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Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston.

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Presentation on theme: "Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston."— Presentation transcript:

1 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.1 Chapter 5 Innovation and design in services and products

2 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.2 Product/service design Supply network design Layout and flow Layout and flow Process technology People, jobs and organization Product/service design Direct Design Develop Deliver Operations management Figure 5.1 The design activities in operations management covered in this chapter

3 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.3 In Chapter 5 – The design of products and services – Slack et al. identify the following key questions…  How does innovation impact on design?  Why is good service and product design important?  What are the stages in service and product design?  What are the benefits of interactive design? Key operations questions

4 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.4 Nature and purpose of the design activity Products, services and the processes which produce them all have to be designed. Decisions taken during the design of a product or service will have an impact on the decisions taken during the design of the process which produces those products or services and vice versa.

5 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.5 Products and services should be designed in such a way that they can be created effectively Designing the product or service Processes should be designed so they can create all products and services which the operation is likely to introduce Designing the process Product/service design has an impact on the process design and vice versa The design of products/services and processes are interrelated and should be treated together

6 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.6 Design of the service Design of the process In most service operations the overlap between service and process design is implicit in the nature of service Design of the product Design of the process In manufacturing operations overlapping the activities of product and process design is beneficial The overlap of activities is greater in service design

7 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.7 Why is design so important? UK Design Council Survey… Design helps businesses connect strongly with their customers. 90 per cent of businesses growing rapidly say design is significant to them, only 26 percent 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 per cent 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 per cent better than average.

8 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.8 What is designed in a product or service? A concept the understanding of the nature, use and value of the service or product. A package the group of ‘component’ products and services that provide those benefits defined in the concept. A process the way in which the component products and services will be created and delivered.

9 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.9 Performance Time Slow introduction Obstacles to further development overcome Idea approaches its natural limits Performance Time Progressive introduction of new innovative ideas (a) The basic S-shaped improvement in performance (b) Innovation following multiple S-shaped curves The S-shaped curve of innovation Figure 5.2 The S-shaped curve of innovation

10 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.10 High impact on architectural knowledge Low impact on architectural knowledge High impact on component knowledge Low impact on component knowledge Radical innovation Architectural innovation Modular innovation Incremental innovation Telemedicine Walk-in service Direct call-up service New scanner Innovation in primary healthcare example... The Henderson–Clark model Figure 5.3 The Henderson–Clark model

11 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.11 Transformed resources, e.g. technical information market information time information Transforming resources, e.g. test and design equipment design and technical staff lead user (customer) feedback supplier advice collaborators Inputs The product/service design process whose performance is measured by the quality speed dependability flexibility and cost of how designs are created. Outputs Product/ service concept Product/ service package Product/ service process The product and service design activity as a process Figure 5.4 The design activity is itself a process

12 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.12 The stages of product/service design Concept generation Concept screening Preliminary design Evaluation and improvement Prototyping and final design Figure 5.5 The stages of product/service design

13 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.13 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.

14 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.14 Broad categories of evaluation criteria for assessing concepts Feasibility – How difficult is it? The criteria for screening concepts What investment both managerial and financial will be needed? What return in terms of benefits to the operation will it give? What risks do we run if things go wrong? Acceptability – How worthwhile is it? Vulnerability – What could go wrong? Overall evaluation of the concept Concept screening…

15 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.15 Uncertainty regarding the final design Certainty regarding the final design TIME Design involves progressively reducing the number of possibilities until the final design is reached CONCEPT FINAL DESIGN SPECIFICATON Choice and evaluation ‘Screens’ Large number of design options One design Figure 5.6 The design funnel – progressively reducing the number of possibilities until the final design is reached

16 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.16 The component structure for remote mouse LEVEL 0Remote mouse LEVEL 1 LEVEL 2 LEVEL 3 Lead PlugCoverSpeaker LeafletOuter LogoMoulding Battery housing Mould- ing Spring base Button Preliminary design… Upper casing Control unit Lower casing Packing Figure 5.7 The component structure of a remote mouse

17 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.17 A delays in the ‘Time to Market’ disproportionally delays the financial breakeven point Delay in financial breakeven Delay in Time to Market Development costs Development costs of delayed project Time Cash Sales revenue Delayed sales revenue Cash flow Delayed cash flow Figure 5.9 Delay in the time to market of new services and products not only reduces and delays revenues, it also increases the costs of development. The combination of both these effects usually delays the financial break-even point far more than the delay in the time to market

18 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.18 Sequential and simultaneous arrangement of the stages in the design activity Third stage in the design activity Second stage in the design activity First stage in the design activity etc. First stage in the design activity Second stage in the design activity Third stage in the design activity etc. Communication between stages (a) Sequential arrangement of stages (b) Simultaneous arrangement of stages Figure 5.10 (a) Sequential arrangement of the stages in the design activity; (b) simultaneous arrangement of the stages in the design activity

19 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.19 Management activity profile Where should the management attention be? KNOWLEDGE AQUISITION CONCEPT INVESTIGATION BASIC DESIGN INITIAL TESTS PILOT PRODUCTION MANUFACTURING RAMP-UP LAUNCH Time Ability to influence the final design

