Chap12

© Nigel Slack and Michael Lewis 2003

Quality

Per

form

ance

o

bje

ctiv

es

Dependability

Developmentand Organization

(Product and service development and

improvement)

Speed

Flexibility

Cost

Resource Usage

Mar

ket

Co

mp

etit

iven

ess

Decision areas

Issues covered in this chapter

Capacity Supply Network

Process Technology

Issues include:

• Relating product and process development

• Managing product/service development as a process

• Meeting market requirements for new products and services

• Managing product/service development resources


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


Product/service development is itself a process

TRANSFORMED RESOURCES

Technical informationMarket informationTime information

TRANSFORMING RESOURCES

Test and design equipment

Design and technical staff

INPUTSTHE

DEVELOPMENT ACTIVITY

OUPUT FINISHED DESIGNS


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

New Core Process

Next Generation

Process

Redesigned Processes

Minor Modifications

Add-ons and Enhancements

Extension of Product/Service

Range

Next Generation Product/Service

New Core Product/Service

Degree of Product/Service Change

De

gre

e o

f P

roce

ss

Ch

an

ge

Research and Advanced

Development

Eversharp

Bic

Parker

Reynolds

Biro Brothers


‘Pioneer’ Process

Developments to Process

Extension to

Processes

Modifications

to Process

Modification to product/service

Extension to product/service

Development of product/service

‘Pioneer’ product/service

The link between product/service and process development can be closer in service industries

Deg

ree

of

pro

cess

ch

ang

e

Research and

advanced development

Internet banking service

Call-center banking service

Branch banking service

Incr

easi

ng diff

iculty

Incr

easi

ng diff

iculty

Degree of product/service change


Degree of Product/Service Change

Deg

ree

of

Pro

cess

Ch

ang

eResearch

and Advanced

Development

Internet banking service

Call-center

banking service

Branch banking service

Boundary for service operations

Volvo 1970s and 80s

The ‘Mini’ 1960

Boundary for manufacturing

operations

New Core Process

Next Generation

Process

Redesigned Processes

Minor Modifications

Add-ons and Enhancements

Extension of Product/Service

Range

Next Generation Product/Service

New Core Product/Service


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.

Per

form

ance

Ob

ject

ives

Mar

ket

Co

mp

etit

iven

ess

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


Reliable/resilient

Accurate

Fast

Responsive

Secure

Remote links

Connectivity

Scalability

Absolute importance

Relative importance

Technical difficulty

Imp

ort

an

ce

to

c

us

tom

er

Av

ail

ab

ilit

y

R-3

co

nfo

rmt.

Pa

ss

wo

rd x

2

Intr

an

et

co

mp

ati

bil

ity

M

em

ory

re

qu

ire

me

nt

Da

tab

as

e

Inte

rfa

ce

s

Fir

ew

all

s

HOWs

1 2 3 4 5Competitive score

1 =

Min

imu

m

X =

Us

A =

Co

mp

eti

tor

A

B =

Co

mp

eti

tor

B

5 =

Ma

xim

um

B

B

B

B

B

B

B

B

A

A

A

A

A

A

A

A

X

X

X

X

X

X

X

X

98 48 72 54 9 90 54 78

1st 7th 4th 5th 8th 2nd 5th 3rd

4 3 2 2 1 5 4 3 1 = easy, 5 = difficult

9

10

7

4

8

6

5

2

WHATs

Strong relationshipMedium relationship

Weak relationship

931

WHATs vs HOWs

Strong positivePositive

NegativeStrong negative

HOWs vs HOWs

A Quality Function Deployment (QFD) Matrix


Design characteristics

Relationship matrix

Cu

sto

mer

re

qu

irem

ents

Trade-offs

Component characteristics

Relationship matrix

Des

ign

ch

arac

teri

stic

s

Trade-offs

Process characteristics

Relationship matrixC

om

po

nen

t ch

arac

teri

stic

s

Trade-offs

Individual activities

Relationship matrix

Pro

cess

ch

arac

teri

stic

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


Uncertainty Regarding the Final Design

Certainty Regarding the Final Design

TIM

E

Product/service development involves progressively reducing the number of possibilities until the final design is

reached

Choice and evaluation "Screens"

CONCEPT

FINAL DESIGNSPECIFICATION

Large Number of Design options

One Design


Many concepts enter the development process

One ‘best’ design emerges

Customer’s original

specification

One recycle (sometimes) Discussions

with customer

Expansion of original

idea

Narrowing of options for customer

Mutually agreed

development specification

Development of agreed design

(a)

(b)

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


Delay in breakeven

Time

Cash Sales RevenueCumulative 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

So in the short-term the project runs into

problems

Lose business opportunities

The ‘vicious cycle’ of under resourcing development capacity


In-house design capability Outsourced

design capability

Close, but loose

Distant, through contracts

Control of resource

StrongWeak in the short-term, potentiallystronger in the long-term

Familiarity

High Low/limitedAccessibility

Fixed VariableCost

Small Great (Potentially)

Risk of knowledge leakage

The in-house-outsourced continuum


RESIDENT CUSTOMER ENGINEER

Focus – helping suppliers to develop their products at supplier’s sites, to meet customer needs

GUEST DESIGN ENGINEER

Focus – helping the product design effort at the

customer’s site by bringing supplier product and process knowledge

SUPPLIER DEVELOPMENT ENGINEER

Focus – helping suppliers at their site to improve

production methods

RESIDENT PRODUCTION ENGINEER

Focus – helping the manufacture of customer’s products through knowledge of, and changes in, supplier products

Supplier located (employee of customer)

Customer located (employee of supplier)

Largely concerned

with product development

Largely concerned

with process development

A broad typology of guest engineers


INCREASING PROJECT

ORIENTATION

Balanced matrix

Project matrix(Heavyweight project managers)

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


A B C D


A B C D


A B C D

Project 2

Project 3

Project 1

Project 2

Project 3

Project 1

Organizational structures for product/service development


Safety

Quality

Flexibility

CostPer

form

ance

Ob

ject

ives

Mar

ket

Co

mp

etit

iven

ess

Resource Usage

Decision areas

Operations strategy matrix for Project Orlando

* * *

* **

** *

*Capacity

Size of team?

Supply Network

Subcontract any development?

Process Technology

Build pilot plant?

Development and organisation

Dedicated team?

No significant relationship.

Is the company willing to subcontract any responsibility for safety?

Pilot plant may enable potential hazard to be detected.

Dedicated team may help reinforce safety objective.

No significant relationship.

Strict quality standards need to be communicated to any subcontractor.

Pilot plant may enable better quality learning.

Dedicated team may help to reinforce quality objective.

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

Does subcontractor development imply reduced flexibility?

Pilot plant would be dedicated so increase flexibility, but may have scale-up problems.

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

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

Subcontracting development to specialists may reduce total development cost.

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

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

Business

Chap12