Archive for the ‘design’ Category

IKEA has big growth plans. According to the Wall Street Journal, it aims to increase its revenue by €50 billion by 2020 — 74% higher than its 2014 revenue (IKEA Can’t Stop Obsessing About Its Packaging, Jun 17). Part of that growth is going to come from expanding into new markets, some may come from new formats, but a lot of it has to come from selling more stuff through existing stores. And that is going to require finding ways to cut prices to move more volume.

That’s where design comes in. IKEA is reviewing products in order to find ways to reduce their production and — importantly — their distribution costs. As this graphic demonstrates, this is pretty much a war on air.



Read Full Post »

Another day, another post on Norsemen selling furniture for college kids and divorced men. The question this time is about how IKEA designs products, which the Wall Street Journal describes as an excruciating, arduous process (The Long, Slow Process of IKEA Design, Oct 14).

It takes car companies about three years to design a sedan, and handset makers can churn out a new smartphone in six months. But an IKEA kitchen takes half a decade to create. …

“It’s five years of work into finding ways to engineer cost out of the system, to improve the functionality,” Mr. Agnefjäll said of the company’s “Metod” kitchen, a new model, during an interview at a store in his hometown of Malmo, located on Sweden’s southwest coast.

The Metod kitchen (translated as “Method” in English), is the brainchild of a clutch of designers sitting near IKEA’s headquarters here. The goal is to achieve “democratic design,” products that will work in homes whether they are located in Beijing, Madrid or Topeka.

IKEA—known for minimalist design—packs enormous complexity into a kitchen. Metod consists of 1,100 different components, and distilling them all into a cheap, green and easily shippable package has proved arduous.

As the Swedes tell it, they go through a lot of steps to get the design just right.

So is the Journal right to label IKEA as slow and plodding? (more…)

Read Full Post »

It is hard to think of a more challenging problem: How do you distribute necessary medicines in a developing country lacking infrastructure? That is question tackled by Simon and Jane Berry, two Brits trying to reduce childhood deaths from diarrhea in Africa. Diarrhea is the leading cause of death for children under five — which is tragic since it is not some mysterious disease. It is completely treatable by standard and (in the grand scheme of things) cheap medicines. But you need to get the medicines out to rural areas. The Berry’s solution was a packaging innovation that lets them piggyback on existing, super efficient supply chain. Whose supply chain? Here’s a hint, their not-for-profit is called ColaLife (ColaLife: Turning profits into healthy babies, BBC, Jul 22).

Simon Berry and his wife Jane had come up with a strikingly-simple idea – a package for medicine that slotted into the empty space at the top of a crate of soft drink bottles, fitting neatly in between the bottlenecks.

A dazzling idea, to piggyback the delivery of the diarrhoea medicine for babies onto one of the most efficient distribution systems in the world. Go anywhere and you will find a shop selling Coca-Cola. And the plastic packaging is ingenious – once opened it becomes a measuring device.

Here is what ColaLife’s anti-diarrheal kits look like sitting in the crates.

Here is how the crates get out to villages.



Read Full Post »

So how many different radiator models does a global car company need? Clearly it needs enough to accommodate different sized engines and cars. A big pick up with an over-sized cylinder eight-engine is going to need something different from a subcompact with an under-sized four-cylinder engine. But does that translate to twenty-something radiator designs or ninety-something?

Bloomberg reports Toyota has been thinking about this question for radiators and other car parts (Toyota Airbag Cuts Create Opening for Overseas Suppliers, Jun 10).

In one of President Akio Toyoda’s biggest initiatives since taking over in 2009, the carmaker is winnowing the number of parts it uses and increasing common components across models. The plan will cut both the time and cost for creating new models by as much as 30 percent, according to estimates from Toyota. …

In the past, Toyota focused on developing custom parts. It needed 50 types of knee-level airbags because seats for various models had different profiles. By standardizing “hip heights,” as the automaker calls it, across models, Toyota says it can reduce knee airbag variants by 80 percent.

As of last year, the automaker had slashed radiators to 21 models from about 100, according to Shinichi Sasaki, Toyota’s global purchasing chief. And the company is reducing the number of cylinder sizes in its engines to six from more than 18 by 2016, the Nikkan Kogyo newspaper reported June 4. Toyota declined to comment on the report.

