Evaluating the benefits of technical improvements in the

Evaluating the benefits of technical improvements in the
production
The economic benefits of implementing technical improvements
in the production system should be evaluated in terms of
improving…
1 Production Quality Reducing rejects & improving production
accuracy
2 Production Efficiency Reducing material wastage and / or energy
usage
3 Production effectiveness Increasing flexibility & variability of products
4 Production capacity &
throughput
Increasing the volume of production per unit
time
5 Production
responsiveness
Decreasing the time of changeover for product
change
6 Production Cost Decreasing the overall cost of unit product
Evaluating the benefits of innovation in manufacturing &
convincing the senior management…

Acquisition of Technology
1) Factors promoting technology acquisition
a) The Productivity slowdown
b) International competition
I. Universal access to technology
II. Increase in manufacturing output
III. International technology agreements
IV. Competition from smaller firms
c) Technological advances
2) Methods of acquiring technology
a) Using internal R & D
b) Participating in a joint venture
c) R & D contracting
d) Licensing & Franchising
e) Buying the technol0gy
Technology Transfer
Classification of Technology Transfer
1 International TT TT across national boundaries
Example : TT from industrialized countries to
developing countries
2 Regional TT TT from one region of the country to another
3 Cross industry /
Cross sector TT
TT from one industrial sector to another
Example : Space program to commercial applications
4 Inter firm TT TT from one firm to another
5 Intra firm TT TT is within a firm from one location to another
Channels of Technology flow
1 General channels Education – Training – Publications –
Conferences – Study missions – Exchange of
visits
2 Reverse engineering
channels
No legal violatin of intellectual property rights
3 Planned Channels The TT is done intentionally – with the consent of
technology owner
3A Licensing The receiver purchases the right to utilize
someone else’s technology
3B Franchising Source provides some type of continual support
to the receiver by supplying material, marketing
support or training
3C Joint Ventures 2 / more entities combine their interests in a
business enterprise
3D Turnkey Project A country buys a complete project from an
outside source & the project is designed,
implemented & delivered ready to operate
3E Foreign direct
Investment
A multinational decides to produce its products or
invest some of its resources overseas
3F Technical consortium
& Joint R & D Project
2 / more entities collaborate in a large venture –
resources of one are inadequate

Importance of Manufacturing Culture

Importance of Manufacturing Culture
Primary values – Cost - Quality - Cycle time – Safety
Steps in the manufacturing process & material used
Repetitive manufacture – Variation & other problems
Scope of errors
Technical change
Manufacturing – Social technology System
Significance of quality in manufacturing
Design
Conformance
Performance
1) Taguchi’s Views on Quality
Genichi Tagushi – Total cost of pour quality
2) Quality loss function
Total cost (C) or a function of the deviation of product quality (y)
from targeted quality (T)
C = f (T-y)
3) Design for manufacture & Product Life Cycle
Cost & Quality of a product are determined by the design of the
product’s systems, components & packaging.
DFM – Design For Manufacturing
The goals of DFM include…
Improvement of product quality
An increase in productivity & capital utilization
Reduction of lead time
Product flexibility to adapt to market changes
The rules of thumb that DFM practitioners have advocated are…
1 Reduce the numbers of parts 6 Design robustness
2 Foolproof to assemble designs 7 Parts must be designed to consistently
oriented
3 Design variability 8 Design for ease of assembly
4 Avoid tight tolerance 9 Utilize common parts & materials
5 Easy access 10 Design for ease of servicing the product
Loci of introduction of new technologies in Manufacturing
systems
Technological change can occur in any aspect of a production
system…
Technical innovation may occur in any part of a production
system…
Innovation in Unit Process
Technological innovation implemented in the unit processes of a
manufacturing system as…
The invention of a new nit process may be required by…
Innovation in Unit Process Control
Research & Technological innovation can improve unit process
control in two ways…
Real time control through intelligent sensing & control
Experimental design for processes one can not presently
model
Real time control requires
Sensors that can observe the important physical variables in
the unit manufacturing process
Physical models & decision algorithms that compare sensed
data with desired physical performance & prescribe
corrective action
Physical actuators that alter controllable variables in the
physical processes to control the manufacturing process
Manufacturing & the concept of economies of scale, scope &
integration
The major reasons for exercising this approach have been …
To take advantage of learning curve effects
To minimize changeover times
To maintaining a manufacturing focus
Rapid manufacturing technology implementation in
Japanese are those which increased the importance of
economics of scope in manufacturing strategy which include …
Shorter product life cycles
Greater product diversity
Fragmented markets
Widespread product alternatives
More rigorous product quality standards
Sophisticated customers

