Pearson Education Ltd. MindStudio Chapter 5 The design of products and services Pearson Education Ltd. MindStudio

Process design Process design Operations strategy Improvement Planning and control Process design Supply network design Layout and flow Process technology People, jobs and organization Product/service design Operations management

Key operations questions In Chapter 5 – The design of products and services – Slack et al. identify the following key questions: Why is good product and service design important? What are the stages in product and service design? Why should product and service design and process design be considered interactively?

Nature and purpose of the design activity Products, services and the processes which produce them all have to be designed. Decisions taken during the design of a product or service will have an impact on the decisions taken during the design of the process which produces those products or services and vice versa.

Example – The troubled history of the Airbus A380 What were the causes of the delays in the ‘time to market’ of the Airbus A380? What were the effects of the delays in the ‘time to market’?

The design of products/services and processes are interrelated and should be treated together Products and services should be designed in such a way that they can be created effectively. Product/service design has an impact on the process design and vice versa. Processes should be designed so they can create all products and services which the operation is likely to introduce.

The overlap of activities is greater in service design In manufacturing operations, overlapping the activities of product and process design is beneficial. In most service operations the overlap between service and process design is implicit in the nature of service.

Why is design so important? UK Design Council Survey Design helps businesses connect strongly with their customers. 90% of businesses growing rapidly say design is significant to them, only 26% of static companies say the same. Design reduces costs by making processes more efficient. It can also reduce the time to market for new products and services. Almost 70 % of companies seeing design as integral have developed new products and services in the last three years, compared to only a third of businesses overall. Companies who were ‘effective users of design’ had financial performances 200% better than average.

What is designed in a product or service? A concept the understanding of the nature, use and value of the service or product; A package the group of ‘component’ products and services that provide those benefits defined in the concept; A process the way in which the component products and services will be created and delivered.

Example – Spangler, Hoover and Dyson What was Spangler’s mistake? What do you think makes ‘good design’ in markets such as domestic appliances? Why do you think two major vacuum cleaner manufacturers rejected Dyson’s ideas? How did design make Dyson a success?

Fully specified products and services The product and service design activity is a process in itself Transformed resources, e.g. Technical information Market information Time information The product/service design process whose performance is measured by its Quality Speed Dependability Flexibility and Cost Outputs Fully specified products and services Inputs Transforming resources, e.g. Test and design equipment Design and technical staff

The stages of product / service design Evaluation and improvement Prototyping and final design Concept generation Concept screening Preliminary design

Concept generation Ideas from customers formally through Marketing activities Listening to customers – on a day-to-day basis Ideas from competitor activity – For example, reverse engineering Ideas from staff – Especially those who meet customers every day Ideas from research and development.

Example – The Blow-Dry Bar From a market perspective, why was the blow-dry bar successful? From an operations perspective, why is the blow- dry bar successful?

Concept screening Broad categories of evaluation criteria for assessing concepts Feasibility – How difficult is it? What investment both managerial and financial, will be needed? Overall evaluation of the concept The criteria for screening concepts What return in terms of benefits to the operation will it give? Acceptability – How worthwhile is it? Vulnerability – What could go wrong? What risks do we run if things go wrong?

Design involves progressively reducing the number of possibilities until the final design is reached Large number of design options CONCEPT Choice and evaluation ‘Screens’ Uncertainty regarding the final design Certainty regarding the final design TIME One design FINAL DESIGN SPECIFICATON

Example – Square watermelons What market-related questions would you ask before producing square watermelons commercially? What finance-related questions would you ask before producing square watermelons commercially? What operations-related questions would you ask before producing square watermelons commercially?

Preliminary design The component structure for remote mouse LEVEL 0 Upper casing Control unit Lower casing Packing LEVEL 1 Logo Moulding Battery housing Mould-ing Spring base Button Leaflet Outer LEVEL 2 Lead Plug Cover Speaker LEVEL 3

Design evaluation and improvement There are various ways of evaluating preliminary designs. These include: – quality function deployment; – value engineering; – Taguchi methods.

Prototyping and final design Prototypes are needed, so products and services can be tested. Prototypes come in various forms: – card models; – clay models; – computer simulations. CAD has considerably simplified the production of prototypes.

Delay in financial break-even A delay in the ‘Time to Market’ disproportionally delays the financial break-even point Cash Sales revenue Cash flow Delayed sales revenue Delayed cash flow Development costs Development costs of delayed project Time Delay in time to market Delay in financial break-even

Sequential and simultaneous arrangement of the stages in the design activity First stage in the design activity Sequential arrangement of stages Second stage in the design activity First stage in the design activity Third stage in the design activity Communication between stages etc. Second stage in the design activity Simultaneous arrangement of stages Third stage in the design activity etc.

Where should the management attention be? KNOWLEDGE AQUISITION CONCEPT INVESTIGATION BASIC DESIGN INITIAL TESTS PILOT PRODUCTION MANUFACTURING RAMP-UP LAUNCH Ability to influence the final design Management activity profile TIME

Sorting out problems early saves greater disruption later Slow time to market Low Fast time to market Degree of agreement over design decisions and changes in design High Early stages of the total design activity Later stages of the total design activity

Organization structures for the design activity P.M. F.M. PURE FUNCTIONAL ORGANIZATION F.M. P.M. F.M. INCREASING PROJECT ORIENTATION F.M. P.M. PURE PROJECT ORGANIZATION P.M. F.M. P.M. P.M. F.M. = Functional manager = Project manager