Operations Management 3Ms Design and Innovation - Essay Example

Operation’s Management 3M’s Design and Innovation Executive Summary Product designing plays a key role in the success of a product. History is a good example of the fact that most of the successful business that we witness today has been established based on innovation and creativity. Design and Innovation are two vital driving forces that have the capability to create new business. However design and innovation, both have to be focused in the right direction. Both are very essential for the future growth of any company and must be taken seriously. The companies must understand design and innovation can create new business opportunities for them. Designing a new product requires many inputs. The designing of a product is not all about the aesthetics but also about making the product as user friendly as possible. The utility and the appearance taken together creates a successful product. Often companies are not able to balance both factors. Either the appearance of the product is given more importance or the utility factor. 3M is one of the pioneers who have realised the importance of innovation and design is capturing new market. 3M has revolutionised the corporate culture by introducing the concept of intrapreneurship in their work culture. 3M encourages all the employees to think out of box and come up with concepts that can be converted into potential products. This report analyses the operation management of 3M with respect to their design and innovation strategy. Introduction Product design is a very integral part of the product. Product designing is not only about the look of the product it also deals with the utility of the product. The basic utility of the product is to satisfy the need of the customer. A successful product design fulfils all the aspects including performance and reliability of the product. The general perception regarding designing a product is focused around the aesthetics of the product. The colour, the shape and the feel of the product does account for lot of customer attention. However the look alone with the support of excellent functionality and utility will not help the company to sell the product. A product must first address a specific need of the customer. Many companies acknowledge the importance of product design and innovation in capturing new market. Innovation is the pulse of building new business (Takala & Keinonen, 2006, p.27). 3M is one of those companies which recognise the importance of innovation in business development. 3M initiated a corporate culture that encouraged intrapreneurship. The company is acknowledged for vertical organisational structure. The success of 3M has often been given by the management to the ability of the employees to have a creative bent of mind. During the period of 1985-2000, the company was awarded the top three ranking by Fortune magazine for their culture of innovativeness more than other corporates. In 1995, 3M also won the prestigious award of National Medal of Technology, the U.S government’s apex honour for innovation. 3M’s spiritual founder Ex CEO William L. McKnight is considered the main driving force behind the company’s philosophy of encouraging innovativeness amongst employees. The cornerstone of 3M’s success is attributed to the innovation capability of the employees. Company Overview 3M was founded in the year 1902. The company was initially into mining and gets the name from, Minnesota Mining and Manufacturing Corporation (3M). The company has diversified since then and has operations varying from technological field to house hold products. The company has reported to have predicted the revenue in the year 2011 to be between $29 billion to $ 30.5 billion. The product ranges offered by 3M ranges from Post –Its, respirators, computer arms to Scotch tapes. The company has operations world wide, they have set-ups in all the developed and developing countries. All the six segments of 3M’s business are running in profit and have been able to rake up good revenue for the company. The six business segments 3M operates in are – - Industrial (tapes, abrasive and adhesives), -Transportation, Graphics and Safety, -Healthcare (equipments and surgical devices), -Consumer and Office -Electro and Communication. -Speciality Materials The operations of 3M in Asia Pacific, Latin America and Europe have already achieved double digit volume growth. The Non- US operations claim around 53 percent of the sales of 3M. 3M has been very innovative in the strategies followed by the company; 3M identified 21 establishments and strategic new brands. Some of their famous brands include Scotch Brite (Cleaning product range), Post-it (repositionable products). Vikuiti (a new brand of display enhancement) Volition (fibre optic range) Command (adhesive brand) and Nexcare (range of first aid products). More than 75,000 employees working at 3M are credited for creating 500 new products every year. They are known for their culture of intrapreneurship. The employees are encouraged to spend productive time conceptualising new business ideas. The management selects the ideas they feel can be a good business product and develop it further (Achtmeyer, 2000, p.1) . Literature Review The main difference that stems up between the product designers and the operation mangers is the difference in their focus. Product designers often tend to focus on the aesthetics of the product for them the product should look stylish and appealing. However the operations manger focus their priorities on the designed achieved after incorporating the transformation process. Operations manger want the design to be functional and in accordance to the information gathered by the market research team. To design a product few vectors must be taken into consideration. The product is designed for a target customer