Innovation by P/OM for New Product Development (NPD) and Sustainability

Innovation by P/OM for New Product Development (NPD) and Sustainability

Chapter 11:

Innovation by P/OM for New Product Development (NPD) and Sustainability

TRUE/FALSE

1.Organizational continuity planning goes by many names including “contingency planning.” It is a preview (pre-planning) method. In other words, a way to prepare a response to an imaginary set of otherwise unanticipated external and internal emergencies (crises). Without contingency planning the only response is after-the-fact in a reactive mode. This is a risk management topic.

ANS:TREF:11.4 and 11.6.5 also open to broad discussion

2.Adaptation is a major form of innovation which prepares the organization for technological developments. This is partly an operations management responsibility.

ANS:TREF:11.3.2 and 11.5.2

3.Innovation by healthcare professionals is necessary for humanitarian operations and crisis management. P/OM is not involved except with respect to its repair and maintenance responsibilities.

ANS: F PTS: 1 REF: 11.2.1

4.Operations are activities intended to make a product or deliver a service sometimes for profit but not necessarily for profit. That would include government operations as NGOs.

ANS:TREF:Introduction to Chapter 11 and google NGOs

5.One factor that accounts for the growing importance of design for disassembly is the tough European take-back laws.

ANS:TREF:11.7.4

6.P/OM uses innovation to design processes which may be new or adapted from old systems using incremental changes to improve performance. The process design aspect of P/OM must be entirely independent of product design.

ANS:FREF:11.1

7.Decisions made by both marketing and P/OM must be shared in a transparent environment to achieve organizational success.

ANS:TREF:11.1

8.All failure is failure to adapt means that when a new condition arises which threatens to doom existing plans, the organization must change what it has been doing to cope with the new conditions and overcome them. Thus, a cause of failure to adapt is inability to recognize the need for adaptation.

ANS:TREF:11.2

9.The location of remanufacturing is in the reverse supply chain. First, the supply chain is outbound to the customer. Then, it forms a loop—by coming back and going inbound from the customer to the company. It is returned to the company at the end of the product’s life. At this stage, it is a candidate for remanufacturing.

ANS:TREF:11.7.4.

10.ELV stands for “end-of-lifetime-value” which is an important aspect of closed-loop supply chains. We must predesign for efficient end-of-life value.

ANS:FREF:11.7.4

11.A large number of new products fail. That means that new product projects are at fault. New product development projects are marketing driven and are not the responsibility of production and operations managers.

ANS:FREF:11.2.1

12.Sustainability is the term used by environmentalists to save the planet from CO2. The financial area also uses the term for successful IPOs (initial public offerings).

ANS:TREF:11.2.2

13.The planning tree of management options in Figure 11.1 shows in its upper-branch that it is inevitable that product life is finite. It does not indicate how long that lifetime might be as a function of good management creativity.

ANS:TREF:11.2.2

14.Walt Disney had been told that his plans for the Epcot (Experimental Prototype Community of Tomorrow) theme park were doomed to failure. It opened on October 1, 1982 and has been successful ever since. This is an example of Walt Disney’s striving for the impossible.

ANS:TREF:11.2.2

15.The grandfather clause means that old businesses may be exempt from a new government regulation.

ANS:TREF:Open for discussion

16.The planning tree of management options in Figure 11.1 shows why it is necessary to plan for the future and why it is impossible to influence what the future has in store.

ANS:FREF:11.2.2

17.There are four pillars of sustainability. The fourth one is corporate responsibility which entails paying dividends to stockholders.

ANS:FREF:11.2.2

18.The new patent law that went into effect in Spring of 2013 is called the American Innovation Act. It is basically the same as the old law.

ANS:FREF:11.3.1

19.Continuous innovation—Step 1 consists of cultivating an organizational attitude that fosters creating new ideas. This culture embraces disruption and cuts across functional domains.

ANS:TREF:11.3.2

20.Continuous innovation—Step 2 rigorously and continuously markets innovations thereby overcoming negative research results obtained from testing the new products. It takes a great deal of money spent on advertising to reverse consumer dislikes.

ANS:FREF:11.3.3

21.An example of team members working together in synchronization is a perfectly run relay race.

ANS:FREF:11.3.4

22.Figure 11.2 shows spending more early on in a project can lead to more mistakes that need to be corrected. The cost of rectifying early mistakes is greater than correcting later mistakes which have had a chance to be watched and understood.

