Management of Technology
Management of Technology however, may be appropriate for covering the, what and how of selecting new products for new markets. Innovation management or simply the management fad of product development is a discipline that probably covers the objective of inventing new product-market combinations, especially as more recent work on both fads emphasize strongly the link to marketing and the customer.
Over the last few years, a perception of MoT as a part of strategic management has become evident in the literature. This seems to be the culmination of a historical development. A review of the MoT literature reveals that many authors do not share a common understanding of the subject or the nature of technology and management of technology. Thus, the literature on MoT is rich both in different perceptions of MoT and in work within each of these perceptions. Each of the many contributions to the MoT field has something to offer. An overview of the different perceptions of MoT and their implications is, therefore, much needed.
Some authors state that the field of MoT has existed since the early 1980s in its present form, but that the field can be traced back to the early 1970s under labels such as R&D management, innovation management, engineering management, industrial engineering, and operations management. The argument that MoT now embraces all of these different fields is that MoT is an umbrella concept that has the purpose of creating competitive advantage for firms by means of the internal activities in the firm. This has also been (part of) the purpose of operations management, but to me the strength of having MoT as the umbrella concept is that it allows for many different approaches to creating competitive advantage. This is in line with my rather pragmatic view that in practice many different approaches are needed to secure and create competitive advantage.
In 1987, the U.S. National Research Council (NRC) published Management of Technology: The Hidden Advantage, a research project aimed at discussing some current tendencies within international competition. NRC defines MoT as
“Management of technology links engineering, science, and management disciplines to plan, develop, and implement technological capabilities to shape and accomplish the strategic and operational objectives of an organisation. Key elements of MoT in industrial practice are
(1) The identification and evaluation of technological options;
(2) Management of R&D itself, including determining project feasibility;
(3) Integration of technology into the company’s overall operations;
(4) Implementation of new technologies in a product and/or process; and
(5) Obsolescence and replacement. (National Research Council, 1987, p. 15)
This is one of a number of explicit definitions of MoT. Another definition within the same tradition is:
“[MoT should] explicitly incorporate mechanisms to deal with management’s understanding of new and emerging technologies, organizational and workforce issues, and factors external to the firm…. [MoT should be] “Integrated” because it…[should]…combine the management of organisational issues related to technological innovation and implementation with the technical issues. (Monger, 1988, p. 39)
These definitions seem to consider technology one of the important resources of a corporation. G.H.Gaynor states:
“MoT at the academic level implies: developing an understanding as to how all of the technologies of a business can be integrated, directed towards some specific objectives, and optimised with all the other business resources…as an example, marketing, financial, and human resource management must be included. (Gaynor, 1991, p. 21)
However, other definitions concentrate on the invention and innovation of technology.
“Management of technology is the timely creation and improvement of the products and productive capability of the corporation. The problem of managing technology…divides into two parts: encouraging invention and managing successful innovation”. (Betz, 1987, pp. 6–7)
“There is a growing realization that the adoption of new technology is a highly complex process. Success is dependent not only on the management of change in the technology itself but also upon the changes within the business that are necessary to exploit the potential of the technology. It is these technology-induced organizational changes which management often has great difficulty in coming to terms with. Frequently it involves the culture of the business, its strategies, the organisational structure, managerial attitudes, and personal policies”. (Twiss & Goodridge, 1989, pp. xv)
In a third category are authors who see technology as a strategic factor and, therefore, MoT as an explicit part of strategic management.
The integration of business and technology is critical to success in today’s environment of stiff competition, changing social values, and fast development of new technologies. Success in integrating these functions will depend on a corporation’s ability to:
Create a mutual understanding between business and technology, recognizing each other’s needs and constraints.
Recognize the limitations of strategic business planning process.
Incorporate technology as a part of corporate strategic planning process.
Recognize that the effective utilization of human resources may be the only strategic advantage of a business or corporation.
