Lesson 7 - The Design of Products and Services

5/28/2018 Lesson 7 - The Design of Products and Services

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Slack, Chambers and Johnston, Operations Management, 6thEdition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010

5.1

5.1

Chapter 5

The design of products

and services

Pearson Education Ltd. MindStudio


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5.2

5.2

Process design

Operations

strategy

Design Improvement

Planning andcontrol

Supply network design

Layout

and flow

Process

technology

People, jobs

and

organization

Product/service

design

Operations

management


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5.3

5.3

Key operations questions

In Chapter 5The 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?


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5.4

5.4

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 takenduring the design of the process which produces those

products or services and vice versa.

Nature and purpose of the design activity


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5.5

5.5

ExampleThe troubled history of the Airbus A380

What were the causes of

the delays in the time to

market of the Airbus A380? the underlying reason for the

delay was the hopeless lack of

integration [between the French and

German sides] within the company.

Even before the problems became

evident to outsiders, critics of Airbus

claimed that its fragmented structure

was highly inefficient and prevented it

from competing effectively. Eventually

it was this lack of integration between

design and manufacturing processes

that was the main reason for the

delays to the aircrafts launch.

What were the effects of the delays in the time to

market? Cost overruns resulting in the resignation of key staff


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5.6

5.6

ExampleThe troubled history of the Airbus A380

What effect did the delays in the introduction of the Airbus A380

have on the costs and reputation of Airbus?

Essentially, the effect of delays of the introduction of the aircraft can be summarized using the conceptsexpressed in Figure 5.9. For some years prior to the planned introduction, the company had been

generating publicity through press releases and advertising campaign. This emphasizes the dramatic

nature of the plane, being larger and more spacious that anything that had been built previously. It even

speculated that its airline customers would want to incorporate such facilities as gyms, crches for

children, bars and restaurants and so on, in the way they configured the aircraft. This had the effect of

creating a great deal of excitement around the new product. Yet, while this publicity campaign was

having its most impact, problems started to emerge in the development of the plane. So, not only didlate introduction of the aircraft delay the sale of the first aircraft and therefore the revenue coming in to

the company, it also generated a great deal of negative publicity. For every story hailing the technical

breakthrough that the plane presented, there was one that described the confusion and delays in its

design and manufacture. It isnt known exactly how this affected the likelihood that potential future

customers were reluctant to place orders, but it is likely that it has some effect on future revenues. Just

as important, the considerably extended development and manufacturing time meant that the costs of

designing, developing, and manufacturing the plane rose very significantly. It is this combination of

reduced revenue and increased costs that pushes back the breakeven time of the product by manyyears. And, although the Airbus 380 went on to be launched successfully and is still a desirable aircraft

with customers waiting to receive their deliveries of the plane, it could have been so much more

profitable.

Th d i f d t / i d i t l t d


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5.7

5.7 The design of products/services and processes are interrelated

and should be treated together

Products and services should be designed insuch 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 cancreate all products and services which theoperation is likely to introduce.


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5.8

5.8

The overlap of activities is greater in service design

In manufacturing operations, overlapping theactivities of product and process design is

beneficial.

In most service operations the overlap betweenservice and process design is implicit in the

nature of service.


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5.9

5.9

Why is design so important?

UK Design Council SurveyDesign 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.


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5.10

5.10

What is designed in a product or service?

A conceptthe understanding of the nature, use and

value of the service or product;

A packagethe group of component products andservices that provide those benefits defined

in the concept; e.g. Nandos family combo, Sports car with itswarranties and after sales support.

Customers buy these packages of product and services when they buy a

product.

A processthe way in which the component productsand services will be created and delivered.

All products and services can be considered as having three aspects:

The concept is a clear articulation of the outline specification including the nature, use and value

of the product or service against which the stages of the design (see later) and the resultant

product and/or service can be assessed. For example, a new car will have an underlying concept, such as an

economical two-seat convertible sports car, with good road-holding capabilities and firm, sensitive handling, capable of

0100 km/h in 7 seconds and holding a bag of golf clubs in the boot.

The package of components which make up a product, service or process are the ingredients of the design;

however, designers need to design the way in which they will be created and delivered to the customerthis is

process design, that is, the design of the manufacturing processes and the service processes of the delivery of

the product to customers.


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5.11

5.11

ExampleSpangler, Hoover and Dyson

What was Spanglers mistake?

What do you think makes good

design in markets such as domestic

appliances?

Why do you think two major vacuum

cleaner manufacturers rejected

Dysons ideas?

How did design make Dyson asuccess?


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5.12

5.12

ExampleSpangler, Hoover and DysonWhat was Spanglers mistake?