ANS:FREF:11.3.4

23.A rule of successful innovators is: The best way to avoid risks is by making no changes. An alternate statement is “take no chances.”

ANS:FREF:11.4

24.Recovery from failure by making amends leads to the observation that “recovery from failure often creates stronger bonds between customers and the company.

ANS:TREF:11.4.1

25.Maintenance and process changeovers require monitoring to be certain that the job was done right. For example, it has been estimated that surgeons leave equipment inside patients’ bodies about 39 times per week. (livescience, 12/21/12).

ANS:TREF:11.4.2

26.New competitors are naïve and are said to have a greenfield disadvantage. Legacy competitors have the advantage of years of experience which is called the brownfield advantage.

ANS:FREF:11.4.3

27.The entire old lighting industry has been innovated out of existence in a matter of a few years. The product and process of standard incandescents are being phased out. New production of tungsten filament bulbs is already prohibited.

ANS:TREF:11.4.3

28.The conceptual platform for continuous innovation shown in Figure 11.3 is a goal and not a reality. The idea is to start with a concept and if it tests well, put it into company memory for later execution.

ANS:FREF:11.5

29.The product platform planning known as PPP is Step 3 of the continuous innovation cycle. It replaces planning for one product at-a-time. The one product at-a-time concept is now passé.

ANS:TREF:11.6.2

30.W. L. Gore & Associates has been using continuous project systems for NPD for many years and with great success. One of thousands of products made by the company is Gore-Tex® fabrics which most folks have used in one form or another.

ANS:TREF:11.6.1

31.Innovations wax and wane in rhythm with long-term cycles. One of the best known waves was proposed by Nikolai Kondratiev (or Kondratieff) who was sent to the gulag and executed in 1938. (See Kondratiev wave in Wikipedia.) There is no group that can accept or reject such a theory but a number of advocates have spoken up for it and a number of critics have panned it.

ANS:TREF:11.2.2

32.Sustainability Pillar 3 refers to economic forces and Pillar 2 to the social dimension. These are not as well defined as Pillar 1 in the literature.

ANS:FREF:11.2.2

33.The Lifetime Value (LTVVL) of a very loyal customer might be different from the Lifetime Value (LTVAL) of an average loyal customer. To be specific, say that Very Loyal Customers are defined as those who buy a coffee in one of our stores at least five days out of seven. Then, say that Average Loyal Customers are defined as buying a coffee at least once a week and no more than four days out of seven. Is this statement T or F?

ANS:TREF:11.5.2

34.The Lifetime Value of a heavy buying loyal customer might be different from the Lifetime Value of an average buying loyal customer. To be specific, say H-B Loyal Customers are defined as those who spend $50 a week or more in one of our stores. Then, say that A-B Loyal Customers are defined as spending between $35 and $49 a week in one of our stores. Is this statement T or F?

ANS:TREF:11.5.2

35.There is no need to use the Net Present Value (NPV) calculations of the Lifetime Value of a customer if the purchase cycle for the product is short. The NPV summation, in this case, will not differ from the undiscounted stream of payments.

ANS:FREF:11.5.2

36.In the case of an automobile owner who buys a new car every three years and who services the car regularly during the intervening years, the time stream of payments would not be identical as in Column B of Figure 11.4. Column B might read like this instead: $32,000, $2000, $2000, $32,000 etc. This would invalidate the use of NPV for the determination of the LTV.

ANS:FREF:11.5.2

37.Frequent-flyer plans that reward customers for mileage rather than the number of flights that they take are rewarding long-distance flyers and penalizing those who might fly more frequently. The effect would have to be studied to determine the best loyalty plan.

ANS:TREF:11.5.3

38.Loyalty plans are product innovations.

ANS:TREF:11.5.3

39.NGPs are similar to PPPs; it is just another name for the same approach to NPD.

ANS:TREF:11.6

40.Product modularity is an innovation that inhibits product platform planning (PPP).

ANS:FREF:11.6.3

41.Modular design has been used for many years whereas the product platform planning (PPP) methods are relatively new. The increase stress on PPP abilities has emerged as a result of competitive abilities to imitate and compete in a very short time. The shorter life cycle after early growth necessitates the upgrading of new product entries.

