Innovation and operations management Chapter 4 Innovation and operations management

Learning objectives At the end of this session you should be able to understand: innovation in the context of operations the difference between ‘product’ and ‘process’ innovation and design.

The functional links Operations Marketing Research and development

Ideas generation Marketing Concept generation Internal sources External sources Marketing Customer needs analysis Surveys Research departments Customer suggestions Suggestions from staff Competitors Concept generation

A good innovative design Meets customer requirements Is simple to make Can be rapidly developed into production Few modifications are required during the development phase

Design for manufacturing If a product is easy to make, it will be economical to produce It is important to consider the manufacturability early in the design phase Integrate product design with process planning and design

Design simplification PRODUCTS DESIGN Assembly using common fasteners One-piece base and elimination of fasteners Push and snap in assembly

Product process types High Variety Low Low Volume High PROCESSES High Project Jobbing Batch Variety Mass Continuous Low Low Volume High THE MOST APPROPRIATE METHOD (PARTICULARLY IN COST TERMS) CHANGES WITH TIME

Awards Malcolm Baldridge Demming ISO 9000 EFQM

Excellence model Leadership Society Results Partnerships & Resources Processes Key Performance INNOVATION AND LEARNING ENABLERS RESULTS People Policy & Strategy Customer Results EFQM, 1999. The Model is a registered trademark of the EFQM

What is self assessment? Self-assessment is a comprehensive, systematic and regular review of an organisation’s activities and results against a ‘continuous improvement model’. Source: EFQM (2003) EFQM Excellence Model The process allows the organisation to discern clearly its strengths and areas for improvement and culminates in planned improvement action plans which are then monitored for progress.

NHS1 Innovation Introducing into practice new ideas (or ideas new to you) which lead to improvements in efficiency, effectiveness or better value for money Intellectual property (IP) includes services, systems devices, diagnostics, consumables and therapeutics Innovative staff let down by: Not capturing their ideas Wasting assets by not implementing them Resistance to innovative ideas for service development, drugs and products from other health care systems and health care industries in the UK and internationally

NHS2 Why innovate? “This Government formally committed the NHS to becoming an innovative organisation when it published the NHS plan back in 2000.” Lord Warner, Parliamentary Under-Secretary of State in the Lords, April 2004 “As the NHS is a service, driven first and foremost by science and scientific advances, innovation should be a natural part of our business.” Rt Hon John Hutton MP, Minister of State (Health), June 2004

NHS3 General NHS Direct Care in the community NHS Plus Patient choice Telephone Online Sky TV Care in the community NHS Plus Workplace health care (self-funding) Patient choice Choose and book Walk-in centres and treatment centres Run by commercial companies on behalf of NHS

LA1 Making improvements Customer feedback New ideas and innovation Staff feedback KEY PRINCIPLES: Motivation of staff is key in looking for innovation. Cultural change has taken place across the council. Especially with e-government. Consider things such as: Look at processes that do not add value to the Council and try to re-engineer process. Currently process mapping every service area to see what improvements can be made. Customers now expect more than ever. They expect us to answer requests: Quicker, better and more efficiently. They also want to get our services 24hrs a day. Actually targeting unhappy customers in order turn around their view of the council. Actually checking those who complain and ask them to come to consultation on the future long term vision of the council! Full senior management support

LA2 Actions already undertaken Innovation outputs : (Resulting from staff suggestions) Installed timers on the water coolers, vending machines to reduce energy use out of working hours Fitted new Building management system that allows for automatic switching on and off, dependant upon weather and time of day. Now replacing all new plant with versions that can be operated with our new building management system. New lighting using triphosphorus. These last longer and use less electricity. Newsletters with helpful hints.

Illustration DELL Mass customisation SCM good links with flexible vendors Background in telemarketing Customer knowledge leading to ‘premier pages’ that have saved Ford $2m High reliability: Dell has received awards for performance Delivery support 24/7 Adaptive business strategy by moving up the value chain Concentrating on what customers wanted

Conclusions Whilst you might not be directly involved in R&D you will be involved in innovation.