“From now on, Toyota will seek the compatibility of certain parts it uses with standard parts used by many automakers globally,” the company said in a statement outlining its Toyota New Global Architecture, or TNGA, in March.

Some of the anticipated benefits here are fairly obvious. For example, the article mentions that standardizing parts like radiators that customers don’t care much about (beyond knowing that the car has one) will free up engineering time to work on body or cockpit design that customers do care about. Similarly, many of the implementation challenges (such as standardizing hip height) are fairly clear. Customers may not care about knee-level airbags per se, but standardizing those means standardizing some aspect of the interior design. Customer may or may not notice.

The most interesting part of this to me is its implications for supply chain risk. (more…)

Read Full Post »

Last Monday I posted about Rethink Robotics’ Baxter robot which can be easily programmed to perform a variety of manufacturing tasks. And that very day, the Wall Street Journal had a story about a firm that uses Baxter robot (A Toy Maker Comes Home to the U.S.A., Mar 11)! K’Nex Brands makes a variety of plastic building sets that snap together to make any number of things. Over the last several years, they have moved much of their production from China back to Pennsylvania. There are a number of strategic reasons for the move.

By moving production closer to U.S. retailers, K’Nex said it can react faster to the fickle shifts in toy demand and deliver hot-selling items to stores faster. It also has greater control over quality and materials, often a crucial safety issue for toys. And as wages and transport costs rise in China, the advantages of producing there for the U.S. market are waning.

Robotics play a roll in this. They use the Baxter for “simple packaging tasks,” which sounds like the kind of thing that it would be impossible to have a human do more cost effectively in the US than in Asia.

But to my mind, the most interesting part of the article discusses the design trade offs that K’Nex has made to facilitate the move. (more…)

Read Full Post »

When I was a kid, I loved Legos. So I was, of course, pleased when my kids started playing with them. In the last year or so, my kids have outgrown them. And while having all the Legos put away makes it a little safer to walk barefoot across the family room, it does make me a litte sad. Which is why, I guess, I have a soft spot for stories about Legos.

Like, for example, a BBC story asking just how many Legos can you stack on top of each other (How tall can a Lego tower get?, Dec 3). Turns out, you can make a pretty tall tower.

Ian Johnston and the team do two more tests to be sure we hadn’t just happened upon the strongest Lego brick in existence. And in fact they were impressed at the consistency of Lego manufacture.

The average maximum force the bricks can stand is 4,240N. That’s equivalent to a mass of 432kg (950lbs). If you divide that by the mass of a single brick, which is 1.152g, then you get the grand total of bricks a single piece of Lego could support: 375,000.

So, 375,000 bricks towering 3.5km (2.17 miles) high is what it would take to break a Lego brick.

Here’s a graphic to help visualize 375,000 Lego bricks.



Read Full Post »

Apple, the world’s highest valued company, and its relationship, both competitive and cooperative, with Samsung provide a wonderful setting to discuss some fundamental questions that relate to strategy and operations:

FIRST: Which one is the more sustainable provider of Apple’s competitive advantage: design or the business model?

  • Daring Fireball’s John Gruber wrote three beautiful paragraphs to argue his view on what he termed “The New Apple Advantage“:

So let’s be lazy for a second here, and attribute all of Apple’s success over the past 15 years to two men: Steve Jobs and Tim Cook. We’ll give Jobs the credit for the adjectives beautiful, elegant, innovative, and fun. We’ll give Cook the credit for the adjectives affordable, reliable, available, and profitable. Jobs designs them, Cook makes them and sells them.

It’s the Jobs side of the equation that Apple’s rivals — phone, tablet, laptop, whatever — are able to copy. Thus the patents and the lawsuits. Design is copyable. But the Cook side of things — Apple’s economy of scale advantage — cannot be copied by any company with a complex product lineup. How could Dell, for example, possibly copy Apple’s operations when they currently classify “Design & Performance” and “Thin & Powerful” as separate laptop categories?

This realization sort of snuck up on me. I’ve always been interested in Apple’s products because of their superior design; the business side of the company was never of as much interest. But at this point, it seems clear to me that however superior Apple’s design is, it’s their business and operations strength — the Cook side of the equation — that is furthest ahead of their competition, and the more sustainable advantage. It cannot be copied without going through the same sort of decade-long process that Apple went through.

