Objectives When you complete this section you should be able to:

1. ObjectivesWhen you complete this section you should be able to: Recognise the difference between product and process designs Know who is responsible for design within an organisation, how products are designed and how the product design / development process operates Be able to differentiate between product design and process design and understand some common applications of process design Understand the need for a close link between design and strategy Recognise the importance of innovation and value engineering and value analysis within an organisation

2. The Design-Maker Interface • A poorly designed product fails as market needs and expectations are not met. • Yet operations managers may be excluded from the actual design process. Their task may be confined to just "make to specification and to cost". • The interface between designers and makers/ deliverers is the point at which conflict can occur e.g. the makers despair at the implementation headaches that a particular design gives them. • Design and the manufacturing process are closely linked.

3. Design Phases • 1) Basic research and development: • A company needs to be aware of new facts, ideas, materials and techniques discovered within the scientific community. • Large innovative companies maintain research and development teams which explores how new science which may be used to create new products and services and improve existing ones. • Other companies (imitators) soon pick up such "science", license it and apply it to their own products.

4. Design Phases (contd) • 2) Define Market Needs: • Marketers verify demand for the product and determine precisely what the market wants. • When prototypes products are available they pilot the new products and services on the market. • Feedback from testing is used to fine tune before full scale production.

5. Design Phases (contd) • 3) Generate the Design Specification: • The design specs. link market/customer needs to organisational/technical ability. • The design specification is a brief which sets out what is required. • The standards defined in the specification are central to the contract of delivery between the company who commissions the design and the builders/manufacturers of it. • Operations must be involved with the design specification. Divergence between the new product and operations capability must be identified

6. Design Phases (contd) • 4) Generating Design Alternatives: • Alternative designs are investigated and developed - each a solution to the problem as defined by the design specification. • The short-listed designs can be subsequently appraised for feasibility. • The selected option can now proceed to a detailed design stage - detailed drawings, parts lists, assembly sequences, test specifications, etc.

7. Design Phases (contd) • 5) Prototyping: • The success of a design will be clear when a prototype product has been created and tested. • The materials will need testing as will the manufacturing methods.

8. Design Phases (contd) • The design specification is re-worked until satisfied. • At this point - when the client is agreed - we can conceive of a hand-over to those who will implement (manufacture) it. • The designers need to supervise/participate in the implementation of the design and so will stay close to the operations teams. • There will be a continual stream of adaptations in the light of new circumstances.

9. Value Analysis (VA) • A cost-reduction technique to cut costs of established products or services • without reducing their value. Product design features are evaluated relating to cost and construction. Elements not contributing to function are eliminated. • Value engineering applies VA principles and procedures in design. • needs a creative, task force whose job it is to target products, services and procedures that offer big potential savings and quality improvements.

10. Value Analysis (VA) • VA evaluates a product's: • Utility - how useful/functional the product is seen to be. • Esteem value - what the customer/user values in the product features (aesthetic and subjective). • Market value - what the market will pay for the product (given utility value + Esteem value)

11. Which product? Obtain cost data Identify & define the components Define the functions of that the essential product/service must perform Get data on current & future demand Focus on primary function only 7. Brainstorms many ways to achieve primary function 8. Evaluate/cost the alternatives 9. Investigate the cheapest alternatives 10. Select the best option & work out all development requirements 11. Return to additional/secondary functions 12. Win acceptance Steps in Value Analysis

12. Characteristics of Service • Commonly held assumptions about services: • - Intangibility • - Simultaneous Production and Consumption • - Time Perishability • - Variability • - Flexibility • - Customer Participation • - Labour Intensiveness

13. Packaging Services • Support facility: physical resources that enable the service, ie, layout, equipment, décor • Facilitating goods: Material purchased, ie, quantity, consistency, choice • Explicit benefits: easily observed - response time, access, location, comprehensiveness • Implicit: psychological - waiting time, status, attitude, atmosphere

14. Comparing production & service operations • 1. Customer presence and participation. • Production operations change materials into finished product and then, after storage and transportation and stocking, the customer is supplied. • Production managers seldom meet customers. Such encounters are commonplace for service operations managers. • In services the customer is active in the process.

15. Comparing production & service operations • 2. Using Customers as Labour • In self-service situations e.g. a modern supermarket, customers are extensions to the staff of the store. • Information absorption, overload/ underload can be a problem and service systems must be designed according to the needs, abilities and preferences of differing customers. • significance of customer satisfaction is obvious (link: profits  loyalty  customer satisfaction  employee satisfaction)

16. Comparing production & service operations • 3. Stocking a service: the point at which production and consumption coincide: • Cannot ‘stock’ a service, though possible to stock peripheral goods • Implications on queuing theory

17. Comparing production & service operations • 5. Design and the intangibles • Intangibles in the service transaction mean that it is often difficult to specify and agree on the exact nature the service. • Customers will vary as to their perception of what they want and what they are getting. • Our assessment of what is/is not acceptable may differ considerably. • Understanding customer needs is essential; in this regard, good market research for customer feedback is important.

18. Comparing production & service operations • 6. Systems efficiencies • The design of back-room operations in a service and the service itself (what the customer experiences) are intricately linked. • Utilisation levels and costs are important particularly given demand variations and the fact that we cannot stock the service operation.

19. Comparing production & service operations • 7. Quality • Quality control for services is different than for production particularly because the customer is experiencing the service directly • Yet quality assurance is essential. • Even though we cannot specify all the intangibles it is vital for systematic quality assurance that the characteristics of the product or service are well-specified. • The intangibles merely mean that this is more difficult.

20. Nine Service design Principles: recmmended by Lyth and Johnston (1988) • 1. Define the service concept clearly and in detail • 2. Be clear about the image that the service concept communicates to customers; The image influences customer expectations. • 3. Study the operation from the customer viewpoint. Study how customer expectations and perceptions are managed. Designers and service providers’ familiarity with the system clouds their perception. They need to see through customers eyes.

21. Nine Service design Principles: • 4. Top management commitment to service quality is essential • 5. Functional and technical quality standards must be defined. • 6. Once we understand the standards, existing procedures/systems can be examined/re-designed to better support the front-end, service-providing activities.

22. Nine Service design Principles: • 7. Develop standard procedures to control the known, predictable events – (standardize at the same time, flexible) • 8. Systems must together support the objectives of service. This includes treating customer service staff as internal customers. • 9. Unless standards and performances are monitored to maintain - they drift and deteriorate.