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OPERATIONS/
TECHNOLOGY
CAPABILITIES
Session 5
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Operational capabilities- types

• Operational improvements- resources for improving
current processes
• Operational innovation- capabilities for improving
processes and for creating new processes
• Operational customization- capabilities for extending and
customizing operations proceses
• Operational cooperation- capabilities for creating internal
and external linkages
• Operational responsiveness- capabilities for responding
quickly to changes in input or output requirements
• Operational reconfiguration- re-establish fit between
operations strategy and market environment if equilibirium
has been disturbed
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Technological capabilities
• Traditionally seen as a requirement to align technology to
the strategy- must for effective implementation
• “strategic management of technology”
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What is technology?
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Understanding the technology

• STOCK AND FLOW ASPECTS
• Product embodied aspect of technology
• Process related- how to use/make the product
• Knowledge related to the technology (tacit and explicit: explicit-
manuals, charts, formulae, theory-partly protected by
patents/copyright)
• Skills related to the technology
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How do we assess the technological

level of firms?
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---Assessing technology
• Assessing costs and benefits of new technologies
(patents, annual contribution from new products/
processes)
• Life cycle position of new technologies
• Emergent technologies not yet used by the organization
• Phases (design, development, production, marketing,
post-marketing) where the top management spends its
time
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Markets Products Tech 1 Tech 2 Tech 3

Market 1 Product 1

Product 2

Market 2 Product 3

Product 4
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Identifying the CC tree

• Listing groups of related products
• Identifying the derivative technologies associated with
each group of products
• Identifying the core technologies associated with the
derivative technologies
• Identify the basic technologies that give rise to the core
technologies
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Canon: Products and Core Technical Capabilities

Precision Fine
Mechanics Optics

35mm SLR camera Plain-paper copier

Compact fashion camera Color copier
EOS autofocus camera Color laser copier
Digital camera Laser copier
Basic fax
Video still camera
Laser fax
Mask aligners Inkjet printer
Excimer laser aligners Laser printer
Stepper aligners Color video printer
Calculator
Notebook computer

Micro-
Electronics
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Technology influences: Customer value

criteria
• Quality
• Service
• Cost
• Cycle time
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Customer value: Quality

• Meeting customer requirements
• Fitness for use
• Process integrity
• Minimum variances
• Elimination of waste
• Continuous improvement
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Customer value: service

• Customer service
• Product service
• Product support
• Flexibility to meet customer demands
• Flexibility to meet market changes
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Customer value: cost

• Design and engineering
• Conversion
• Quality assurance
• Distribution
• Administration
• Inventory
• Materials
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Customer value: cycle time

• Time to market
• Concept to delivery
• Order entry to delivery response to market forces
• Lead time (initiation to completion of a process)
• Design
• Engineering
• Conversion
• Delivery
• Materials inventory
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How can we operationalize/classify

technological capabilities?
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Technological capability: elements

Strategic technological capability
Tactical technological capability
Supplementary technological capability
Steering capability
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Strategic Technological capability

• Creation capability
• Design and engineering capability
• Construction capability
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Tactical Technological capability

• Production capability
• Marketing and selling capability
• Servicing capability
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Supplementary technological capability

• Acquiring Capability
• Strategic Planning Capability
• Training Capability
• Information Support And Networking Capability
• Technology Selling Capability
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Steering Capability
• Path Finding Capability
• Decision Making And Implementing Capability
• Integrating Capability
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Operationalising capabilities
• Deciding indicators for different levels for each capability
• Rating the organization on each of these capabilities
• Understanding the gap and resources required for
reaching the desired level
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‘World class’ production

• Stage 1. Internally neutral: by own standards, supply
without ‘surprises’
• Stage 2: Externally neutral: meet standards of main
competitors
• Stage 3: ‘Internally supportive’- no longer appropriate to
copy competitors, actions related to organizational
strategies
• Stage 4: ‘Externally supportive’- Best in the world in
anything important it does
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Distributed technological
capabilities
• Across large and increasing number of
technological fields
• In different parts of the organization- eg in
corporarte R&D units for exploring new and
emerging opportunities and in the
subsidiaries for sustaining the distinctive
competencies
• Among different strategic objectives of the
organization