Chapter 3 Products and Services To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.

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Product Design Specifies materials Determines dimensions & tolerances Defines appearance Sets performance standards Design always begins with the criteria, the measures by which designs will be evaluated.These are determined by objectives. A lot of designs are done with CAD. Some CAD machines solve a nonlinear optimization model to come up with an optimum design. To do this the design criteria have to be mathmatized. The product or process has to be modeled mathematically. Then an optimization algorithm goes to work to find the optimal design. The automobile industry and the air frame industry designs cars and airplanes this way.

Service Design Specifies what the customer is to experience Physical items Sensual benefits Psychological benefits

An Effective Design Process Matches product/service characteristics with customer needs Meets customer requirements in simplest, most cost-effective manner Reduces time to market Minimizes revisions

Stages in the Design Process Idea Generation — Product Concept Feasibility Study — Performance Specifications Preliminary Design — Prototype Final Design — Final Design Specifications Process Planning — Manufacturing Specifications

The Design Process

New product or service launch Revising and testing prototypes The Design Process Pilot run and final tests New product or service launch Final design & process plans Idea generation Feasibility study Product or service concept Performance specifications Functional design Form design Production design Revising and testing prototypes Design specifications Manufacturing or delivery specifications Suppliers R&D Customers Marketing Competitors Figure 3.1

Idea Generation Suppliers, distributors, salespersons Trade journals and other published material Warranty claims, customer complaints, failures Customer surveys, focus groups, interviews Field testing, trial users Research and development

More Idea Generators Perceptual Maps Benchmarking Reverse engineering Visual comparison of customer perceptions Benchmarking Comparing product/service against best-in-class Reverse engineering Dismantling competitor’s product to improve your own product Benchmarking refers to finding the best-in class produce or process, measuring performance of your product or process against it and making recommendations a for improvement based on the results. Ford reverse-engineered 400 other designs before finalizing the design of the Taurus.

Perceptual Map of Breakfast Cereals

Perceptual Map of Breakfast Cereals HIGH NUTRITION LOW NUTRITION GOOD TASTE BAD TASTE Figure 3.2

Perceptual Map of Breakfast Cereals HIGH NUTRITION LOW NUTRITION GOOD TASTE Cocoa Puffs BAD TASTE Rice Krispies Wheaties Cheerios Shredded Wheat Figure 3.2

Feasibility Study Market Analysis Economic Analysis Technical / Strategic Analysis Performance Specifications

Preliminary Design Create form & functional design Build prototype Test prototype Revise prototype Retest

Form Design (How the Product Looks) Cellular Personal Safety Alarm Personal Computer

Functional Design (How the Product Performs) Reliability Probability product performs intended function for specified length of time Maintainability Ease and/or cost or maintaining/repairing product

Computing Reliability

Computing Reliability Components in series 0.90 0.90 x 0.90 = 0.81

Computing Reliability Components in series 0.90 0.90 x 0.90 = 0.81 Components in parallel 0.95 0.90 R2 R1 0.95 + 0.90(1-0.95) = 0.995

System Availability System Availability, SA = MTBF MTBF + MTTR

System Availability MTBF MTBF + MTTR System Availability, SA = PROVIDER MTBF (HR) MTTR (HR) A 60 4.0 B 36 2.0 C 24 1.0 Example 3.1

System Availability MTBF MTBF + MTTR System Availability, SA = PROVIDER MTBF (HR) MTTR (HR) A 60 4.0 B 36 2.0 C 24 1.0 SAA = 60 / (60 + 4) = .9375 or 93.75% SAB = 36 / (36 + 2) = .9726 or 97.26% SAC = 24 / (24 + 1) = .9473 or 94.73% Example 3.1

System Availability MTBF MTBF + MTTR System Availability, SA = PROVIDER MTBF (HR) MTTR (HR) A 60 4.0 B 36 2.0 C 24 1.0 SAA = 60 / (60 + 4) = .9375 or 93.75% SAB = 36 / (36 + 2) = .9726 or 97.26% SAC = 24 / (24 + 1) = .9473 or 94.73% Example 3.1

