
• Means of production
• Organization
• Distribution of wealth
• Means of communications [Betz 98]
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Technologies for Manufacturing IndustriesTechnologies for• a product to be manufactured• production of parts• products distribution• product maintenance and repair• assisting customer’s applications of the products• communicating and conducting transactions with
customers and suppliers.• Controlling the activities of the manufacturing firm
[Betz 98]
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Technologies for service industries
Technologies for
• devices used in service delivery
• supply and maintenance of devices and used in service delivery
• service delivery
• service development
• assisting the customer’s applications of services
• communicating and conducting the firm’s activities
• controlling the firm’s activities
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Invention“Invention is the creation of a functional way to do
something, an idea for a new technology [Betz 98].”
Invention denotes the first combination of ideas around a concept; the concept may be one articulated by market research, triggered by competitor action or emerging from R&D work in-house, or externally. The key point is that it is here that the innovation moves from a collection of ideas, conscious or unconscious, to some physical reality. Much depends on this stage on the nature of the new concept.
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Basic Idea
Invention
Innovation
Re-Innovation
Is it scientifically and technically feasible?
Can it be made better or cheaper or both?
Can it be built Commercially?
Design fordemonstration
Design for
marketable
production
Re-design
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• Invention is only the first step in a long process of bringing a good idea to widespread and effective use. Invention is merely the process of discovering a principle. Design is the process of applying that principle.
• Innovation is more than simply coming up with good ideas; it is the process of growing them into practical use.
• The inventor discovers a class of system and the designer prescribes a particular embodiment of it.
• Engineering design is the use of scientific principles, technical information and imagination in the definition of a mechanical structure, machine or system to perform pre-defined functions with maximum economy and efficiency.
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Annual
Sales
Time
Inve
ntio
n
Research Develop-ment
Market
Growth
ProductMaturity
MarketDecline
Generationof
Demand
Effects ofcompetition,Limitations of market
size
Advent of new products, tastes and trends
Typical Product Life Cycle
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200019801960
Dem
and
for
aero
-en
gine
s
19401920
High bypassratioturbo-fans
Low bypassratioturbo-fans
Turbo-jets
Tubo-
propsPistonengines
Product Life Cycles for the Principal Types of Aero-Engine
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Product Responses to Opportunities in the Food Industry
Opportunities created by technology
Opportunities created by consumer demand
Product Response
Home freezer(quality andconvenience
Microwave oven(convenience)
Instant foods and drinks
Freeze packs
Ready-preparedmeals
Exotic dishesSpecial
dietary dishes
Quality
Convenience V
arie
ty
Hea
lth
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The process of technological innovationManufacturin
gEngineering
Research &Development
New productMarketing
Basic research andinvention
C o n ce p t d e s ig n
Prototype development and testing
Final product or design engineering Test marketingTooling andindustrial
engineering
Manufactutringstart-up
Marketingstart-up
Production, marketing and sales
After-sales service and trouble shooting
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Discovery
Innovation
Needs
Demands
ExploitationProduct
DevelopmentProduct
Development
New
Environment
leads to
leads to
The Role of Cyclic Innovation
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Corporate/General Management
TestMarket
FutureMarket
Research
ProductMarket
Definition
NewProduct
Development
Mar
ket s
Kno
wle
dge
Operations ManagementInnovation Management
CurrentMarketingOperations
NewProductLaunch
CurrentProductionOperations
ResearchDevelopment
&Testing
Pilot/Prototype
Production
FullProduction
Tec
hnol
ogic
alK
now
ledg
e
Innovation and Operations Management
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Some definitions of ‘innovation’
• In Latin, innovare means ‘to make something new’.
• Innovation is ‘successful exploitation of new ideas’. [K DTI, 1994]
• Innovation is the point of first commercial application or production of a new process, product, or service.
• “Technological innovation is the transformation of an idea into a new or improved saleable product or operational process in industry or commerce …” [OECD, 1981]
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Innovation
• “Innovation is introducing a new or improved product, process, or service into the marketplace [Betz 98].”
