Technology Management-2

Assignment – A

1. a) What is technology? Discuss the role of technology in the productivity growth.
(b) Explain the concept of atlas of technology.

2. a) Why should technology be considered as a strategic resource?
(b) Why management of technology at the enterprise level important?

3. a) What is technology absorption? What are the reasons for the external acquisition of technology?
(b) What is technology intelligence capability?

4. a) Explain the term world class manufacturing?
(b) What is JIT? Discuss the basic elements that constitute JIT.

5. a) Differentiate the terms invention and innovation.
(b) Why organizations resort to technology transfer? What are the issues that encompass technology transfer?

Assignment – B

1.a) What is technovation? Explain the process of tehnovation.
(b) What are the principles of technology fusion?

2.a) Explain the term intellectual property right?
(b) What is the role of WTO in protecting IPR?

3. Write short notes
(a) Concurrent engineering
(b) Core competency
(c) Appropriate technology

Case Study

Managing Technology and R&D

ESAB Indian limited, Bombay is a leading manufacturer of welding consumables and equipment. ESAB India Limited is the Indian associate of ESAB AB, the Swedish multinational and the world’s largest company in welding and cutting, with production centers, core representation in most of the countries.

ESAB India, a Public Limited Company with paid up capital of Rs. 50 million, employs 206 people, including 35 S&T personnel, at its Kalwa unit which is the major manufacturing facility. It had a turnover of above Rs. 30 crores during 1991-92. It is licensed to make 1250 nos. of welding and cutting equipment and 24020 km of welding electrodes.

The in-house R&D unit of the company employs about 10 persons including S&T personnel (scientists and engineers) and is headed by a well qualified chief at the level of General Manager directly reporting to the Managing Director. The R&D unit is a separate entity situated within the company premises occupying a floor area of about 300 sq. m. but closely interacts with other functional groups. It has well equipped laboratories and pilot plant facilities for development purposes. The annual R&D expenditure was about Rs. 24 lakhs during 1991-92, i.e. about 0.8% of the annual turnover. A good technical library having books, journals and periodicals in the field of manufacturing is maintained. The company also encourages close interaction with the relevant R&D organizations and academic institutions. R&D personnel participate in technical seminars and meetings in India and abroad. A computerized information facility has also been built up.

The R&D unit of the ESAB India closely interacts from time to time with the principals in Sweden and at other places on developmental needs and receives relevant technical information which is very useful for R&D in India. In fact, there are some products/areas which have specifically been developed to meet the needs of India and could be relevant to other developing countries as well, but are not covered in the product range of the principals abroad. Most of the developments relate to highly specific applications such as for oil, power, underwater uses and are import substitutes. There are immense export possibilities through constant development efforts to meet the specific requirements of other countries.

In the early eighties ESAB realized that to survive in the competitive world of welding it had to become the biggest company and a leader in technology. As a route to achieve this objective, ESAB acquired a number of companies active in the field of welding and cutting. It acquired the European welding activities of Philips electrical and electronic group, based in the Netherlands in 1985. Subsequently, the welding business unit of Philips India Limited also became a part of ESAB Group in July 1988. This unit was not doing well commercially. The turnover of ESAB (India) almost tripled in three years due to active marketing efforts. In May, 1991 ESAB India Limited acquired the welding business of Indian Oxygen Limited (IOL), Calcutta. The turnover then approached Rs. 100 crore. The new Indian organization now has four major manufacturing centers and has sales outlets in all parts of the sub-continent.

TECHNOLOGY AND STRATEGY POLICY

ESAB’s objective was to become a world leader in welding technology. This was to be achieved by carrying in-house research and by absorbing the technology of newly acquired companies. ESAB now has well established R&D facilities in a number of countries, including India. The R&D unit of ESAB is a DSIR recognized unit and works presently mainly for the Indian market. In setting the objective of ESAB India, the top management of the parent company takes into account the in-house capability and potential for further advancement through imported technology. All possible support to R&D is extended by the management to retain the leadership in its field.

