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THE sTRATEgiC imPoRTAnCE oF PRoduCT And sERviCE dEvEloPmEnT 281

its fragmented structure was highly inefficient and prevented it from competing effectively.
Eventually, it was this lack of integration between design and manufacturing processes that
was the main reason for the delays to the aircraft’s launch. During the early design stages the
firm’s French and German factories had used incompatible software to design the 500 km of
wiring that each plane needs. Eventually, to resolve the cabling problems, the company had
to transfer 2,000 German staff from Hamburg to Toulouse. Processes that should have been
streamlined had to be replaced by temporary and less efficient ones, described by one French
Union official as a ‘do-it-yourself system’. Feelings ran high on the shop floor, with tension and
arguments between French and German staff. ‘The German staff will first have to succeed at doing
the work they should have done in Germany’, said the same official. Electricians had to resolve the
complex wiring problems, with the engineers having to adjust the computer blueprints as they
modified them so they could be used on future aircraft. ‘Normal installation time is two to three
weeks’, said Sabine Klauke, a team leader. ‘This way it is taking us four months.’ Mario Heinen, who
ran the cabin and fuselage cross-border division, admitted the pressure to keep up with intense
production schedules and the overcrowded conditions made things difficult. ‘We have been
working on these initial aircraft in a hand-made way. It is not a perfectly organised industrial process.’
But, he claimed, there was no choice. ‘We have delivered five high-quality aircraft this way. If we had
left the work in Hamburg, to wait for a new wiring design, we would not have delivered one by now.’ But
the toll taken by these delays was high. The improvised wiring processes were far more expensive
than the planned ‘streamlined’ processes, and the delay in launching the aircraft meant two
years without the revenue that the company had expected.
But Airbus was not alone. Modern aircraft are fiendishly difficult to get right. At the same
time, as the Airbus was struggling into the skies its great rival, Boeing, were also having prob-
lems. Engineers’ strikes, supply chain problems and mistakes by its own design engineers had
further delayed its ‘787 Dreamliner’ aircraft. Specifically, fasteners used to attach the titanium
floor grid to the composite ‘barrel’ of the fuselage had been wrongly located, resulting in 8,000
fasteners having to be replaced. The Boeing aircraft was also two years late and was grounded
by technical problems soon after launch.

Product and process change should be considered together
We can put together the degree of process change scale from the previous chapter with
the scale indicating the degree of product/service change described in Table 8.1. This is
done in Figure 8.6. Advanced, or ‘blue sky’, research and development lies beyond both
of these scales, but it is from this direction that most radical innovation emerges. The
dotted lines indicate the degree of difficulty encountered in the development process.
Put simply, product/service change is easier when the underlying processes that pro-
duce them are not being changed at the same time, and vice versa. Figure 8.6 also shows
three service/process developments at a bank. Making changes to the services offered in
a bank branch involves relatively minor ‘product’ and process changes compared with
the redesign of both product and process involved in a major new call centre. This, in
turn, is less than the development of a totally new internet banking service.

Managing the overlap between product and process development
Because it is often difficult to untangle a service ‘product’ from the process that
produces it, operations developing new services know they have to develop new pro-
cesses concurrently. But manufacturing operations are different. It is often possible

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