Centre for Strategic Manufacturing DMEM A Model for Technology Strategy Development Aryantono Martowidjojo Supervisor: Prof. Allan S. Carrie

Centre for Strategic Manufacturing DMEM Agenda Background Basic Concept (presented on IEMC-2000, August , organised by IEEE) Existing Models The New Model Case Study & Software Tools Conclusion + Future Works

Centre for Strategic Manufacturing DMEM Background The issues on technology strategy development model The dynamics of industrial competition require: a dynamic technology strategy development process technology strategy which focuses on competitive advantage Technology strategy models tend to be too general and lack operational focus Issues: linking corporate strategy and technology strategy the structure of technology strategy the market pull versus technology push

Centre for Strategic Manufacturing DMEM Basic Concepts Product Leadership Customer Intimacy Operational Excellence

Hill’s Manufacturing Strategy Model 5. Infrastructure Manufacturing Strategy1. Corporate Objectives Growth Survival Profit Return on investment Other financial measures 2. Marketing Strategy Product markets and segments Range Mix Volumes Standardisation versus customisation Level of innovation Leader versus follower alternatives 3. How do products win orders? Price Conformance quality Delivery; Speed Reliability Colour range Product range Design Brand image Technical support 4. Process Choice Choices of alternative processes Trade-off embodied in the process choice Role of inventory in the process configuration Process positioning Capacity Size Timing Location Function support Manufacturing planning and control systems Manufacturing systems engineering Quality assurance and control Clerical procedures Work structuring Organisational structure Payment systems

Centre for Strategic Manufacturing DMEM Existing Model of Technology Strategy

Centre for Strategic Manufacturing DMEM Converting Hill’s Manufacturing Strategy Model to create a Technology Strategy Model Corporate objective - corporate strategy Marketing strategy - strategic advantage How products win orders - how technology adds enhanced value The conversion of: What is needed in order to adapt manufacturing strategy model: Manufacturing Strategy = Process Choice + Infrastructure Technology Strategy = Technology Portfolio + Technology Management

Technology Strategy Model 1. Corporate Objectives Select thecompetitivestrategy: productleadership customerintimacy operationalexcellence The businessstrategy: mission strategic actionprograms the role to beplayed bytechnology theaggressivenessof innovation 2. Strategic Advantage The mode ofcompetitiveadvantage: Price Quality – Cost Know-how Timing Selection oftechnologytrajectory: Science based Specialised supplier Scale intensive Information intensive Supplier dominated. 3. Technology Advantage Criteria How differenttechnologiescreateenhanced value RivalryStance Value ChainStance Scope Depth. 5. Technology Management Theimplementationrequirements: R&D investment People and competencedevelopment Organisational structure Acquisition, exploitationandprotectionmethods. 4. Technology Portfolio Core technologies Type of innovation Rate of innovation R&D programmes Investment levels Risks Technology Strategy Technology Strategy Model

Centre for Strategic Manufacturing DMEM Five Major Technological Trajectories (Pavitt)

Centre for Strategic Manufacturing DMEM Technology Advantage Criteria The technology advantage criteria suggested by Burgelman and Rosenbloom are: Rivalry Stance, i.e. identifying the technologies which would provide cost leadership and/or differentiation advantage over rival firms. Value Chain Stance. Identifies technologies that enhance the value created at various stages in the value chain. Scope. The scope of the technologies considered by the firm to have material impact on its competitive advantage. This will also distinguish between core and non-core technologies. Depth. The depth of expertise within the firm's technological capability. Factors would include the number of technological options that the firm has available and its capability in anticipating technological change.

Centre for Strategic Manufacturing DMEM Case Study - Background Name: Vought Aero Products HBS , 1995 Product: Military aeroplanes (since World War I) Problems: Lack of major contracts in the late 1970s Competencies: Design and Building whole aeroplanes and their weapon systems expert in the development and fabrication of advanced composite materials leader in vibro-acoustics Competitors: Many

Centre for Strategic Manufacturing DMEM Case Study - Application of Model

Centre for Strategic Manufacturing DMEM Conclusions The model captures key factors to guide the technology strategy development process Technology Strategy = Technology Portfolio + Technology Management Linking Corporate Objective and Technology Strategy via Competitive Advantage Future Works The model is about to be tested in Scottish major manufacturing companies