The company’s commitment to welding technology and product development is evident from the goal of the organization which is to provide technical solutions to the customers. Here the organization insists on the important distinction that is to provide solutions and does not sell products.

In a world where technology dominates there are new opportunities for continuous development. The development of low moisture absorption welding electrodes is a good example. The offshore structures of the North Sea required welding consumables (electrodes) which would produce welded fabrication free from structural failure in a very harsh working environment. The cost of such failures could be tremendous compared to the cost of welding consumables. Typically, welding consumables constitute less than 1.5% of the total cost of the structure. The cost of failure of the structures is frequently many times the cost of the structure itself.

The early objective was to have extra low hydrogen in the weld metal. For this purpose special low hydrogen electrodes were made and then re-packed just before use. This costly process could be eliminated by packing the electrodes in vacuum sealed packages (Vac Pac) at a relatively high cost. Efforts at developing the low cost devices for packing continued. The low moisture absorption electrodes have now been produced which reduce the cost of the solution of the welding problem. At the same time the product was further developed to give improved welding characteristics in order to improve manufacturability and to reduce cost.

Expenses incurred on product and process development have to be recovered from sales so that R&D process for continuous improvement can go on. The key words which characterize ESAB’s commitment to the continuous development of processes and system are:

The productivity of the welder and fabricator

The quality of weld deposit

The working environment

PRODUCTIVITY

During the last decade and a half, a shift from the manual welding process to semi and fully automatic welding processes has taken place in most of the developed countries, mainly to achieve higher productivity and lower manufacturing cost. Today in these markets more than half of the total production of weld metal is derived from continuous solid and flux cored wires processes. It, therefore, became necessary to develop consumables to meet this challenge. Many new automatic consumables have been added.

There was a parallel development of new welding machines to match the automatic welding processes (including welding robots). The packing standards were also changed to suit automatic welding consumables for uninterrupted supply of high-quality wire to the robotic processes (ESAB’s Marathon Pac).

QUALITY

Products are services which do not meet the quality requirements of the customers and do not stand the test of time. Today quality does not remain within the boundaries of the product alone. Total quality is the need of the hour. Introduction of a Total Quality Program is the ESAB group is a step in this direction. While finalizing the requirement for a new product the quality of the weld is inbuilt in the specification. Welding is not an end in itself. It is a process to produce a structure. The most successful welds produce the base component or fabrication at the lowest level.

ENVIRONMENT

The cost and quality of the weld very much depend on the welder who in turn is profoundly influenced by the working environment. The welder will produce better welds in a friendly environment or with electrodes with better welding characteristics, a single point control (synergic control) of the welding machines and reduce fume. Controlling the toxicity limit of the welding fume shows concern towards the health of the welder whilst at the same time improving the effectiveness. ESAB’s R&D is in the forefront of action to make the environment friendlier to the welder.

As can be seen, developments in welding concern while process and are realized by improving existing products and introducing new technologies. Attention will, in future, focus increasingly on issues relating to the internal and external environment and economy. Combining ESAB’s product, process research and development with the customers’ production experience often lead to collaborative ventures to improve economy, quality, and productivity and safety standards in the latter works.

The R&D department of ESAB India is the focal point of all technical activities of ESAB in India. It also acts as the interface between the principals in Sweden and the Indian organization. It undertakes research and development activities related to new products and technologies for meeting the needs of the growing Indian market. Emphasis is on continuous local technological development, absorption and up-gradation of imported technologies for all the welding activities.

The department is manned by a group of highly qualified persons who have the experience in other line functions so that their perception of the problem is realistic rather than theoretical. Members have had previous experience in quality control, production or marketing before they joined the R&D group. They are capable of understanding the real problems or the requirement of new products as envisaged by the customer. All members of the department help each other to keep expectation within feasible limits.