  • James Allworth, co-author of How Will You Measure Your Life?, adds an important dynamic component to the argument by applying Clay Christensen’s theory to this question:

The design part of Apple’s equation is to their ability to redefine new industries as they did with the iPhone. Whether they go after the TV market next, or something else, it’s this integrated design component that will be crucial to their initial success. But compared to the business side of Apple, design actually generates much less sustained strategic advantage in any one product category, once performance in that category becomes “good enough”. The tech industry has always revolved around copying. Once folks work out how it’s done, everyone piles on. And at that point, it becomes much less about design than it does about how you operate your business.

  • In summary: the answer to whether design or the operating model is the more sustainable competitive advantage is the typical MBA response to a tough question: “it depends.”  The rather sophisticated reasoning involves the fact that products and services over time improve and then become “good enough” and the dimension of competition shifts. Notice that I did not say that design is a commodity and fully copyable (my personal favorite question: why can’t Lexus designs have the timeless sophistication and elegance as Mercedes?); rather, another dimension overtakes it in importance.


Read Full Post »

We’ve got two stories today that illustrate ways of taking cost out of building cars but they come from very different parts of the auto market. One is about making high-volume, low-cost cars at Renault. The other is about high-end, low-volume electric cars from Tesla.

The Renault story comes from the Wall Street Journal (Renault Takes Low-Cost Lead, Apr 16). Renault launched  a low-cost model called the Logan in 2004 with the intention of selling it in developing markets but subsequently expanded its entry-level offerings (see the graphic) and started selling them in Western Europe. They now account for 30% of Renault’s sales and supposedly sport a profit margin more than double the margins on the rest of Renault’s line.

So how do they do it? (more…)

Read Full Post »

I just finished teaching Operations Strategy where we discuss many interesting decisions, including the impact of design complexity on outsourcing and the mechanisms to foster innovation in existing organizations.  The StreetScooter is a project that hits on both these topics: this is a modular car (not a scooter!) that is designed and manufactured in Germany through collaboration by more than 50 companies.  A prototype of the 5,000 euro vehicle with a 120km/hr top speed has been presented and production in Europe is slated for 2013.  Here’s the 1min promotional video:

In class we discuss electronic designs as perfect candidates for modular design: after all, each electrical connection only needs a few variables (e.g., volt, amps, and frequency). These variables are easily specified and define the interchangeable interfaces that then form the input or constraints in the design of each module (using, say, CAD programs).  This gave rise to the disintegration of the computer industry and all the wonders that followed.


Read Full Post »

Each year we design new ‘kits’ (uniforms) for my cycling team and have them manufactured.  During that quest, I’ve started to put premiums not only on quality but also on minimum order size and response time.  The typical leadtime for custom pro-level cycling wear is about 8 weeks and several manufacturers have minimum order sizes of 10 units (which is not helpful to get replacement kits after the inevitable crash).

Like many other industries, the textile industry has been digitizing to allow smaller batch sizes and faster turn-around-times.  Digital inkjet printing became the norm for small batch sizes.  Sublimation still the higher quality but for larger batches.  Apparently, the technology has now sufficiently advanced to bring the same flexibility to higher volumes (and hence lower cost per unit).

According to industry expert Debra Cobb, high speed developments now have led to new printing capabilities:

At ITMA in September 2011, the array of inkjet printing developments generated strong interest amongst attendees. While high-volume printing is generally considered to be better than 200 m2/hr, new printers have moved way beyond this benchmark.

Stork Prints highlighted their new Sphene 24 digital printer, which is said to realize speeds up to 555 m2/hr on virtually any fabric; including tricky substrates such as polyamide/elastane swimwear knits. Durst Phototechnik AG launched its Kappa 180 inkjet printer, said to reach speeds of over 600 m2/hr with a resolution of 1056 dpi x 600 dpi.

Xennia Technology’s Osiris high speed digital printing system, also introduced at ITMA, is said to be one of the fastest inkjet printing systems in the world. It is capable of printing up to 2880 m2/hr, with up to 8 colours; its speed gives mass market fashion printers a competitive edge by allowing them to react quickly to new fashion trends.


Read Full Post »

Older Posts »

%d bloggers like this: