Presentation on theme: "Innovation and design in services and products"— Presentation transcript:
1 Innovation and design in services and products Chapter 5Innovation and design in services and products
2 Product/service design DirectDesignDevelopDeliverOperations managementProcess designSupply network designLayoutand flowProcess technologyPeople, jobs and organizationProduct/service designFigure 5.1 The design activities in operations management covered in this chapter
3 Key operations questions 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?
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 Designing the product or service The design of products/services and processes are interrelated and should be treated togetherProducts and services should be designed in such a way that they can be created effectivelyDesigning the product or serviceProcesses should be designed so they can create all products and services which the operation is likely to introduceDesigning the processProduct/service design has an impact on the process design and vice versa
6 The overlap of activities is greater in service design Design of the productDesign of the processDesign of the serviceDesign of the processIn most service operations the overlap between service and process design is implicit in the nature of serviceIn manufacturing operations overlapping the activities of product and process design is beneficial
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 What is designed in a product or service? A conceptthe 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.
9 The S-shaped curve of innovation Idea approaches its natural limitsObstacles to further development overcomePerformancePerformanceProgressive introduction of new innovative ideasSlow introductionTimeTime(a) The basic S-shaped improvement in performance(b) Innovation following multiple S-shaped curvesFigure 5.2 The S-shaped curve of innovation
10 The Henderson–Clark model Innovation in primary healthcare example...High impact on architectural knowledgeDirect call-up serviceTelemedicineArchitectural innovationRadical innovationLow impact on component knowledgeHigh impact on component knowledgeIncremental innovationModular innovationNew scannerWalk-in serviceLow impact on architectural knowledgeFigure 5.3 The Henderson–Clark model
11 The product and service design activity as a process Transformed resources, e.g.technical informationmarket informationtime informationThe product/service design process whose performance is measured by thequalityspeeddependabilityflexibility andcostof how designs are created.Product/ service conceptProduct/ service packageProduct/ service processInputsOutputsTransforming resources, e.g.test and design equipmentdesign and technical stafflead user (customer) feedbacksupplier advicecollaboratorsFigure 5.4 The design activity is itself a process
12 The stages of product/service design Evaluation and improvementPrototyping and final designConcept generationConcept screeningPreliminary designFigure 5.5 The stages of product/service design
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 Concept screening…Broad categories of evaluation criteria for assessing conceptsFeasibility – How difficult is it?What investment both managerial and financial will be needed?Overall evaluation of the conceptThe criteria for screening conceptsWhat returnin terms of benefits to the operation will it give?Acceptability –How worthwhile is it?Vulnerability – What could go wrong?What risksdo we run if things go wrong?
15 Design involves progressively reducing the number of possibilities until the final design is reached Large number of design optionsCONCEPTChoice and evaluation ‘Screens’Uncertainty regarding the final designCertainty regarding the final designTIMEOne designFINAL DESIGN SPECIFICATONFigure 5.6 The design funnel – progressively reducing the number of possibilities until the final design is reached
16 Preliminary design… The component structure for remote mouse LEVEL 0 Upper casingControl unitLower casingPackingLEVEL 1LogoMouldingBattery housingMould-ingSpring baseButtonLeafletOuterLEVEL 2LeadPlugCoverSpeakerLEVEL 3Figure 5.7 The component structure of a remote mouse
17 Delay in financial breakeven A delays in the ‘Time to Market’ disproportionally delays the financial breakeven pointCashSales revenueCash flowDelayed sales revenueDelayed cash flowDevelopment costsDevelopment costs of delayed projectTimeDelay in Time to MarketDelay in financial breakevenFigure 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 Sequential and simultaneous arrangement of the stages in the design activity First stage in the design activity(a) Sequential arrangement of stagesSecond stage in the design activityFirst stage in the design activityThird stage in the design activityCommunication between stagesetc.Second stage in the design activity(b) Simultaneous arrangement of stagesThird stage in the design activityetc.Figure (a) Sequential arrangement of the stages in the design activity; (b) simultaneous arrangement of the stages in the design activity
19 Where should the management attention be? KNOWLEDGE AQUISITIONCONCEPT INVESTIGATIONBASIC DESIGNINITIAL TESTSPILOT PRODUCTIONMANUFACTURING RAMP-UPLAUNCHAbility to influence the final designManagement activity profileTime
20 Sorting out problems early saves greater disruption later Slow time to marketLowFast time to marketDegree of agreement over design decision and changes in designHighEarly stages of the total design activityLater stages of the total design activityFigure Sorting out problems early saves greater disruption later in the design activity
21 Organization structures for the design activity P.M.F.M.Pure functionalorganizationF.M.P.M.F.M.Increasing projectorientationF.M.P.M.Pure projectorganizationP.M.F.M.P.M.P.M.F.M.= Functional manager= Project managerFigure Organization structures for the design activity
22 Chapter 5 ‘end-of-chapter’ case Chatsworth – the adventure playground decisionSource: Alistair Brandon-Jones
23 The concept, package and process for the adventure playground Task...Suggest some key words that could be included in a service concept(You may like to categorize their answers as... nature, use and value)NatureWhat does the service provide? UseWho is intended to use the service? ValueWhat should users get out of the service
24 The concept, package and process for the adventure playground (Continued) Task...Suggest some key words that could be included in a service concept(You may like to categorize their answers as... nature, use and value)NatureWhat does the service provide? UseWho is intended to use the service? ValueWhat should users get out of the servicesafe (ish) play and adventure children (maybe specifically ages 8–12)enjoyment, fun
25 The concept, package and process for the adventure playground (Continued) Task...Put your key words into a sentence that conveys the service concept 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.
26 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 the childrenFor their parentsFor exampleClimbing frames... ..bridges walkways..... swings......chutes..... slides ‘interesting’ access via the ‘secret tunnel’For exampleSeating...clear visibility ....easy access for pushchairs For safety, ground covered in bark and first aid post
27 The concept, package and process for the adventure playground (Continued) Reminder – the process is the way in which the concept and package will be delivered to the customer.Task...Outlinethe organization’s process, andthe co-production process (with the children and parents)...that allows the service to be delivered.
28 The concept, package and process for the adventure playground (Continued) The organization’s processIncludes 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.The co-production process (with children and parents)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 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 itRelatively 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 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 nothingThe 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 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 similarSomewhat 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 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 betterSomewhat 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!)