Technology and product is market lead in India. For instance, in a specific nuclear project the requirements were very stringent and critical. The required product was developed in two phases. In the beginning, the technical requirements were first met and subsequently the cost was reduced. Initially, market demand was not large but with time it expanded and now they have a proprietary product with large demand.

Many such market-led developments have been successfully carried out in India. This has helped ESAB earn the name of a technology based company. The R&D department accordingly has established its importance in the organization and has representation in all decisions of the group management pertaining to technology and product management.

METHODOLOGY

If the product development is market-led, the marketing department has to present its requirements in regard to future market demand, possible new businesses or new applications. Once the need has been agreed the R&D department attempts to ascertain whether the product is available within the ESAB group. If it is, the principals abroad are contracted for details of formulation and production data. In the event that a group product cannot be identified, then the R&D department of the principals combines with their Indian counterparts for a program for development. After establishing the basic formulation and production data, work on adaptation to Indian condition starts. This adaptation is necessary because of variations in the raw materials and production plant.

The formulations are broken into their basic chemical constituents and on them the chemical composition of the indigenous raw materials is superimposed. Imbalances are suitably adjusted to provide the correct weld metal analysis and welding characteristics of the electrode. Theoretical knowledge and practical experience are essential for doing this. A tentative formula is obtained which is refined through experiment to give the final desired product. The new formulation is first tried on pilot plant and subsequently transferred to production. For successful development and commercialization of a product, marketing and sales, materials management and production departments are all involved. The R&D personnel remain involved till the product is established commercially. R&D must also be involved in manufacturing technology to meet the company’s own demand for improved productivity, quality or to increase manufacturing flexibility.

DIFFICULTIES ENCOUNTERED

What has been discussed above works if the situation is ideal? Reality is often different. Some of the major difficulties encountered in actual practice relate to:

Changes in specifications during the development period

Failure to achieve the required result by the R&D department

Unduly long response time of development

Prohibitive cost of product

In the course of development, the customers’ need may change. If such a change is not very major, it may only cause a small delay but in case of major changes, it may mean development in an entirely new direction. Alternatively, the specifications may sometimes be too stringent that it may not be possible to manufacture a new product within the constraints and projected cost. It is also possible that the targets laid down in the guidelines received from the principals cannot be met because of non-availability of specific raw materials at reasonable prices. These are all major handicaps in developing the desired product.

Undue delay in developing a product may result in losing market opportunity for which it was intended. Often development may use costly materials and the finished available product may become more expensive than an alternative product in the market resulting in failure to develop a commercially viable product. All problems and difficulties described above combine into a single problem-loading the interest of the customer. These difficulties can arise in market-led development. However, if development is production-led, many new and good developments never reach the market because they do not satisfy a recognized customer need. In relation to development activity, the following observations of general nature can be made:

1. The top management must commit itself (through the company objectives) to render active support of development of product and technology. Often in times, expenses incurred to development come under the microscope. The commitment of the top management will ensure that in the long-term, investment in R&D activities will pay off handsomely.

2. Development is not a single department’s job. Active involvement from marketing and sales, production and materials management is essential to make the new product reach the customer at right time and at the right cost.

3. Cost of the product plays an important role in the development efforts. This point must be kept in mind from the very beginning. A developer must be conversant with the cost structure of the product.

4. All industrial R&D activities must have commercialization of the development as its goal. Any development will be termed a failure if it does not improve the bottom line of the organization.

5. Many difficulties may be faced during the R&D process, so R&D is assured of a quick and easy success.

6. Guidelines and directions from the principals abroad are only part of the story. Local R&D is important to satisfy local needs and constraints. Appropriate technology is the need for all R&D effort while adapting products and technologies from abroad.

7. ESAB India’s role in future will be to develop the existing techniques and to participate in the research and development of new techniques with a view to maintain its leading position in the field of welding and cutting in the 21st century.

