Global Operations Management Experts Challenge Conventional Wisdom

First Global Operations Conference touts risk-taking and innovative thinking

ANN ARBOR, Mich. – On the surface, celebrating failure doesn't sound like sound business practice. However, leading management and academic experts at the first ever Management of Innovations in Global Operations conference were leading cheers for risks taken and lessons learned.

The experts were invited to discuss innovation in their respective fields, and each of the nine high-level speakers alluded to failure as being an inherent part of risks worth taking. The conference, held Dec. 7 and 8 at the University of Michigan, was the brainchild of Ross School of Business students Priya Dass and Todd Mintzer. The second-year MBAs co-chaired the conference, designed to be an annual interactive exchange of the latest ideas in management innovation.

Presented by the Operations Management Club and sponsored by the Tauber Institute for Global Operations, the conference catered to students, academicians, and industry leaders involved in global operations. The speakers delivered powerful messages based on their own experiences to provide real world insight to attendees.

Innovative Business Themes
Emerging themes of the conference were: dealing with company growth, the international aspect of business, growing energy concerns and leveraging the Internet. Innovation was woven through the messages conveyed by the experts, as new ways of thinking were highlighted as essential.

David C. Munson, Jr., dean of the College of Engineering, gave the inauguration and pointed out some of the many ways U-M is using interdisciplinary approaches to innovate. "There is a broad range of talent represented in this room. This conference gives us all a unique opportunity to learn from each other," he said.

An original innovator, the Tauber Institute for Global Operations benefactor and namesake was on hand to kick off the conference. Pictured right, Joel Tauber recounted his early days in manufacturing when he traveled to third world countries in search of new supply chains. "I looked around the world to find new sources of material, but what I found was primitive and unreliable. There were no classes on global operations then. I had to deal with people from all around the world in order to bring new products to the United States," said Tauber.

Presentations from renowned guest speakers representing both large integrated companies and global management consulting firms with worldwide operational footprints were accompanied by recognized academic speakers who discussed current innovations and trends in modern-day global operations management.

Innovation Goes to Work
Innovation can be defined as the successful implementation of creative ideas. In business applications, the ideas must be new and substantially different from those that came before and they must make products or processes better, thus increasing their value to consumers and stakeholders.

Over the two-day conference, the term "innovation" was examined and redefined by the high-profile professionals at the podium. Each talked about how fresh thinking is helping their companies and organizations thrive:

• John Engler, the former governor of Michigan and current president of the National Association of Manufacturers, called innovation the driver of the United States' position in the global economy. He pointed out that the manufacturing industry is challenging the frontiers of science and technology to come up with better answers for creating the world's products.

• The future is exactly what Google is attempting to shape. Mark Matossian, the platforms build manager at the world's largest search engine-slash-advertising company gave conference attendees a glimpse at the hardware company hidden in the software company. The corporate culture at Google is nurturing to those with "disruptive" thinking. "Our management doesn't mind if we fail," said Matossian. "They just encourage us to fail quickly and move on."

• Failure, in fact, is celebrated at computer networking giant, Cisco. According to Kevin Harrington, vice president of global business operations, the cultural message put out to employees encourages creativity and even mistakes. "We have created a safe environment for collaboration, leadership, execution and disruption. If someone has the guts to put something on the table and it fails but we learn from it -- yes. We celebrate that," Harrington said. New ideas are key to Cisco, he added, pointing out that the word "innovation" is on the top line of all employee identification badges. "It is taking Cisco from being the plumbing of the Internet to the platform that enables people to experience life," he said.

• Charles L. Holland, vice president of engineering at UPS, recounted the history of the 100 year old company that has seen it all and is continuing to change to remain strong. In order to survive in the Brave New World of open markets and global trade, UPS had to transform its business over the past two decades. Effective supply chains grow revenue by reaching new markets, improving cash flow, differentiating products, improving customer service and enhancing productivity, he said.

• As executive director of logistics, purchasing and supply chain for one of the world's largest companies, Thomas McMillen of General Motors knows a thing or two about dynamic thinking and innovation on a global scale. One of the challenges he faces is moving some 70 million vehicles to their consumers around the world each year. From railways to seaways, simply adding capacity is met with challenges of size and scope. Despite lagging sales figures in Michigan and the U.S., McMillen said that GM's sales for the third quarter of 2007 are up four percent, due to the emerging markets of India, China, Russia, Latin America and more. His company is employing innovation in getting vehicles to these locations, he said.

