chapter 4: product/service design1 chapter 4 product/service design
TRANSCRIPT
Chapter 4: Product/Service Design 1
Chapter 4
Product/Service Design
Chapter 4: Product/Service Design 2
Introduction
Chapter 4: Product/Service Design 3
Progressive Corp.
Prior to 1988, carved our profitable niche serving high-risk drivers
In 1988 two major events occurred Allstate overtook it in high-risk niche California passed proposition 103
Round-the-clock immediate response program adopted
Chapter 4: Product/Service Design 4
Progressive Corp. continued
Special vans equipped with air-conditioning, comfortable chairs, desk, and two cell phones.
Often settlement check offered on spot80% of accident victims contacted within 9
hours of learning of accident70% of vehicles inspected within one dayTypically claim wrapped up with a week
Chapter 4: Product/Service Design 5
Thermos
In 1992 had 25% share of $1 billion barbecue grill market
Product becoming a commodityCEO believed consumers were too
intelligent to be tricked by clever advertising and slick packaging
Survival dependent on constant innovation, high quality, at right price
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Thermos continued
Interdisciplinary team with representatives from marketing, manufacturing, engineering, and finance to design new grill
Team used to reduce project completion time
As example, initially designers opted for tapered legs
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Thermos continued
Manufacturing noted that tapered legs would have to be custom made
Design changed to straight legsUnder previous system, manufacturing
would not have found out about legs until design completed
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Thermos continued
Team developed revolutionary electric grill
Technology used to give food barbecued taste
Burns cleaner than gas or charcoalGrill won four design awards in its first
year
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Caterpillar
Used virtual-reality system called CAVE (cave automatic virtual environment) to take large earthmoving equipment for test drive before it was actually built
Surround-screen and surround sound cube with 10-foot sides
Super-computer projects 3D graphics onto the walls
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Caterpillar continued
Inside CAVE, people can walk around and operate imaginary controls
System responds to movementsProvides many perspectivesBackhoe and wheel loader recently
introduced incorporate visibility and performance improvements based on data collected from virtual test-drives
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Themes Illustrate in Examples
Two examples related to design of products and one to the design of a service
Importance of product and service design to an organization’s competitiveness Progressive Thermos
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Themes continued
Technology In Progressive’s case, new technology
such as cellular phones made new service possible
In Caterpillar’s case, new technology used to enhance design process
Design Teams
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Impacts of Selection/Design Decisions
FitMaterialsLaborEquipmentProcessFinancing
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Three Stages inOutput Selection and Design
Selection stage Idea generation Screening and selection
Product and service design stage Preliminary design Prototype testing Final design
Process design
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Steps in Product-Service Selection and Design
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The Selection Stage
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Generation of Ideas
Employees with customer contact play a key role in generating new ideas
Can imitate proven new ideaPurchase new ideaMarketing “pull” versus technology
“push”Product versus process research
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The Development Effort
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Mortality Curve of Chemical Product Ideas from Research to Commercialization
20
Service Gap Identifier
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Product-Process Innovations Over Time
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Screening and Selection
Assessing technical feasibility Determining up-front capital needs Evaluation may include calculation of
payback period, return on investment, or net present value
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Analysis of Organizational Fit
Experience with particular outputExperience with production system
required for the outputExperience in providing an output to the
same target recipientsExperience with the distribution system
for the output
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Typical Checklist for Organizational Fit
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The Aggregate Project Plan
Project Portfolio Derivative projects Breakthrough projects Platform projects R&D projects
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The Aggregate Project Plan
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An Example AggregateProject Plan
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Using the AggregateProject Plan
Identify gaps in portfolioEvaluate resource requirementsEmployee development
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The Product/Service Design Stage
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The Product Design Stage
Preliminary DesignPrototype TestingFinal Design
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Preliminary Design
Tradeoff AnalysisStandardizationModularityComputer-Aided Design
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Tradeoff Analysis Factors to Consider Function Cost Size and shape Appearance Quality Reliability
Environmental impact
Producability Timing Accessibility Recipient input
requirements
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Using QFD to link customers’ attributes to technical, component, and operation requirements
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The House of Qualityfor a Car Door
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Advantages of Standardization
Minimizes number of parts needed to stock
Minimizes number of equipment setupsSimplified operations proceduresQuantity discounts due to larger
purchasesMinimized service and repair problems
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Disadvantages of Standardization
Possible lower quality because standard parts used rather than specially made parts
Inflexible production
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Modularity
computer
5 hard drive sizes
5 choices for RAM
5 choices for CPU
4 modem choices
5 x 5 x 5 x 4 = 500 possible computer configurations with only 19 different parts
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Computer-Aided Design
Develop drawings on computer screen Can retrieve old designs and changes as
necessary rather than creating new designs from scratch
Computer-aided engineering (CAE)Computer-aided process planning
(CAPP)Computer-aided manufacturing (CAM)
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Prototype Testing
Design concept developed in preliminary stage tested
Physical modelsComputer simulationRapid prototyping (RP)Actual product or serviceAccept, extend, modify, or reject
preliminary design
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Final Design
Simplification and value analysisSafety and human factorsReliabilityManufacturability
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Methods to Speed New Output Introduction
Contract R&DProduct/process teamsOverlap development stagesCombine/eliminate stages Incremental emphasisMore extensive applicationUse new technologies
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Commercialization
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Commercialization
Process of moving an idea for a new product or service from concept to market
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History of the Typewriter
Mechanical typewriter dominated market for 25 years
Then the electromechanical typewriter dominated market for 15 years
Electric typewriter dominated for the next 7 years
First generation microprocessor based machines dominated for next 5 years
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Characteristics of Companies with Superior CommercializationCapabilities Commercialize two to three times as many
new products and processes as their competitors
Two to three times as many technologies incorporated into products
Get product to market in half timeCompete in twice as many product and
geographic markets
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Example: Assume following applies to laser printer industry Market growing 20% annuallyPrices declining 12% annuallyFive year life cycle
As a project leader, would you choose between incurring a 30% cost overrun to finish project on schedule or miss deadline by six months?
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Laser Printer example continued
Incurring the 30% cost overrun will reduce cumulative profits by 2.3%
Launching printer six months late will reduce cumulative profits by 33%
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To Improve Commercialization Capability Must Measure It
Time to marketRange of marketsNumber of marketsBreadth of technologies
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Improving Commercialization Capability
Make it a prioritySet goals and benchmarksBuild cross-functional teamsPromote hands-on management to
speed actions and decisions
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Disruptive Technologies
Disruptive technologiesSustaining technologies
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Performance Trajectories: Traditional Versus Online Distance Education Learning Programs