Design of Goods & Services

Humor in Product Design

Need-satisfying offering of an organization Example P&G does not sell laundry detergent P&G sells the benefit of clean clothes Customers buy satisfaction, not parts May be a good or a service What is a Product?

Generation of New Product Opportunities Economic change Sociological and demographic change Technological change Political/legal change Changes in market practice professional standards suppliers and distributors

Product Idea Package Physical Good Features Quality Level Service (Warranty) Brand (Name) Product Components

Product Life Cycle Introduction Growth Maturity Decline

Product Life Cycle Introduction Fine tuning research product development process modification and enhancement supplier development

Product Life Cycle Growth Product design begins to stabilize Effective forecasting of capacity becomes necessary Adding or enhancing capacity may be necessary

Product Life Cycle Maturity Competitors now established High volume, innovative production may be needed Improved cost control, reduction in options, paring down of product line

Product Life Cycle Decline Unless product makes a special contribution, must plan to terminate offering

Product Life Cycle vs. Sales, Cost, and Profit Sales, Cost & Profit IntroductionMaturityDeclineGrowth Cost of Development & Manufacture Sales Revenue Time Cash flow Loss Profit

Percent of Sales From New Product

Products in Various Stages of Life Cycle Growth Decline Time Sales Hybrid Cars Plasma TVs Cell Phones VCRs Introduction Maturity

Few Successes Development Stage Number 1000 Market requirement Design review, Testing, Introduction 25 Ideas 1750 Product specification 100 Functional specifications One success! 500

Product-by-Value Analysis Lists products in descending order of their individual dollar contribution to the firm. Helps management evaluate alternative strategies.

Product Development Stages Idea generation Assessment of firms ability to carry out Customer Requirements Functional Specification Product Specifications Design Review Test Market Introduction to Market Evaluation Scope of product development team Scope of design for manufacturability and value engineering teams

Quality Function Deployment Identify customer wants Identify how the good/service will satisfy customer wants Relate customer wants to product hows Identify relationships between the firms hows Develop importance ratings Evaluate competing products

QFD House of Quality

House of Quality Sequence

Idea Generation Stage Provides basis for entry into market Sources of ideas Market need (60-80%); engineering & operations (20%); technology; competitors; inventions; employees Follows from marketing strategy Identifies, defines, & selects best market opportunities

Customer Requirements Stage Identifies & positions key product benefits Stated in core benefits proposition (CBP) Identifies detailed list of product attributes desired by customer Focus groups or 1-on-1 interviews

Functional Specification Stage Defines product in terms of how the product would meet desired attributes Identifies products engineering characteristics Example: printer noise (dB) Prioritizes engineering characteristics May rate product compared to competitors

Determines how product will be made Gives products physical specifications Example: Dimensions, material etc. Defined by engineering drawing Done often on computer Computer- Aided Design (CAD) Product Specification Stage

Quality Function Deployment Product design process using cross-functional teams Marketing, engineering, manufacturing Translates customer preferences into specific product characteristics Involves creating 4 tabular Matrices or Houses Breakdown product design into increasing levels of detail

Youve been assigned temporarily to a QFD team. The goal of the team is to develop a new camera design. Build a House of Quality. © T/Maker Co. House of Quality Example

High relationship Medium relationship Low Relationship Customer Requirements Customer Importance Target Values

House of Quality Example High relationship Medium relationship Low Relationship Target Values Light weight Easy to use Reliable What the customer desires (wall) Aluminum Parts Auto Focus Auto Exposure Customer Requirements Customer Importance

House of Quality Example High relationship Medium relationship Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure Average customer importance rating

House of Quality Example High relationship Medium relationship Low Relationship Customer Requirements Customer Importance Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure Relationship between customer attributes & engineering characteristics (rooms)

House of Quality Example High relationship Medium relationship Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure Target values for engineering characteristics (basement); key output

Organizing for Product Development Historically – distinct departments Duties and responsibilities are defined Difficult to foster forward thinking Today – team approach Representatives from all disciplines or functions Concurrent engineering – cross functional teams including research, development, manufacturing process design, etc.

Manufacturability and Value Engineering Benefits: reduced complexity of products additional standardization of products improved functional aspects of product improved job design and job safety improved maintainability of the product robust design

Cost Reduction of a Bracket via Value Engineering

Successful Value Engineering: Support of top management Qualified, experience leadership Formal organization of the value engineering function Training programs to teach the skills and techniques to those assigned to teams A diverse, cooperating team Adequate staffing, funding, and vendor assistance

Issues for Product Development Robust design Time-based competition Modular design Computer-aided design Value analysis Environmentally friendly design Green manufacturing

Robust Design Products are designed so that they may be manufactured uniformly and consistently despite adverse manufacturing and environmental conditions.