• Robert J. Dolan, dean of the Ross School of Business, said that business has done much to commercialize the world, but the focus should now shift to innovation. "The time has come to let go of today and see what the future will be about," he said.

• Henry Davis, vice president and general manager of Torque Control Products at Eaton Corporation, is a seasoned Fortune 500 executive with proven success in achieving turnaround in union and non-union workforces. He spoke to the conference attendees about how innovation drives the product process at Eaton. In fact, the corporate culture at Eaton embraces innovation as key to improving its products as well as its market share.

• David Brandon, chairman and CEO of Domino's Pizza, closed the conference by describing his company's quest to go global while retaining strong brand identity. He said that pizza dough and sauce are standard throughout the world, but it is the topping that distinguishes pizza in specific regions. For example, Asian markets prefer seafood to pepperoni and people in Taiwan would rather dine in a restaurant than receive delivery. Brandon said that Domino's is finding innovative ways to reach the regional needs in a global market, while remaining true to its brand.

Ground-breaking Bears Set an Example
Renowned management expert and educator C.K. Prahalad, the Paul and Ruth McCracken Distinguished University Professor at Ross, provided one of the most dynamic addresses of the conference. Using his first-hand knowledge of what helps businesses compete, he painted a picture of innovation – in the guise of a teddy bear.

Prahalad used the example of the toy company Build-A-Bear to drive home the fact that successful companies are often selling something other than products. Yes, customers come out of the store with a stuffed animal, but they get a lot more. Build-A-Bear allows a customer to select an animal, stuff it with cotton, add a recorded message and give it a heart. Then, after bathing and naming their new friend, customers often purchase additional clothing and accessories for them. Repeat business is a given. "This does not represent the conventional wisdom of the toy industry. It is innovation at work," said Prahalad.

The co-creation aspect of successful businesses illustrates that experience is where innovation lies, he added. "Imagine the innovation that will be needed over the next 10 years. Leverage the talent from around the world to meet that need," he said.

Innovation Earns High Marks
The conference also was a platform for academic and career-building endeavors. It included a career networking session for sponsoring companies, a presentation of the Tauber Spotlight! summer internship project winners, the International Case Competition and Integrated Product Design course winners.

The International Case Competition, presented by PRTM, is open to MBAs and graduate engineering students from top schools in the US and abroad. The top three finalists in the International Case Competition "Management of Innovations in Global Operations" presented their project solutions to the entire conference audience. Teams were ranked by industry experts and faculty with awards presented immediately following the presentations. Purdue University took top honors, and runners up were Darden College at the University of Virginia and the University of Michigan Ross School of Business.

The most innovative ideas come from collaborative effort, as evidenced by the successful Integrated Product Design course led by Professor William Lovejoy. The IPD took a well-deserved bow at the conference when the results of the recent online and on campus trade shows were presented. The 2007 Urban Shopping Cart challenge-winning design from Team Velocity was showcased, as were the other top designs. The IPD is a cross-disciplinary course offered by Ross, the College of Engineering, and the School of Art & Design. Teams of students from each school are combined, given a product to research, design, manufacture and market. The results are calculated based on their web page impact and on-campus trade show performance. For more information on the IPD class, please visit: www.tauber.umich.edu/News and Events/IPD/index.htm.

Global Operations Conference Speakers:
Governor John Engler - President, National Association of Manufacturers

C.K. Prahalad - Paul and Ruth McCracken Distinguished University Professor, Ross School of Business, University of Michigan

David Brandon - Chairman and Chief Executive Officer, Domino's Pizza

Henry Davis - Vice President and General Manager, Torque Control Products, Eaton Corporation

Kevin Harrington - Vice President, Global Business Operations, Worldwide Manufacturing, Cisco

Charles L. Holland - Vice President of Engineering, UPS

William Lovejoy - Chair of Operations Management Science Department, Ross School of Business, University of Michigan

Thomas McMillen - Executive Director of Global Logistics, Global Purchasing and Supply Chain, General Motors

Mark Matossian - Platforms Builds Manager, Google

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Written by Nancy Davis

Tauber Media Contact: bakerpa@umich.edu