and must satisfy the need of those target customers. The transformed resources which include technical information regarding the product, the market information and the information regarding the usage time of the product. These informations have to be utilised while designing the product. The transformed resources along with the transforming resource that include the know how of the designers and technicians create the desired product (Roy & Wield, 1986, p.2). . The product and service design out put has a specific process that it goes through before the actual design is approved and used for the production. The process starts with the generation of concept. Employees randomly accumulate concepts that according to them can be converted into a profitable business. These concepts are mostly applied towards the current need of a set of customers. The concepts are than are presented to the management , the management selects few of the concepts that they find lucrative. This step is acknowledged as screening. Once the screening is done, the designers are asked to work on the preliminary designs of the product to understand the utility and the feel of the product (Chitale & Gupta, 2007, p.6). Converting a concept to a primary design often is a painstaking step. During this process many flaws in the concept are generally realised. Once the preliminary designed is made the scope of further improvements are measured. A through discussion between the designers and the support team which includes the market research team, technical team and the finance team helps in creating clarity regarding the utility of the product and the potential of the product to generate revenue (Trott, 2008, p.111) After all the requirements outlined by essential members of the product design team are incorporated in the preliminary design the final design or in some case the prototypes are created. Prototypes often help the company to gauge the response of the customers regarding the product value and utility. In many cases during the test marketing of the prototype many feed backs from the customers are taken and incorporated in the final design (Howlett, 2011, p.271). . There are many factors that lead to concept generation. Concept generation in the right direction is very essential for any business. Trying to conceptualise a product without taking into consideration few key factors often does not materialise into profitable product. To acquire the backdrop based on which the product designing should be focused. Few inputs are necessary. The products are designed and innovated to satisfy the need of the customer. The inputs given by customers regarding an idea is important for conceptualising anew product. Certain inputs like, Suggestions given by customers, the current trend in the market, the actions and strategy applied by the competitors, the advice and feed back from the staff members who deal directly with the customers, suggestions from the research and development team are very essential. The staff members who interact with customers on a daily basis are well equipped to elaborate the apprehensions of the customers regarding certain features of the product and the assessment of the customers regarding the utility of the product. The research and development team can help the designers in understanding the flaws and function ability of the product design. The market survey team can help the designers regarding the current trend in the product in the market. The designs applied by the competitors, the flaws in the current designs available in the market (Cooper & Press, 2003, p. 43). The designers have to consider three criteria before deciding their design. The feasibility, the difficulties that must be solved and must be tackled. Difficulties regarding the financing required for the product. The managerial support required for the product is also a concern that has to be addressed before embarking the new plan. The second criteria that the designer have to consider is the acceptability of the product. Whether the product will be received well by the customers. The potential of the product to gain revenue and recover the initial investment. The third criteria which is the most essential one is the visibility of the vulnerable areas of the products. The trouble shooting capability comes from preparedness regarding failure of the product in certain areas. The assessment of the risk taken on taking up the product is a key issue. If the risks are higher and the revenue generation potential of the product is not much , the concept is mostly discarded. The product should impose minimal risk and high revenue generation. These criteria must be met by all the concepts , the screening of concepts are manly done by evaluating these criteria. Only the concepts which are able to address the three criteria of Feasibility, Acceptability and Vulnerability are screened for the next step of product p-preliminary designing (Seider, Seader & Lewin, 2009, p.13). . A concept must appeal to the commercial, technical, Economical and Company’s internal policy to be accepted by the management. The commercial aspects deal regarding the actual requirement of the product in the market. The pricing accepted by the market etc. the technical aspect deals with the technical glitches the product might have and be solved. The economical aspects mainly deal with the cost that the company will have to incur in producing the product and the return on investment the company can expect from the product. The company policy controls the suitability of the product in the product line offered by the company (Heizer, Jay, Render, Barry& Rajashekhar, 2009, p.147). . Two basic measures that are utilised to improve preliminary designs are Quality function deployment (QFD) and Value Analysis. QFD deals with utilising all the information from the cross sectional team regarding the customer and market expectation from the product and incorporating them in the product design. Whereas Value analysis looks for methods in which the cost incurred by the company in producing the product can be reduced without compromising on the quality and the utility of the product. Value analysis also seeks to increase the value of the product by adding feature to the product which increases the utility and appeal factor of the product (Hippel, 2005, p. 15). . Product Design and Innovation applied by “3M” At 3M the design and innovation process starts with idea generation. 