OPPORTUNITIES OF ESAB INDIA

In the international scenario the technological developments are taking place at a very rapid pace. India with its wealth of technical expertise should adopt overseas technological advances for speedy commercial implementation and benefit from them. Such adaptation will hasten the process of industrialization. Indian R&D efforts should be directed initially towards meeting the local needs and overcoming local constraints by suitable adaptation. But finally we must aim to be a world competitive supplier of welding and cutting solutions.

QUESTIONS

1. What strategic route ESAB AB followed to become technology leader in the world? What could be the reasons behind such a route?

2. What efforts were made by ESAB AB and ESAB India in the field of product development?

3. How is the R&D function at ESAB India organized? Critically examine.

4. What difficulties ESAB has experienced in relation to product development efforts? What would you suggest to overcome these difficulties? What opportunities are open to ESAB India? How best can it avail of those opportunities?

Assignment – C

1. Which of the following is NOT a part of Techno ware
A) Powered equipment
B) Automated machines
C) Computerized machines
D) Operating ability

2. Info ware consists of all the following EXCEPT
A) Describing facts
B) Familiarizing facts
C) Repairing abilities
D) Utilizing facts

3. Which of the following is NOT very important in managing technology
A) Production process
B) Product & process design
C) Information systems
D) Compensation packages

4. Technology management is concerned with all EXCEPT
(A) Incremental innovation in existing technologies
(B) Development of new technology
(C) Combining older technologies
(D) Procurement of machines similar to the one existing

5. An R& D centre is to be set up when
(A) Technology is a competing strategy
(B) The company uses reverse engineering
(C) Subsidy exists for setting up R&D units
(D) A Ph. D qualified person is to be promoted as a unit head

6. Which of the following depict the central role of a corporate R&D
(A) Development of relevant breakthrough technology
(B) Continuous process and product improvement
(C) Day to day problem solving
(D) Engage in basic research

7. All of the following are determinants of productivity except
(A) Effective control over cost and quality
(B) Rationalization of work flow
(C) Training hours spent on staff
(D) Optimal scheduling of work and material handling

8. A term used to indicate a good match between the technology utilized and the resources required for its optimal use
A) New technology
B) Emerging technology
C) Appropriate technology
D) Codified technology

9. Reverse engineering is also known as
A) Experience and design looping
B) Design to cost
C) Reengineering
D) Zero defect production

10. Productivity techniques used to reduce costs of one or more of production inputs by replacing with the cheaper available substitutes is known as
A) Group technology
B) TQM
C) Factor substitution
D) Six Sigma

11. All of the following are characteristics of high technology EXCEPT
(A) A fast rate of growth
(B) High ratio of R&D expenditure to sales
(C) Very limited market
(D) Less educated employees

12. All are reasons for external acquisition of technology EXCEPT
(A) Firm lets other firms to take big risk before participation
(B) Technology already developed saves time and cost
(C) Technology that can be handled with existing machines and equipment
(D) Doesn’t require recruitment of skilled labor

13. Technology that proprietary to a firm is known as
A) Basic technology
B) Generic technology
C) Key technology
D) Appropriate technology

14. Which is NOT an issue in acquisition and absorption of technology from external sources
(A) Difficult to assess the relative merits of technologies which are complex
(B) Adapting and modifying technologies to local conditions
(C) Negotiating technology license
(D) Arranging payment for the technology

15. All the following are technological intelligence capability EXCEPT
(A) Ability to monitor worldwide technological trends
(B) Ability to source technology
(C) Ability to get skilled labor
(D) Ability to mange acquired technology

16. A technology for which research has progressed far enough to indicate its success is known as
(A) High technology
(B) Emerging technology
(C) Appropriate technology
(D) Codified technology

17. All of the following are basic constituents of JIT EXCEPT
(A) Simplification of product design
(B) Improvement of plant layout design based on flow
(C) Immediate payment to suppliers
(C) Making vendors partner to the production process

18. Which of the following is not a characteristic of CIM
(A) Compatible hardware and software
(B) Paperless office and integrated business system
(C) Flexibility of operations and low cost of implementation
(D) Use of CNC machines