Risks in design of technologically innovative products

Risks in design of technologically innovative products
1) Causes for the failure of innovative product design
2) Criteria for good design
3) Deciding on the right product specifications
4) Deciding on the price performance trade off
5) Managing the challenge of multiple technologies

1) Causes for the failure of innovative product design
Innovative product designs can fail commercially in two ways…
The product design may fail as its expression of a principal
technology system performs functionally not as well s the
competing product.
The product design also may fail in its balance of quality
dimensions as perceived by the customer, sometimes even
if technologically performing as well as a competing
product.
2) Criteria for good design
The engineering prototype design of a new product should
establish the following criteria for the innovative product…
The Manufacturing prototype design of a new product should
establish two additional criteria…

3) Deciding on the right product specifications
Designing a product to specifications most demanding for
customer applications will likely produce the most robust design.

4) Deciding on the price performance trade off
Designing a product to specifications most demanding for
customer applications will likely produce the most robust design.

5) Managing the challenge of multiple technologies
Several sources of risk in product designing
Uncertainty in establishing customer requirements
Trade offs between product performance
Cost & incompleteness of the product as an application
system for a customer

Principles of Design

Principles of Design
1) Domains of Design
2) Incorporating new functional logic for innovation
3) Managing complex designs
1) Domains of Design
Functional domain
Objective of design is always started
Functional requirements
Innovative software design
Physical domain
The physical solution is always generated
Design parameters
Innovation hardware design – Physical forms
2) Incorporating new functional logic for innovation
Technical Progress
Scaling up of previous techniques
Increasing the numbers of transistors on a chip
3) Managing complex Design
Decomposition of a complex design
Metal removal device
For the practice of good engineering design, two general axioms
are…
The independence axiom – Main the independence of
functional requirement in the design
The Information axiom – Design the functions to require
minimal information from prior factions / from the outside to
perform the function.
Market & Performance / Cost Trade offs in Design
Different markets for new technology may value the
performance / cost handle trade off differently
Military Market Performance – valued over cost
Industrial Market Performance – valued at a cost – Appropriate return on
investment
Business Market Performance – valued within the upper boundaries of the
business practices of monthly expenses
Hobbyist Market Performance – valued within the upper boundary of
disposable recreational income
Consumer Market Performance – valued within price ranges of comparable
categories of consumer purchases
Service Technologies & Software Design
Service applications are the information, communication &
control procedures.
Large software development projects confront two major
obstacles…
Large projects are put performed by one or two people
Oveall system complexity
Three major design sources of commercial failure in software
are…
Incompleteness of understanding the boundaries of the
software application
Lack of insightfulness about the key logic features of the
application
Failure to rid the software of buss

Managing Design

Managing Design
1) The quest for the right product design
2) Importance of competitive bench marking
The systematic identification & listing of product system
features & their highest quality expression in a product system
of any price is called competitive benchmarking.
The highest quality of features of all product system price
classes that is called a best of breed product design.
Lower cost system
Technological innovation, which allows best –of- breed
designs in lower price classes, adds product differentiation
competitiveness to price competitiveness in a product.
Management of the Product Development Cycle
1) Basic requirement for product introduction
a) Continuous & incremental improvements in manufacturing
b) Appropriate project management techniques & design setting
tailored to the technical nature of product lines.
2) Lessons from successful products
1 Superior Products Unique benefits between customers
Me too products
2 Well defined Products Specifications
3 The Quality of execution
of the technical activities
Testing & pilot production affected the quality
of the product
4 Technical synergy Between technical personnel & the firm’s
sales force
5 Marketing synergy Between personnel & the firm’s sales force
facilitated the development of successful
products
6 The quality of execution
of marketing activities
Important to product success
7 Products Targeted for attractive markets in terms of
inherent profitability added to success
Project Management Phases
Managing Technical Risks
We can classify a development project by the degree of risk in the
technology being implemented…
1 Low tech Project No new technology is used
2 Medium tech Project Some new technology is used within existing
systems
3 High tech Project Key technologies as components fist two
achievements
4 Super high tech Project New key technology must be developed
1) Low tech Project
Estimating – Scheduling – Budgeting – Staffing
PERT chat is very useful
2) Medium tech Project
If new technology is non essential – A substitute technology
should be used
Essential – Important to plan & schedule development &
testing new technology
3) High tech Project