Production Design Part of the preliminary design phase Simplification Standardization Modularity

Design Simplification (a) The original design The first design had 24 common parts and required 84 seconds to assemble. The second design was originally designed to be assembled with robots in which number of parts was reduced to four and assemble time was cut to 12 seconds. This productivity gain goes from 43 assemblies/hr to 300 assemblies per hour. Figure c shows an even simplier design consisting of only two parts, a base and spindle. Assembly time is reduced to four seconds—900 assemblies per hour. You can see how this would be a great way to get cost out of a product—by making it easy to assemble. Assembly using common fasteners Figure 3.3

Design Simplification (a) The original design (b) Revised design One-piece base & elimination of fasteners Assembly using common fasteners Figure 3.3

Design Simplification (a) The original design (b) Revised design One-piece base & elimination of fasteners (c) Final design Design for push-and-snap assembly Assembly using common fasteners Figure 3.3

Final Design & Process Plans Produce detailed drawings & specifications Create workable instructions for manufacture Select tooling & equipment Prepare job descriptions Determine operation & assembly order Program automated machines

Improving the Design Process Design teams Concurrent design Design for manufacture & assembly Design to prevent failures and ensure value Design for environment Measure design quality Utilize quality function deployment Design for robustness Engage in collaborative design The Design process is essentially the product development process, to be further discussed in the next chapter.

Figure 3.4 Breaking Down Barriers to Effective Design

Design Teams Marketing, manufacturing, engineering Suppliers, dealers, customers Lawyers, accountants, insurance companies

Concurrent Design Improves quality of early design decisions Decentralized - suppliers complete detailed design Incorporates production process Often uses a price-minus system Scheduling and management can be complex as tasks are done in parallel

General Performance Specifications Instructions to supplier: “Design a set of brakes that can stop a 2200 pound car from 60 miles per hour in 200 feet ten times in succession without fading. The brakes should fit into a space 6” x 8” x 10” at the end of each axle and be delivered to the assembly plant for $40 a set.” Supplier submits design specifications and prepares a prototype for testing

Design for Manufacture and Assembly Design a product for easy & economical production Incorporate production design early in the design phase Improves quality and reduces costs Shortens time to design and manufacture

DFM Guidelines Minimize the number of parts, tools, fasteners, and assemblies Use standard parts and repeatable processes Modular design Design for ease of assembly, minimal handling Allow for efficient testing and parts replacement

Design for Assembly (DFA) Procedure for reducing number of parts Evaluate methods for assembly Determine assembly sequence

Design Review Failure Mode and Effects Analysis (FMEA) A systematic approach for analyzing causes & effects of failures Prioritizes failures Attempts to eliminate causes Fault Tree Analysis (FTA) Study interrelationship between failures

Figure 3.5 Fault Tree for Potato Chips

FMEA for Potato Chips Stale FAILURE MODE CAUSE OF FAILURE EFFECT OF FAILURE CORRECTIVE ACTION Stale Low moisture content, expired shelf life, poor packaging Tastes bad, won’t crunch, thrown out, lost sales Add m cure longer, better package seal, shorter shelf life Broken Too thin, too brittle, rough handling, rough use, poor packaging Can’t dip, poor display, injures mouth, chocking, perceived as old, lost sales Change recipe, change process, change packaging Too Salty Outdated receipt, process not in control, uneven distribution of salt Eat less, drink more, health hazard, lost sales Experiment with recipe, experiment with process, introduce low salt version Table 3.1

Value Analysis (Value Engineering) Ratio of value / cost Assessment of value : 1. Can we do without it? 2. Does it do more than is required? 3. Does it cost more than it is worth? 4. Can something else do a better job 5. Can it be made by less costly method, tools, material? 6. Can it be made cheaper, better or faster by someone else?