19. Gaurav’s role in his organization is to scan the market and bring new technologies to the organization. His role can be identified as
(A) Project manager
(B) Sponsor
(C) Technological gatekeeper
(D) Entrepreneur

20. The development of new hybrid technologies by combining the capabilities of existing technologies is called
(A) Technovation
(B) Technology fusion
(C) Technology intelligence
(D) Technology push

21. A necessary condition for technological fusion is
(A) Technological diversification
(B) Technological determinism
(C) Technology codification
(D) Technology integration

22. All of the following are part of business alliances in use in Japan EXCEPT
(A) Exchange of expertise by companies in different fields
(B) Merger and acquisition of companies
(C) Alliance among large, medium and small companies
(D) International alliances among industries in developed countries

23. Core competence of Sony is
(A) Capacity to miniaturize
(B) Optical media expertise
(C) Heavy R&D expenditure
(D) JIT production

24. Japanese companies focus on ___________ rather than result
(A) People
(B) Processes
(C) Quality
(D) Plans

25. Which of the following is NOT a conducive atmosphere for innovation
(A) An open decentralized organizational structure
(B) Ensure that new ideas are not easily killed
(C) Minimize administrative interference
(D) Tight deadlines

26. Two basic objectives of a national policy relate to the promotion of productivity, innovation and competition on one hand and the facilitation of the firm’s _________ on the other
(A) Competitive capabilities
(B) Financial strength
(C) Autonomy
(D) Labor unions

27. Following are reasons for making inventions EXCEPT
(A) Personal satisfaction
(B) Solving problems faced in everyday life
(C) Being recognized by others
(D) Zeal for charity

28. Neighboring rights does not include
(A) The rights of performing artists in their performance
(B) The rights of producers of Phonograms in their phonograms
(C) The rights of broadcasting organization in their radio television broadcast
(D) The rights of authors in their books

29. The process of ___________ threatens the developing world by appropriating the collective knowledge of the society into proprietary knowledge for the commercial profit of a few
(A) Liberalization
(B) Globalization
(C) Privatization
(D) Commercialization

30. Which is not a planned channel for technology transfer
(A) Reverse engineering
(B) Joint venture
(C) Franchise
(D) Foreign Direct Investment

31. The six step ASSETS process does not contain
(A) Asses current situation
(B) Specify technology strategy
(C) Codify technology
(D) Select technology portfolio

32. Traditionally intellectual property is divided into two groups. If one is Copyrights, which is the other
(A) Agricultural Property rights
(B) Real estate rights
(C) Industrial Property rights
(D) Self expression rights

33. WIPO convention covers all of the following under IPR except
(A) Performances of performing artists, phonograms and broadcasts
(B) Scientific discoveries
(C) Trademarks, service marks, and commercial names and designations
(D) Agricultural patent rights

34. A form of networking of institutions and activities for inducting high technologies
(A) Technology Park
(B) Technology associations
(C) Technology groups
(D) Technology centers

35. The act of producing or selling a product containing an intentional and calculated reproduction of a genuine trademark is called
(A) Counterfeiting
(B) Cyber squatting
(C) Infringement
(D) Copyrights violation

36. When a producer has authorization from an IPR holder to produce goods but exceeds the quantity, the excess goods are
(A) Illegitimate goods
(B) Overrun goods
(C) Grey market goods
(D) Black goods

37. The term used to protect the rights of an unpublished book
(A) Copyright
(B) Trademark
(C) Service mark
(D) Publishing rights

38. Area not covered by TRIPS agreement
(A) Trademarks and service marks
(B) Industrial designs
(C) Geographical indications
(D) Layout design of manufacturing plans

39. MFM treatment under TRIPS means
(A) Mild and fast foreign negotiations with MNC’s
(B) Treating everyone equally
(C) Special treatment to some nations
(D) Increasing reciprocity

40. Darjeeling tea has protected its intellectual property rights based on
(A) Trademark
(B) Service mark
(C) Geographical indications
(D) Patents