Design Activities in Operations
Management
• Learning objectives:
– To review all key design activities in the
field of operations management
– Focus on the design of manufactured
goods
– To understand the key challenges of
design tasks
•
•
•
•
Product design & Innovation
Challenges of design
Best practices in NPD
The importance of time to market
MGT3303
Michel Leseure
New Product Development
• The process of converting an idea into a
product or service
• The development task may be more or less
innovative:
– Invention: products or services that are
radically new
– Expansion: products or services that are new
to the firm
– Revisions of existing products and services
MGT3303
Michel Leseure
Information flow in NPD
Product and/or
service
Needs/Wants
Customers
Mkt Function
Outline
Specification
Case of a market-led
NPD
Designers
Operations
Function
Operational
Specification
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Michel Leseure
Product Design Process
Concept Generation
Screening
Preliminary Design
Evaluation & Improvement
Prototyping and Final Design
Concept
Package
Process
From Slack et al., 2004
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Michel Leseure
No
Idea
generation
Product
Concept
Product
feasible?
Feasibility
study
Russell & Taylor’s
Framework
Preliminary
Yes
Performance
Specifications
design
Final
design
Prototype
Process
planning
Design & Manufacturing
Specifications
Manufacturing
MGT3303
Michel Leseure
Failures in NPD
• NPD can fail because:
– The process itself is costly and uncertain –
a technically successful innovation might
not be profitable
– The process is hard to manage –
innovating firms require special skills
– Reward of success are hard to appropriate
– innovations can be copied and bettered
by competitors
MGT3303
Michel Leseure
NPD & Product Superiority
• History has proved that technological
superiority is NOT a sufficient condition for
NPD success
–
–
–
–
VHS vs. Beta
Concorde
Qwerty keyboards, path dependency
Dos and Windows, increasing economies
of scale
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Michel Leseure
The Challenge of Design: Achieving
Integration
Source: Simon & Schuster from Fast Cycle Times: How to Align Purpose,
Strategy, and Structure for Speed by Christopher Meyer. Copyright © 1993 by
Christopher Meyer.
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Michel Leseure
Design Changes
Number of
Design Changes
Company 1
Company 2
90% of Total
changes
complete
Time
Product is
commercialised
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Michel Leseure
Best practices in NPD
MGT3303
Michel Leseure
Best Practices in NPD
• Concurrent engineering, supplier involvement,
cross-functional teams
– Improve communication between parties through:
• Well designed NPD and information exchange processes
• The right organisational structure
• The right organisational climate
• Process integration
– CADCAM, Rapid prototyping
• Idea generation
– Brainstorming
– Benchmarking
– Reverse engineering
MGT3303
Michel Leseure
Perceptual Maps
Good taste
• Cocoa Puffs
High nutrition
Low
nutrition
• Rice
Krispies
• Cheerios
• Wheaties
• Shredded
Wheat
Bad taste
MGT3303
Michel Leseure
Best Practices in NPD
• Platform and modularity
• Design for manufacture, design for
assembly
• Failure mode effect analysis
• Value analysis
• QFD (covered in next class)
MGT3303
Michel Leseure
Platform Technology
– The platform concept
• “A platform can broadly be defined as a relatively large set
of product components that are physically connected as a
stable sub-assembly and are common to different final
models” (Meyer and Lehnerd, 1997)
– The modularisation concept
• “A module can be described as a large group of
components that is physically coherent as a sub-assembly
and which often has standardised interface designs
(Muffato, 1999).
MGT3303
Michel Leseure
Examples of Platforms
•
•
•
•
•
•
•
Swiss army knives
Swatch watches
Xerox copiers
Hewlett-Packard printers
The Boeing 747 family of aircraft
Kodak single use camera
Sony Walkman
– Original designed as a platform in 1979
– There are 250+ models
– New designs (i.e. innovations) only account for 25% of all
models
– This means that 85% of the models were a simple recombination of modules
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Michel Leseure
Evolution of Platforms/Products
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Michel Leseure
Platforms and Scalability
(Rolls Royce Engines)
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Michel Leseure
Benefits of Platforms
• At the production level
– Similar models more easily assembled in
the same production process
– Some companies even define platform
from a production rather than productfunction standpoint!
• From a multi-product perspective
– Ability to target sub-segments within a
product family at a fraction of the cost of
independent designs
MGT3303
Michel Leseure
Benefits of Modules
• Possibility of producing product variations
which have only limited impact on
production and assembly processes
• Limited proliferation of parts
• Reduction of throughput time because
many pre-assembly operations are
eliminated
• Greater productivity and quality from
automation
MGT3303
Michel Leseure
Design for Manufacture
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Michel Leseure
Failure Mode and Effects
Analysis (FMEA)
• A systematic approach for analyzing
causes and effects of failures
• Prioritizes failures
• Attempts to eliminate causes
• Similar to: Fault Tree Analysis (FTA)
– more visual
– studies interrelationship between failures
MGT3303
Michel Leseure
FMEA
Failure
Mode
Stale
Causes of Effects of Corrective
Failure
Failure
Action
Low moisture
content, expired
shelf life, poor
packaging
Tastes bad, won’t Add moisture, cure
crunch, thrown
longer, better
out, lost sales
package seal,
shorter shelf life
Broken
Too thin, too
brittle, rough
handling, rough
use, poor
packaging
Can’t dip, poor
Change recipe,
display, injures
change process,
mouth, choking, change packaging
perceived as old,
lost sales
Too Salty
Outdated recipe,
process not in
control, uneven
distribution of salt
Eat less,
drink more,
health hazard,
lost sales
Experiment with
recipe, experiment
with process,
introduce low salt
version
MGT3303
Michel Leseure
MGT3303
Michel Leseure
Value Analysis
(or value engineering)
• Ratio of value to cost
• Assessment of value:
1. Can we do without it?
2. Does it do more than is required?
3. Does it cost more than it is worth?
4. Can something else do a better job
5. Can it be made by less costly method, tools,
material?
6. Can it be made cheaper, better or faster by
someone else?
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Michel Leseure
The Timing of NPD
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Michel Leseure
Product Lifecycle
Sales
Volume
Maturity
Growth
Decline
Introduction
Beware of design gaps!
Time
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Michel Leseure
Time to Market Performance
• Time to market
– First mover advantage
– Ability to deliver a product on time
• Essential for a product which is « sold in »
• A printer brought 6 months to the market within development cost
will lose the organisation 33% of profits
• A printer brought on time to the market 30% over-budget will lose
the organisation 2.3% of profits (McKinsey)
– Time-based competition
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Michel Leseure
Time to Market Performance
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Michel Leseure
Second Mover Advantage
• Many researchers have questioned the idea of
“first-mover advantage”
• First mover advantage only works if the product
which is launched is perfectly reliable!
• Otherwise, a second company can imitate the
first mover and avoid the mistakes that were
made!
– Second Mover advantage!
– There is an optimal timing for new product
introductions!
– Time vs. quality trade-off
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Michel Leseure
Follower
Advantage!
From (Cottrell
and Sick, 2002)
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Michel Leseure
Summary
• Several key issues in managing
innovation:
– Timing of NPD
– Reliability of NPD
– Role of process, best practices, and
organisation
MGT3303
Michel Leseure
Suggested Homework
• Question 3.1, p. 110
• Morocco’s textile sector is an important part of
the Moroccan economy. Write an assessment of
this sector’s design capabilities.
• Questions 3.3, 3.4, 3.6 p. 110
• There are a number of innovation/invention
prizes in Morocco. What types of new product
designs could be a winner?
MGT3303
Michel Leseure