Technological innovation must occur not only in new products, but also in new production processes to produce products quickly, cheaply, and high quality. Over time, the number of innovations of production exceeds the number of innovations in products. Accordingly, innovation strategy should focus not only in high-tech products but also on high tech production.
Production has been called by different names in different industries. Example: In the hardware industries production is called manufacturing, in the civil structures industry it called construction, in service industry it is called service delivery. Software production is either named hard goods production.
Production systems, Materials must thus be transported to the production site, moved to and between unit production processes, packaged, stored in finished product inventory, and shipped into distribution channels. The system of coordinating all this is called production system. Technological change in production system can occur in any aspect and any part of the production system.
Innovation in production systems can provide competitive edges of two economic types: economies of scale or economies of scope. An economy of scale is a unit cost advantage in production that arises from technical efficiencies in the volume of the production scale. An economy of scope is a production flexibility that allows a producer to market a broad range of products.
Technological Innovation can be implemented in both unit processes and the control of the unit processes of a manufacturing system. Research and technological innovation can improve unit process control in two ways: by real time control through intelligent sensing and control, 2) through experimental design for processes that one cannot presently model
Production learning curve
Production innovation is critical to the beginning of the production of any new product, as improvements in production to improve product quality and lower product costs are essential to competition. When a new production system is innovated, the initial production of the system always be more costly and of lower quality and less safe that later production. Learning better how to produce is the common experience of successful producers. This has been expressed in the production learning curve. Plotting the unit cost of production over time shows how unit production costs can decline as technologies and skills of production are improved.
Design for manufacturing
Not only of product performance have been termed DFM, lower manufacturing costs and improve manufacturing quality have been termed DFM either.
Quality in manufacturing
Technological Innovation can improve product quality in three ways: through improving performance(how well does it do the job for customer?) or dependability (Does it do the job dependably), or through lowering product variability (does it produce the product in volume without defective copies?)
When a product fails, you must replace it or fix it. In either case, you must track it, transport it, and apologize for it. Losses will be much greater than the costs of manufacture, and none of this expense will necessarily recoup the loss to your reputation…(Taguchi and Clausing, 1990.p.65).
Evaluating the benefits of innovations in manufacturing requires following criteria:
- Improvement in production precision, production flexibility, production control and scheduling,
- Reduction of material waste, throughput time, work-in-process inventories and indirect product costs.
Financial evaluation of technical innovation in manufacturing solely on a direct cost return-on-investment criterion misses the impact of quality on competitiveness and profitability.
Hard goods production technology audit
A systematic list of all technologies involved in production is called production technology audit. Example: Hard goods production technology audit 1) unit-production processes 2) materials-handling processes 3) production control processes 4) environmental control processes 5) product distribution processes. In each of those processes, there will be physical equipment and phenomena and control equipment and algorithms.
Service delivery technology audit
Necessary infrastructure : 1) Major device system 2) Facility system 3) Sales system
Parallel operating systems: 1) professional personnel system 2) Support system 3) Scheduling system 4) Maintenance/ resources systems
