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Product and Service

Innovation

Week 5
Figure 3.2
The relationship between creativity,
innovation and design
Copyright © 2017 Pearson Education, Ltd. 5-3
Figure 3.3
The S-shaped curve of innovation
Figure 3.4
The Henderson–Clark Model
Figure 3.5
The product and service design
innovation activity as a process
Figure 3.8
A QFD matrix for a promotional USB
data storage pen
Product Decision

The objective of the product decision


is to develop and implement a
product strategy that meets the
demands of the marketplace with a
competitive advantage

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Product Strategy Options

► Differentiation
► Shouldice Hospital
► Low cost
► Taco Bell
► Rapid response
► Toyota

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Product Life Cycles

► May be any length from a few


days to decades
► The operations function must be
able to introduce new products
successfully

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Product Life Cycle

Cost of development and production


$ Sales revenue

Loss Profit
Loss
Introduction Growth Maturity Decline

Figure 5.2

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Life Cycle and Strategy
Introductory Phase
► Fine tuning may warrant
unusual expenses for
1) Research
2) Product development
3) Process modification and
enhancement
4) Supplier development

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Product Life Cycle

Growth Phase

► Product design begins to


stabilize
► Effective forecasting of capacity
becomes necessary
► Adding or enhancing capacity
may be necessary

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Product Life Cycle
Maturity Phase

► Competitors now established


► High volume, innovative
production may be needed
► Improved cost control, reduction
in options, paring down of
product line

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Product Life Cycle

Decline Phase

► Unless product makes a special


contribution to the organization,
must plan to terminate offering

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Product Life Cycle Costs
100 –
Costs committed

80 –
Percent of total cost

60 –
Costs incurred

40 –

20 –
Ease of change

0–

Concept Detailed Manufacturing Distribution,


design design service,
prototype and disposal
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Product-by-Value Analysis

► Lists products in descending order


of their individual dollar
contribution to the firm
► Lists the total annual dollar
contribution of the product
► Helps management evaluate
alternative strategies

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Generating New Products
1. Understanding the customer
2. Economic change
3. Sociological and demographic
change
4. Technological change
5. Political and legal change
6. Market practice, professional
standards, suppliers, distributors

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Product
Concept
Development Stages
Feasibility Figure 5.3

Customer Requirements

Functional Specifications

Product Specifications Scope for


Scope of design and
product Design Review engineering
development teams
team Test Market

Introduction

Evaluation

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Quality Function Deployment
► Quality function deployment (QFD)
► Determine what will satisfy the customer
► Translate those customer desires into the
target design
► House of quality
► Utilize a planning matrix to relate
customer wants to how the firm is going
to meet those wants

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Quality Function Deployment
1. Identify customer wants
2. Identify how the good/service will satisfy customer
wants
3. Relate customer wants to product hows
4. Identify relationships between the firm’s hows
5. Develop our importance ratings
6. Evaluate competing products
7. Compare performance to desirable technical
attributes

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QFD House of Quality
Interrelationships
Customer
importance
How to satisfy
ratings
customer wants

assessment
Competitive
What the Relationship
customer matrix
wants

Target values Weighted


rating
Technical
evaluation
Copyright © 2017 Pearson Education, Ltd. 5 - 27
House of Quality Example

Your team has been charged with


designing a new camera for Great
Cameras, Inc.
The first action is
to construct a
House of Quality

© 2014 Pearson Education, Inc. 5 - 28


House of Quality Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
Example What the
Customer
Wants
Relationship
Matrix

Technical
Attributes and
Evaluation

What the
customer wants
Customer
importance
rating
(5 = highest)
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1

© 2014 Pearson Education, Inc. 5 - 29


Interrelationships

House of Quality Example How to Satisfy


Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation
Low electricity requirements

Aluminum components

High number of pixels How to Satisfy

Ergonomic design
Customer Wants
Auto exposure
Auto focus

© 2014 Pearson Education, Inc. 5 - 30


House of Quality Interrelationships

How to Satisfy
Customer Wants

Example

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

High relationship Technical


Attributes and
Evaluation
Medium relationship
Low relationship

Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1

Relationship matrix
© 2014 Pearson Education, Inc. 5 - 31
House of Interrelationships

