"Design" is the right choice because clearly the sentence needs a noun in the blank space after the definite article. While a gerund – "designing" in this case -- also acts as a noun, it would not be appropriate here.
The definition of "design" as used in this sentence is entered in the Collins COBUILD English Dictionary *: "A design is a drawing which someone produces to show how they would like something to be built or made. When Bernadello asked them to build him a home, they drew up the design in a week."
"Designing" – the gerund form of the verb "design" – refers to the action of planning and drawing something, a garment, building, or machine for example.
Your sentence calls for a word which describes the result of the design. To use "designing" would refer to the actions of producing that design, and surely the factory board is looking for results, and not the process of the design.
Examples of sentences which contain nouns used to refer the result of an action, as well as appropriate verb forms, including gerunds, are:
While the factory produces $390 million dollars worth of appliances per year, production is down this year. A bad economy discourages people from buying expensive products.
Driving across the country is an interesting experience. The drive along the northern route has some spectacular scenery.
Few examples of "the designing" appear on the Collins' online concordancer**. While a total of forty examples could be given, only three appear on this page:
...has been several years in the designing and, once in operation, BNFL....
...magnets would also allow the designing of smaller, more efficient...
...himself responsible for much of the designing, too.
Each of these examples describes the process of design, and not the result. It would, however, be possible to refer to the result by changing the word "designing" to "design."
The relationship of the noun form of the verb to the verb itself is a complex one. Quirk*, in Section 17.54 on page 1290, shows fourteen steps from a pure count noun such as "painting" (can also be plural) as in "some paintings of Brown's" to a purely participial form in the sentence "Brown is painting his daughter."
*The Collins COBUILD English Dictionary. Harper Collins.1995
***Quirk et al.: A Comprehensive Grammar of the English Language. Longman. 1985