Product innovation and the costs of energy-using product policies

Energy-using Products (EuPs) contribute significantly to the United Kingdom’s CO2 emissions, both in the domestic and non-domestic sectors. Policies that encourage the use of more energy efficient products (such as minimum performance standards, energy labelling, enhanced capital allowances, etc.) can therefore generate significant reductions in overall energy consumption and hence, CO2 emissions. While these policies can impose costs on the producers and consumers of these products in the short run, the process of product innovation may reduce the magnitude of these costs over time. If this is the case, then it is important that the impacts of innovation are taken into account in policy impact assessments. Previous studies have found considerable evidence of experience curve effects for EuP categories (e.g. refrigerators, televisions, etc.), with learning rates of around 20% for both average unit costs and average prices; similar to those found for energy supply technologies. Moreover, the decline in production costs has been accompanied by a significant improvement in the energy efficiency of EuPs. Building on these findings and the results of an empirical analysis of UK sales data for a range of product categories, this paper sets out an analytic framework for assessing the impact of EuP policy interventions on consumers and producers which takes explicit account of the product innovation process. The impact of the product innovation process can be seen in the continuous evolution of the energy class profiles of EuP categories over time; with higher energy classes (e.g. A, A+, etc.) entering the market and increasing their market share, while lower classes (e.g. E, F, etc.) lose share and then leave the market. Furthermore, the average prices of individual energy classes have declined over their respective lives, while new classes have typically entered the market at successively lower “launch prices”. Based on two underlying assumptions regarding the shapes of the “lifecycle profiles” for the relative sales and the relative average mark-ups of individual energy classes, a simple simulation model is developed that can replicate the observed market dynamics in terms of the evolution of market shares and average prices. The model is used to assess the effect of two alternative EuP policy interventions – a minimum energy performance standard and an energy-labelling scheme – on the average unit cost trajectory and the average price trajectory of a typical EuP category, and hence the financial impacts on producers and consumers.

Production systems and supplier selection: a multi-phase process model

Purpose: This paper presents a combined multi-phase supplier selection model. The process repeatedly revisits the criteria and sourcing decision as the development process continues. This enables a structured adoption of product and production system innovation from strategic suppliers, where previously the literature purely focuses on product innovation or cost reduction. Design/methodology/approach: The authors adopted an embedded researcher style, inductive, qualitative case study of an industrial supply cluster comprising a focal automotive company and its interaction with three different strategic stamping suppliers. Findings: Our contribution is the multi-phased production and product innovation process. This is an advance from traditional supplier selection and also an extension of ideas of supplier-located product development as it includes production system development, and complements the literature on working with strategic suppliers. Specifically, we explicitly articulate the previously unreported issue of whether a supplier chosen for its innovation capabilities at the start of the new product development process will also be the most appropriate supplier during the production system development phase, when an ability to work collaboratively may be the most important attribute, or in the large-scale production phase when an ability to manufacture at low unit cost may be most important. Originality/value: The paper identifies a multi-phase approach to tendering within a fixed body of strategic suppliers which seeks to identify the optimum technological and process decisions as well as the traditional supplier sourcing choice. These areas have not been combined before and generate a valuable approach for firms to adopt as well as for researchers to extend our understanding of a highly complex process.

The effects of conflict in driving forward innovation in shared leadership management consultant teams

It is argued in this study that current investigations of the role of conflict in shared leadership teams and, thus, teams in which all members have the opportunity to participate in its decision-making process are insufficient as they have focused on the downsides of these conflicts. This study demonstrates that task conflict is beneficial in that it can have positive effects on innovation in teams. It shows that particularly in shared leadership management consultant teams task conflict can stimulate innovation. Therefore, this research investigates the relationships among shared leadership, conflict and innovation. The research develops and empirically tests a conceptual model which demonstrates the relationships between these concepts and for which the inclusion of multiple research methods was essential. The sequential explanatory approach included a combination of quantitative and qualitative methods, the order of which can be adapted for other domains of application. The conceptual model was first tested with a sample of 329 management consultants. This was followed by 25, in-depth, face-to-face interviews conducted with individual survey respondents. In addition, weekly meetings of a management consultant team in action were video recorded over several months. This allowed for an in-depth explanation of the findings from the survey by providing an understanding of the underlying processes. The inclusion of observational methods provided a validating role and explained how and why conflicts contributed to the development of team innovation, through the analysis of subtleties and fleeting disagreements in a real-life management consultant team. The results deliver an assessment of the theoretical model and demonstrate that task conflict can allow for additional innovation in management consultant teams operating under a shared leadership structure. A practical model and guidelines for management consultant teams wanting to enhance their innovatory capacities are provided. In addition, a novel-user methodology which includes video observations is developed, with recommendations and steps aiding researchers aiming to employ a similar combination of methods. An original contribution to knowledge is made regarding the positive effects that task conflict can have towards innovation in shared leadership teams. Collaboration and trust are identified as important mediators between shared leadership and task conflict and significant regarding the development of innovation. The effectiveness of shared leadership in reducing negative relationship conflict and the benefits of both shared leadership and task conflict in enhancing innovation are demonstrated.