Lesson 7 - The Design of Products and Services

5.
Chapter 5 The design of products and services

Pearson Education Ltd. MindStudio
5.1
Slack, Chambers and Johnston, Operations Management, 6th Edition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010
5.2
Process design
Operations strategy Operations management
Supply network design

Layout and flow
Design
Improvement
Planning and control People, jobs and organization
Process technology
Product/service design
5.2
5.3
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?
5.3
5.4
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.
5.4
5.5
Example The 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 Slack, Chambers and Johnston, Operations Management, 6th Edition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010
5.5
5.6
Example The 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 concepts expressed 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 did late 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 many years. 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.
5.6
5.7
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.
5.7
5.8
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.
5.8
5.9
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.
5.9
5.10
What is designed in a product or service?

All products and services can be considered as having three aspects: A concept the understanding of the nature, use and value of the service or product;
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.
A package
the group of component products and services that provide those benefits defined in the concept; e.g. Nandos family combo, Sports car with its
warranties and after sales support. Customers buy these packages of product and services when they buy a product.
A process
the way in which the component products and services will be created and delivered.
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 customer this is process design, that is, the design of the manufacturing processes and the service processes of the delivery of the product to customers.
5.10
5.11
Example Spangler, 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 a success?
5.11
5.12
Example Spangler, Hoover and Dyson

What 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. Produceability the 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. Slack, Chambers and Johnston, Operations Management, 6th Edition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010
5.12
5.13
The product and service design activity is a process in itself
Transformed resources, e.g. Technical information Market information Time information

Inputs
The product/service design process whose performance is measured by its Quality Speed Dependability Flexibility and Cost Outputs
Transforming resources, e.g. Test and design equipment Design and technical staff
5.13
Fully specified products and services
5.14
The stages of product / service design
Concept generation
Concept screening
Preliminary design
Evaluation and improvement
Prototyping and final design
5.14
5.15
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.
5.15
5.16
Concept screening Design 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 option can 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 option do 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 option do 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.)
5.16
5.17
Concept screening
Broad categories of evaluation criteria for assessing concepts
Feasibility How difficult is it? The criteria for screening concepts Acceptability How worthwhile is it? Vulnerability What could go wrong?
What investment both managerial and financial, will be needed?

What return in terms of benefits to the operation will it give? What risks do we run if things go wrong? Overall evaluation of the concept
5.17
5.18
Design involves progressively reducing the number of possibilities until the final design is reached
Large number of design options
Choice and evaluation Screens
CONCEPT
Uncertainty regarding the final design TIME Certainty regarding the final design
FINAL DESIGN SPECIFICATON
One design
5.18
5.19
Example Square watermelons

Why 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 been well 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 creative When 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 stores had 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 a better way I could be doing this? and you will find there often is. Impossibilities often aren't If 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.
5.19
5.20
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?
5.20
5.21
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 into the 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
Preliminary design
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.
5.21
5.22
Preliminary design
The component structure for remote mouse
LEVEL 0
Remote mouse
LEVEL 1
Upper casing
Lower casing
Control unit Spring base
Packing
LEVEL 2
Moulding Logo
Mould- Battery Button housing ing
Outer
Leaflet
LEVEL 3
Lead
Plug
Speaker
Cover
5.22
5.23
Design evaluation and improvement

There are various ways of evaluating preliminary designs. These include:
quality function deployment (QFD)

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.
value engineering / value analysis;

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.
Taguchi methods.
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.
5.23
5.24
Example Taguchi methods

In the case of an adventure holiday, for example, service designers need to plan for such contingencies as:
foul weather the need for bad-weather alternatives; equipment failure the provision of enough equipment to cover for maintenance; staff shortages flexible working to allow cover from one area to another; accidents the ability to deal with an accident without jeopardizing the other children in the group, with easily accessible first-aid equipment, and
using facilities and equipment that are easy to clean and unlikely to cause damage to children;
illness the ability to deal with ill children who are unable to take part in an activity.
5.24
5.25
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.
5.25
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 development resources, 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 but also reduced profitability an 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.
5.26
5.27
A delay in the Time to Market disproportionally delays the financial break-even point (Figure 5.9)
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