Important to plan & schedule system integration in a modular
Subsystem can be tested thoroughly before final system
integration & assembly occur
4) Super high tech Project
Go / no go decisions
Full system development should not be scheduled until all key
technologies have been successfully proven or substituted
Significance & importance of product / service design
Central problems in implementing new technology in new

products or services include…

Next Generation Technology Products
Product design requirements are determined base on the class
of the customers
In technology innovation the most easily approached first market
is an essential market
1) Establishing customer requirements with radical design
decisions
First critical design decisions – Identifying the customer is
applications for the product
2) Identify the right factors for design decisions
Third critical design decisions – estimating the acceptable sales
price

Competitiveness & timing of innovation

Competitiveness & timing of innovation
a) Time based competition
Getting a product to market even 6 months late reduced
expected gross profit by a 33%
Getting to a market even by a month improved expected gross
profit b 12 %
b) Managing time based innovation
Being proactive to market changes
Creating the right internal environment
Required for innovating new technology problem
A. Being proactive to market change
The product is never perfect at the first time
After the product as quick as small begin
B. Creating the right internal environment
C. Required for innovating new technology problem
The service technologies that provide capabilities for first
response companies form on…
Rapid product development cycles
Manufacturing science bases in unit production processes
Intelligent control in operating system
Teamwork & communications that integrate the business
enterprise
Concurrent Engineering
A concurrent engineering product development requires for the
formation of multifunctional teams for managing complete
development of a new product.
1) Step to success with concurrent engineering team
Conduct a competitive benchmarking analysis
Product development schedule & early prototyping goals & means
Identify early source of supplies
Solicits suggestions from service forms
Concurrent engineering practices can facilitate the implementation
of new technology in products by improving communication &
cooperation among research, product design, manufacturing,
marketing sales & finance.
2) Significance of concurrent engineering
Colloboration in concurrent engineering
Balancing performance, quality & cost in concurrent engineering

Complex Technology System

Complex Technology System
A complex technology system may be constructed by …
A parallel subsystems
A hierarchy subsystems
Both Parallel & Hierarchy subsystems
Product Systems, Production Systems & Service
Systems
3 different manifestations of technology systems
Product systems – Completed & Connected
transformational technology system used by a customer.
Production Systems – Completed & Connected set of
transformational technology systems used in a producing a
product.
Service System – Completed & Connected set of
transformational technology systems used in
communication & transacting operations within between
producer / customer / supplier networks.
Application System
Forecasting application systems development
The challenge tablet discontinuities
Classification of technology innovation base in core competencies
Technological innovations can be classified according…

Classification of Technological Innovations based on Core
Competencies
Technological innovations can be classified according to
whether they preserved or destroyed such corporate
competencies…
Regular innovations Preserve production
competencies and
Market competencies
Niche-creation
Innovations
Preserve production
competencies but
Disrupt market competencies
Regular innovations Preserve production
competencies but
Preserve market competencies
Regular innovations Preserve production
competencies and
Disrupt market competencies
Innovation in the Product Development Cycle
1) Innovation in Product
Technology road map
Element of time
Speed & correctness are the criteria for a good product
development process & are essential when, innovating new
technology.
2) Managing uncertainties in product development Cycle
Uncertainties…
Uncertainties of timing
Uncertainties of performance of new technology
Uncertainties of the customer requirements
Uncertainties of trade off between performance & cost
Uncertainties of the production
3) Managing for the right product / Service
Product development cycle
Fast Cycle Company - Time as a competitive factor
Design in Parallel - Use concurrent engineering procedures
that Encourage the performance of
product design activities in parallel
Produce it right the first time - Design the product for quality
Manufacturability & life cycle
Design in virtual time - Develop & use computer aids
Manage design bugs - Manage the design process to
proactively seek out design bugs
Technology road maps - Use strategic technology planning to
develop products that embody next
generations of technology

