Innovation and Operations

1. Innovation and Operations April 2010 Richard Noble

2. Innovation and OperationsLearning Outcomes • At the end of this session you should be able to:- • appreciate that the nature of design is context dependent; • recognise the importance of innovation in operations management; • recognise the importance of sales volume in product design; • recognise the importance of design in the process of making and delivering a product or service- three illustrations • recognise that much of innovation is not patentable • Sunday Times appointments • have an understanding of a number of approaches to design and process management- called TRIGGERS for innovation. • But first a reminder about Operations Management 2

3. Reminder- the activities of Operations Managers objectives Relation to competition Transformed resources; Materials Information Customers Operations strategy design improvement input output Planning and control Goods and Services Transforming Resources; Facilities Staff 3

4. A good design Meets customer requirements Dyson light weight On site service Is simple to make/produce- -- Management Today Pulley blocks HMS Victory p116 4

5. A trigger -Total Quality Management 1. Customer defines the quality 2. Top management leadership 3. Quality as a strategic issue 4. All employees responsible for quality 5. Continuous improvement 6. Shared problem solving IBM 7. Statistical quality control 8. Training & education for all employees + Quality improvement is the MOST powerful mechanism to change anything 5

6. TQM In Service situations Inputs similar to manufacturing Processes & outputs are different Services tend to be labour intensive Quality measurement is harder Timeliness is an important feature So why are have the differences even discussed See the3M case study page 452? 6

7. Lllustration 1. Fire Service Hampshire Fire and Rescue ServiceI Innovation in the Fire Service. Innovation is the successful exploitation of new ideas.  These ideas improve the way we do things and the things we make: the things that allow a business to remain competitive.  Some ideas are small and iterative; others can create an entire paradigm shift.  Evidence shows that businesses that have the awareness to continually create, evaluate and successfully exploit their new ideas are more likely to survive and prosper in the competitive global economy http://www.dti.gov.uk/innovation/innovation-dti/page11863.html Making Hampshire Safer

8. Motivators for Innovation Communication Empowerment Feedback Recognition Sense of value Investors in People Hampshire Fire and Rescue Service

9. Innovative Ideas Hampshire Fire and Rescue Service • Community Fire Wardens • Environmental Audits • Fire Setters Intervention • Young Firefighters Association • Local Fire Intervention Education • Rapid Response Vehicles • Partnership Working Making Hampshire Safer

10. Hampshire Fire and Rescue Service Without Innovation Which Generates Prevention Ideas. We Will Always Have To Deal With This Making Hampshire Safer

11. Illustration 2. NHS- A Big business 1.33 m direct employees 575 trusts/organisations 305 m primary care appointments 686 m prescriptions 17.8 m A&E attendances 13.4 m out-patient visits 5.4 m operations €90 + billion in 2009/10

12. Why innovate? “He that will not apply new remedies must expect new evils, for time is the great innovator.” Francis Bacon “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

13. 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 healthcare systems and healthcare industries in the UK and internationally

14. Research and development Funded by Department of Health’s R&D directorate Examples Serious Hazards of Transfusion (SHOT) Barcode reading device South West Hub Blood transfusion wastage cut, saving £20m per year

15. People IiP Improving Working Lives (IWL) – work/life balance Child-friendly policies Agenda for Change (A4C) Knowledge and skills framework Competency based Appraisals and personal development Training Reward and recognition

16. General NHS Direct Telephone Online Walk-in centres and treatment centres Run by commercial companies on behalf of NHS

17. Illustration 3University-What form can Innovation take? Product -Research Academic papers Books New courses or services MSc Health and Well being Process New ways of delivering courses eLearning, Work-Based learning, Problem-Based learning Position Positioning University in different markets Internal Structure of University

18. Process - DCQE “The central aim of DCQE is to enhance the quality of the student learning experience and promote student success. Its mission is to play a central role in advising, guiding, supporting and developing staff and students through the dissemination, promotion and embedding of good practice in academic departments” T&L Conferences Workshops & seminars

19. Supply Chain Management THE SUPPLY CHAIN The Operation Information on price, products, location, delivery etc BPR on whole sectors -Ebay 19

20. Ohno’s seven Wastes of- overproduction -making too much too early or just in case- waiting -time not being used effectively transporting (e.g. double handling) inappropriate processing e.g. ‘ using a hammer to crack a nut’ unnecessary inventory( excessive safety stock) unnecessary motions(relates to the ergonomics of the workplace- bending, reaching, more than two turns to loosen a nut) defects (quality failure- scrap, rework , complaints ) NEW WASTES- waste of untapped human potential, waste of inappropriate systems, wasted energy, pollution waste. 20

21. Agile supply chains Agility- ‘ adaptable, flexible responsive business capable of rapid adaptation in response to unexpected and unpredicted changes and events market opportunities and customer requirements. Time compression is key to agility in SC Drivers to agility/lean- as before plus emphasis on mass customisation (big differences in taste even in small area like W. Europe), rapid rates of technological innovation Lean has been viewed as an enabler to agility Advantages: inventory held at generic level- fewer stock keeping variants/ less inventory in total. See DELL illustration page 130 ‘Leagile’ 21

22. Innovation as an Operations Process itself See slide 3 Inputs Time, People, IT Ideas The Innovation Process (efficiency) Outputs New Products and Services. Patents Journal articles Books Repaired car (effectiveness) Indeed -Paul Trotts whole book? 22

23. A Design Spectrum Product- process- service -SCM –organisation- controls- business sector The story today- If you INNOVATE you will be successful To manage all this is very difficult 23

24. References Chapter 4 of Paul Trotts book. Dell p130, 3M p452, Pulley blocks HMS Victory p115 Slack et al (2007) chapter 15 Sunday Times- Appointment section March 14 2010 Management Today April 2008 ( Keeping things simple & managing complexity) 24