“Management of technology is actually the practice of integrating technology strategy with business strategy in the company. This integration requires the deliberate co-ordination of the research, production, and service functions with the marketing, finance, and human resources functions of the firm. (Gaynor, 1991, p. xi)
Few people have provided an overall view of the management of technology as a discipline. Among those who have are Paul Adler (1989), and John P. Ulhøi. Thus in conclusion there are several different perceptions of what MoT is in the current research community. For the purposes it is particularly relevant that MoT can be divided into four schools of thought:
The schools have been evolving since the early 1970s. More recent development in the field of innovation management suggests that this corresponds to a traditional perception of innovation management, and that this perception is currently being supplemented with the idea that innovation should also take place at the internal level—competencies—of the firm.
Supply Chain Management
A supply chain operations strategy is a subclass of the supply network strategy. It determines the nature of procurement of raw materials, transportation of materials, manufacture of product or delivery of service, and distribution (including after-service follow-up). Such a strategy is also known as a value-chain operations strategy and is usually a linear interaction between nodes.
Supply chain or value chain management is composed of the operational or tactical activities (genus) and can be defined as ‘Managing the entire chain of raw material supply, manufacture, assembly and distribution to the end consumer’ Jones (1989).
Other definitions abound, but all concentrate on similar themes. Christopher (1998), for example, describes supply chain management as ‘The management of upstream and downstream relationships with suppliers and customers to deliver superior consumer value at less cost to the supply chain as a whole’. A supply chain will consist of three primary elements: structures, processes and the linkages between them:
Structures – these are the organizational units within the supply chain that interact. They include a company, its suppliers, its customers, distribution channels, design and engineering centres, manufacturing and service centres.
Processes – the operational activities that transform inputs into outputs. These can involve demand and supply planning, forecasting, sourcing, purchasing, manufacturing and service operations, logistics, order entry, materials management, and new product or service development.
Linkages – connecting process to structure via communication, usually in the form of shared information and continuous communication.
To these we can add: Cross-functional teams – to co-ordinate the interaction between supply chain functions.
Cross-enterprise teams – co-ordinating the interaction between nodes or supply chain organizations.
At a strategic level, a supply chain operations strategy involves making long-term decisions about some of the following elements:
Coordination and integration of all supply chain activities into a seamless process within and external to the organization;
Planning and collaboration across a distributed supply chain;
Optimally delivering the right product to the right place at the right time.
Unfortunately, a number of practitioners and academicians from various schools of thought have tended to apply more localized interpretations of the supply chain. For example, one very narrow perspective views supply chain management (and its accompanying operations strategy) as including only those activities prior to point of manufacture. Another, although slightly wider, considers only those elements up to the last point at which a product differentiation decision is made (Jones, 1989). Clearly, both of these neglect the end consumer – a rather radical omission.
A supply chain operations strategy in its true sense encourages a much wider viewpoint of the flow of information and products in a supply setting (supply alone being merely a logistics view point). It should incorporate the notion of end consumers and the provision and coordination of activities that will provide product and service combinations that they require. Further, as the chain metaphor implies, this is achieved through management across and between company boundaries.
What of the benefits from supply chain management and a supply chain operations strategy? Although often difficult to quantify (this is one of the disadvantages) there are undoubted advantages. Quinn (1997) suggests that total supply chain costs represent more than half, and in some cases three-quarters, of the total operating expenses of most organizations. Ferguson (2000) reports that firms employing such approaches enjoy a 45 per cent supply system cost advantage. Lumus and Vokurka (1999) note meanwhile that firms operate with 36 per cent lower logistics costs, which translates into a 4 per cent increase in net profit margins. Other more qualitative benefits include: A focus upon the end consumer. The recognition that customers make decisions affecting the success of an industry was long overdue. In order to remain competitive every enterprise must ensure that all activities along the chain are managed in accordance with customer demand.
Synergy. The achievement of optimal interaction of enterprise resources of the supply system will allow more effective and efficient operation; thus providing higher value to the end consumer but with lower cost. In theory, the benefits of synergistic operation should far outweigh those achievable by any individual firm.
