Operations management

Table of Contents

1. Topic pack - Operations management - introduction
2. Operations Management (OM) - Introduction
3. 5.1 Production methods notes
4. 5.1 Production methods - questions
5. 5.2 Costs and revenues - notes
6. 5.2 Costs and revenues - questions
7. 5.3 Break-even analysis - notes
8. 5.3 Break-even analysis - questions
9. 5.3 Break-even analysis - simulations and activities
10. 5.4 Quality assurance - notes
11. 5.4 Quality assurance - questions and activities
12. 5.5 Location - notes
13. Innovation - notes (HL only)
    1. Innovation
    2. Case study - Xerox
    3. Research and development (R&D)
    4. Pharmaceutical companies - a new contract
    5. Innovation and R&D
    6. Europe moving in R&D slow lane
    7. Canadian apparel companies dress for success
    8. R&D - costs and benefits
    9. Patents, copyrights and trademarks
    10. Intellectual Property Rights (IPR)
    11. Digital Rights
    12. China: The Intellectual-Property Battleground
    13. Factors affecting Innovation
    14. Case study - 3M corporation
14. 5.6 Innovation - questions
15. 5.7 Production planning - notes
16. 5.7 Production planning - questions
17. 5.8 Project management - notes (HL only)
18. 5.8 Project management - questions (HL only)
19. Print View

Innovation and R&D

Innovation may be the result of Research & Development, but it may simply involve better technology or better methods of working without investment of time or money. R&D is likely to be a formal programme to find new products and services or to improve product quality and function, whereas innovation may simply involve incremental change at a micro level.

The R&D department should work closely with both marketing and production. The demands on R&D can be linked to the product life cycle (the shorter the life cycle of a product, the faster that new products must be developed), new product development and the firm's product portfolio. Look back at the Boston Matrix and the role of the cash cow in a firm's product portfolio. All firms need at least one cash cow to generate the cash flow to pay for R&D.

A typical cycle may go like this:

• Marketing identify a need for a new product. They 'design' it in terms of concept, performance and consumer needs.
• R&D produces one or more products to meet the marketing brief.
• Products may go to market research and test marketing.
• Suitable products, after investment appraisal, go into production and onto the market.

The process starts all over again. Frequently work will start on a new project before the last project is finished. So R&D ends up working on a portfolio of projects. Some will be long-term; others short-term. Some will have a clear commercial future, others may be more difficult to exploit.

R&D is usually found within large commercial organisations. Here R&D may be found both as a function on its own, and as part of the operating companies. Unilever is an example.