A Model of Technology Strategy Development Based on Hill’s Manufacturing Strategy Model Aryantono Martowidjojo <email@example.com> Supervisor: Prof. Allan S. Carrie
DMEM DMEM Background • The dynamics of industrial competition require: • a dynamic technology strategy development process • technology strategy which focuses on competitive advantage • Issues: • linking corporate strategy and technology strategy • the structure of technology strategy • the market pull versus technology push
Theoretical Background Finding the theory that provide analytical foundation for creating corporate strategy and technology strategy Finding the similar approach to technology strategy in manufacturing field Converting the selected manufacturing strategy model
The Elements of a Business Design • Customer Selection and Value Proposition. • Value Capture/Profit Model. • Strategic Control. • Scope of Operations. • Organizational Systems.
Learning from Manufacturing Strategy Field Hill’s Manufacturing Strategy Model Hill’s Manufacturing Strategy Model 1. Corporate Objectives 2. Marketing Strategy 3. How do products win orders? Manufacturing Strategy 4. Process Choice 5. Infrastructure • Growth • Survival • Profit • Return on investment • Other financial measures • Choices of alternative processes • Trade-off embodied in the process choice • Role of inventory in the process configuration • Process positioning • Capacity • Size • Timing • Location • Function support • Manufacturing planning and control systems • Manufacturing systems engineering • Quality assurance and control • Clerical procedures • Work structuring • Organisational structure • Payment systems • Product markets and segments • Range • Mix • Volumes • Standardisation versus customisation • Level of innovation • Leader versus follower alternatives • Price • Conformance quality • Delivery; • Speed • Reliability • Colour range • Product range • Design • Brand image • Technical support
Converting Hill’s Manufacturing Strategy Model to create a Technology Strategy Model What is needed in order to adapt manufacturing strategy model: • Corporate objective - business strategy • Marketing strategy - strategic advantage • How products win orders - how technology adds enhanced value • The conversion of: Manufacturing Strategy = Process Choice + Infrastructure Technology Strategy = Technology Portfolio + Technology Management
DMEM DMEM Effective Technology Strategy Competitive strategy The role of technology Value captured Strategic Advantage the innovator’s share Value created How do technologies create value Tech. Portfolio + Tech. Management
New Technology Strategy Model Technology Strategy Model Technology Strategy 1. Corporate Objectives 2. Strategic Advantage 3. Technology Advantage Criteria 4. Technology Portfolio 5. Technology Management • Select the competitive strategy: • product leadership • customer intimacy • operational excellence • The business strategy: • mission • strategic action programs • the role to be played by technology • the aggressiveness of innovation • The mode of competitive advantage: • Price • Quality – Cost • Know-how • Timing • Selection of technology trajectory: • Science based • Specialised supplier • Scale intensive • Information intensive • Supplier dominated. • How different technologies create enhanced value • Rivalry Stance • Value Chain Stance • Scope • Depth. • Core technologies • Type of innovation • Rate of innovation • R&D programmes • Investment levels • Risks • The implementation requirements: • R&D investment • People and competence development • Organisational structure • Acquisition, exploitation and protection methods.
DMEM DMEM Case Study - Background • Name: Vought Aero Products HBS 9-687-008, 1995 • Product: Military aeroplanes (since World War I) • Problems: Lack of major contracts in the late 1970s • Competencies: Design and Building whole aeroplane and their weapon systems • expert in the development and fabrication of advance material composite • leader in vibro-acoustics • Competitors: Many
DMEM DMEM Case Study - Application of Model • A. Corporate Objectives • Adapt "near prime" business strategy • Operational excellence strategy + customer intimacy. • B. Strategic advantage • Gain know-how advantage technological niches • Move from a specialist supplier to between a specialist supplier and scale intensive Centre for Strategic Manufacturing • C. Technological Advantage criteria • Narrower and Deeper • Better service to customers
DMEM DMEM Case Study - Application of Model • A. Corporate Objectives • Adapt "near prime" business strategy • Operational excellence strategy + customer intimacy. • B. Strategic advantage • Gain know-how advantage technological niches • Move from a specialist supplier to between a specialist supplier and scale intensive • C. Technological Advantage criteria • Narrower and Deeper • Better service to customers D. Technology Portfolio Two niches: the fabrication of large, complex-contour, advanced fibre composite parts, and high-throughput machining of large, complex geometry titanium parts. Centre for Strategic Manufacturing • E. Technology Management • Transform the existing core skills form original engineering to manufacturing and detailed engineering within customers' designs. • Invest in R&D in these niche technologies
Conclusions • The model captures key factors to guide the technology strategy development process • Technology Strategy =Technology Portfolio + Technology Management • Linking Corporate Objective and Technology Strategy via Competitive Advantage