PGBM03 Operations Management

Session 05 Design of Product and

Services

Module Leader: Peter Coleman

Process design

Operations

strategy

Design Improvement

Planning and

control

Supply network design

Layout

and flow

Process

technology

People, jobs

and

organization

Product/service

design

Operations

management

Key operations 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?

Product life cycle

Sales

Time

Product life cycle

Sales

Time

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 packagethe group of ‘component’ products and

services that provide those benefits defined

in the concept;

A processthe way in which the component products

and services will be created and delivered.

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

The stages of product / service design

Concept

generation

Concept

screening

Preliminary

design

Evaluation

and

improvement

Prototyping

and final

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.

Broad categories of evaluation criteria for assessing concepts

Feasibility –

How difficult is

it?

The

criteria for

screening

concepts

What investmentboth managerial and

financial, will be needed?

What return in terms of benefits to the operation will

it give?

What risksdo we run if things

go wrong?

Acceptability –

How worthwhile is

it?

Vulnerability –

What could go

wrong?

Overall

evaluation

of the

concept

Concept screening

Uncertainty regarding the final design

Certainty regarding the

final design

TIM

E

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

CONCEPT

FINAL DESIGN

SPECIFICATON

Choice and evaluation ‘Screens’

Large number of

design options

One design

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?

The component structure for remote clicker

LEVEL 0 Remote Mouse

LEVEL 1

LEVEL 2

LEVEL 3 CasingUSB

LeafletOuterLogoMoulding Battery housing

Mould-

ingSpring base

Button

Preliminary design

Upper casing

Control unit

Lower casing

Packing

A delay in the ‘Time to Market’ disproportionally delays the

financial break-even point

Delay in financial

break-even

Delay in time to market

Development costs

Development costs of delayed project

Time

Cash Sales revenue

Delayed sales revenue

Cash flow

Delayed cash flow

Low

High

Slow time to market

Fast time to

market

Sorting out problems early saves greater disruption later D

eg

ree

of a

gre

em

en

t o

ve

r d

esig

n d

ecis

ion

s

an

d c

ha

ng

es in

de

sig

n

Early stages of the total design activity

Later stages of the total design activity

Assignment Hand In February 8th.

Thank You