ANS:TREF:11.6.3

MULTIPLE CHOICE

1.The percent of new product development failures cannot be known exactly and it changes over time. However, a fair estimate might be _____.

a. / 70 percent / c. / 37 percent
b. / 7 percent / d. / 0.7 percent

ANS:AREF:11.2.1

2._____ is meant to connote that efforts are made to achieve sustainable land and water resources.

a. / Protecting the environment / d. / Allow only responsible developments
b. / Staying green / e. / All of the above
c. / Improving the QOL

ANS:EREF:11.2.2

3._____ is based on swappable components any of which can be plugged into the mother unit. Each swappable component has its own capabilities.

a. / Modularity / c. / A stochastic process
b. / The theory of interchangeable parts / d. / Sequenced line assembly

ANS:AREF:11.6.3

4.Compact fluorescent lamps (CFLs) are made with Edison bases because:

a. / P/OM cannot develop production processes that make other bases at competitive prices.
b. / Left hand threads prevent theft of these CFLs.
c. / CFLs require candelabra bases
d. / Most applications replace incandescent bulbs in standard sockets.

ANS:DREF:11.6.3

5.Which choice makes sense for enabling take-back, reverse supply chain achievement?

a. / products that can be dismantled quickly and easily
b. / components that can be reused
c. / parts that can be disposed of safely
d. / all of the above

ANS:DREF:11.7.4

6._____ relate to product innovations that provide variety and greater choice to customers without forcing them to switch to a competing brand.

a. / Line extensions / d. / Refurbished units
b. / Remanufactured units / e. / Social media claims
c. / Replacements

ANS:AREF:11.7.1

7.Brand switching matrixes______.

a. / are used to determine change in market share after one year.
b. / can be used to show flows of customers who are switching between brands.
c. / can be used to show numbers of customers who are repeat purchasers.
d. / only b and c are correct.

ANS:DREF:11.7.4

8._____ is when an original innovation is imitated with improvements by a competitor.

a. / Over-claiming product attributes / c. / Being first to market
b. / Leapfrogging effect / d. / Being second

ANS:BREF:11.9.1

9.Which of the following is one of the ways that reverse supply chains manifest themselves?

a. / Remanufacturing can raise costs and decrease quality.
b. / Resource recovery has the potential to reduce the cost of material.
c. / Cause an increase in the cost of failures or requires repair/replacement.
d. / All of the above

ANS:BREF:11.7.4

10._____ has led in disassembly with recycling goals of better than______percent______.

a. / VW, 85, of parts / c. / BMW, 95, by weight
b. / Ford, 98, by weight / d. / Honda, 98, of metals

ANS:CREF:11.7.4

11.Traditional classrooms are being replaced by an array of technologies which permit asynchronous learning. Asynchronous means that teachers and students can be______.

a. / Complete strangers yet communicate / c. / Distant from each other
b. / Using different computers / d. / On different time schedules

ANS:DREF:11.8.1

12.A(n) _____ plant has the advantage of being able to do things right the first time.

a. / brownfield / c. / OSHA regulated
b. / greenfield / d. / Legacy

ANS:BREF:11.4.3

13.A(n) _____ plant must be redesigned and rebuilt at high costs, including the cost of lost production while changing over from one system to the other.

a. / greenfield / c. / grandfathered
b. / old / d. / none of the above

ANS:BREF:11.4.3

14.Which of the following is incorrect?

a. / The conceptual platform is aligned with the company goals.
b. / Prototypes are needed to do actual physical consumer testing of products.
c. / Product designs are tested after concepts are converted into tested designs.
d. / New products are not launched into the market until the prototypes pass muster.
e. / none of the above

ANS:EREF:11.5

15.Platform (PPP) differentiation for different demographics is well illustrated by______.

a. / Vegetarians, vegans, and meat eaters / d. / Chocolate vs vanilla lovers
b. / Caffeinated vs decaffeinated drinkers / e. / All of the above
c. / Pulp vs no pulp in orange juice

ANS:EREF:11.6.4

16.The opposite of mass_____ is mass production.

a. / hysteria / c. / Prediction
b. / Effect 3 / d. / Customization

ANS:DREF:11.6.5

17.What enables a production process to be mass customized?

a. / Mechanical engineering feats / c. / Computer-assisted flexibility
b. / Engineers at the controls / d. / Computer-aided design

ANS:CREF:11.6.5

18.To be accepted, mass customization must be able to______.

a. / Switch between at least two different product designs.
b. / Switch between product designs in what seems like no time at all.
c. / Have the same output rate as a mass production system.
d. / all of the above