Methodology of Forecasting

Methodology of Forecasting
Exploratory
Normative
1) Exploratory Forecasting
Starting from present & advancing step by step towards
the future
Involves extrapolation of current trends into future
Two methods…
Delphi Method / Subjective / The expert opinion
method
The technology S Curve / Objective / Quantities
method
Example of notoriously wrong decisions based on
exploratory / subjective method
Lord Kelvin – 1895 – Heavier than air flying machine
are impossible
1904 – Fly machine invented
2) Normative Forecasting
Inventing some future & identifying the actions needed to
bring that future into existing.
Two methods…
Analysis
Planning
a) Normative Analysis
o Looks at underlying structures of current trends
b) Normative Planning
o Actual formation of technology strategy
o Research programs to implement strategy

Forecasting the rates of Technological changes
Technology performance parameters
The measure of technology performance
The efficiency of the transformation
Technology S Curves & physical phenomena underlying
Technologies
Two kind of technology progress
Incremental progress – Along as S Curve
Discontinuous progress – Jumps from an old S Curve
Characteristics of Technology S Curve
Forecasting involves mainly …
The exploration of past & current trends
A structural analysis
Exploration of possible changes
4 general classes of structural features
Structures of current technology abilities
Structures of economic activities & market
Structures of nature & natural potential
Structure of demographic & cultures
Forecasting Directions of Technological Changes
Technology as a system
Progress in technology system
Complex technology system
Product systems / Production system & service systems
Application System
Forecasting application systems development
1) Technology as a system
Any technology is a mapping of a functional logic to a physical
structure.
The analysis of a technology as a system will real two
descriptions.
A logic scheme
A corresponding morphology
Example…
Automobile – Technology as a system
Logic order – Automobile must be fueled, entered, started,
directed & stopped
Logic schematic – Logic of the functional transformer
Physical morphology – Constructed physical structural
whose processes map in a one to one manner with the
logic scheme.
2) Progress in technology system
The advance may occur by…
Extending the logic schematic
Alternating physical morphologies given schematic
Improving performance of a given morphology
Technologies progress can occur from changes in any aspect of
the system…

Product / Technology Matrix

Product / Technology Matrix
Different aspects of a product as a system
1 Boundary 5 Materials
2 Control 6 Energy
3 Components 7 Peripherals
4 Connections 8 Fabrication & Assemble processes
Competition at different phases of the technology life cycles
1) The Embryonic Stage
Competition is based on innovation
The introduced technology has not yet demonstrated its potential
for changing the bases of competition.
2) The Growth Stage
The technology has the potential for changing the basis of
competition
Company must be able to believe its growth strategies with
marketing strategies
Technology at growth stage ---- Key technology
3) The Maturity Stage
Rate of innovation deadlines
Technologies at this stage – Base Technologies
Have a little ability to give a company a strong competitive age
Diffusion of Technology
Diffusion is the process by which an innovation is commercialized,
over the time through certain channels to members of a social
system.
1 Innovation is perceived Less expensive method of
producing a product
2 Innovation is compatible Incompatible innovation
3 Innovation is considered complex & different New process
4 Innovation can be introduced Use of new Drug on trial
basis
5 Innovation is seen & potential adopters Small satellite dish
Industrial Reorganization Scenarios
A Technology system is a system of functional transformations...
1) Upstream / Downstream technology rotation
Upstream Sectors - Suppliers
Downstream - Customers
Technology of the upstream Sectors – Technology systems
Technology of the downstream Sectors – Application System
Upstream technology change can effect downstream application
system several ways…
Low cost of transportation – Lower priced market
Improve quality to improve substitution into current
applications system
Improve performance to increase substitutions
Simultaneously improve cost, quality & performance to
increase substitutability & move new market niches.
Lower cost to provide multiple copy ownership of products in a
market niche.
Improve performance to adapt technology to new application
system & new markets.
Procedure for Forecasting industrial structural changes
For each business – Construct the industrial value chain
For each sector value chain – Identify & list core technology
For each core technology – Evaluate technology changes
- Identify any substitute technology / material
Construct a technology / business matrix
The columns – The business
List the core technology / substitute technology
Data entry
Construct a strategic technology
Construct industrial recognition scenario