20 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.20 Low High Slow time to market Fast time to market Sorting out problems early saves greater disruption later Degree of agreement over design decision and changes in design Early stages of the total design activity Later stages of the total design activity Figure 5.11 Sorting out problems early saves greater disruption later in the design activity

21 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.21 Increasing project orientation P.M. F.M. = Functional manager = Project manager Organization structures for the design activity P.M. F.M. Pure functional organization F.M. P.M. F.M. P.M. Pure project organization P.M. F.M. P.M. Figure 5.12 Organization structures for the design activity

22 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.22 Chatsworth – the adventure playground decision Chapter 5 ‘end-of-chapter’ case Source: Alistair Brandon-Jones

23 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.23 The concept, package and process for the adventure playground Task... Nature What does the service provide? Use Who is intended to use the service? Value What should users get out of the service Suggest some key words that could be included in a service concept (You may like to categorize their answers as... nature, use and value)

24 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.24 The concept, package and process for the adventure playground (Continued) Task... Nature What does the service provide? Use Who is intended to use the service? Value What should users get out of the service Suggest some key words that could be included in a service concept (You may like to categorize their answers as... nature, use and value) safe (ish) play and adventure children (maybe specifically ages 8–12) enjoyment, fun

25 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.25 The concept, package and process for the adventure playground (Continued) A well-designed adventure playground suited to children aged from 8–12 which provides a challenging, enjoyable but reasonably safe environment for children, on their own or with other children, while being supervised by their parents. Task...Put your key words into a sentence that conveys the service concept

26 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.26 For the children The concept, package and process for the adventure playground (Continued) Task...Suggest the elements that could be included in the service ‘package’ for the adventure playground (You may like to distinguish the elements of the ‘package’ intended for the children and those for their parents) For their parents For example Climbing frames.....bridges walkways..... swings......chutes..... slides ‘interesting’ access via the ‘secret tunnel’ For example Seating...clear visibility....easy access for pushchairs For safety, ground covered in bark and first aid post

27 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.27 Reminder – the process is the way in which the concept and package will be delivered to the customer. The concept, package and process for the adventure playground (Continued) Task... Outline (a)the organization’s process, and (b) the co-production process (with the children and parents)...that allows the service to be delivered.

28 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.28 The concept, package and process for the adventure playground (Continued) The organization’s process The co-production process (with children and parents) Includes activities such as the inspection of all the equipment in the morning before opening time. Staffing the admission office, café and first aid post, opening the farmyard and playground, providing first aid cover throughout the day, closing the playground and cleaning and tidying the areas ready for the following day. This process is somewhat more freeform, but starts with entering the playground via the secret tunnel, running from one component to the next, asking parent(s) for help, showing parent(s) how high/upside down/stuck they are and objecting when its time to leave

29 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.29 Describe the four options highlighted in the case in terms of feasibility, acceptability and vulnerability. Feasibility (How difficult is it? What investment will be required?) Acceptability (Is it worthwhile? What are the returns?) Vulnerability (What could go wrong? What are the risks?) Remove it Relatively easy. It would require several person – days to dismantle it plus removal costs of the equipment. Having no adventure playground better fits with Chatsworth’s concept of country estate. Income would still be gained from entrance fees to the farmyard. The risk is that there is less (indeed little) for children to do so parents may be much less inclined to visit and in particular not visit again.

30 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.30 Describe the four options highlighted in the case in terms of feasibility, acceptability and vulnerability (Continued) Feasibility (How difficult is it? What investment will be required?) Acceptability (Is it worthwhile? What are the returns?) Vulnerability (What could go wrong? What are the risks?) Do nothing The easiest option of all but with increasing maintenance costs. Visitors continue to pay to use the playground. Income not likely to be affected at least in the short term. This option would allow the decision and investment to be delayed. In the longer term increasing risk of equipment failing and potentially causing injury.

31 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.31 Describe the four options highlighted in the case in terms of feasibility, acceptability and vulnerability (Continued) Feasibility (How difficult is it? What investment will be required?) Acceptability (Is it worthwhile? What are the returns?) Vulnerability (What could go wrong? What are the risks?) Replace with similar Somewhat difficult. This would require removing the old one and replacing it during the closed season. Cost about £100,000. Would minimize the maintenance costs and keep the equipment in good repair. The returns would be as at present. The equipment may start to appear dated (old fashioned) and be less appealing to children who have seen/used newer equipment.

32 Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7 th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014 Slide 5.32 Describe the four options highlighted in the case in terms of feasibility, acceptability and vulnerability (Continued) Feasibility (How difficult is it? What investment will be required?) Acceptability (Is it worthwhile? What are the returns?) Vulnerability (What could go wrong? What are the risks?) Replace with substantially better Somewhat difficult. It would require removing the old one and replacing it during the closed season. Cost about £200,000–250,000. Before the event it was impossible to forecast what the impact would be, at worst, there would be no discernible impact on visitor numbers at all. At best...who knows? There are two risks, firstly an untried layout and state-of-the-art equipment and secondly that visitors wouldn’t see it as much different than before (therefore have no impact on visitor numbers or at worst not like it and visitor numbers reduce!)


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