Wk 15.3 Product & service dev

  

PRODUCT & SERVICE

DEVELOPMENT

  Resource Usage

  Issues include: s es

• Relating product and

  Quality process development en iv ce

• Managing product/

  Speed it es service development an et iv as a process p Dependability ct rm m je fo o

• Meeting market

  b Flexibility C requirements for new er o t P products and services Cost ke

• Managing product/

  ar service development M resources Development and Organization Process Capacity Supply (Product and service Network Technology development and improvement)

  Decision areas

  Issues covered in this chapter

  Increased competitiveness Shortened life-cycles Fragmented markets Rapid technology change Means of building capabilities Involves all parts of the business

  

The increasing strategic importance of product and

service development

  OPERATIONS RESOURCES MARKET REQUIREMENTS Product and service development

  Development of the Service Development of the Process Development of the Product Development of the Process In most service operations the overlap between service and process development is implicit in the nature of service In manufacturing operations overlapping the activities of product and process development is beneficial

  Products and services should be developed in such a way that they can be created effectively

  Processes should be developed in such a way that they can create all products and services which the operation is likely to introduce Decisions taken during the development of the product or service will have an impact on the decisions taken during the development of the process which produces the product or service or vice versa Developing the Product or Service Developing the Process which Produces the Product or Service

  The development of products/services and processes are interrelated and should be treated together

  TRANSFORMED RESOURCES Technical information Market information Time information TRANSFORMING RESOURCES Test and design equipment Design and technical staff

Product/service development is itself a process

Introducing ……… the Ballpoint Pen

  

1939 Hungarian brothers Ladislao and Georg Biro file patent and in 1944

produce first commercial ballpoint pen.

  Eversharp buy US distribution rights.

Before first shipment, Milton Reynolds’ copy product on sale in US (also

retractable).

  Legal wrangles unearth Biro brothers’ 1939 patent preceded 50 years earlier!

Reynold enjoyed early success but quality problems undermine market

image.

  Both Eversharp and Reynolds go bust. Parker introduce reengineered product to overcome some reliability problems.

  Parker reasonably successful with mid-price product.

French company Bic make further product modifications and overcome

mass production problems.

  

Bic make the product ‘consumer disposable’ and change the pen market.

  

Product/service and process development - the Ballpoint pen

Research and Advanced

  Development Biro New Core

  Brothers Process e

  Eversharp Reynolds g

  Next an h

  Generation Process C

  Bic ss ce

  Redesigned ro

  Processes P f o e

  

Parker

Minor re

  Modifications eg D

  Add-ons and Extension of Product/ Next Generation New Core Product/ Enhancements Service Range Product/Service Service Degree of Product/Service Change

  Research and advanced development ‘Pioneer’ Process e ty Internet g

ul

ic banking iff an d h Developments service ng c to Process si ss ea cr ce

  In ty Call-center ro ul p banking ic f iff o service d Extension e ng si re to ea Processes cr eg

  In D Branch banking service Modifications to Process Modification to Extension to Development of ‘Pioneer’ product/service product/service product/service product/service

  Degree of product/service change

  

The link between product/service and process development can be

closer in service industries

  Research and

  Advanced Development New Core e g

  Process Volvo an

  Internet 1970s h

  Boundary banking and

   C for service service

  80s Next operations ss

  Generation ce

  Process Call- ro

  Boundary for P center f manufacturing banking o operations service e

  Redesigned re

  Processes eg D

  Branch The banking ‘Mini’ service 1960

  Minor Modifications Add-ons and Extension of Product/ Next Generation New Core Product/ Enhancements Service Range Product/Service Service

  

Degree of Product/Service Change

  Quality - Error free designs which fulfil market requirements

  Speed - Fast development from concept to launch Dependability - Designs delivered to schedule

  Flexibility - Designs which include latest ideas

  Cost - Designs produced without consuming excessive cost

  Capacity - Amount of development resource matched to demand over time

  Supply Network

• - Relationships

  with outside sources of development knowledge

  Process Technology - Provision of design technology (CAD), expert systems, etc.

  Development and Organization - Organization of development resources and improvement strategy.

  P er fo rm an ce O b je ct iv es

  M ar ke t

  C o m p et it iv en es s

  Resource Usage Operations strategy for the product and service development operations

  Decision areas

  Concept generation Concept screening Preliminary design Design evaluation and improvement Prototyping and final design Developing the operations process

  

A typical ‘stage model’ of the product and

service development process

  HOWs vs HOWs Strong positive Positive Negative HOWs B A Strong negative r r to to m ti ti m u e e u WHATs vs HOWs p p o t. im y

  2 t im t m m x 9 it Strong relationship e n o y x o rm in s a il c e

r s

it e b Medium relationship

  3 s C n fo rd

   C U e il e M M t m s ti ll a o n c b ry e = = e a m a a = = = Weak relationship

  1 o a rt a w o n ir b B A

  5 p

  1 X w o il s

to rf

c a u m e ta p s a s m q tr e te Competitive score -3 a v a ir u o WHATs Im c R In c M re D F