5.27
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 the development project.
5.28
5.29
Sequential and simultaneous arrangement of the stages in the design activity

First stage in the design activity Second stage in the design activity
Sequential arrangement of stages
First stage in the design activity

Second stage in the design activity Third stage in the design activity Simultaneous arrangement of stages
Third stage in the design activity

etc.
Communication between stages
etc.
5.29
5.30
Where should the management attention be?

KNOWLEDGE CONCEPT AQUISITION INVESTIGATION BASIC DESIGN INITIAL TESTS PILOT MANUFACTURING LAUNCH PRODUCTION RAMP-UP
Ability to influence the final design
Management activity profile
TIME
5.30
5.31
Sorting out problems early saves greater disruption later
Slow time to market Degree of disagreement over design decisions and changes in design High
Fast time to market
Low Early stages of the total design activity
Later stages of the total design activity
5.31
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 ideas the various organizational functions which contribute to the design or the design project itself should 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. 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 solely to the project. The task force could be led by a project manager who might hold all the budget allocated to the design project. 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. Slack, Chambers and Johnston, Operations Management, 6th Edition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010
5.32
5.33
Organization structures for the design activity (Fig 5.12)
F.M. F.M. F.M. F.M. F.M. F.M. F.M. F.M. P.M. P.M. P.M. P.M. P.M. P.M.
F.M. F.M. F.M. F.M.
PURE FUNCTIONAL ORGANIZATION
PURE PROJECT ORGANIZATION

P.M. P.M. P.M.
INCREASING PROJECT ORIENTATION

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.
F.M. = Functional manager P.M. = Project manager
5.33

Lesson 7 - The Design of Products and Services

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5.

Chapter 5 The design of products and services

Supply network design

Planning and control People, jobs and organization

Key operations questions

Nature and purpose of the design activity

Example The troubled history of the Airbus A380

What were the effects of the delays in the time to market?

Example The troubled history of the Airbus A380

The overlap of activities is greater in service design

Why is design so important?

UK Design Council Survey

What is designed in a product or service?

Example Spangler, Hoover and Dyson

How did design make Dyson a success?

Example Spangler, Hoover and Dyson

The product and service design activity is a process in itself

Transformed resources, e.g. Technical information Market information Time information

Fully specified products and services

The stages of product / service design

Evaluation and improvement

Prototyping and final design

Concept screening Design criteria

The acceptability of the design option do we want to do it

What investment both managerial and financial, will be needed?

Choice and evaluation Screens

Example Square watermelons

What does this example tell us about product design?

Example Square watermelons

The objective of this stage is to have a first attempt at:

Control unit Spring base

Mould- Battery Button housing ing

Design evaluation and improvement

quality function deployment (QFD)

value engineering / value analysis;

Example Taguchi methods

Prototyping and final design

CAD has considerably simplified the production of prototypes.

The benefits of interactive design

Development costs Development costs of delayed project

Delay in time to market

Delay in financial break-even

Sequential and simultaneous arrangement of the stages in the design activity

Sequential arrangement of stages

First stage in the design activity

Third stage in the design activity

Communication between stages

Where should the management attention be?

Ability to influence the final design

Management activity profile

Sorting out problems early saves greater disruption later

Fast time to market

Low Early stages of the total design activity

Later stages of the total design activity

Project-based organization structures

Organization structures for the design activity (Fig 5.12)

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

PURE FUNCTIONAL ORGANIZATION

PURE PROJECT ORGANIZATION

INCREASING PROJECT ORIENTATION

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

F.M. F.M. F.M. F.M. P.M. P.M. P.M.

F.M. = Functional manager P.M. = Project manager

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