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282 CHAPTER 8 • PRoduCT And sERviCE dEvEloPmEnT And oRgAnisATion

Figure 8.6 The link between product/service and process development can be closer
in service industries

Research and
advanced
development
‘Pioneer’
process
Increasing diculty Internet
Developments banking
service
Degree of process change to processes Call centre Increasing diculty
to process

banking
service
Extension

Branch
Modifications banking
to process service

Modification Extension to Development of ‘Pioneer’
to product/service product/service product/service product/service
Degree of product/service change

to develop products independently of the processes that make them, and also is
common practice for many companies. Yet, because product development and pro-
cess development are not the same thing, it does not mean that they should not
overlap. In fact, one of the more important trends in product design has been the
considerable effort that recently has been put into managing the overlap. There are
probably two reasons for this. First, there is a growing recognition that the design of
products has a major effect on the cost of making them. Many decisions taken during
the development of products such as the choice of material, or the way components
are fastened together, will define much of the cost of making the product. It clearly
makes sense, therefore, to build into the development process the need to evaluate
product design choices in terms of their effect on manufacturing processes, as well as
the functionality of the product itself. Second, the way overlap is managed between
product and process development has a significant effect on the effectiveness and
efficiency of the development process itself. This is particularly true for the time
between the initial product or service concept and its eventual delivery into the
market, and the overall cost of the total development effort. We shall deal with this
issue later in the chapter.

Modular design and mass customisation
Two separate, but related, ideas – modularity in product and service design and mass
customisation – have made an impact on product and service development. We will
consider them separately and then bring the two ideas together.

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