Design for Environment Design from recycled material Use materials which can be recycled Design for ease of repair Minimize packaging Minimize material & energy used during manufacture, consumption & disposal

Figure 3.6 Design for Environment

Metrics for Design Quality Percent of revenue from new products or services Percent of products capturing 50% or more of the market Percent of process initiatives yielding a 50% or more improvement in effectiveness Percent of suppliers engaged in collaborative design

Metrics for Design Quality Percent of parts that can be recycled Percent of parts used in multiple products Average number of components per product Percent of parts with no engineering change orders Things gone wrong

Quality Function Deployment (QFD) Translates the “voice of the customer” into technical design requirements Displays requirements in matrix diagrams First matrix called “house of quality” Series of connected houses

House of Quality

Design characteristics Customer requirements Competitive assessment House of Quality Trade-off matrix Design characteristics Customer requirements Target values Relationship matrix Competitive assessment Importance 1 2 3 4 5 6 Helps to coordinate efforts of various teams working together. Translates the voice of the customer to technical requirements at every stage of design and manufacture. Basically this house converts customer requirements into product design characteristics. It has six sections—the customer requirements section, a competitive assessment section, a design characteristics section, a relationship matrix, a trade-off matrix and a target values section. We begin the process by listening to our customers. Suppose our customers tell us they want an iron that presses quickly, removes wrinkles, doesn’t stick, provides enough steam, doesn’t spot fabric, and doesn’t scorch fabric.. Ranking of these requirements is on a scale of 0 to 10. Next we conduct a competitive assessment on a scale of 0 to 5. We see our iron doesn’t fare well with respect to doesn’t stick, doesn’t spot, heats quickly, quick cool-down and not too heavy. Next we need a way to translate these requirements into measurable design characteristics. Figure 3.7

Competitive Assessment House of Quality Figure 3.8 Irons well Easy and safe to use Competitive Assessment Customer Requirements 1 2 3 4 5 Presses quickly 9 B A X Removes wrinkles 8 AB X Doesn’t stick to fabric 6 X BA Provides enough steam 8 AB X Doesn’t spot fabric 6 X AB Doesn’t scorch fabric 9 A XB Heats quickly 6 X B A Automatic shut-off 3 ABX Quick cool-down 3 X A B Doesn’t break when dropped 5 AB X Doesn’t burn when touched 5 AB X Not too heavy 8 X A B

House of Quality Figure 3.9 Customer Requirements Time required to reach 450º F Time to go from 450º to 100º Protective cover for soleplate Material used in soleplate Flow of water from holes Energy needed to press Thickness of soleplate Automatic shutoff Size of soleplate Number of holes Weight of iron Size of holes Customer Requirements Presses quickly - - + + + - Removes wrinkles + + + + + Doesn’t stick to fabric - + + + + Provides enough steam + + + + Doesn’t spot fabric + - - - Doesn’t scorch fabric + + + - + Heats quickly - - + - Automatic shut-off + Quick cool-down - - + + Doesn’t break when dropped + + + + Doesn’t burn when touched + + + + Not too heavy + - - - + - Irons well Easy and safe to use House of Quality

House of Quality + - Figure 3.10 Protective cover for soleplate Time to go from 450º to 100º Time required to reach 450º Material used in soleplate Flow of water from holes Energy needed to press Thickness of soleplate Automatic shutoff Size of soleplate Number of holes Weight of iron Size of holes - +

