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Chapter 1: Domain and Process Views of an Enterprise
Activities at
the Interface
The activities that appear to have most impact across the interface between
marketing and manufacturing are product design, quality assurance, demand and
capacity management, inventory holding, supply chain, production scheduling, and
costing.
Product Design
Because of the increasing importance of two factors-decreasing product life
cycles and shortening time to market-product design is assuming strategic
importance. It is a given that marketing people would want products to mean all
things to all people (Shapiro 1977). However, since customer preferences and
customer ability to pay vary widely, and since customers appreciate variety,
with emphasis on new products, it may not be cost-effective to try to satisfy
all customers in all market segments at all times. Increasing product variety
requires a larger number of unique components to be designed and manufactured,
increasing cost. Modular product design increases component sharing, but it may
also reduce product variety to a less-than-desirable level for customers.
Flexible manufacturing equipment can produce a wide range of components on the
same machine, but the cost of designing and implementing a flexible
manufacturing system (including personnel training) may be very high. Similarly,
to reduce the time to market, product development time must be reduced. One way
of doing that is to overlap (in parallel) development activities such as
prototyping and testing, which would otherwise be done sequentially. Overlapping
such activities can be very risky, however, as a design error found in one test
may require all other tests, done in parallel, to be repeated.
An application of product design to reduce time to market of singleuse 35 mm
cameras is reported by Kodak, who used a well-structured database and a
computer-aided procedure to frequently exchange design drawings among different
functions (Davenport 1993). This transformed a sequential design process into
one where components could be designed in parallel.
Quality Assurance
There are several dimensions of product quality (Garvin 1984), but the two
major dimensions are conformance quality and performance quality. Market share
can be increased (albeit in different segments) by improving conformance quality
(practiced by Japanese companies) or by strengthening performance quality
(practiced by German companies such as BMW). To enhance performance, it is
crucial that emphasis be placed on technology innovation and its incorporation
in product design. This requires product designs to be modified as and when new
technology appears. In the case of BMW (Pisano 1996) this has meant that product
designs could not be frozen even at advanced prototyping stages, and so
expensive modifications in manufacturing processes were required even during
production ramp-up. This ensures the latest technology in products, but the time
to market may become long and uncertain, and the cost of product development
could be high. Japanese companies, on the other hand, aim at conformance
quality. They meticulously practice freezing designs at a certain point, so any
new technology innovations beyond those time fences are left to be incorporated
in a future modification. During prototyping they lay emphasis on process
simplification, appropriate material use...
