Starter: Key Terms… Explain what the following key terms mean: 1. Productivity 2. Unit Cost 3. Labour Productivity 4. Raw Materials 5. Suppliers

Starter: Key Terms… Explain what the following key terms mean: 1. Productivity 2. Unit Cost 3. Labour Productivity 4. Raw Materials 5. Suppliers Productivity is a measurement of efficiency. It measures the output of a business in relation to its inputs. Unit Cost is the cost of producing one unit of a good/service. The lower the unit cost, the greater is the level of efficiency and the business is more cost effective. Labour productivity measures the amount a worker produces over a given period of time. Raw Materials are good brought by a business to be used in the production process. Suppliers are other businesses that provide the raw materials for the production process, in return for capital.

Tuesday, 18 August 2015 Today you will know what invention and innovation are. You will understand their importance in product design. You will apply your knowledge to the Tide Coldwater study questions.

Invention, Innovation & Design An invention occurs when a new product or process is created; –inventions will earn money only if they are put into practice – in other words, innovation takes place. Innovation means using a new idea in the marketplace or work place. Design involves developing both the physical appearance and the internal workings of a product. –Design is used by businesses to ensure that their products are attractive and practical. At the heart of any business is the product it sells as that product is the key to success. –Invention, innovation and design are the processes by which interesting, new or unique products enter the market.

Invention… (1) The activity of inventing products is somewhat hit and miss. –Many new products have been invented by accident. i.e. The Post It note. Apples iPod was largely the invention of company outsiders, but apple added the key designed features and linked it with the music download software – iTunes. –When the iPod made its press debut in 2001 it wasn’t well received, it was the public that saw the opportunities rather than the press ‘experts’ Other products have been invented to fulfil a particular purpose, such as stair lifts for the elderly and disabled.

Invention… (2) Invention is not limited to products (product invention) Production processes have been invented that have led to greater competitive advantages. This is known as process invention. For example Pilkington PLC developed the self-cleaning glass process. This was branded and patented as: Pilkington Activ. It has a coating that breaks down dirt particles so that they do not stick to the glass and are washed away with rain. Pilkington Activ is used on many attractions such as The Spinnaker Tower

Invention… (3) Although many inventions come from company research programmes, there is still a place for the inventor. James Dyson, inventor of the cyclonic vacuum cleaner had his idea rejected by many manufactures including Hoover! As a result James decided to set up his own business to enable him to produce his revolutionary new cleaner. –Within 4 years his business had grown and he employed 600 staff, he claimed 26% of the market and he was estimated to be worth between £100 – 250 million. Having come up with an invention it is vital to patent and protect it. This means registering it with the Patent Office.

Innovation… (1) As with invention, innovation can be based on products or processes. However successful innovation required business skill in addition to inventive talent. The inventive idea must be honed into a marketable product. –Meanwhile the method of production must be developed and finance found. Successful innovation is vital to the long term success and survival of a business. Innovation allows the business to update its product portfolio by replacing products at the end of the lifecycle. –Sony have been Innovative with their PlayStation:

Innovation… (2) It is particularly important to continue to innovate in markets where competition is strong, product lifecycles are low and the rate of innovation is high. –Computer manufacturers seek to launch a new innovation every few months, in an attempt to gain a competitive advantage. Innovation is essential in this market to ensure survival. In most markets, the term ‘innovation’ means nothing so dramatic. –In the Salad Cream market the first ‘squeezable’ bottle was called ‘Innovative’ by Heinz. In large, established markets, quite small product innovations can have a major impact on market share. –Coca-Cola hope that its innovation of a resealable drinks can will give it an extra edge over its rivals.

Design The design of a product is not just about its appearance and shape. It is also about its function, quality and durability. Designers work to a design brief which tells them the criteria for looks, costs and quality all of which MUST be considered in designing the finished product. There are THREE factors to be considered when designing a product. This is often referred to as the DESIGN MIX. It can be drawn: Aesthetics EconomicFunction How does the product look/feel/smell? Does the product work, is it reliable, Does it fit the purpose? Is it simple enough to be made quickly and efficiently?

The Ideal Design Mix The ideal DESIGN MIX would be: As this shows a central balance between all three areas For example… »Car that is environmentally friendly, cheap to tax and run »Looks Goods »Reasonably priced Aesthetics EconomicFunction

Striking a Balance However ONE factor is MOST likely to be a clear priority –This would be an example of a product that is low on both looks/ taste/smell and function E.g. Cheap and cheerful! Aesthetics EconomicFunction

Invention & Innovation Invention and Innovation fits into all functions of the business: Marketing, Finance, People and Operations Management. Invention & Innovation in Marketing. Many people would argue that the most important element of the marketing mix is the product itself. Successful product development keeps a business one step ahead of the competition. This usually means keeping one step ahead in pricing as well and being first can mean you have the option to charge a premium price. Innovative products are also very likely to get good distribution. Supermarkets are reluctant to find space on their shelves for a just another ‘me too’ product, however if it is a product that is truly innovative space will be found.

Invention & Innovation Invention & Innovation in Finance. Invention, innovation and design all require significant amounts of long-term investment. Innovation takes time, and that is spent by highly paid researchers. The result is that businesses who are unwilling to accept long payback periods are unlikely to be innovators. Short-termists businesses are far more likely to copy other businesses successes. In fact, much of the money spent by businesses on invention and innovation provides no direct feedback. Ideas are researched and developed before discovering that they will not succeed in the market place. The result is that innovation is something of a hit and miss process that has no guarantee of reward, but the possibility of a brand new, market changing product.

Invention & Innovation Invention & Innovation in People. Businesses realise that team work provides many of the most successful innovations. As a result research teams are encouraged to share their breakthroughs on a regular basis in the hope that the team can put their ideas together to create a successful product. The research teams are often created by taking specialists in various fields of operation, from different departments within the business, an accountant, production specialists and marketing expert. This blend of expertise will enable to the team to identify cost-effective, marketable new ideas that can be produced by the business.

Invention & Innovation Invention & Innovation in Operations Management. Innovation and invention are not just limited to products. New production processes can be invented or developed. These can lead to more efficient, cheaper, or higher-quality production. Furthermore new products often need new machinery and processes to be developed for their manufacture. Design is also important in Operations Management and Production. The process needs to be clearly thought through so that every machine and activity has a logical place in the production system.

Activities… Page 282 of the text book. Task 1: Revision Questions Complete Questions 1 – 10. (45 minutes) Task 2: Tide Coldwater Case Study Read the case study. Complete questions 1-5. (40 minutes) Remember to use the assessment objectives to achieve FULL marks. AO1: Knowledge AO2: Application AO3: Analysis AO4: Evaluation