Continuity. Firms in a closely linked supply chain tend to build longer-term partnerships and alliances. Security amidst a turbulent environment comes from the development of such relationships and the shared expertise it brings, as well as the barriers to entry it develops.
Information. Successful supply chain management operations rely heavily upon shared information. The sharing of data/information should, in theory, enrich the business process and link supply to demand more closely.
Cooperation. With reduced organizational barriers, other firms can contribute their expertise into what would traditionally have been an internal function such as research and development, new product development, marketing and promotion, etc.
Customer access. Potentially, using supply chain management, organizations further upstream can establish closer links to customer demand than they would normally expect.
Diversity. As has been alluded, many sectors are witnessing increased demand for variety, choice, uniqueness and customization. This being so, the business environment becomes more turbulent. Integration of the complete product cycle at its various stages along the supply system does have the potential to increase product customization possibilities.
As noted, the term supply chain management is synonymous with a mixed bag of concepts, theories, terms and tools that apply to more than one industry. The overall proposition is quite simple, however; it has been made unnecessarily complex by various diverse and disparate movements within different industries.
Supply chain management covers a number of activities, some of which are more value adding than others, while a supply chain strategy involves making long-term decisions concerning core operational processes, resources, technologies and certain tactical and support activities. It is suggested that the many of the terms encountered in the literature regarding the former, in fact equate to a short list of common sense axioms: The organization, being an open system, exists in a wider environment and is influenced by it;
Organizations, as systems themselves, have inputs that they transform into outputs using a variety of energy sources;
For their inputs and energy sources, they nearly always rely upon other organizations, likewise for the sale or transfer of their outputs;
Other organizations, upon which they are reliant, are part of a wider supply system or network that contains a number of chains;
Products, services, information and value added activities form part of the currency of these supply networks and they are constantly generated, traded, bought and sold;
The more the parties in a supply network align their focus on the end customer and the necessary value adding activities, the more profitable will be the venture;
A common agreement is needed between the members of a supply network as to exactly what does and does not add value, and how this is to be measured;
Effective and open communication is essential;
Unlimited flows of data and information are necessary, travelling both forwards and backwards, to which each and every organization has unrestricted access;
If the parties in any particular supply network recognize their joint dependence, in what is a symbiotic relationship, it is a first step to improving the performance of the total entity. Should they then form closer working partnerships as a result, so much the better.
A commitment to continually improve the whole network activity is mandatory.
Having briefly examined the nature of supply network and supply chain operations strategies, a small digression is in order. It is important to remember that there are certain processes and cycles involved in both supply network and supply chain. For a strategy to be developed, these must be well understood; as there will be certain longer-term strategic decisions necessary concerning how the organization delivers products and services.
In conclusion I must say that the management in technology plays very important role in supply chain management as efficiency in information technology directly influences supply and demand of the product. Effective management and technology makes the evaluation of overall production of the organization very dynamic.
Betz, F., Managing Technology: Competing Through New Ventures, Innovation, and Corporate Research. Englewood Cliffs, NJ: Prentice-Hall, 1989
Christopher M. (1998) Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service, 2nd edn, Pitman Publishing, London.
Ferguson B.R. (2000) ‘Inplementing Supply Chain Management’, Production and Inventory Management Journal 41, 64-7.
Gaynor, G.H., Achieving the Competitive Edge Through Integrated Technology Management. New York: McGraw-Hill, 1991.
Jones C. (1989) ‘Supply Chain Management – The Key Issues’, BPICS Control October/ November, 15, 6, 23.
Lumus R.R. and Vokurka R.J. (1999) ‘Managing the Demand Chain through Managing the Information Flow: Capturing “Moments of Information” ’, Production and Inventory Management Journal 39, 49-58.
Monger, R.F., Mastering Technology: a Management Framework for Getting Results. New York: The Free Press, 1988.
National Research Council, Management of Technology: The Hidden Advantage. New York: National Academy Press, 1987, 15.
Quinn F.J. (1997) ‘What’s the Buzz? Supply Chain Management Part I’, Logistics Management 36, 43, 68-75.