Alex Hill and Terry Hill

Chapter 3BBT2435| TOUR OPERATION MANAGEMENT

Prepared by KAMELIA CHAICHI

Lecture outline

• INTRODUCTION

• DESIGNING and DEVELOPING services and products

• TECHNIQUES for improving design

• Critical REFLECTIONS

• SUMMARY

Designing and developing services and products

Can they beDESIGNED and DELIVERED?

Is there DEMAND for the proposed services and

products?

The research and development process

LONG-TERM PROGRAMMES

TACTICAL PROGRAMMES

> KEY IDEA

Research and development combinesLONG-TERM and TACTICAL programs

This case provides an example of the role of design as an

order winner; it also illustrates the process Asahi undertook in developing its Super Dry beer specification, in terms of taste,

strength and color.

CASE 3.1

SERVICE AND PRODUCT DESIGN AT ASAHI BREWERIES

1.What are its market ORDER-WINNERS and QUALIFIERS?

CASE 3.1

Question Answer

ORDER-WINNERS

QUALIFIERS

• Product RANGE *• QUALITY conformance• Delivery RELIABILITY• PRICE

• Product RANGE *

• Product DESIGN

The design and development process

The design and development process

Idea Generation

• Company’s own R&D department• Customer complaints• Salespersons in the field• Factory workers or suggestions• Marketing research• Suppliers• New technological developments• Competitors

The design and development process

Feasibility Study• Market analysis• Economic analysis•Technical/strategic analyses• Performance specifications

prototype

n. original model which serves as an example for later stages or forms

prototype

n. original model which serves as an example for later stages or forms

prototype

n. original model which serves as an example for later stages or forms

prototype. original model which serves as an example for later

stages or forms

The design and development process

Rapid Prototyping• testing and revising a preliminary design model• Build a prototype• Test prototype• Revise design• Retest

During the design and development process, organizations need to use both EXTERNAL and INTERNAL sources to generate ideas

• EMPLOYEES• SERVICE or PRODUCT

research and development

• MARKET research• SALES force• Reverse ENGINEERING

INTERNAL SOURCES

• CUSTOMERS• SUPPLIERS• LEGISLATIVE requirements• ENVIRONMENTAL concerns• TECHNOLOGICAL advances

EXTERNAL SOURCES

* Reverse engineering: Dismantling competitor’s product to improve your own product, disassembly of a device or program in order to

discover how it operates

CASE 3.3

DESIGN AND DEVELOPMENT AT GLAXOSMITHKLINE

1.How did it CHANGE its approach?

2.What were the ADVANTAGES of these changes?

CASE 3.2

Question Answer

Changes

Advantages• Increased new product

DEVELOPMENT• Faster TESTING of new products

• Introduced AUTOMATED PROCESSES to develop and test new products

Reviewing the service and product mix

Assessing where services/products are in their LIFE CYCLE helps when FORECASTING sales revenue

Developing a specification

•The NATURE of services and products•Developing SPECIFICATION to reflect the

service/product mix•The EXPLICIT BENEFITS of the offering•The IMPLICIT BENEFITS of the offering•The supporting structural FACILITIES

FACTORS TO CONSIDER

The service/product SPECIFICATION offered is made up of explicit and implicit BENEFITS plus supporting structural FACILITIES

Developing a specification

The EXPLICIT BENEFITS : The primary services delivered to customers, such as the food and

the level of service in a restaurant.

•The IMPLICIT BENEFITS of the offering: The secondary services delivered to customers, such as the atmosphere within a restaurant and customer attention throughout.

Restaurant

Developing a specification

Designing and developing services and products

Big Night

(1996)

Film clip Restaurant

FilmTitleDirector (year)

Big NightCampbell Scott and Stanley Tucci (1996)

ClipStartFinish

00:03:1900:08:13

What clip showsThe two brothers, who run the restaurant, setting it up for the evening and then serving a customer

Key learning objective

How to develop a service/product specificationThe possible mismatch between customer expectations and the actual service/product expectation

Developing a specification

Designing and developing services and products

Service/product specification

Restaurant

EXPLICIT benefits

IMPLICIT benefits

Supporting structural FACILITIES

ISSUES

Developing a specification

• DINING experience• FOOD• DRINK

• ATMOSPHERE

• Front office - RESTAURANT• Back office - KITCHEN

• Customer EXPECTATION vs ACTUAL specification

Techniques for improving design

•STANDARDISATION•Mass CUSTOMISATION•Quality functional deployment (QFD) and

the house of quality•VALUE analysis•Simultaneous ENGINEERING•VARIETY reduction

1. Establish CUSTOMERS’ NEEDS and wants• Establish customers’ VIEW OF COMPETITORS• Identify TECHNICAL REQUIREMENTS• Identify LINKS between technical requirements and

their effect on different customers’ need and wants• Complete TECHNICAL COMPARISONS• Evaluate the TRADE-OFFS for different design features

Quality functional deployment (QFD)

> KEY IDEA

Quality functional deployment links CUSTOMER NEEDS to OPERATIONS REQUIREMENTS

Quality functional deployment (QFD)

Value analysis

> KEY IDEA

Value analysis is a systematic approach to REDUCING COSTS without reducing the service or product specification

Should the RANGE be reduced?

Analysis of current SERVICES and PRODUCTS provided

Variety reduction

POTENTIAL ADVANTAGESVariety reduction

> KEY IDEA

New service and products are the LIFEBLOOD of a business

Simplification reducing number of parts, assemblies, or options in aProduct

•Standardization using commonly available and interchangeable parts

• Modular Design combining standardized building blocks, or modules, tocreate unique finished products

• Design for Manufacture (DFM)Designing a product so that it can be produced easily andeconomically

Fast-food chains illustrate the use of standardization in both the products offered and the service delivery system used. For example, at McDonald

Production Design

Commercial airlines use a modular approach to serve their customers throughout the range of seat types (first, business and economy). Handling customers involves a similar set of stages but the modules involved (from ticket purchase to collection of luggage) vary in their provision depending on the class of seat involved

any new design for any manufactures

Critical reflections

• Innovation starts with understanding the CUSTOMER

• Encouraging CREATIVITY is only part of the solution

• Need to clearly link INNOVATION with corporate SUCCESS

• Innovation concerns NOT ONLY R&D, but all aspects of a business

• Need to CONTINUALLY look to improve and develop services and products

• Innovation involves EVERYONE and covers EVERYTHING

Summary• New service and product INTRODUCTION

- Lifeblood of a business

• INNOVATION concerns- Breakthrough and incremental

developments

• Most companies will sell TOMORROW what they sold TODAY

- Need to rethink what they do today

• IDEAS should come from- Internal and external sources

CASE FOR TUTORIAL

DYSON