Technology life Cycle

Technology life Cycle
The performance of a technology for a recognized over time that is
properly understood, can be of great use in strategic planning.
1) The S – Curve of technology progress
Transistors per chip
Aircraft speed n moles per hour
The S – Curve of technology progress
TLS – Technology Life Cycle
The new invention Period - The embryonic stage
Technology improvement period - The growth stage
Mature technology period - Vulnerable to substitution obsolesce
New invention period
Period of slow initial growth
Time for experiments
Mature technology period
Upper limit of the technology is approaches & progress in
performance slows down
When a technology reaches its natural limits, it becomes a mature
technology vulnerable to substitution / obsolesces.
2) Market growth & TLC
Market Growth – Expressed as market volume
Six Different phases
1 Technology development Phase 4 Mature technology phase
2 Application Launch Phase 5 Technology substitution phase
3 Application growth Phase 6 Technology obsolesce phase
Scientists & Engineers are spending significant amounts if efforts
& money to create the technology, develop prototypes & test the
new technology.
Very expensive & do not produce revenue.
New application is launched into the market – Slow initial growth
Penetration of the market depends on the rate of innovation & the
market needs for the new technology.
The growth rate slows down – Market volume reaches a
maximum & streets to decline
Companies that continue to use the old technology in this phase
will be faced with a strategy market share & a full in revenues.
Trial phase – Technology has little / No value
The Product Life Cycle
1) Concept Design Prototype
A product emerges from a concept – Translated into
engineering design & illustrated through an engineering
drawing.
2) Product Launch
Involves an increasing awareness of the product
Characterized by a very slow initial market response
3) Product Growth
Follows the product launching phase
Sales starts slow – Accelerates as the product
Becomes known & accepted in the market
4) Mature Stage
Product is diffused in the market
Market becomes saturated
Growth stage – slow dawn
5) Sbustitution Products
Represents the on set of obsolensence
6) Obsolete Products
The products have little / No monetary value
Placed at antiques or kept as rare items in museum
7) Reasons for finite lifetimes for principle reasons
Technical performance / feature obsolescence
Performance / features – markedly less at the
same price as those of a competing product
Cost Obsolescence
Same performance @ same price / less price then
the competitor
Safety obsolescence
Similar performance & price with improved safety
Fashion Obsolescence
Competition is un-differntiable in performance &
price but is differentiable in lifestyle

A Structured Approach to Corporate Technology Strategy

A Structured Approach to Corporate Technology Strategy
Step 1 – Access Current Situation
Organization is categorized performance
Internal background – Company’s goals, strategies,
Capabilities
External Background – Business & technology environment
in which company operates
Understanding of future business environment
Customers Competitors
Suppliers Demand for product
Industry financial ratios Economic trends
Understanding of the technical environment
Patents – Key technologies
Center of research excellence & capabilities
Level of funding
The potential for break thoughts
Barriers to technology deployment
STAs – Strategic technology areas
Step 2 – Specify Technology Strategy
Specify a game plan for technology development
Four main elements
Customers Competitive Approach
Investments Organizational Culture
Important technology components
1) Market Competence
Product differentiation
Low cost producer
2) Market Scope
 Largest market share
 Specialized niche player
3) Market timing
 First Mover / Leader
 Wait & Ignore
Step 3 – Select Technology portfolio
Identify suitable candidates
A remote scanning of literature
Observing the technology environment
Monitoring competitors – Suppliers – Customers
Attending conferences
Symposia & assignments
A few criteria are…
Payback cost benefit ratio
Market / Spin off potential
Business sector priority
Continuous availability of funding
Technological risk
Potential for high innovation
Step 4 – Executive technology investment
Functions…
Organize the work team
Planning the details of the work
Staffing the work activities
Directing & leading the effort
Controlling the activities to ensure compliance with plans &
needs
Step 5 – Transfer results for deployment
Activities Needed
Prototype development
Scale up production / Purchase
Distribution / Installation
Step 6 – Secure long term position
Final Stem
Monitoring / Review & feedback activity
Continuous monitoring activities of others
Business & technology trends

Minimalist Definitions of Technology & Innovation

Minimalist Definitions of Technology & Innovation

Mills provided very simplified but interesting definitions for several
components of the process of technological innovation.
Science How things are
Technology How to do things
Management How to get things done
Technology management Dong tings
Entrepreneurship Doing things to make money
Innovation Doing entrepreneurship

The innovation and Wealth creation process

In Past 50 years – 40 % of productivity gain – Industrial innovation
Key elements of innovation process…
Innovation is a concurrent, interactive non linear activity
Innovation includes…
o Science – Engineering – Technological
o Social – Political – Economic – Interactions
Critical Element – Scientific engineering
o An analytic, reductionism process

