mgt3303 michel leseure design activities in operations management learning objectives: –to review...

MGT3303Michel Leseure

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

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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

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Information flow in NPD

Needs/Wants

Mkt Function

OutlineSpecification Designers

Customers

Product and/orservice

OperationsFunction

OperationalSpecification

Case of a market-ledNPD

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Product Design ProcessConcept Generation

Screening

Prototyping and Final Design

Evaluation & Improvement

Preliminary Design

Concept Package Process

From Slack et al., 2004

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No

Ideageneration

Finaldesign

Preliminarydesign

Feasibilitystudy

Processplanning

Productfeasible?

Yes

Prototype

Manufacturing

Design & ManufacturingSpecifications

Product Concept

PerformanceSpecifications

Russell & Taylor’sFramework

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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

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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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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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Design Changes

Company 2

90% of Totalchangescomplete

Company 1

TimeProduct is

commercialised

Number ofDesign Changes

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Best practices in NPD

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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

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Perceptual MapsGood taste

Bad taste

High nutritionLow nutrition

• Cocoa Puffs

• Rice Krispies • Wheaties

• Cheerios

• Shredded Wheat

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Best Practices in NPD

• Platform and modularity • Design for manufacture, design for

assembly• Failure mode effect analysis• Value analysis• QFD (covered in next class)

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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).

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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 re-

combination of modules

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Evolution of Platforms/Products

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Platforms and Scalability(Rolls Royce Engines)

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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 product-function standpoint!

• From a multi-product perspective– Ability to target sub-segments within a

product family at a fraction of the cost of independent designs

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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

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Design for Manufacture

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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

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FMEAFailure Mode

Causes of Failure

Effects of Failure

Corrective Action

Stale Low moisture content, expired shelf life, poor packaging

Tastes bad, won’t crunch, thrown out, lost sales

Add moisture, cure longer, better package seal, shorter shelf life

Broken Too thin, too brittle, rough handling, rough use, poor packaging

Can’t dip, poor display, injures mouth, choking, perceived as old, lost sales

Change recipe, change process, change packaging

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

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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 job5. 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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The Timing of NPD

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Product Lifecycle

Introduction

Growth

Maturity

Decline

Time

Sales Volume

Beware of design gaps!

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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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Time to Market Performance

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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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Follower Advantage!

From (Cottrelland Sick, 2002)

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Summary

• Several key issues in managing innovation:– Timing of NPD– Reliability of NPD– Role of process, best practices, and

organisation

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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?