Page 311 - Operations Strategy

286 CHAPTER 8 • PRoduCT And sERviCE dEvEloPmEnT And oRgAnisATion

looking at everyday things with new eyes and working out how they can be made better. It’s about
challenging existing technology’.
Dyson scientists were determined to challenge even their own technology and create vac-
uum cleaners with even higher suction. So they set to work developing an entirely new type of
cyclone system. They discovered that a smaller-diameter cyclone gives greater centrifugal force.
So they developed a way of getting 45 per cent more suction than a dual cyclone and removing
more dust, by dividing the air into eight smaller cyclones. This advanced technology was then
incorporated into their new products.

Product/service development – an operations strategy analysis
Product and service development can be treated as a coherent operation in its own
right. We include it here as a part of the development and organisation decision area
because developing products and services is clearly vital to any organisation’s strate-
gic development. However, the topic could be treated as an entirely separate function
(which it is in many organisations). Indeed, for professional design consultancies, for
example, it is their whole reason for existing. We include the topic within operations
strategy not because we believe product and service development should be always an
integral part of the operations function organisationally. Rather, it is because of the
difficulty in untangling the process of producing and delivering products and services
and that of developing those products and services in the first place. Also, because we
treat the topic as an integral part of operations strategy does not mean that no benefit
can be derived from analysing product and service development as a distinct operations
strategy in its own right.
For example, Figure 8.7 illustrates how an operations strategy matrix (discussed
in Chapter 1) can be constructed for product and service development operations.
The generic performance objectives of quality, speed, dependability, flexibility and
cost can be used to describe the impact of new or modified products and services in
the marketplace. In order to achieve competitive ‘production’ of product and ser-
vice designs, the resources and processes that are used to develop them will them-
selves need organising along the lines of any other operation. The company’s design
capacity will have to be matched to the demand placed on it over time; relationships
with an external supply network for design and development knowledge will have to
be established; process technologies such as computer-aided design (CAD) systems,
expert systems, simulations and so on, may be needed; and also the resources tech-
nology and processes used to develop products and services will need organising and
themselves developing over time. All decision areas are of some relevance to most
companies’ development efforts.
The remainder of this chapter will first examine the nature of the product and service
development process and then use the operations strategy approach to illustrate the
requirements of the market and the capabilities of development resources.

stages of development
Describing the way in which organisations develop products and services is problem-
atic because different organisations will adopt different processes. Furthermore, what
companies specify as a formal product or service development procedure, and what

M08 Operations Strategy 62492.indd 286 02/03/2017 13:07