Quality How to Satisfy


Customer Wants

Competitors
Analysis of
What the

Example
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Relationships between
the things we can do

Low electricity requirements

Aluminum components

High number of pixels

Ergonomic design
Auto exposure
Auto focus

© 2014 Pearson Education, Inc. 5 - 32


Interrelationships

House of How to Satisfy


Customer Wants

Competitors
Analysis of
What the

Quality Example
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1

Our importance ratings 22 9 27 27 32 25

Weighted rating

© 2014 Pearson Education, Inc. 5 - 33


House of Quality
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Customer
Wants
Relationship
Matrix
Example
Technical
Attributes and
Evaluation

Company B
Company A
How well do competing
products meet customer
wants

Lightweight 3 G P
Easy to use 4 G P
Reliable 5 F G
Easy to hold steady 2 G P
High resolution 1 P P

Our importance ratings 22 5

© 2014 Pearson Education, Inc. 5 - 34


Interrelationships

How to Satisfy
Customer Wants House of Quality

Competitors
Analysis of
Example
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Failure 1 per 10,000

Panel ranking
Target values
(Technical

2 circuits
attributes)

2’ to ∞
0.5 A

75%
Company A 0.7 60% yes 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F

Us 0.5 75% yes 2 ok G


© 2014 Pearson Education, Inc. 5 - 35
House of Quality

Low electricity requirements

Aluminum components
Example

High number of pixels

Ergonomic design
Auto exposure

Company A

Company B
Auto focus
Completed
Lightweight 3 G P
House of Easy to use 4 G P

Quality Reliable
Easy to hold steady
5
2
F G
G P
High resolution 1 P P
Our importance ratings 22 9 27 27 32 25

Failure 1 per 10,000


Target values

Panel ranking
(Technical
attributes)

2 circuits
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical
Company B 0.6 50% yes 2 ok F
evaluation
© 2014 Pearson Education, Inc. Us 0.5 75% yes 2 ok G 5 - 36
House of Quality Sequence
Deploying resources through the organization
in response to customer requirements

Quality
plan
Production
process

Production
Specific
House

process
components

components
House 4

Specific
Design
characteristics

characteristics
3
House
Design

2
requirements
Customer

House
1

Figure 5.4
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Figure 3.11
Organisation structures for innovation
processes
Organizing for Product
Development
► Traditionally – distinct departments
► Duties and responsibilities are defined
► Difficult to foster forward thinking
► A Champion
► Product manager drives the product
through the product development
system and related organizations

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Organizing for Product
Development
► Team approach
► Cross functional – representatives from
all disciplines or functions
► Product development teams, design for
manufacturability teams, value
engineering teams
► Japanese “whole organization”
approach
► No organizational divisions
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Organizing for Product
Development
► Product development teams
► Market requirements to product success
► Cross functional teams often involving
vendors
► Open, highly participative environment
► Concurrent engineering
► Simultaneous performance of product
development stages

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Manufacturability and
Value Engineering
► Benefits:
1. Reduced complexity of the product
2. Reduction of environmental impact
3. Additional standardization of components
4. Improvement of functional aspects of the product
5. Improved job design and job safety
6. Improved maintainability (serviceability) of the
product
7. Robust design

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Cost Reduction of a Bracket
via Value Engineering

Figure 5.5

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Issues for Product Design
► Robust design
► Modular design
► Computer-aided design (CAD)
► Computer-aided manufacturing (CAM)
► Virtual reality technology
► Value analysis
► Sustainability and Life Cycle Assessment
(LCA)

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Robust Design

► Product is designed so that small


variations in production or assembly
do not adversely affect the product
► Typically results in lower cost and
higher quality

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Modular Design

► Products designed in easily segmented


components
► Adds flexibility to both production and
marketing
► Improved ability to satisfy customer
requirements