• “The managed effort of an organization to develop new products or services or new uses for existing products or services. [Griffin 96]”
• “Innovation is about new ways of delivering customer value. [ O’Hare 88]”
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New: New ways of solving existing problems and meeting market requirements, not optimizing the current set-up.
Delivery: Not just confined to products or services. Can apply to any part of the business system or value chain associated with delivering the product or service to a customer.
Customer: Truly successful innovation is always driven by a careful consideration of customers’ needs rather than internal constraints.
Value: Do not value always a higher performance product. Sometimes, customers may value lower performance--with greater simplicity/convenience/availability/affordability/..
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‘New’
Innovation requires identifying new ways of solving existing problems and meeting the market’s requirements, not optimizing the current set-up. There will always be ways to fine-tune the existing situation: careful attention to costs and operations can bring a product or service’s price down over time; continuous attention to market research and customers’ comments cab ensure its continued relevance as those customer needs evolve. These are necessary and must continue, but alone they are insufficient. Innovation calls for different ways of satisfying basic needs, not just doing existing tasks better. It requires lateral thinking. Existing moulds and patterns of behavior have to be broken and cast aside.
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‘Delivery’
Innovation need not relate only to the product or service itself—it can apply to any part of the business system or value chain associated with delivering the product or service to the customer. Toyota innovated in the manufacturing part of its value chain, with major beneficial effects for cost, product quality and model range. Federal Express innovated by competing on the basis of a completely new and different value chain.: it replaced the point-to-point approach of its competitors with a hub-and-spoke system. Innovation, therefore, can consist of changes to a particular link in the value chain, or to the creation of a fundamentally new value chain, bypassing the traditional approach.
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‘Customer’
All too often the search for innovation is internally driven—how can we perform this function better? How can we optimize this process? Unless it is related directly to customers’ needs, however, such internal optimization is worth little. Truly successful innovation is always driven by a careful consideration of customers’ needs rather than internal constraints. In many cases the innovation may even result in lower levels of efficiency, as measured by narrow internal measures. That need not matter, however, if the innovation meets customers’ real needs in a better way than the previously available solution.
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‘Value’
The search for innovation must be motivated by the will to offer the customer that which (s)he values more than her/his current product or service. Sometimes this means a higher performance product. Sometimes, however, it means lower performance—with greater simplicity, convenience, availability, affordability, etc. What it always means, however, is identifying unsatisfied needs—either among customers as a whole, or more frequently in some segment. There are often many different ways of creating new customer value within one industry.
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VALUE: Product Promotion
Product &Service Market &
Customers
BusinessValue
+ =
ProductionValue
PerceivedValue
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In the context of value analysis,Value = Worth/CostCost = Life cycle cost = First cost + Follow-on CostWorth = How to measure worth. Assess worth not absolutely but relatively.
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How is worth decided?
• Ultimately, worth is decided by the customer.
• We need to anticipate the ‘needs’ and ‘wants’ of the customer. (What is the difference between needs and wants?)
• Needs may be measured, but can wants be measured?
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• Industrial innovation includes the technical design, manufacturing , management and commercial activities involved in the marketing of a new (or improved) product or the first commercial use of a new (or improved) process or
equipment.• Innovation can be incremental.
• Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. [Peter Drucker, 1985]
• Companies achieve advantage through acts of innovation. They approach innovation in its broadest sense, including both technologies and new ways of doing things. [Porter ‘90]
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The difference between the apparently more successful companies and countries and those less so is not in the quantity of work performed, but rather the quality. Not in the volume of final output, but in the value added to basic raw materials. The value is determined by the innovativeness and quality of design and the innovative way it is made to meet customers’ requirements, than by other factors.
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Types of Innovation [Trott 98]
• Product Innovation:
“A change in the physical characteristics of a product or service or the creation of a new one. [Griffin 96]”:
e.g., a new design of car, a new insurance package and a new home entertainment system.
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• Process Innovation:
“A change in the way a product or service is manufactured, created or distributed. [Griffin 96]”, e.g., Pilkington’s float glass process.