Clearly, it was failing to understand the implications of his preliminary design. The spark of creative

genius was there but not the ability to fully understand the designs implications or its commercial

potential. Had it been, we could be still be talking about spanglering the carpet.

What do you think makes good design in markets such as the domestic appliance market?

Three things:

Aesthetics the product must look good and reflect the brand value.

Usability the product must be easy to use and work well.

Produceabilitythe product must be easy to make, or at least not so difficult that costs and

quality are compromised.

Why do you think the two major vacuum cleaner manufacturers rejected Dysons ideas?It depends on how charitable you want to be to them. If we are being charitable one could say that

Dysons design represented too much of a risk for the established manufacturers. They would be

threatening their own existing products and forgoing the revenue they gained from selling the cleaner

bags, for a design which had not been proven in the market place. A less charitable view would be that

they were simply conservative, had little imagination, and did not understand the need for innovation. Nor

did they understand how a better product, alternatively positioned in the market to stress design and

performance, could undermine their existing market position.

How did design make Dyson a success?

By systematically challenging the assumptions behind current product orthodoxy. Dysons design brought

together concepts that were not totally original but integrated them and used them in a new context. The

ability to do that successfully (and the perseverance) are often far more valuable than pure creative

originality. The process of design is essentially about systematically bringing together ideas and

subjecting them to a critical process. It took Dyson 5 years and 5000 prototypes to refine the idea.

The product and service design activity is a process


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5.13

5.13

The product/service design

process whose performance

is measured by its

Quality

Speed

Dependability

Flexibility and

Cost

Outputs

Fully

specified

products

and

services

Inputs

The product and service design activity is a process

in itself

Transformed resources,e.g.

Technical information

Market information

Time information

Transforming resources,

e.g. Test and design

equipment

Design and technical

staff


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5.14

5.14

The stages of product / service design

Conceptgeneration

Conceptscreening

Preliminarydesign

Evaluation

and

improvement

Prototyping

and final

design


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5.15

5.15

Concept generation

Ideas from customers formally through Marketing

activities

Listening to customerson a day-to-day basis

Ideas from competitor activityFor example, reverse

engineering

Ideas from staffEspecially those who meet

customers every day

Ideas from research and development.


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5.16

5.16

Concept screeningDesign criteria The purpose of the concept-screening stage is to take the flow of concepts and

evaluate them.

Evaluation in design means assessing the worth or value of each design option,so that a choice can be made between them. This involves assessing each

concept or option against a number of design criteria, given below.

The feasibility of the design optioncan we do it?

Do we have the skills (quality of resources)?

Do we have the organizational capacity (quantity of resources)?

Do we have the financial resources to cope with this option?

The acceptability of the design optiondo we want to do it

Does the option satisfy the performance criteria which the design is trying to achieve?

(These will differ for different designs.)

Will our customers want it?

Does the option give a satisfactory financial return?

The vulnerability of each design optiondo we want to take the risk? That is,

Do we understand the full consequences of adopting the option?

Being pessimistic, what could go wrong if we adopt the option? What would be the

consequences of everything going wrong? (This is called the downside risk of an option.)


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5.17

5.17

Broad categories of evaluation criteria for assessing concepts

Feasibility

How difficult is

it?

The

criteria for

screening

concepts

What investmentboth managerial and

financial, will beneeded?

What returnin terms of benefitsto the operation will

it give?

What risksdo we run if thingsgo wrong?

Acceptability

How worthwhile is

it?

Vulnerability

What could go

wrong?

Overall

evaluation

of the

concept

Concept screening

Design involves progressively reducing the number of


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5.18

5.18

Uncertaintyregarding the

final design

Certainty

regarding thefinal design

TIME

Design involves progressively reducing the number ofpossibilities until the final design is reached

CONCEPT

FINAL DESIGN

SPECIFICATON

Choice andevaluationScreens

Large number of

design options

One design

E l S l


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5.19

5.19

ExampleSquare watermelonsWhy is a square watermelon an advantage?

The first point to make is that its a novelty! Such an unusual product will attract attention (and presumably a premium price). Also, Japanese

grocery stores are much smaller than those in many other parts of the world, and they don't have room to waste. Watermelons, big and round,

wasted a lot of space. Most people would simply tell the grocery stores that watermelons grow round and there is nothing that can be done

about it. That is how the vast majority of people would respond. But some Japanese farmers took a different approach. If the supermarkets

wanted a square watermelon, they asked themselves, How can we provide one? It wasn't long before they invented the square watermelon.

What does this example tell us about product design?

Here are a few of the lessons that have been suggested.