ANS:DREF:11.6.5

19.Some roadblocks in having the United States Mint employ mass customization of coinage might be:

a. / Reeding / c. / Coin sizes
b. / Metal differences / d. / All of the above

ANS:DREF:11.6.5

20.If it can be done, the mass customization of coinage manufacture by the United States Mint would have some beneficial aspects. Which benefits listed below are correct?

a. / Inventories of coins reduced / c. / both a and b
b. / Production run sizes cut / d. / neither a nor b

ANS:CREF:11.6.5

21.Some negatives about mass customization have been written. Which of the following are relevant?

a. / Capital investment is not greater / c. / Customers don’t know how to customize
b. / Problems delivering customized product / d. / B and C

ANS:DREF:11.6.5

22.Single or solo-product rollovers signify that_____product are (is) available.

a. / The old product and the new / c. / Only the redesigned old
b. / The old product is replaced; only the new / d. / No

ANS:BREF:11.6.5

23.Dual -product rollovers mean that_____product are (is) available.

a. / The old product and the new / c. / Only the redesigned old
b. / The old product is replaced; only the new / d. / No

ANS:AREF:11.6.5

24.Which of the follow is correct?

a. / In the dual-product rollover situation, it is essential to achieve the right balance of price differentials between the original and revamped product.
b. / In the solo-product rollover situation, it is essential to achieve the right balance of price differentials between the original and revamped product.
c. / Dual-product rollovers are more risky than solo-product rollovers.
d. / none of the above

ANS:AREF:11.6.5

25.Which major changes are on the horizon?

a. / computers are gaining practical capabilities to see, smell, hear, and feel
b. / computers are able to move ideas and documents without wires over large distances.
c. / computers are available that can lift, push, grasp and work 24/7
d. / all of the above

ANS:DREF:Open to discussion

26.The fundamental nature of the Markovian brand switching model is based on_____.

a. / Observations of two consecutive purchases by consumers
b. / Observations of a sequence of consecutive purchases over a long time period
c. / A and B are correct
d. / Simulation results for market shares over time

ANS:CREF:11.7

27.Table 11.1 shows that when_____occurs, the market shares are in equilibrium. They are stable.

a. / Equal switching in and out / c. / 40% of market share for B
b. / 60% of market share for A / d. / none of the above

ANS:AREF:11.7

28.Table 11.2 shows that Brand A is losing share to Brand B because ______.

a. / Fewer consumers switch from A to B / c. / Brand B has fewer switchers to A
b. / Brand A has less loyalty / d. / Brand B has greater loyalty

ANS:BREF:Tables 11.1 and 11.2

29.For the brand switching models, the statement is made that there are questionable assumptions such as the persistence of the switching and repeating rates. This makes good sense because_____.

a. / The samples are small / c. / There is high variability in the sample
b. / External conditions change quickly / d. / All of the above

ANS:DREF:11.7.1 and 11.7.2

30.Section 11.7.2 shows the method by which equilibrium values are derived. It is marked optional because it has mathematical equations that may go beyond the comfort level of some students. However, the fundamental concept can be stated as follows, equilibrium occurs when the values of brand shares after the next purchase cycle______.

a. / Are less than the prior set of values. / c. / Have ceased changing.
b. / Both C and D are correct. / d. / Are unchanged from the previous values.

ANS:BREF:11.7.2

31.Why should anyone care about how quickly equilibrium occurs?

a. / C and D may be correct (*) / c. / Equilibrium shares may resist change more than shares in disequilibrium.
b. / No one cares – it is not a good benchmark / d. / Brands with losses want to restore former brand shares as soon as possible

ANS:AREF:11.7.3

*Time to equilibrium may indicate how fast the system reacts.

32.In what way do Blue vs. Red Ocean strategies affect our plans, decisions, and actions?

a. / Blue is disruptive of existing markets.
b. / Red is swarming with competitors willing to cut prices for small gains.
c. / Blue can be copied by a clever imitator
d. / All of the above

ANS:DREF:11.7.4

33.P/OM can provide blue ocean capabilities by instituting a______where one has not existed before.

a. / Weight reduction program / c. / Quality control (ISO) program
b. / CLSC / d. / Program to win the Baldrige Award

ANS:BREF:11.7.4

34.Companies that excel in managing closed loop supply chains (CLSC)______than those who don’t.