House of Quality Figure 3.11 Protective cover for soleplate Time to go from 450º to 100º Time required to reach 450º Material used in soleplate Flow of water from holes Energy needed to press Thickness of soleplate Automatic shutoff Size of soleplate Number of holes Weight of iron Size of holes Units of measure ft-lb lb in. cm ty ea mm oz/s sec sec Y/N Y/N Iron A 3 1.4 8x4 2 SS 27 15 0.5 45 500 N Y Iron B 4 1.2 8x4 1 MG 27 15 0.3 35 350 N Y Our Iron (X) 2 1.7 9x5 4 T 35 15 0.7 50 600 N Y Estimated impact 3 4 4 4 5 4 3 2 5 5 3 0 Estimated cost 3 3 3 3 4 3 3 3 4 4 5 2 Targets 1.2 8x5 3 SS 30 30 500 Design changes * * * * * * * Objective measures Figure 3.11

House of Quality Figure 3.12

Series of QFD Houses

Series of QFD Houses A-1 A-2 A-3 A-4 House of quality Parts deployment Customer requirements House of quality Product characteristics A-1 Parts deployment Part characteristics A-2 Process planning Process characteristics A-3 Operating requirements Operations A-4 Figure 3.13

Benefits of QFD Promotes better understanding of customer demands Promotes better understanding of design interactions Involves manufacturing in the design process Breaks down barriers between functions and departments Provides documentation of the design process

Design for Robustness Product can fail due to poor design quality Products subjected to many conditions Robust design studies Controllable factors - under designer’s control Uncontrollable factors - from user or environment Designs products for consistent performance

Consistency is Important Consistent errors are easier to correct than random errors Parts within tolerances may yield assemblies which aren’t Consumers prefer product characteristics near their ideal values

Technology in Design CAD - Computer Aided Design Assists in creating and modifying designs CAE - Computer Aided Engineering Tests & analyzes designs on computer screen CAD/CAM - Design & Manufacturing Automatically converts CAD data into processing instructions for computer controlled equipment

Benefits of CAD Produces better designs faster Builds database of designs and creates documentation to support them Shortens time to market Reduces time to manufacture Enlarges design possibilities Enhances communication and promotes innovation in design teams

Collaborative Product Commerce Share and work on design files in real time from physically separate locations, typically over the internet Accelerates product development Helps resolve product launch issues Improves the quality of design

Characteristics of Services Services are intangible Service output is variable Service have higher customer contact Services are perishable Service inseparable from delivery Tend to be decentralized and dispersed Consumed more often than products Services can be easily emulated

A Well-Designed Service System is Consistent with firm’s strategic focus User friendly Robust Easy to sustain Effectively linked between front & back office Cost effective Visible to customer FedEx

The Service Design Process

The Service Design Process Figure 3.14 Performance Specifications Service Delivery Specifications Physical items Sensual benefits Psychological benefits Design Specifications Service Provider Customer Customer requirements Customer expectations Activities Facility Provider skills Cost and time estimates Schedule Deliverables Location Service Concept Service Package Desired service experience Targeted customer

Figure 3.15 Blueprint for an Installment Lending Operation Loan application Branch Officer Pay book Line of visibility Deny 1 day 2 days 3 days Confirm Fail point Customer wait Employee decision F W 30 min. – 1 hr. Decline Receive payment Final payment Notify customer Close account Delinquent Issue check Print payment book Accept Verify income data Initial screening Employer Bank accounts Credit check Credit bureau Data base records Branch records Accounting Verify payor

Design for High-Contact Services DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT SERVICE Facility location Convenient to customer Near labor or transportation Facility layout Must look presentable, accommodate customer needs, and facilitate interaction with customer Designed for efficiency Quality control More variable since customer is involved in process; customer expectations and perceptions of quality may differ; customer present when defects occur Measured against established standards; testing and rework possible to correct defects Capacity Excess capacity required to handle peaks in demand Planned for average demand Table 3.2

Design for High-Contact Services DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT SERVICE Worker skills Must be able to interact well with customers and use judgment in decision making Technical skills Scheduling Must accommodate customer schedule Customer concerned only with completion date Service process Mostly front-room activities; service may change during delivery in response to customer Mostly back-room activities; planned and executed with minimal interference Service package Varies with customer; includes environment as well as actual service Fixed, less extensive Table 3.2