Three Critical Trajectories Impacting the innovation Process

Three critical trajectories are…
o Border crossing [National & Sectorial]
o Emergence of Complex technologies
o Knowledge & distributed intelligence
1) Border crossing [National & Sectorial]
International boundaries
Internationally co authored articles increased by 150 % from
1981 – 193
73 % of recent patents awarded in the US cite research
2) Emergence of Complex Technologies
The change of nature of the product & the processes
demandable by today’s global marketplace
Donald Kash & Robert Rycroft
o Most successful commercial technologies have changed
in one basic way over the past quarter century
KDI – Knowledge & distributed intelligence
Move from internet decade to information

KDI – 3 basic characteristics
o Knowledge networking
o Learning & intelligent systems
o New challenges
Factors influencing technological innovation in industry
1) The changing world environment
2) Improvements in communication
3) Multiple site continuous R & D
4) Time to market
5) The push for education
6) Changes n institutional interactions
7) Changes in organizational structures
8) Infusion of resources into technological development &
penetration
An Example of technological innovation :

Xerography involves the confluence & interplay of a number of
disparate developments in science, technology & business.
It employs a broad rare of materials & physical phenomena ranging
from….

Non crystalline or amorphous solids to polymers
o Photoconductivity
o triboelectricity
The subsequent evolution of xerography ….
o Digital solid state electronics
o Word processing computers
o Lasers
The production of images based on the ability of electro statically
charged insulators to attract triboelectricity charged powders.
Selenyi & others – the concept of charging an insulator with an
image wise pattern o charged ions.
Selenium crystals – 1870’s
Carlson’s invention – electro photography
The developer – lycopodium powder
Greek word for dry – Xeros
For writing / Drawing – graphein
Xerography – Xerox
Xerox 914 – would make copies on paper up to 9" x 14" - 1958
Technology Strategy Framework

1) Forecast the technology
Starting point
Involves the projection of both internally owned technology
Technology available in the market place
2) Analyze the forecast the environment
Identify the key factors
Potential states of the environment
Key uncertainties
Major threats and opportunities
3) Analyze & forecast the market / User
Direct contact with potential customers
Fulfill of customers requirements & desire
Get closer to customer


4) Analyze the organization
Delineate the major assets & problems
Develop a catalogue of available human / material / resources
Access recent performance against stated objective
Understand the strength & weakness of the organization
5) Develop the mission
Specify critical assumption
Establish overall organization objectives
Establish specific target objectives
6) Design organization actions
Create candidates actions
Analyze & debate candidate
7) Put the plan in to operation
Develop timely sub objectives
Specify action steps
Schedule and budget
Develop tracking mechanisms
Specify control mechanisms

Goals of Technology Strategy

Maintaining technical competence –

Expansion of markets –

Competitive advantages

The need for structured thinking about technology

Conducting internal R & D activities Direct investment
Diverging / acquire - assets / companies Licensing
Activity patenting Contracting R & D
Utilizing the results of public sector R & D Joint ventures
Re – training & re-directing existing resources & capabilities

Strategies of Technological Innovation

Strategies of Technological Innovation

1) Basic Research
Understanding the laws of nature
Process of generating knowledge
2) Application Research
Research directed toward selling one / more
Result in technology development & implementation
3) Technology Development
Human activity that converts knowledge & idea into physical
hardware / Software / Service
4) Technology Implementation
Set of activities associated with introduction a product into the
market place
5) Production
Set of activities associated with the widespread conversion of
design concepts or ideas into products & services.
Involving Manufacturing – Production control – Logistics –
Distribution
6) Marketing
Activities that ensures that consumers embrace the technology
It entails…
o Market assessment
o Distribution Strategy
o Promotion
o Gauging of consumers’ behavior
7) Proliferation
The strategy & associated activities that ensures the widespread
use of the technology & its dominance in the marketplace.
Depends on methods of exploiting the technology & on the practice
used for marketing the technology.
8) Technology Enhancement
Set of activities associated with maintaining a competitive edge for
the technology
It entails …
o Improving the technology
o Developing new generations
o New applications for the technology
o Improving quality
o Reducing cost & meeting customers’ special needs
The innovation Chain Reaction
Martin – Technology innovation process or a chain equation
A commonly successful innovation is the product of sustained chain
reaction
It requires…