  1 A P In

  2

  3

  4

  5 Reliable/resilient

  9 B A

  X Accurate A B

  X

  10 Fast B

  X A

  7 Responsive

  4 B

  X A Secure

  8 X A B Remote links

  6 A

  X B

  5 Connectivity A B

  X X

  2 A B Scalability Absolute importance

  94

  48

  72

  54

  9

  90

  54

  78 1st 7th 4th 5th 8th 2nd 5th 3rd Relative importance

  4

  3

  2

  2

  1

  5

  4 3 1 = easy, 5 = difficult Technical difficulty

  A Quality Function Deployment (QFD) Matrix

  Design characteristics Relationship matrix

  C u st o m er re q u ir em en ts

  Trade- offs Component characteristics Relationship matrix

  D es ig n ch ar ac te ri st ic s

  Trade- offs Process characteristics Relationship matrix

  C o m p o n en t ch ar ac te ri st ic s

  Trade- offs Individual activities Relationship matrix

  P ro ce ss ch ar ac te ri st ic s

  Trade- offs ‘House of quality’ Component deployment Process planning Activity planning

  QFD matrices can be linked with the ‘hows’ of one matrix forming the ‘what’ of the next

  

Product/service development involves progressively

reducing the number of possibilities until the final design is

reached

  Large Number of CONCEPT

  Choice and Design options evaluation

  "Screens" Uncertainty Regarding the

  Final Design T

  IM E Certainty Regarding the Final

One Design

  Design FINAL DESIGN SPECIFICATION

  Many concepts enter the development process One ‘best’ design emerges (a)

  One recycle Customer’s (sometimes) original Discussions specification with customer Development of agreed design Mutually (b) agreed Expansion Narrowing of development of original options for specification idea customer

  

(a) The idealised development funnel; (b) one company development funnel

  Delay in breakeven Time Cash Sales Revenue Cumulative cash flow Sales revenue (delayed launch) Cumulative cash flow (delayed launch) Delay in launch Slow and/or delayed development times, which can be the result of quality or flexibility failure, will increase costs and can reduce revenue

  Confirmed development need only in the short-term Reluctant to invest in long-term development resources Lose business opportunities So in the short-term the project runs into problems because it is under-resourced

  

The ‘vicious cycle’ of under resourcing

development capacity

  In-house design capability

  Outsourced design capability Close, Distant, through Control of resource but loose contracts Weak in the short-term, Familiarity Strong potentially stronger in the long-term Accessibility High

  Low/limited Cost Fixed Variable Risk of knowledge leakage Great Small (Potentially)

  The in-house-outsourced continuum

  Customer located Supplier located

  (employee of supplier) (employee of customer) RESIDENT CUSTOMER GUEST DESIGN ENGINEER ENGINEER Largely concerned Focus – helping suppliers to Focus – helping the product with product develop their products at design effort at the development supplier’s sites, to meet customer’s site by bringing customer needs supplier product and process knowledge SUPPLIER DEVELOPMENT RESIDENT PRODUCTION ENGINEER

  ENGINEER Largely Focus – helping suppliers at their Focus – helping the manufacture concerned site to improve of customer’s products with process production methods through knowledge of, and development changes in, supplier products

  A broad typology of guest engineers

  INCREASING PROJECT ORIENTATION Balanced matrix Project matrix Project

   2 Project

   3 Project team (‘Tiger’ teams) Function Function Function Function Functional organization A B C D Project

   1 Functional matrix (Lightweight project managers) Project

   2 Project

   3 Project

  

1

Function Function Function Function A B C D Function Function Function Function A B C D Function Function Function Function A B C D Project

   2 Project

   3 Project

   1 Project

   2 Project

   3 Project

   1 Organizational structures for

  product/service development

  Strict quality standards need to be communicated to any subcontractor.

  Pilot plant is likely to be more expensive that using partners’ capacity.

  Subcontracting development to specialists may reduce total development cost.

  Very significant, the larger the development team the higher the cost of development.

  Dedicated team likely to be more flexible if all necessary skills are represented in it.

  Does subcontractor development imply reduced flexibility? Pilot plant would be dedicated so increase flexibility, but may have scale- up problems.

  Need to have development capacity to respond quickly to accelerated development needs.

  Dedicated team may help to reinforce quality objective.

  Pilot plant may enable better quality learning.

  No significant relationship.

  Dedicated team may help reinforce safety objective.

  Is the company willing to subcontract any responsibility for safety? Pilot plant may enable potential hazard to be detected.

• Capacity

  Dedicated team? No significant relationship.

  Build pilot plant? Development and organisation

  Subcontract any development? Process Technology

  Size of team? Supply Network

  Decision areas Operations strategy matrix for Project Orlando

  P er fo rm an ce O b je ct iv es M ar ke t C o m p et it iv en e ss Resource Usage

  Safety Quality Flexibility Cost

  Dedicated team likely to be more expensive, functional organisation usually gives higher utilisation of staff.