• Organizational Innovation: e.g., a new venture division, internal communication system, or accounting procedure
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• Managerial Innovation:
“A change in the management process by which products and services are conceived, built, and delivered to customers. [Griffin 96]”, e.g., introduction of TQM, BPR, or SAP R3.
• Production Innovation: e.g., introduction of Quality Circles, JIT, a new production planning software (e.g., MRPII, a new inspection system, etc.)
• Commercial/Marketing Innovation: New financing arrangements, new sales approach, e.g., direct marketing
• Service Innovation: telephone financial services
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R&D
Production
Marketing Need?
TECHNOLOGY PUSH
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R&D
Production
Marketing
ExpressedMarket
Need
MARKET PULL
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T e c h n o l o g y
T e c h n o l o g y
I n n o v a t i o n
M a r k e t N e e dM a r k e t
P u l l
T e c h n o l o g yP u s h
I n n o v a t i v eP e o p l e &
O r g a n i z a t i o n
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Traditionally, it is said that innovation happens because of TECHNOLOGY PUSH or MARKET PULL.
These are two sides of the same coin.
In modern literature, innovation is said to be driven by COMPETITIVE FORCES.
Here you may visit the case study on• “Westinghouse’s Oxygen Analyzer” to appreciate
‘Technology Push”, and• “Westinghouse’s Elevator” to appreciate “Market
Pull”.
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The innovation chain equation Scientific invention
+ Engineering development
+ Entrepreneurship
+ Management
+ Recognized special need
+ Supportive Environment
= Commercially successful innovation
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Here, you may visit case studies titled • Toyota’s Production System• Mini-mills• Direct Line• Federal Express 1• Kwik-Fit• Integrated Steel Works• A Midland’s Motorcycle Dealer• A Distributor of Industrial Hoses• A Belgian Biotechnology Company
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With respect to each of the six case studies and answer:
1. What is the key innovation?
2. Is the innovation related to a product, process, or service?
3. What value has the innovation provided the customers?
4. Did the innovation involve development of one or more new technologies?
5. Was the innovation arrived at randomly?
Did it depend mainly on the creative genius of one individual in the company or on the creative culture nurtured by the company?
6. Does the case study suggest that innovation could be managed?
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Some common perceptions about innovation
• Innovation is driven by new technological developments. Technology is what makes innovation possible. Innovation and R&D lie side by side.
• Innovation relates directly to a new product or service. The process of innovation culminates in the launch on to the market of a new concept. Other types of innovations, such as in a manufacturing process or the distribution method are not important.
• The process of innovation is inherently random. It relies more than anything upon some creative spark of genius. The critical input is made by one person acting in isolation. Without a creative genius like this, there can be no innovation. Therefore, the whole process is difficult to manage. Either you have a genius or you don’t.
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Implications of these common perceptions
• Innovation is unimportant in industries which are low-tech and mature.
• Innovation is the responsibility primarily of the R&D department.
• Impetus for innovation comes from one department. Others contribute in a supporting role.
• Innovation relates to new products and services, not to new ways of running existing businesses.
• Innovation can be pursued independently from the day-to-day running of the company.
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Exercise
Go through each of the implications listed in the previous slides and state whether you agree or disagree. Give reasons for your decision.
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A company need not be big to innovate(Most HK companies are small)
• Apple Computers began in Steve Job’s garage.• People Express started out in 1981 with three used
Boeing 737s.• Tie Rack was founded with two shops in 1979 by
entrepreneur Roy Bishko.• Sea Containers was a start-up run by three
partners when it entered the container leasing business.
• Kwik-Fit started with one outlet in 1971.
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Roles you can play in innovation processes [Betz 1998]
1. Scientific gatekeeper
2. Inventor
3. Process, product, or service champion
4. R&D strategist
5. R&D sponsor
6. Project Manager
7. Problem solver
8. Business sponsor9. Process user gatekeeper
10. Product user
gatekeeper
11. Quality controller
12. Top Management
top related