Commercially Successful Innovation
Synthesis of knowledge & expertise Scientific invention
Entrepreneurial spirit Engineering development
Management skills Entrepreneurship
Recognized social need Management
A supportive environment Recognized social need
Supportive Environment
Formalized management takes a defined product & connects into a
market using a set of…
Structured functions
Formalized procedures
Engineered work processes
Defined role for employees
Safer capabilities

Productivity, Effectiveness & Competitiveness

Productivity, Effectiveness & Competitiveness
Productivity
o Ratio of the output to input resources
o Output – Production
o Input – Input resources – Capital – Material – Labor –
Energy

Natural Productivity
o GDP – Gross Domestic Production
o Gross Domestic Production / Input In terms of total hrs
worked
o Per capita income = GDP / Total population
Productivity = Output
Input [Total hours worked]
Productivity = Output Per Capita GDP
Input [Total hours worked] Capita = Total Population

Intellectual Property
Types of intellectual properties….
1 Patents Invention of new ideas / useful ideas
2 Copy Rights Protection against expression of the ideas
3 Trademark Registered identification of product – Corporate identities
4 Trade Secrete Commercially
Problems with Patents The concept of patent evolved in England – Eighteenth Century

Steps for acquiring a patent
o Filling a patent disclosure & patent application with the
patent office
Output / Input

In case of denial – Appeal
The claim of invention must include…
o The conception of idea & the reduction of that idea to
workable form
o An actual device
o Built & working
o Merely a clear description of a workable form
o In case of denial – Appeal
Satisfying criteria for patentable innovation…
o Utility – Should be useful / shouldn’t hurt society
o Novelty – Must not simple rearrangement of prior art
o No obviousness
Non patentable – Natural phenomena & Scientific laws
Patentable …
o New material forms
o Process to produce material
o New life forms
o Biological process to produce new life forms
o Processes – Machines – Manufactures – Composition
Of matter
Patent office has distinguished…
o Mathematical algorithms – Non Patentable
o Computer algorithms – Patentable
o Laws of nature - Patentable
Leaders Versus Followers
Winners are those who bring the technology to the market.
3 categories...
1) Leader – First mover – first to market in innovation
2) Follower – Follow closely benign the leader
- May be able to catch up or surpass the leader if they
can capitalize on them own strength

Science – Technology Link

Science – Technology Link
Science – Scientific discoveries
Technology – Technological innovations

Types of Innovation
Innovation can influence …
o A Product
o A Process
o A Service
Enhances existing services
Classification …
1) Radical / Fundamentally new innovation
o Based on invention
o Can change / create new industry
o Relatively very rare
o Example … The transistor
2) Architectural / Configuration innovation
o Simply reconfiguring existing components
o Can change / create new industry
o Relatively very rare
o Example …Miniature of hearing aid
3) Incremental / Evaluator innovation
o Small / important improvements in a profit /
process / service
o Relatively common & created within the firms of an
industry
o Example … Thinner mechanical watches

Creativity & Innovation
Creativity is the engine of innovation.
Characteristics of creative people…
Conceptual fluency
Ability to produce large no of ideas quickly
Generate original & unusual ideas
Interest in problem facing
Perseverance

Suspension of judgment
Willingness to analyze & explore
Genuine regard for intellectual & cognitive markers
Science - Technology Push
Science provides the base for technical development which in turn
creates new market.
Field of Electronics - Maxwell’s theory of electromagnetism
Nuclear energy - Einstein’s relatively principle
Transistors - Wilson’s theory of semiconductors

Genetic Engineering - Watson & Crick’s discovery of DNA Structure
Market Pull -Technology is often developed to meet a market need / demand.
Market pull - most effective way to connect technology with the
market.
Consumer stimulated market pull
Bringing innovation to market
Stimulating Innovation

Diffusion of Technology – it is the marketplace in order to fully
exploit its benefits.
Example of speeding diffusion …Microsoft’s strategy of licensing its
own DOS operating system for use by many computer companies &
then making its windows 95 program available of each PC

Technology & the concept of core competency

Technology & the concept of core competency
Distinctive Technologies
Technology in which company’s standing gives it a distinctive
competence.

