Important Role of CFT Approach

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From the course by Korea Advanced Institute of Science and Technology

Supply Chain Management: A Learning Perspective

388 ratings

Korea Advanced Institute of Science and Technology

Supply Chain Management: A Learning Perspective

388 ratings

As a human being, we all consume products and/or services all the time. This morning you got up and ate your breakfast, e.g., eggs, milk, bread, fresh fruits, and the like. After the breakfast, you drove your car to work or school. At your office, you used your computer, perhaps equipped with 27” LCD monitor. During your break, you drank a cup of coffee and played with your iPhone. So on and so forth. You probably take it for granted that you can enjoy all of these products. But if you take a closer look at how each of these products can be made and eventually delivered to you, you will realize that each one of these is no short of miracle. For example, which fruit do you like? Consider fresh strawberries. In order for the strawberries to be on your breakfast table, there must be numerous functions, activities, transactions, and people involved in planting, cultivating, delivering, and consuming strawberries. Moreover, all of these functions, activities, transactions, and people are connected as an integral chain, through which physical products like strawberries themselves and virtual elements such as information and communication flow back and forth constantly. By grouping related functions or activities, we have a supply chain, comprised of four primary functions such as supplier, manufacturer, distributor, and finally consumer. A supply chain is essentially a value chain. For the society or economy as a whole, the goal is to maximize value, i.e., to create satisfactory value without spending too much. In order to create the maximum value for the strawberry supply chain, every participant in the chain must carry out its function efficiently. In addition, all of the members must coordinate with each other effectively in order to ensure value maximization. We have to face the same issues for almost all the products and services we take for granted in our everyday life, e.g., cars, hamburgers, haircuts, surgeries, movies, banks, restaurants, and you name it! In this course, we want to understand fundamental principles of value creation for the consumers or the market. We try to answer questions like how the product or service is made, how the value-creating activities or functions are coordinated, who should play what leadership roles in realizing all these, and so on. As our course title hints, we approach all of these issues from a learning perspective, which is dynamic in nature and emphasizes long-term capability building rather than short-term symptomatic problem solving.

From the lesson

New Product Innovation

New product innovation is the key to firm's success. In order to sustain successful business, the firm must design and manage its new product process effectively and efficiently. In this chapter, we will learn new product innovation and new product development process. Especially, we will look into and compare two approaches, traditional approach and cross-functional approach.

New Product Innovation8:50

NPD Process - Two Approaches Part 114:36

NPD Process - Two Approaches Part 222:52

Cost-Benefit Analysis8:59

Important Role of CFT Approach9:18

Three Stages of Change13:23

Meet the Instructors

Bowon Kim
Professor
KAIST Business School

Let's talk about another very important

role played by crest function team approach.

Think about the general project, not just, you know, new product development.

You know, think about some construction or shepherding

or, you know, any, any type of project.

So this is projected time.

And I want to focus on two things.

The first one is how easy it is to fix the problem.

If there is problem, we gotta fix the problem, right?

We gotta fix the problem, and how easy is it to fix the problem?

Is it easy to fix the problem in the early period of project time?

Or is it easy to fix the problem toward the end of the project time?

It is obvious that if we, if we find out the problem.

If we identify the problem in the early phase of project time,

then it's easy, it's more, it's easier to fix the problem, right?

On the other hand, if we, you know, approach the end of a project time,

if we, you know, identify problem, it's difficult to fix the problem.

Think about this, you know, construction.

We want to, we want to build a huge big building, we construct a big building.

If we find some fundamental problems at the

early stage, at the early stage, at, in

the, in the early phase of this construction,

we can actually fix the problem very easily.

We can change work procedure, we can use different materials and

we can change the sequence in a task in someones office.

But lets say that we are approaching the end of a project

time, therefore the project, the building is on the final floor, maybe.

50th floor is all done and you know, everything is almost done.

And so then we realized that we forgot to

install some, you know, steel beams in the building.

So what?

What can we do?

We already completed all these outside and

inside, interiors and exteriors of the building.

And now you say that you forgot to, you know, put more steel beams.

And without knowing that we cementing all these things and

we completed all this workings and now what can you do?

We cannot fix the problem.

We already done this whole, whole building.

So the flexibility or let's say ease, right, east to fix the problem.

Is largest, the highest in the early period

and it becomes almost impossible to fix the problem.

Now I will look at the another thing,

management attention, management attention, management attention.

All cost to fix the problems.

The

cost is relatively low, right?

Relatively low in the early period.

And then of course, it's very expensive towards end of this project, and that's

consistent with this ease to fix problem, or flexibility to fix the problem.

But I want to more focus on this management attention allocation patterns.

Traditionally, you know, time management pays you know,

more attention as the project approaches completion time.

Maybe, many managers probably don't care much about the project

in the early phase because Let's again think about this construction.

You know, building construction and normal exteriors and pods

and here and there people are moving all around and

everything looks disorganized in compare, in there with the

top manager, doesn't want to get involved in this ah,highly.

Highly complex, highly complicated situation.

So, they don't want to pay more attention.

After all, they can't see any building yet.

But as the floors, you know, rising, and as the building

takes it's shape, it looks more important, it looks more, you know, relevant.

And then manages to start paying more and more attention.

So their attention allocation pattern, let's say this is attention

allocation pattern.

Is, like this, okay?

Early phase, not much attention, but towards end of project, much attention.

But that's not good.

I mean that it's useless to pay more attention at the

end of project time because it's too late to fix problem.

Even if you pay more attention to the project, you cannot fix those problems.

In other words, there is huge mismatch, huge mismatch between.

Management attention location and the flexibility to fix

the problems, or the ease of problem solving.

What's the benefit?

What's the good thing to use cross function team approach?

Cross function team approach, has the

company to deallocate this management potential location.

In other words, don't pay your attention at the end of the project.

You have to actually change, you have

to actually change this potential location pattern.

In other words, you move this like that.

In other words, you pay more attention, you pay

more attention in the early phase of your project time.

And you don't have to pay much attention toward the end of project time.

And therefore, you have to have dual management attention location pattern

that actually consistent with this flexibility or ease to fix problems.

They gotta be, they gotta be met or they gotta be consistency between this.

Problem solving and attention location.

This functional approach is useful to shift,

to shift these attention location patterns, why?

Because in the early phase, lots of the functions get involved in the process and

it becomes very important to coordinate all

these you know, activities at the same time.

And therefore that necessarily draws more attention from time management

and therefore if we use, if the company uses criss function to approach them.

They necessary pay more attention in the early phase because

they're needed to coordinate, needed to coordination is

very intensive, is very high in the early phase of this project time.

So actually that's another, another door, very

important door which is not discussed open which

is it's not easy to identify actually,

but basically well actually that's very important thing.

So I say cross function approach actually

enhances the awareness level at the early stages.

And this is a very important, very important point.

And, that's another reason why we can, you know,

we can get benefit from using cross-function team approach.

It is also interesting to note that, you know, if the.

Technological uncertainty, and if the market uncertainty

is very high then the benefit due

to this match between, you know problem

solving and attention allocation is much larger.

And again here if the, you know,

technological and certain the market uncertainty's very high,

then it's much more beneficial to use

cross function team approach, better than traditional approach.

[BLANK_AUDIO]

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