Quality

1. Resource Usage Issues include: • Relating product and process development • Managing product/service development as a process • Meeting market requirements for new products and services • Managing product/service development resources Quality Speed Performance objectives Dependability Market Competitiveness Flexibility Cost Development and Organization (Product and service development and improvement) Supply Network Process Technology Capacity Decision areas Issues covered in this chapter

2. Rapid technology change Increased competitiveness Means of building capabilities Shortened life-cycles Product and service development OPERATIONS RESOURCES MARKET REQUIREMENTS Involves all parts of the business Fragmented markets The increasing strategic importance of product and service development

3. Development of the Product Development of the Service Development of the Process Development of the Process In manufacturing operations overlapping the activities of product and process development is beneficial In most service operations the overlap between service and process development is implicit in the nature of service

4. Products and services should be developed in such a way that they can be created effectively Processes should be developed in such a way that they can create all products and services which the operation is likely to introduce Developing the Product or Service Developing the Process which Produces the Product or Service Decisions taken during the development of the product or service will have an impact on the decisions taken during the development of the process which produces the product or service or vice versa The development of products/services and processes are interrelated and should be treated together

5. TRANSFORMED RESOURCES Technical information Market information Time information THE DEVELOPMENT ACTIVITY FINISHED DESIGNS OUPUT INPUTS Test and design equipment Design and technical staff TRANSFORMING RESOURCES Product/service development is itself a process

6. Introducing ……… the Ballpoint Pen 1939 Hungarian brothers Ladislao and Georg Biro file patent and in 1944 produce first commercial ballpoint pen. Eversharp buy US distribution rights. Before first shipment, Milton Reynolds’ copy product on sale in US (also retractable). Legal wrangles unearth Biro brothers’ 1939 patent preceded 50 years earlier! Reynold enjoyed early success but quality problems undermine market image. Both Eversharp and Reynolds go bust. Parker introduce reengineered product to overcome some reliability problems. Parker reasonably successful with mid-price product. French company Bic make further product modifications and overcome mass production problems. Bic make the product ‘consumer disposable’ and change the pen market.

7. Biro Brothers Eversharp Reynolds Bic Parker Product/service and process development - the Ballpoint pen Research and Advanced Development New Core Process Next Generation Process Redesigned Processes Degree of Process Change Minor Modifications Add-ons and Enhancements Extension of Product/Service Range Next Generation Product/Service New Core Product/Service Degree of Product/Service Change

8. Research and advanced development ‘Pioneer’ Process Internet banking service Increasing difficulty Developments to Process Degree of process change Call-center banking service Increasing difficulty Extension to Processes Branch banking service Modifications to Process Modification to product/service Extension to product/service Development of product/service ‘Pioneer’ product/service Degree of product/servicechange The link between product/service and process development can be closer in service industries

9. Volvo 1970s and 80s Internet banking service Boundary for service operations Call-center banking service Boundary for manufacturing operations Branch banking service The ‘Mini’ 1960 Research and Advanced Development New Core Process Next Generation Process Degree of Process Change Redesigned Processes Minor Modifications Add-ons and Enhancements Extension of Product/Service Range Next Generation Product/Service New Core Product/Service Degree of Product/Service Change

10. Resource Usage Quality - Error free designs which fulfil market requirements Speed - Fast development from concept to launch Operations strategy for the product and service development operations Dependability - Designs delivered to schedule Market Competitiveness Performance Objectives Flexibility - Designs which include latest ideas Cost - Designs produced without consuming excessive cost Supply Network - Relationships with outside sources of development knowledge Process Technology - Provision of design technology (CAD), expert systems, etc. Development and Organization - Organization of development resources and improvement strategy. Capacity - Amount of development resource matched to demand over time Decision areas

11. Concept generation Concept screening Preliminary design Design evaluation and improvement Prototyping and final design Developing the operations process A typical ‘stage model’ of the product and service development process

12. R-3 conformt. HOWs vs HOWs Strong positive Positive Negative Strong negative HOWs WHATs vs HOWs A = Competitor A B = Competitor B Intranet compatibility Importance to customer Memory requirement 9 3 1 Strong relationship Medium relationship Weak relationship 5 = Maximum X = Us 1 = Minimum Firewalls Database Password x2 Interfaces Availability Competitive score WHATs 1 2 3 4 5 Reliable/resilient 9 B A X Accurate A B X 10 Fast B X A 7 4 Responsive A B X Secure 8 A X B 6 Remote links A X B 5 A X Connectivity B X B 2 A Scalability Absolute importance 98 48 72 54 9 90 54 78 1st 7th 4th 5th 8th 2nd 5th 3rd Relative importance 3 2 2 1 5 4 3 4 1 = easy, 5 = difficult Technical difficulty A Quality Function Deployment (QFD) Matrix