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Computer Aided Design (CAD)
► Using computers to
design products and
prepare engineering
documentation
► Shorter development
cycles, improved
accuracy, lower cost
► Information and designs
can be deployed
worldwide
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Extensions of CAD
► 3-D Object Modeling
► Small prototype development
► Design for Manufacturing and Assembly
(DFMA)
► Solve manufacturing problems during the
design stage
► CAD through the internet
► International data exchange through STEP
► 3-D printing

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Computer-Aided
Manufacturing (CAM)

► Utilizing specialized computers and


program to control manufacturing
equipment
► Often driven by the CAD system
(CAD/CAM)

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Benefits of CAD/CAM

1. Product quality
2. Shorter design time
3. Production cost reductions
4. Database availability
5. New range of capabilities

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Virtual Reality Technology
► Computer technology used to develop
an interactive, 3-D model of a product
from the basic CAD data
► Allows people to ‘see’ the finished
design before a physical model is built
► Very effective in large-scale designs
such as plant layout

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Value Analysis

► Focuses on design improvement


during production
► Seeks improvements leading either to
a better product or a product which
can be produced more economically
with less environmental impact

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Sustainability and Life Cycle
Assessment (LCA)
► Sustainability means meeting the needs of
the present without compromising the
ability of future generations to meet their
needs
► LCA is a formal evaluation of the
environmental impact of a product

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Product Development
Continuum
► Product life cycles are becoming
shorter and the rate of technological
change is increasing
► Developing new products faster can
result in a competitive advantage
► Time-based competition

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Product Development
Continuum
External Development Strategies
Figure 5.6 Alliances
Joint ventures
Purchase technology or expertise
by acquiring the developer

Internal Development Strategies


Migrations of existing products
Enhancements to existing products
New internally developed products

Internal Cost of product development Shared


Lengthy Speed of product development Rapid and/
or Existing
High Risk of product development Shared

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Product Development
Continuum
► Purchasing technology by acquiring
a firm
► Speeds development
► Issues concern the fit between the
acquired organization and product and
the host
► Joint Ventures
► Both organizations learn
► Risks are shared
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Product Development
Continuum
► Alliances
► Cooperative agreements between
independent organizations
► Useful when technology is developing
► Reduces risks

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Figure 3.9
Some implications of the in-house–outsourced
continuum

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Defining a Product
► First definition is in terms of functions
► Rigorous specifications are developed
during the design phase
► Manufactured products will have an
engineering drawing
► Bill of material (BOM) lists the
components of a product

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Monterey Jack Cheese
(a) U.S. grade AA. Monterey cheese shall conform to the following
requirements:
(1) Flavor. Is fine and highly pleasing, free from undesirable flavors and odors.
May possess a very slight acid or feed flavor.
(2) Body and texture. A plug drawn from the cheese shall be reasonably firm.
It shall have numerous small mechanical openings evenly distributed
throughout the plug. It shall not possess sweet holes, yeast holes, or other
gas holes.
(3) Color. Shall have a natural, uniform, bright and attractive appearance.
(4) Finish and appearance—bandaged and
paraffin-dipped. The rind shall be sound,
firm, and smooth providing a good
protection to the cheese.

Code of Federal Regulation, Parts 53 to 109,


General Service Administration

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Service Design
► Service typically includes direct
interaction with the customer
► Process – chain – network (PCN)
analysis focuses on the ways in
which processes can be designed
to optimize interaction between
firms and their customers

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Process-Chain-Network (PCN)
Analysis

Figure 5.12

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Process-Chain-Network (PCN)
Analysis
1. Direct interaction region includes process steps
that involve interaction between participants
2. The surrogate (substitute) interaction region
includes process steps in which one participant
is acting on another participant’s resources
3. The independent processing region includes
steps in which the supplier and/or the customer
is acting on resources where each has
maximum control

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Process-Chain-Network (PCN)
Analysis
▶ All three regions have similar operating issues
but the appropriate way of handling the issues
differs across regions – service operations
exist only within the area of direct and
surrogate interaction
▶ PCN analysis provides insight to aid in
positioning and designing processes that can
achieve strategic objectives