Time-based Competition Product life cycles are becoming shorter. Faster developers of new products gain on slower developers and obtain a competitive advantage

Modular Design Products designed in easily segmented components known as modular designs Adds flexibility to both production and marketing Examples: Airbus – wings Fast food – buns, vegetables, etc. Dell computer

Designing products at a computer terminal or work station Design engineer develops rough sketch of product Uses computer to draw product Often used with CAM © 1995 Corel Corp. Computer Aided Design (CAD)

Benefits of CAD Shorter design time Database availability New capabilities Improved product quality Reduced production costs Extensions Design for Manufacturing and Assembly (DFMA) 3-D Object Modeling CAD info is translated into machine control instructions (CAM) CAD & CAM

Virtual Reality Computer technology used to develop an interactive, 3-D model of a product Especially helpful in design of layouts (e.g. factory, store, home, office, etc.)

Value Analysis Focuses on design improvement during production Seeks improvements leading either to a better product or a product which can be more economically produced

Environmentally Friendly Designs Benefits Safe and environmentally sound products Minimum raw material and energy waste Product differentiation Environmental liability reduction Cost-effective compliance with environmental regulations Recognition as good corporate citizen

Green Manufacturing Make products recyclable Use recycled materials Use less harmful ingredients Use lighter components Use less energy Use less material

Product Development Continuum External Development Strategies Alliances Joint Ventures Purchase Technology or Expertise by Acquiring the Developer Internal Development Strategies Migrations of Existing Products Enhancement to Existing Products New Internally Developed Products Internal Cost of Product Development Shared Lengthy Speed of Product Development Rapid and/or Existing High Risk of Product Development Shared

Engineering drawing Shows dimensions, tolerances, & materials Shows codes for Group Technology Bill of Material Lists components, quantities & where used Shows product structure Engineering Change Notice (ECN) A correction or modification of an engineering drawing or bill of material Product Documents

Monterey Jack (a) U.S. grade AA. Monterey cheese shall conform to the following requirements: (1)Flavor - Is fine and highly pleasing, free from undesirable flavors and odors. May possess a very slight acid or feed flavor. (2)Body and texture - A plug drawn from the cheese shall be reasonably firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not possess sweet holes, yeast holes, or other gas holes (3)Color - Shall have a natural, uniform, bright and attractive appearance. (4)Finish and appearance - bandaged and paraffin-dipped. The rind shall be sound, firm, and smooth providing a good protection to the cheese Code of Federal Regulation, Parts 53 to 109,. Revised as of Jan. 1, 1985, General Service Administration

Engineering Drawing Example

Engineering Drawings - Show Dimensions, Tolerances, etc.

Bill of Material Example

Bill of Material for a Panel Weldment Hard Rock Cafés Hickory BBQ Bacon Cheeseburger NumberDescriptionQt y DescriptionQty A60-71 Panel Weldmt 1Bun Hamburger Patty Cheddar Cheese Bacon BBQ Onions Hickory BBQ Sauce Burger Set Lettuce Tomato Red Onion Pickle French Fries Seasoned Salt 11-inch Plate HRC Flag 1 8 oz. 2 slices 2 strips ½ cup 1 oz. 1 leaf 1 slice 4 rings 1 slice 5 oz. 1 tsp 1 A 60-7 R R P 60-2 Lower Roller Assembly Roller Pin Locknet R A Guide Assem. Rear Support Angle Roller Assem. Bolt A A R Guide Assm, Front Support Weldmt Wear Plate Bolt BOM – Manufacturing vs. Fast-Food

Make-or-Buy Decisions Decide whether or not you want (or need) to produce an item May be able to purchase the item as a standard item from another manufacturer

Reasons for Making lower production cost unsuitable suppliers assure adequate supply utilize surplus labor and make a marginal contribution obtain desired quality remove supplier collusion obtain a unique item that would entail a prohibitive commitment from the supplier maintain organizational talent protect proprietary design or quality increase/maintain size of company

Reasons for Buying lower acquisition cost preserve supplier commitment obtain technical or management ability inadequate capacity reduce inventory costs ensure flexibility and alternate source of supply reciprocity item is protected by patent or trade secret frees management to deal with its primary business

Parts grouped into families Similar, more standardized parts Uses coding system Describes processing & physical characteristics Part families produced in manufacturing cells Mini-assembly lines Group Technology Characteristics

112mm 60mm 4mm x 45° chamfer 80mm Product Code: Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe) Round Rod Group Technology Code Example

Group Technology Schemes Enable Grouping of Parts

Improved product design Reduced purchases Reduced work-in-process inventory Improved routing & machine loading Reduced setup & production times Simplified production planning & control Simplified maintenance Group Technology Benefits

Production Documents Assembly Drawing Assembly chart Route sheet Work order

Shows exploded view of product HeadNeck Handle End Cap © T/Maker Co. Assembly Drawing

Assembly Drawing and Chart

Route Sheet Lists all operations

Work Order Dept Oper Date Work Order Approved: JM Manufacturing Authorizes producing a given item, usually to a schedule

Configuration Management A system by which a products planned and changing components are accurately identified and for which control and accountability of change are maintained

Service Design – Customer Participation

Decision Trees & Product Design Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes. Considerations: Include all possible alternatives and states of nature - including doing nothing Enter payoffs at end of each branch Approach determining expected values by backward induction & pruning tree

Transition to Production First issue: knowing when to move to production Second issue: must view product development as evolutionary, not the responsibility of single individual or department Third issue: expect to need a trial production period to work the bugs out Fourth issue: recognize that responsibility must also transition