The architecture of complex engineered products, processes, and organizations

Speaker: Prof. Steven Eppinger Professor of Management Science and Innovation Massachusetts Institute of Technology, Sloan School of Management, USA

12 October 2011 - Room H7 HEC school - From 2:30 pm to 4:00 pm

Development of complex engineered systems is a highly interactive social process involving hundreds of people designing thousands of interrelated components and making millions of coupled decisions. In this seminar, I will introduce three views of product development complexity: a product view, a process view, and an organization view. We are able to learn about the complex social phenomenon of product development by studying the architectures of interaction among elements within each view using a method called design structure matrix (DSM). We also compare the alignment of the interaction patterns between the product, process, and organization domains. The results of this research have included new methods for studying product development problems as well as new methods for managing product complexity and complex processes.

Designing Experiential Services: The Customer Journey Perspective

Speaker: Stylianos (Stelios) Kavadias
Associate Professor of Technology and Operations Management College of Management, Georgia Institute of Technology, Atlanta

18 March 2011 - Room 41 - From 10.00 am to noon

In this paper, we explore the basic challenges that an organization faces in the design and introduction of an experiential service. In experiential services, the customer value extends beyond the functional benefits of the service and encompasses the overall experience. We build upon the customer journey, a widely used concept in service design, which views a service as a collection of individual "touchpoints" between the customer and the service provider. The interaction at each of those touchpoints creates a holistic experience for the customer which translates to a utility equivalent. A service provider may choose to control only a part of this journey and delegate the rest to the customers. We model the service experience as a process comprised of sequential touchpoints, and we identify the provider's optimal decisions concerning the number of service touchpoints she chooses to control and the price she charges. Our results reveal the non-monotonic effects of the touchpoint interactions between the provider and the customer. Those interactions may assume the form of losses (due to the inability to match fully the customer needs) or they may a affect the subsequent experiences (touchpoint dependencies). Finally, we also fully characterize the conditions under which the service provider may use the design decisions to effectively signal the experience potential of the service offering. We find that a separating equilibrium can be attained where, depending on the cost structure, the high type provider (i.e., the provider of the service with high experience potential) can successfully reveal her type either by signaling expertise (i.e., controlling fewer touchpoints) or by signaling efficiency (i.e., controlling more touchpoints). The price is used only as a signaling mechanism of last resort, that is, when the control of more or fewer touchpoints fails to communicate service potential. In the rest of the cases, the choice of the price or the number of touchpoints controlled by the provider conveys no additional information regarding the experience potential of the service, and therefore a pooling equilibrium is formed.

Bio: Stylianos (Stelios) Kavadias is the Edward J. Brown Jr. Associate Professor of Technology and Operations Management at the College of Management of Georgia Tech. His research focuses on the challenges that arise during the new product development (NPD) project portfolio selection decisions, and on the management of product co-development efforts (e.g. effectiveness and decision making in cross-functional product development teams). Stelios has received the 2nd prize in the George B. Dantzig Competition (INFORMS), and the Brady Family award for research excellence (Georgia Tech). He currently serves as the Department editor for the NPD, R&D and Project Management department of Production and Operations Management (POM) journal, and as an Associate Editor for Management Science's Entrepreneurship and Innovation Department, and POM's Management of Technology department. His research has appeared on different academic outlets (Management Science, POM). He teaches NPD/Innovation elective courses in the regular, part-time and Executive MBA programs at Georgia Tech, as well as in open enrollment and custom executive programs at the Huang Executive Education Center at Georgia Tech's College of Management. He has authored several case studies of Fortune 500 corporations (e.g. Microsoft, Saturn, Whirlpool, 3M, AT&T), and he has often spoken at corporate audiences (e.g. NCR leadership team, IHG Global IT conference, Pfizer Innovation Taskforce). He received his undergraduate Diploma in Electrical and Computer Engineering from NTUA (National Technical University of Athens), and his Ph.D. from INSEAD in France.

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