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Adding Service Efficiency
▶ Service productivity is notoriously low
partially because of customer
involvement in the design or delivery
of the service, or both
▶ Complicates product design

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Adding Service Efficiency

▶ Limit the options


▶ Improves efficiency and ability to meet
customer expectations
▶ Delay customization
▶ Modularization
▶ Eases customization of a service

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Adding Service Efficiency

▶ Automation
▶ Reduces cost, increases customer
service
▶ Moment of truth
▶ Critical moments between the customer
and the organization that determine
customer satisfaction

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Documents for Services

► High levels of customer interaction


necessitates different
documentation
► Often explicit job instructions
► Scripts and storyboards are other
techniques

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First Bank Corp. Drive-up
Teller Service Guidelines
• Be especially discreet when talking to the customer through the
microphone.
• Provide written instructions for customers who must fill out forms
you provide.
• Mark lines to be completed or attach a note with instructions.
• Always say “please” and “thank you” when speaking through the
microphone.
• Establish eye contact with the customer if the distance allows it.
• If a transaction requires that the customer park the car and come
into the lobby, apologize for the inconvenience.

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Application of Decision Trees
to Product Design
► Particularly useful when there are a
series of decisions and outcomes that
lead to other decisions and outcomes

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Application of Decision Trees
to Product Design
Procedure
1. Include all possible alternatives and
states of nature – including “doing
nothing”
2. Enter payoffs at end of branch
3. Determine the expected value of each
branch and “prune” the tree to find the
alternative with the best expected value

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Decision Tree Example
(.4)
Purchase CAD
High sales

(.6) Low sales

Hire and train engineers

(.4)
High sales

(.6)
Low sales
Do nothing

Figure 5.13
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Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
High sales
$1,000,000 Net

$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss

(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(– $20,000)

(.6)
Low sales
Do nothing

Figure 5.13
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Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net

$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss

(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(– $20,000)
= $388,000
(.6)
Low sales
Do nothing

Figure 5.13
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Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net

$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
$365,000
$2,500,000 Revenue
(.4) – 1,250,000 Mfg cost ($50 x 25,000)
High sales – 375,000 Hire and train cost
$875,000 Net

$800,000 Revenue
(.6) – 400,000 Mfg cost ($50 x 8,000)
Low sales – 375,000 Hire and train cost
Do nothing $0 $25,000 Net

$0 Net Figure 5.13


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Transition to Production
► Know when to move to production
► Product development can be viewed as
evolutionary and never complete
► Product must move from design to production
in a timely manner
► Most products have a trial production period
to insure producibility
► Develop tooling, quality control, training
► Ensures successful production

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Transition to Production
► Responsibility must also transition as the
product moves through its life cycle
► Line management takes over from design
► Three common approaches to managing
transition
► Project managers
► Product development teams
► Integrate product development and
manufacturing organizations

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Corporate Social
Responsibility
▶ How products and services affect people
and the environment
▶ Stakeholders have strong opinions about
environmental, social, and ethical issues
▶ Doing what’s right can be beneficial to all
stakeholders
▶ Corporate social responsibility (CSR)

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Sustainability
▶ Meeting the needs of
the present without
compromising the
ability of future
generations to meet
their needs
▶ More than “going green”
▶ Includes employees, customers,
community, and company reputation
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Systems View
▶ Looking at a product’s life from design to
disposal, including all the resources
required
▶ The product or service itself is a small part
of much larger social, economic, and
environmental systems
▶ Understanding systems allows more
informed judgments regarding
sustainability
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Commons
▶ Many inputs to a production system
held by the public
▶ Common resources often misallocated
▶ Possible solutions include
1) Moving some of the common to private
property
2) Allocation of rights
3) Allocation of yield

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Triple Bottom Line
▶ Consider the systems necessary to
support the three Ps: people, planet, and
profit

Figure S5.1

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Triple Bottom Line
▶ Decisions affect people
▶ Globalization and outsourcing complicate
the task
▶ Supplier selection and performance
criteria are important
▶ Materials must be safe and
environmentally responsible

