MANAGING OPERATIONS AND

TECHNOLOGY
Unit 5
Managing Technology
6 hours

By
Laxman Pokhrel

Monday, June 24, 2019

Technology and Operations Management

• The scope of Technology and operation management has

evolved over a period of time and has moved from
development of products into design, management and
improvement of operating system and processes.
• Usage of technology in operation management has
ensured that organizations are able to
– reduce the cost,
– improve the delivery process,
– standardize and improve quality,
– focus on customization,
– thereby creating value for customers.
Technological Evolution in
Operations
 Perspectives on Technology
• Business information value chain
– Raw data acquired and transformed through stages
that add value to that information
– Value of information system determined in part by
extent to which it leads to better decisions, greater
efficiency, and higher profits
• Business perspective:
– Calls attention to organizational and managerial
nature of information systems
The Business Information Value Chain

View of a firm as
a series, chain,
or network of
basic activities
that add value to
its products and
services, and
thus add a
margin of value
both to the firm
and its
customers
 Disruptive Technology
• A new technology that gets its start from the
mainstream of a market and then, as its
functionality improves over time, invades the
main market
• Revolutionizes the industry structure and
competition, often causing the decline of
established companies because they listen to
customers who say they do not want it
• Causes a technological paradigm shift

7-6
 Disruptive Technology
– Technology that brings about sweeping change to
businesses, industries, markets
– Examples: personal computers, word processing
software, the Internet, the PageRank algorithm
– First movers and fast followers
– First movers—inventors of disruptive technologies
– Fast followers—firms with the size and resources
to capitalize on that technology
Disruptive Technology
Disruptive Technologies
 Concept of Technology Transfer
• Technology transfer is a principle means of
industrialization for underdeveloped nations.
• The transfer of technology from developed to
developing country has grown considerably in
last few decades.
• Acquisition of technology cannot be regarded
as a neutral phenomenon. It is closely bound
by the economic policy at both national &
international level.
 Concept of Technology Transfer
• Technology transfer is not about selling some hardware to a
client who is then left with the task of using it as he/she
deems fit. Technology transfer is the imparting of
knowledge, skills and methodologies involved in the whole
production cycle. Technology transfer is a system that
encompasses the social and economic fabric of a country.
Where technology has been effectively transferred, there
should be a visible change - from the person to the
production system as well as compatibility with the needs,
in the institutional framework, skills, training, financial
capacity, promotion, and active support of endogenous
capacity and appreciation of the natural environment of the
recipient country. Technology transfer also has to do with
disseminating information on the technologies themselves.
 Technology Transfer
• Any transfer of technology to be made under an
agreement between an industry and a foreign
investor on the following matters
– Use of any technological right, specialization, formula,
process, patent or technical know how of foreign origin.
– Use of any trademark of foreign ownership
– Acquiring any foreign technical consultancy,
management and marketing service.
• Technology transfer is possible even in areas
where foreign investment is not allowed.
 Self Learning
• The Foreign Investment and Technology
Transfer Act 2019 (2075) (“FITTA”) that has
replaced the Foreign Investment
and Technology Transfer Act 1992.
 Technology Transitions
• Technological transitions (TT) describe how technological
innovations occur and are incorporated into society.
• Technological innovations have occurred throughout
history and rapidly increased over the modern age.
• New technologies are developed and co-exist with the old
before supplanting them.
• Alongside the technological developments, TT considers
wider societal changes such as “user practices, regulation,
industrial networks (supply, production, distribution),
infrastructure, and symbolic meaning or culture”.
• Eg. from sailing to steam ships to automobiles replacing
horse-based transportation.
 Product and Process Innovation
• A product innovation is the introduction of a good
or service that is new or significantly improved with
respect to its characteristics or intended uses.
• These include significant improvements in technical
specifications, components and materials,
incorporated software, user friendliness or other
functional characteristics.
• Product innovations include both new products and
new uses for existing products.
 Product and Process Innovation
• New products. These are goods and services that differ
significantly in their characteristics or intended uses from products
previously produced by the firm. The first microprocessors and
digital cameras are examples of new products using new
technologies. The first portable MP3 player, which combined
existing software standards with miniaturized hard-drive
technology, was a new product combining existing technologies.
• New uses for products. The development of a new use for a
product with only minor changes to its technical specifications is a
product innovation. An example is the introduction of a new
detergent using an existing chemical composition that was
previously used as an intermediary for coating production only.
 Product and Process Innovation
• A process innovation is the implementation of a new
or significantly improved production or delivery
method.
• This includes significant changes in techniques,
equipment and/or software.
• Process innovations can be intended to decrease unit
costs of production or delivery, to increase quality or
to produce or deliver new or significantly improved
products.
• Process innovations can be distinguished by
production methods or delivery methods, or both:
 Product and Process Innovation
• Production methods. These methods involve the
techniques, equipment and software used to produce goods
or services. Examples of new production methods are the
implementation of new automation equipment on a
production line or the implementation of computer-assisted
design for product development.

• Delivery methods. These concern the logistics of the firm

and encompass equipment, software and techniques to
source inputs, allocate supplies within the firm or deliver
final products. An example of a new delivery method is the
introduction of a bar-coded or active RFID (radio frequency
identification) goods tracking system.
 Distinguishing Product and Process
Innovation
• If the innovation involves new or significantly
improved characteristics of the service offered to
customers, it is a product innovation.
• If the innovation involves new or significantly
improved methods, equipment or skills used to
perform the service, it is a process innovation.
• If the innovation involves significant improvements in
both the characteristics of the service offered and in
the methods, equipment or skills used to perform the
service, it is both a product and a process innovation.
 Process Innovation Example
• One of the most famous and groundbreaking
examples of process innovation is Henry Ford’s
invention of the world’s first moving assembly
line.
• This process change not only simplified vehicle
assembly but shortened the time necessary to
produce a single vehicle from 12 hours to 90
minutes.
 The Profitability of Innovation

Value of an • Legal protection

innovation • Complementary
Profits
from assets
• Ease of imitation
Innovation
Innovator’s
ability to of technology
appropriate • Lead time
value from an
innovation
 Thank You

Cell: 9801200827 Email: laxman,pokhrel@cgim.edu.np