Production Technology – Manufacturing
Logistic Technology – Transportation / Delivery
Basic Technologies


Survival technologies
The tech of which company’s operations depends
Necessary for a company to stay in business
Essential for a development of a product

External Technologies
Technologies which are supplied by other companies
Available to the market at large
Have a much lower impact on the company
Developing Core competencies
CCC & P – Corporate core competencies & products
Core Products – Key components
Core Competencies – Knowledge – Skills – facilities necessary to
design & produce core products

Core technological Competencies – Corporate assets
Technology Planning – top down procedure at corporate
- Bottom up procedure at strategic business unit

Hierarchy of Competencies
Primary Capabilities / Building Blocks of core competencies
Large & diverse array of discrete activities
Skills & discipline
Technology & the concept of core competency

Distinctive Technologies
Technology in which company’s standing gives it a distinctive
competence.
Production Technology – Manufacturing
Logistic Technology – Transportation / Delivery
Basic Technologies
Survival technologies
The tech of which company’s operations depends
Necessary for a company to stay in business
Essential for a development of a product

External Technologies
Technologies which are supplied by other companies
Available to the market at large
Have a much lower impact on the company
Developing Core competencies


CCC & P – Corporate core competencies & products
Core Products – Key components
Core Competencies – Knowledge – Skills – facilities necessary to
Core technological Competencies – Corporate assets
Technology Planning – top down procedure at corporate
- Bottom up procedure at strategic business unit
Hierarchy of Competencies
Primary Capabilities / Building Blocks of core competencies
Large & diverse array of discrete activities
Skills & discipline

Basic management principles…

5 Basic management principles

Technology should be conceived of as a competitive factor
within a business system.
New technological potential should be forecast.
Technological forecasts should be implemented through
planned technology strategies.
New products using the new technology must be marketed
with special attention to the problems of new markets.
Technology strategy & business strategy must be closely
integrated.


Technology Strategy & Core Competence
Fundamental concept in the formulation of a technology strategy.
Core competence could be in …
A Technology / A product / A process / The way that
integrates its technology assets
Core competence – in marketing – ability to access & secure
markets in a unique way.
Core competence – in organization structure – permits managing
operations in a unique way.

Strategic Technology Attitude
3 concepts of strategic technology attitudes are…
Central perception
Competence
Commitment
Technologically effective enterprise should be capable of Core Competence of a Diversified Corporation
Core competences – collective set of knowledge – Skill –
Technologies

Continuously learning & building capabilities that
Can not be easily duplicated by its competitors
Create new products & services for its customers
Generate alliances & relationships with suppliers to provide
its customers with cost & value advantage.

Core competency in an organization
Tree Analogy
The roots – The competencies of the corporation.
The trunk – The Products
Small Branches – Business units
Leaves – End Product

Common Characteristics of core competencies
Exploitation of competencies
The management recommended actions are …
Develop, cultivate & enhance the company’s core competence
Deploy core competencies
Align all other activities

Technology Strategies & Business Strategy

Two Economic goals for managing strategic technology
Innovate new market
Dominate & keep existing market

Technology Innovation & Technology Strategy

Motivators of invention…
Desire to advance techniques – Technology Push
Satisfy a specific market need -- Market Pull

Commercially successful innovation should …
Match technological superiority to market application
Provide competitively priced, high quality goods


General Competitive strategies …
Product differentiation
Low cost leadership

Quality control for business Success…
Quality - how well a product performs
Overall Quality - Suitability to an application
Quality of production process - Quantity of product production
Quality to customer - Durable – Maintenance free

Technology & Indicators of Competitiveness

1) High Standard of living
 Top crown – Crown of pyramid
 Central indicator of national competitions
 Measures as GDP – GDP per capita
2) Trade
 Useful indicator
 Growth rates & level of experts of manufactured products
 Merchandise goods & Services
 Trade Balance
3) Productivity
 Efficiency to produce services & product
 Determined by…
 Previous investment
 Quality & performance
 Technological innovation
 Quality of plant & equipment
4) Investment
 Fundamental building block – Base of pyramid
Private Sector Expenditures on - Factories & Equipment
Public/Private Sector Expenditures on - R & D
Public Sector Expenditures on - Education

Definition of Technology

Technology Hardware Machines
Highly advanced electronic gadgets
Software
Human Skills
Zeleny Technology Consists of 3 interdependent important
components.
Hardware Physical structure & logical layout
Equipment – Machinery
Software Knowledge of how to use a hardware
Human Skills The reasons for sing the technology
Know why theory
Knowledge & Technology We currently live in – Knowledge age
Industrial revolution has given way to the technological revolution
Technology & Business
Resources includes…
Natural Resources
Human Resources
Information Resources
Other Resources