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Walmart’s Objectives
1. Improving livelihoods through the creation
of productive, healthy, and safe
workplaces
2. Building strong communities through
access to affordable, high-quality services
3. Preventing exposure to substances that
are considered harmful or toxic
4. Promoting health and wellness

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Triple Bottom Line
▶ The planet’s environment
▶ Look for ways to reduce the
environmental impact of operations
▶ Overarching objective is to conserve
scarce resources
▶ Carbon footprint and greenhouse gas
emissions (GHG)

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Carbon Footprint
Figure S5.2

34.5-gram Bag of
Frito-Lay Chips

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Triple Bottom Line
▶ Social and environmental sustainability do
not exist without economic sustainability
▶ Staying in business requires making a
profit
▶ Alternate measures of success include risk
profile, intellectual property, employee
morale, and company valuation
▶ Social accounting can supplement financial
accounting to support economic
sustainability
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Update: The Concept of Shared Value

So, we’ve moved from:


Corporate Social Responsibility to Shared Value

“Create economic value by creating societal value”


“What is good for the community is good for the business”

Class Question:
Does this include paying a fair share of company tax?

Our role is to manage stakeholder value:


so what should we do?

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Design and Production for
Sustainability
▶ Life cycle assessment valuates the
environmental impact of a product, from raw
material and energy inputs all the way to the
disposal of the product at its end-of-life
▶ The goal is to make decisions that help
reduce the environmental impact of a product
throughout its entire life
▶ The 3Rs— reduce, reuse, and recycle

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Product Design
▶ Design decisions affect materials, quality,
cost, processes, related packaging and
logistics, and how the product will be
processed when
discarded
▶ Incorporate systems
view to lower
environmental impact
▶ Alternative materials

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Design for Disassembly
Harmonizer
RESALE RECYCLING PROCESSING DISPOSAL
REVENUE REVENUE COST COST
PART PER UNIT PER UNIT PER UNIT PER UNIT
Printed circuit board $5.93 $1.54 $3.46 $0.00

Laminate back 0.00 0.00 4.53 1.74

Coil 8.56 5.65 6.22 0.00

Processor 9.17 2.65 3.12 0.00

Frame 0.00 0.00 2.02 1.23

Aluminum case 11.83 2.10 2.98 0.00

Total $35.49 $11.94 $22.33 $2.97

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Design for Disassembly
Rocker
RESALE RECYCLING PROCESSING DISPOSAL
REVENUE REVENUE COST COST
PART PER UNIT PER UNIT PER UNIT PER UNIT
Printed circuit board $7.88 $3.54 $2.12 $0.00

Coil 6.67 4.56 3.32 0.00

Frame 0.00 0.00 4.87 1.97

Processor 8.45 4.65 3.43 0.00

Plastic case 0.00 0.00 4.65 3.98

Total $23.00 $12.75 $18.39 $5.95

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Design for Disassembly
Total Total Total Total
Revenue
retrieval = resale + recycling – processing – disposal
revenue revenue cost cost

Revenue
retrieval for = $35.49 + $11.94 – $22.33 – $2.97 = $22.13
Harmonizer

Revenue
retrieval for = $23.00 + $12.75 – $18.39 – $5.95 = $11.41
Rocker

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Production Process
▶ Reduce the amount of resources in the
production process
▶ Energy
▶ Water
▶ Environmental contamination
▶ Reduce cost and environmental
concerns

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Logistics
▶ Reduce costs by achieving efficient
route and delivery networks
1. Getting shipments to customers
promptly
2. Keeping trucks busy
3. Buying inexpensive
fuel

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Logistics

▶ Management analytics can help


▶ Evaluate equipment alternatives
▶ Life cycle ownership costs

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Life Cycle Ownership Costs
OPERATING
COST TO COSTS PER
VEHICLE BUY FUEL EFFICIENCY MILE
Ford TriVan $28,000 Regular Unleaded 24 mpg $.20
Honda $32,000 Regular 37 mpg $.22
CityVan Unleaded/Battery
Annual distance = 22,000 miles Life = 8 years Gas price = $4.25/gallon

