Operational Innovation

1. Cross Docking

1.1. lowers inventory levels and operating costs(eg Wallmart)

2. Case Study: Progressive Auto Insurer

2.1. claimant directly contacts Progressive representative by phone and schedule

2.2. immediate response claim handling

3. Benefits

3.1. strategic , marketplace, operational advantage

4. Implementation

4.1. break the implementation process into milestones that are manageable and improve them by iteration

5. Sustainability

5.1. continuous process ,once achieved organisation can focus on other areas for improvement and can gain competitive advantage

6. Barrier entry

6.1. Organisational barriers

6.1.1. business culture undervalues operations ,top management team only focus on getting more sales and deals and pays little attention to the operation

6.1.2. the performance indicator data such as order fulfilment cycle, time, accuracy of customer service responses , cost of each procurement transaction are not visible in the organisation

6.1.3. no specific role of ownership for operational innovation within the organisation

7. Achieving operational innovation

7.1. disruptive in nature,focus only on the business activities that has larger impact on the organisation's strategic goal and limits the use of resources

7.2. adopting the technique from other industry

7.3. develop strategy to eliminate the assumption,causing the interference for achieving a strategic goal

7.4. transforming the crisis into opportunity and makes the strategies applied to over these crisis as part of the normal operation process

7.5. redesigning the operational process - what results, who, where, when, how