Don't assume The major problem was that most people had always seen round watermelons so they automatically assumed that square

watermelons were impossible before even thinking about the question. Things that you have been doing a certain way your entire life have

taken on the aura of the round watermelon and you likely don't even take the time to consider if there is another way to do it. Breaking yourself

from assuming this way can greatly improve your overall life as you are constantly looking for new and better ways to do things.

Question habits The best way to tackle these assumptions is to question your habits. If you can make an effort to question the way you do

things on a consistent basis, you will find that you can continually improve the way that you live your life. Forming habits when they have beenwell thought out is usually a positive thing, but most of us have adopted our habits from various people and places without even thinking about

them. It's a never ending process, but by doing this, you can consistently strive towards making all aspects of your life more enjoyable instead

of defaulting to what you have now.

Be creativeWhen faced with a problem, be creative in looking for a solution. This often requires thinking outside the box. Most people who

viewed this question likely thought they were being asked how they could genetically alter water melons to grow square which would be a

much more difficult process to accomplish. By looking at the question from an alternative perspective, however, the solution was quite simple.

Being creative and looking at things in different ways in all portions of your life will help you find solutions to many problems where others

can't see them.

Look for a better way The square watermelon question was simply seeking a better and more convenient way to do something. The storeshad flagged a problem they were having and asked if a solution was possible. It's impossible to find a better way if you are never asking the

question in the first place. Get into the habit of asking yourself, Is there abetter way I could be doing this? and you will find there often is.

Impossibilities often aren'tIf you begin with the notion that something is impossible, then it obviously will be for you. If, on the other hand,

you decide to see if something is possible or not, you will find out through trial and error. Take away the lessons from the square watermelons

and apply them to all areas in your life (work, finances, relationships, etc.) and you will find that by consistently applying them, you will

constantly be improving all aspects of your life.


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5.20

5.20

ExampleSquare watermelons

What market-related questions would you ask before

producing square watermelons commercially?

What finance-related questions would you ask before


What operations-related questions would you ask before



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5.21

5.21

Preliminary design Having generated an acceptable, feasible and viable product or service

concept the next stage is to create a preliminary design.

The first task in this stage of design is to define exactly what will go intothe product or service: that is, specifying the components of the package.

This will require the collection of information about such things as the

constituent component parts which make up the product or service package

and the component (or product) structure, the order in which the component

parts of the package have to be put together. For example the components for a remote mouse for a computer may

include, upper and lower casings, a control unit and packaging, which are

themselves made up of other components. The product structure shows how

these components fit together to make the mouse

The objective of this stage is to have a first attempt at: specifying the component products and services in the package, and

defining the processes to create the package.

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5.22

5.22

The component structure for remote mouse

LEVEL 0 Remote mouse

LEVEL 1

LEVEL 2

LEVEL 3 Lead Plug CoverSpeaker

LeafletOuterLogoMoulding Batteryhousing

Mould-

ingSpringbase

Button

Preliminary design

Upper

casing

Control

unit

Lower

casing

Packing

5 23

D i l i d i


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5.23

5.23

quality function deployment (QFD)

value engineering / value analysis;

Taguchi methods.

Design evaluation and improvement

There are various ways of evaluating preliminary

designs. These include:

The key purpose of QFD is to try to ensure that the eventual design of a product or

service actually meets the needs of its customers.

The technique tries to capture what the customer needs and how it might be

achieved.

The purpose of value engineering is to try to reduce costs, and prevent any unnecessary

costs, before producing the product or service.

Simply put, it tries to eliminate any costs that do not contribute to the value and performance

of the product or service.

The main purpose of Taguchi methods is to test the robustness of a design.

The basis of the idea is that the product or service should still perform in extreme conditions.

A telephone, for example, should still work even when it has been knocked onto the floor.

Product and service designers therefore need to identify all the possible situations that might arise

and check that the product or service is capable of dealing with those that are deemed to be

necessary and cost-effective.

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5.24

5.24

ExampleTaguchi methods

In the case of an adventure holiday, for example, service

designers need to plan for such contingencies as:

foul weatherthe need for bad-weather alternatives;

equipment failurethe provision of enough equipment to cover for

maintenance;

staff shortagesflexible working to allow cover from one area to

another; accidentsthe ability to deal with an accident without jeopardizing the

other children in the group, with easily accessible first-aid equipment, andusing facilities and equipment that are easy to clean and unlikely to cause

damage to children;

illnessthe ability to deal with ill children who are unable to take partin an activity.

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P t t i d fi l d i


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5.25

5.25

Prototyping and final design

card models;clay models;computer simulations.

Prototypes come in various forms:

CAD has considerably simplified the production of

prototypes.