3M management regards the first step as a creative process where all the employees are given the freedom to use their business acumen and creativity to conceptualise an idea. The ideas are then taken up by the management for screening. The screened ideas are the formed in a concept to have clarity regarding the potential of the product. At this phase the product designing team uses their expertise and tries to add value to the product. Once the designing team has designed the product the business strategy team takes up and prepares the product for launch (Tronconi, 2009, p.8). Experience design. 3M acknowledges the customer satisfaction as the main aim behind any new design and innovation. The experience the customers have while they purchase the 3M products and the experience the customers have while using the products are taken into consideration by the design and innovation team at 3M. Their new method of functioning is to incorporate new technology , business models, and aesthetics of the product with the customer’s experience to develop a successful model. Leveraging product design to build business opportunities. 3M has learnt from its own experience that innovation opens up new markets. Few innovations also have the potential to generate need in the market. 3M attributes the continuous drive to innovate in its employees as the main reason of their success. The company does not restrict the areas of innovation and encourages the employees to think out of the box. This policy adapted by the management is the main reason behind the wide diversified operations of 3M. Roadblocks. The main road blocks that are faced by 3M in applying their policy is selecting the right product concept. The screening process is very vital for 3M management because they are under pressure to select a concept that has business potential and signifies innovation. The other major road block faced by 3M is the risk factor, taking up new products and design does expose 3M to certain amount of risk financially. Suggestions 3M has been able establish itself as a brand which personifies design and innovation. 3M should carry their management style of intrapreneurship and incorporate new customer behaviour theories in their product designing and innovation to attain further success. Conclusion 3M indeed has made a name for itself in the business world. The company’s commitment towards innovation and creative designing has given it a distinct identity. Most of their products are not just rated high for their utility but also for their designs. The products that are manufacture by 3M are considered to be few of the most essential products by customers. The company has also not kept their business restricted to one domain, 3M has ventured into several business all varying from each other but united in their focus of serving their customer’s need. 3M is good example of how creativity can be united with utility. The operations management of 3M with respect to their designing and innovation is a well coherent process. 3M recognises the customers demand from a particular product and does through research regarding the need of the product by the customer before embarking a new design. 3M has been very successful in incorporating the basic requirements of the customers in their products. The operations management of 3M balances the informations acquired from market survey and analysis with their products design and innovation. 3M has also been able to establish themselves as a global brand that signifies innovation as a solution to the need of the customers. References Achtmeyer. W . F . ( 2000) . 3M Corporation.[Pdf]. Available at : http://mba.tuck.dartmouth.edu/pdf/2002-2-0002 . [ Accessed on May 25, 2011] Chitale . A . K & Gupta . R . C . (2007) . Product Design and Manufacturing. PHI Learning Pvt. Ltd Cooper . M & Press . R . ( 2003). The design experience: the role of design and designers in the twenty-first century . Ashgate Publishing Hippel . E. V . ( 2005). Democratizing innovation. MIT Press Howlett . R. J. ( 2011). Innovation Through Knowledge Transfer 2010. Springer Heizer, Jay, Render, Barry, Rajashekhar . ( 2009). Operations Management. Pearson Education India Lewin . D . R , Seader . J . D & Seider . W. D .( 2009). Product & Process Design Principles: Synthesis, Analysis And Evaluation, 2Nd Ed (With Cd) . Wiley-India. Roy . R & Wield . D . (1986) . Product design and technological innovation: a reader. Open University Press. Takala . R & Keinonen . T ( 2006) . Product concept design: a review of the conceptual design of products in industry . Birkhäuser Trott . ( 2008). Innovation Management And New Product Development, 4/E . Pearson Education India Tronconi . V . ( 2009). 3M Design & Innovation .[Pdf] . Available at : http://www.innovationcircus.it/2009/images/stories/Slide/Tronconi. [Accessed on May 25, 2011] Bibliography Gundling . E, & Porras . J . ( 2000). The 3M way to innovation: balancing people and profit. Kodansha International Gottlieb . R. ( 1995). Reducing toxics: a new approach to policy and industrial decisionmaking. Island Press Gerybadze . A & Rege . G . ( 2008). Globalization of R&D: Recent Changes in the Management of Innovation in Transnational Corporations.[Pdf]. 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