Innovation & Design

Source: Slacks (2015)

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 Distributor Dilemma

In January 2017, Aan, a marketing manager in a

state-owned enterprise cement producer, was thinking hard
on the assignment he just received from the BoD. He needs
to come up with a plan on what the company needs to do
with its 18-distributors.
What a difference a two year time period could
bring. Two years ago, distributors were trying to get the
attention of the company. Now, they have the upper-hands
as many new cement producers have started producing.
Should Aan consider some innovations and new
designs in dealing with the distributors?

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 New Product/Service Opportunities

1. Understanding the customer

2. Economic change
3. Sociological and demographic
change
Brainstorming is a
4. Technological change
useful tool
5. Political/legal change
6. Market practice, professional
standards, suppliers, distributors

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 Definitions

Innovation: A change that creates a new

dimension of performance.
Innovation creates the novel idea, design makes it
work in practice.
Why is operations concerned about this?
However well a product/service is designed, it needs
to be produced/delivered to a high standard
However well a product/service is conceived, it needs
to be implemented
https://www.youtube.com/watch?v=oSWEd4o-
BdE

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The Henderson-Clark Model

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 The Henderson-Clark Model

Dimensions explained:
Component knowledge knowledge of each of
the components that performs a well-defined
function within a broader system that makes up
the product or service.
Architectural knowledge knowledge about the
way the components are integrated and linked
together. This is knowledge about how the system
works and how the various components are
configured and work together.

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Further definitions to assist in the understanding of
the Henderson Clark model
Architectural innovation: a reconfiguration of an
established system to link together existing
components in a new way.
Incremental innovation: a change that builds on an
organisations expertise in component technology
within an established architecture.
Radical innovation: establishes a new dominant
design, and hence new set of core design concepts
embodied in components that are linked together in a
new architecture.
Modular innovation: does not involve a whole new
design, but it does involve new or at least significantly
different components.
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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.

Design activities have one overriding objective: to provide

products, services, and processes that will satisfy the
customers.

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The design of products/services and processes are
interrelated and should be treated together

Products and services should be designed in

such a way that they can be created effectively.

Product/service design has an impact on the

process design and vice versa.

Processes should be designed so they can

create all products and services which the
operation is likely to introduce.

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What is designed in a product or service?
A concept the understanding of the nature, use and value of
the service or product;

the group of component products and services

A package that provide those benefits defined in the
concept;

the way in which the component products and

A process services will be created and delivered.

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 The stages of product / service design

Evaluation and Prototyping

Concept Concept Preliminary
improvement and final
generation screening design
design

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 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.

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 Concept screening
Broad categories of evaluation criteria for assessing concepts

Feasibility How What investment both

difficult is it? managerial and
financial, will be
needed?

The criteria What return Overall

for Acceptability in terms of benefits to evaluation
screening How worthwhile is the operation will it of the
concepts it? give?
concept
Vulnerability
What risks
What could go do we run if things go
wrong? wrong?

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 Reducing design complexity

Simplicity is a virtue, complexity increases

costs.
Standardisation restricting the variety of
products or services to only those that have real
value for the end customer.
Commonality Using common elements across a
range of products and services.
Modularisation desiging standardised sub-
components of a service or product that can be
put together in different ways.

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Design evaluation and improvement
Take the preliminary design and see if it can be improved
before it is tested in the market.
There are various ways of evaluating preliminary designs.

These include:
quality function deployment;
Purpose: Identify the customer requirements for a service or product
along with their relative importance and relate them to the design
characteristics that translate those requirements into practice.
value engineering;
Purpose: To reduce cost, eliminating all costs that do not contribute to
the value and performance of the
product or service.

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 QFD House of Quality
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Customer Relationship
Wants Matrix

Technical
Attributes and
Evaluation

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17
 Prototyping and final design
Prototypes are needed, so products and services can be
tested.
CAD has considerably simplified the production of
prototypes.

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 Group Assignment

In a group having a maximum of 4 members:

1. Select a company of the groups interest.
2. Evaluate the business environments of the company (at
least, its biggest competitor)
3. Evaluate appropriate strategy of the company.
4. Evaluate appropriate operations strategy of the company.
 Group Assignment

In a group having a maximum of 4 members:

With the chosen company of the groups interest:
1. Evaluate the major business processes of the company
 Group Assignment

In a group having a maximum of 4 members:

With the chosen company of the groups interest:
1. Evaluate potential major innovations and/or designs of the
company