Total Cost of Life cycle Life cycle


life = vehicle + cost of + operating
cycle fuel cost
cost

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Life Cycle Ownership Costs

a) Ford TriVan

é miles ù
Total ê 22,000 ú
year
life-
= $28,000 + ê
ê miles ú
( )(
ú $4.25 / gallon 8 years )
êë 24
cycle gallon úû
cost æ miles ö
+ ç 22,000
è year ø
( )(
÷ $.20 / mile 8 years )

= $28,000+ $31,167+ $35,200 = $94,367

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Life Cycle Ownership Costs

a) Honda CityVan

é miles ù
Total ê 22,000 ú
year
life-
= $32,000 + ê
ê miles ú
( )(
ú $4.25 / gallon 8 years )
êë 37
cycle gallon úû
cost æ miles ö
+ ç 22,000
è year ø
( )(
÷ $.22 / mile 8 years )

= $32,000+ $20,216+ $38,720 = $90,936

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Life Cycle Ownership Costs
b) Crossover point
Total cost for Ford TriVan = Total cost for Honda CityVan

é $ ù é $ ù
ê 4.25 ú ê 4.25 ú
gallon gallon
$28,000 + ê
ê miles
+ .20
$
mile ú
( )
ú M miles = $32,000 + ê
ê miles
+ .22
$
(ú M miles
mile ú
)
êë 24 úû êë 37 úû
gallon gallon

æ $ ö æ $ ö
$28,000 + ç.3770
è mile ø
( )
÷ M = $32,000 + ç.3349
è
( )
÷ M
mile ø
æ $ ö
ç.0421
è mile ø
( )
÷ M = $4,000

$4,000
M= = 95,012 miles
$
.0421
mile
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Life Cycle Ownership Costs
c) Crossover point

95,012 miles
Crossover point = = 4.32 years
miles
22,000
year

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End-of-Life Phase
▶ What happens at the
end-of-life stage?
▶ Closed-loop supply
chains or reverse
logistics
▶ Automaker’s design incorporates
disassembly, recycling, and reuse

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Regulations and Industry
Standards
► Product design
► Food and Drug Administration
► Consumer Products Safety Commission
► National Highway Safety Administration

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Regulations and Industry
Standards
► Manufacturing and assembly activities
► Occupational Safety and Health
Administration (OSHA)
► Environmental Protection Agency (EPA)
► State and local agencies

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Regulations and Industry
Standards
► Disassembly and disposal of hazardous
products
► EPA
► Department of Transportation
► Design for disassembly

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Regulations and Industry
Standards
► Nearly all industries have regulations
► Commercial builders
► Federal Safe Drinking Water Act
► Resource Conservation and Recovery Act

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International Environmental
Policies and Standards
► Organizations and governments
guiding businesses
► U.N. Framework Convention on Climate
Change (UNFCCC)
► International Organization for
Standardization (ISO)
► Elimination of greenhouse gas (GHG)

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European Union Emissions
Trading System

▶ To combat climate change


▶ Reduce industrial GHG emissions
▶ “Cap-and-trade” principle

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ISO 14000
▶ Environmental management standards
1) Environmental management
2) Auditing
3) Performance evaluation
4) Labeling
5) Life cycle assessment

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ISO 14000
▶ Advantages
▶ Positive public image, reduced liability
▶ Good systematic approach to pollution
prevention
▶ Compliance with regulatory requirements,
opportunities for competitive advantage
▶ Reduction in the need for multiple audits

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ISO 14000
▶ Implemented by more than 200,000
organizations in 155 countries
▶ Environmental and economic benefits
▶ Reduced materials/resource usage
▶ Reduced energy consumption
▶ Lower distribution costs
▶ Improved image
▶ Improved process efficiency
▶ Reduced waste and disposal costs

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ISO 14000
▶ ISO 14001 addresses environmental
management systems
▶ Guidance to minimize harmful effects on
the environment

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