Prototypes are needed, so products and services can be

tested.

5 26

Th b fit f i t ti d i


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5.26

5.26

The benefits of interactive design

Merging the design of products/services and the processes which create

them is called interactive design which has the following benefits:.o The reduction in the elapsed time for the whole design activity, from concept

through to market introduction, i.e. the time to market (TTM).

o The reduction of TTM gives increased competitive advantage

Implications for the development process taking longer than expected (or

even worse, longer than competitors):

o The costs of development will increase due to having to use developmentresources, such as designers, technicians, subcontractors, and so on, for a

longer development period

o The late introduction of the product or service will delay the revenue from its

sale (and possibly reduce the total revenue substantially if competitors have

already got to the market with their own products or services).

o The net effect of this could be not only a considerable reduction in sales butalso reduced profitabilityan outcome which could considerably extend the

time before the company breaks even on its investment in the new product or

service. This is illustrated in Figure 5.9.

5 27 A delay in the Time to Market disproportionally delays the


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5.27

5.27 A delay in the Time to Market disproportionally delays thefinancial break-even point (Figure 5.9)

Delay infinancial

break-even

Delay intime tomarket

Development costs

Development costs ofdelayed project

Time

Cash Sales revenue

Delayed sales revenue

Cash flow

Delayed cash flow

5 28

Th d ti f ti t k t


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5.28

5.28

The reduction of time to market

A number of factors have been suggested which can

significantly reduce time to market for a product or

service, including the following:o simultaneous development of the various stages in the

overall process;

o an early resolution of design conflict and uncertainty;

o an organizational structure which reflects thedevelopment project.

5.29 equen a an s mu aneous arrangemen o e s ages n e


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5.29

5.29 equen a an s mu aneous arrangemen o e s ages n edesign activity

Third stage in the

design activity

Second stage in the

design activity

First stage in the

design activity

etc.

First stage in the

design activity

Second stage in the

design activity

Third stage in thedesign activity

etc.

Communication betweenstages

Sequential arrangement

of stages

Simultaneous arrangement

of stages

5.30

Wh h ld th t tt ti b ?


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5.30

Managementactivity profile

Where should the management attention be?

KNOWLEDGE

AQUISITION

CONCEPT

INVESTIGATION

BASIC

DESIGN

INITIAL

TESTS

PILOT

PRODUCTION

MANUFACTURING

RAMP-UPLAUNCH

TIME

Ability to

influence the

final design

5.31

S ti t bl l t di ti l t


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5.31

High

Low

Slow time to market

Fast time to

market

Sorting out problems early saves greater disruption later

Degreeofd

isagreement

overdesigndecisions

andchangesindesign

Early stages of thetotal design activity

Later stages of thetotal design activity

5.32 Project-based organization structures


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5.32

Project-based organization structures

The total process of developing concepts through to market will almost certainly

involve personnel from several different areas of the organization:o E.g. Staff from and development department, engineering, production management, marketing and finance.

All these different functions will have some part to play in making the decisions

which will shape the final design.

Yet any design project will also have an existence of its own.o It will have a project name, an individual manager or group of staff who are championing the project, a

budget and, hopefully, a clear strategic purpose in the organization.

The organizational question is which of these two ideasthe variousorganizational functions which contribute to the design or the design project

itselfshould dominate the way in which the design activity is managed?o In a pure functional organization, all staff associated with the design project are based unambiguously in

their functional groups. There is no project-based group at all.

o At the other extreme, all the individual members of staff from each function who are involved in the project

could be moved out of their functions and perhaps even physically relocated to a task force dedicated solelyto the project. The task force could be led by a project manager who might hold all the budget allocated to

the design project.

o In between these two extremes there are various types of matrix organization with varying emphasis on these

two aspects of the organization (see Fig. 5.12). The task force type of organization is more effective at

reducing overall time to market.

5.33

Organization structures for the design activity


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Slack Chambers and Johnston Operations Management 6th

Edition

INCREASING PROJECT

ORIENTATION

P.M.

F.M. = Functional manager

= Project manager

Organization structures for the design activity (Fig 5.12)

P.M.

P.M.

P.M.

F.M. F.M. F.M. F.M.

PURE FUNCTIONAL

ORGANIZATION

F.M. F.M. F.M. F.M.

P.M.

P.M.

P.M.

F.M. F.M. F.M. F.M.

F.M. F.M. F.M. F.M.

P.M.

P.M.

P.M.

PURE PROJECT

ORGANIZATION

P.M.

P.M.

P.M.

F.M. F.M. F.M. F.M.

P.M.

P.M.

P.M.

Lesson 7 - The Design of Products and Services

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