13. Trade-offs Design characteristics Trade-offs Customer requirements Relationship matrix Component characteristics Trade-offs Design characteristics ‘House of quality’ Relationship matrix Process characteristics Trade-offs Component characteristics Component deployment Relationship matrix Individual activities Process characteristics Process planning Relationship matrix QFD matrices can be linked with the ‘hows’ of one matrix forming the ‘what’ of the next Activity planning

14. Large Number of Design options CONCEPT Choice and evaluation "Screens" Uncertainty Regarding the Final Design TIME Certainty Regarding the Final Design One Design FINAL DESIGN SPECIFICATION Product/service development involves progressively reducing the number of possibilities until the final design is reached

15. Many concepts enter the development process One ‘best’ design emerges (a) One recycle (sometimes) Customer’s original specification Discussions with customer Development of agreed design Mutually agreed development specification (b) Expansion of original idea Narrowing of options for customer (a) The idealised development funnel; (b) one company development funnel

16. Cash Sales Revenue Cumulative cash flow Sales revenue (delayed launch) Cumulative cash flow (delayed launch) Time Delay in launch Delay in breakeven Slow and/or delayed development times, which can be the result of quality or flexibility failure, will increase costs and can reduce revenue

17. Confirmed development need only in the short-term Reluctant to invest in long-term development resources Lose business opportunities So in the short-term the project runs into problems The ‘vicious cycle’ of under resourcing development capacity

18. In-house design capability Outsourced design capability Close, but loose Distant, through contracts Control of resource Familiarity Weak in the short-term, potentially stronger in the long-term Strong Accessibility High Low/limited Cost Fixed Variable Risk of knowledge leakage Great (Potentially) Small The in-house-outsourced continuum

19. Customer located (employee of supplier) Supplier located (employee of customer) RESIDENT CUSTOMER ENGINEER GUEST DESIGN ENGINEER Largely concerned with product development Focus – helping suppliers to develop their products at supplier’s sites, to meet customer needs Focus – helping the product design effort at the customer’s site by bringing supplier product and process knowledge SUPPLIER DEVELOPMENT ENGINEER RESIDENT PRODUCTION ENGINEER Largely concerned with process development Focus – helping suppliers at their site to improve production methods Focus – helping the manufacture of customer’s products through knowledge of, and changes in, supplier products A broad typology of guest engineers

20. Functional matrix (Lightweight project managers) Function Function Function Function A B C D Project 1 Functional organization Function Function Function Function Project 2 A B C D Project 3 Balanced matrix INCREASING PROJECT Function Function Function Function A B C D ORIENTATION Project 1 Project 2 Project 1 Project 3 Project 2 Function Function Function Function Project 3 A B C D Project 1 Project team (‘Tiger’ teams) Project 2 Organizational structures for product/service development Project 3 Project matrix (Heavyweight project managers)

21. Is the company willing to subcontract any responsibility for safety? Pilot plant may enable potential hazard to be detected. No significant relationship. Dedicated team may help reinforce safety objective. * * * Pilot plant may enable better quality learning. Dedicated team may help to reinforce quality objective. Strict quality standards need to be communicated to any subcontractor. No significant relationship. * * * Dedicated team likely to be more flexible if all necessary skills are represented in it. Need to have development capacity to respond quickly to accelerated development needs. Pilot plant would be dedicated so increase flexibility, but may have scale-up problems. Does subcontractor development imply reduced flexibility? * * * Very significant, the larger the development team the higher the cost of development. Subcontracting development to specialists may reduce total development cost. Dedicated team likely to be more expensive, functional organisation usually gives higher utilisation of staff. Pilot plant is likely to be more expensive that using partners’ capacity. * Development and organisation Dedicated team? Capacity Size of team? Supply Network Subcontract any development? Process Technology Build pilot plant? Resource Usage Safety Quality Performance Objectives Market Competitiveness Flexibility Cost Decision areas Operations strategy matrix for Project Orlando