1. 14 Summary Management of Operations
Real intelligence is a creative use of knowledge, not merely an accumulation of facts.
D. Kenneth Winebrenner
Summary
How do new firms build a set of operational processes that serve to create, make, and provide the product to the customer?
A new venture needs to design a set of operational processes that will enable it to build, store, and ship the products provided to the customer. New businesses build a supply chain of partners that add value at each stage of the assembly or manufacture of the product.
Chapter 14: Summary
Technology Ventures: From Idea to Enterprise

2. 14 Management of Operations
A value chain is a series of activities for transforming inputs into outputs that customers value.
Chapter 14: Value Chain
Technology Ventures: From Idea to Enterprise

3. 14 Management of Operations Value Chain Information Flow
*A highly integrated company provides most, if not all, the functions along the value chain. EXAMPLES?
Manufacturing
Logistics
Marketing and Sales
Customer
Sales & Service
Distribution
Applied Research
Product Design
Process Design
Information Flow
Understanding the customer:
Preferences
Purchase criteria
Decision-making process
Buyer behavior
Functional needs
Chapter 14: Figure 14.1 – value chain
Technology Ventures: From Idea to Enterprise

4. 14 Management of Operations Operations: a series of actions.
Operations Management is the supervising, monitoring, and coordinating of the activities of a firm carried out along the value chain.
Operation management deals with processes that produces goods and services.
What is a process? – activities or set of activities… Transfer value to customers
Chapter 14: Concepts
Technology Ventures: From Idea to Enterprise

5. 14 Management of Operations
Process: any activity or set of activities that takes one or more inputs, transforms and adds value to them, and provides one or more outputs.
What is a process? – activities or set of activities…”Transfer value to customers”
The business processes should be aligned with its strategies and employee competencies. …”continual Re-balancing” of strategies, (core) business processes, customers and, people and their competencies…
The business theory should be expressed as a clear statement of vision and purpose. E.g. e-Bay’s “We help people trade practically anything on Earth through an online system”.
Chapter 14: Process
Technology Ventures: From Idea to Enterprise

6. 14 Management of Operations Common Business Process
Chapter 14: Figure 14.3
Technology Ventures: From Idea to Enterprise

7. 14 Management of Operations
The best return on investment is often found in companies that combine operational excellence – consistently outstanding performance for customers that is brought to the bottom line – with sustained rapid growth.
Low cost
FOUR competitive capabilities:
Flexibility
Speed
High quality
Quality: a measure of a product that usually includes performance and reliability.
Reliability: a measure of how long a product performs before it fails.
On-time speed: measures the pace of lead time, on-time delivery, and product development.
Flexibility: a measure of a firm’s ability to react to a customer’s needs quickly.
Chapter 14: Quality and Reliability
Technology Ventures: From Idea to Enterprise

8. 14 R Management of Operations + financial resources + sales +marketing
+ product attractiveness R
+ acquisition of customers
- Price
- Unit costs
+operational processes
+Economies of scale
Self reinforcing loop
Chapter 14: Speed and Flexibility
Technology Ventures: From Idea to Enterprise

9. 14 Management of Operations The Value Web for A Firm
Leadership team
Customer and market knowledge
The Value Web for A Firm
Strategic Planning
Human resources: Talent
Product development and management
Business process development and manufacturing
Business results
A business process is a series of activities.
Value webs – grids with no center but allow open communication and movement of items and ideas.
Chapter 14: Figure 14.6
Technology Ventures: From Idea to Enterprise

10. 14 Management of Operations The Value Web of Cisco Systems IKEA??
Chapter 14: Figure 14.7 (from Slywotzky and Morrison, 2000)
Technology Ventures: From Idea to Enterprise

11. Product
Performance
Architecture
Manufacturability
Business and Manufacturing processes
Technology
System Flow
Quality
Throughput
Supply chain
Make versus buy decision
Logistics
Manufacturing system
Coordinated system of product, processes and supply chain.

12. 14 Management of Operations
Strategic control is the process used by firms to monitor their activities, evaluate the efficiency and performance of these activities, and take corrective actions to improve performance, if necessary.
To evaluate the effectiveness of their strategies…
Balanced Scorecard is a set of measurements unique to a company that includes both financial and operational metrics.
Chapter 14: Balanced Scorecard
Technology Ventures: From Idea to Enterprise

13. 14 Management of Operations The Balanced Scorecard
*Both, a strategy formulation device and a report of performance.
* To build an effective scorecard, a firm needs to determine the fundamental drivers of performance and measure them. Finding the right measures such as reliability, quality, or customer satisfaction is challenging.
Chapter 14: Figure 14.9 (from Kaplan and Norton, 2004)
Technology Ventures: From Idea to Enterprise

14. 14 Management of Operations
A Gantt Chart for 5 tasks. The actual progress is indicated by the shaded bars.
Chapter 14: Figure 14.10
Technology Ventures: From Idea to Enterprise

15. 14 Management of Operations
Example of a Roadmap for a New Technology Firm
Chapter 14: Figure 14.11
Technology Ventures: From Idea to Enterprise

16. 14 Management of Operations
The design and management of an efficient, real-time set of production, logistical, and business processes can become a sustainable competitive advantage for a new enterprise.
Chapter 14: Principle
Technology Ventures: From Idea to Enterprise

17. 14 Management of Operations
A new, growing electronic game company wants to outsource its manufacturing, sales and distribution functions. Develop a value web for this company.
Chapter 14: Exercise
Technology Ventures: From Idea to Enterprise

18. Management of Operations14
VENTURE CHALLENGE
Describe the key business processes used by your venture.
Draft a value web for your venture as in figures 14.5 – 14.7.
Chapter 14: Venture Challenge
Technology Ventures: From Idea to Enterprise

19. DVD Video 14 “Operational Excellence Zone” Geoffrey Moore (MDV)
Management of Operations 14
DVD Video
“Operational Excellence Zone”
Geoffrey Moore (MDV)
Chapter 14: DVD Video
Technology Ventures: From Idea to Enterprise