Irwin/McGraw-Hill 1 The Product Design Process Concept Development Product Planning Product/Process Engineering Pilot Production/Ramp-Up 2

Irwin/McGraw-Hill 2 How do you determine what the customer wants? Quality Function Deployment Inter-functional teams from marketing, design engineering, and manufacturing Voice of the customer (for new and existing products) House of Quality 4

X X X X X Correlation: Strong positive Positive Negative Strong negative X * Competitive evaluation X = Us A = Comp. A B = Comp. B (5 is best) X AB X AB A X B X A B Relationships: Strong = 9 Medium = 3 Small = 1 Technical evaluation (5 is best) B A X BA X B A X B X A BXA BA X Engineering Characteristics Energy needed to close door Check force on level ground Energy needed to open door Water resistance Door seal resistance Accoust. Trans. Window Target values Importance weighting Reduce energy level to 7.5 ft/lb Reduce force to 9 lb. Reduce energy to 7.5 ft/lb. Maintain current level Maintain current level Maintain current level Importance to Cust. Customer Requirements Easy to close Stays open on a hill Easy to open Doesn’t leak in rain No road noise

Irwin/McGraw-Hill 4 Value Analysis/Value Engineering Simplification of products and processes Cost reduction and avoidance Design for Manufacturability Traditional approach Concurrent engineering Design for Assembly Global Product Design Product Design 6

Irwin/McGraw-Hill 5 Concurrent Engineering Concurrent engineering can be defined as the simultaneous development of design functions, with open and interactive communication existing among all team members for the purpose of: reducing time to market decreasing cost improving quality and reliability 3

Phased versus Overlapping Approach in New Product Development Design information processing Activity 1 Activity 2 Activity 3 Information batch size Single batch transfer of info Phased Approach Start of Activity 2 Start of Activity 3 Elapsed time Design information processing Activity 1 Activity 2 Small batch transfer of info Overlapping Approach Start of Activity 2 Start of Activity 3 Elapsed time ____________________________________________________________ “New Product Development: The New Time Wars” Joe Blackburn, a

Irwin/McGraw-Hill 7 Types of Processes Conversion - e.g., creating steel from iron ore Fabrication - e.g., forming steel into cans Assembly - e.g., put cans, lids and ingredients together Testing - e.g., testing for sealed weight 7

Irwin/McGraw-Hill 8 Process Flow Structures Job shop Batch Assembly Line Continuous Flow 8

IV. Continuous Flow III. Assembly Line II. Batch I. Job Shop Low Volume One of a Kind Multiple Products, Low Volume Few Major Products, Higher Volume High Volume, High Standard- ization Commercial Printer French Restaurant Flexibility (High) Unit Cost (High) Flexibility (Low) Unit Cost (Low) Heavy Equipment Coffee Shop Automobile Assembly Burger King Sugar Refinery Source: Modified from Robert Hayes and Steven Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New York: John Wiley & Sons, 1984). p Exhibit 5.10, p.168: The Product - Process Matrix 9

Irwin/McGraw-Hill 10 Virtual Factory Shift from centralized production to an integrated network of capabilities 10

Irwin/McGraw-Hill 11 Process Flow Design A process flow design can be defined as a mapping of the specific processes that raw materials, parts, and subassemblies follow as they move through a plant. Common tools to design a process flow: Assembly drawing Assembly chart Operation and route sheet 11

Assembly (Gozinto) Chart A-2SA Lockring Spacer, detent spring Rivets (2) Spring-detent A-5 Component/Assembly Operation Inspection Exhibit 4.13 ©The McGraw-Hill Companies, Inc.,

Assemble Drawing ____________________________________________________________ Operations Management, Roger Schroeder, b

Irwin/McGraw-Hill 14 Example: Process Flow Chart Inspect Material for Defects Return to Supplier for Credit Buffer: Material Received From Supplier Defects Found? Yes No, Continue… 13

Irwin/McGraw-Hill 15 Goods versus Services Pencil Manufacturer tangible storable easy quality assessment centralized production long lead times capital intensive low customer contact production separate from consumption McDonald’s Psychologist intangible perishable difficult quality assessment dispersed production short lead times labor intensity high customer contact production concurrent with consumption goodsservices 47

Irwin/McGraw-Hill 16 Some Service Generalizations (1 of 2) 1. Everyone is an expert on services. 2. Services are idiosyncratic. 3. Quality of work is not quality of service. 4. Most services contain a mix of tangible and intangible attributes (service package). 48

Irwin/McGraw-Hill 17 Some Service Generalizations (2 of 2) 5. High-contact services (described later) are experienced, whereas goods are consumed. 6. Effective management of services requires an understanding of marketing and personnel, as well as operations. 7. Services often take the form of cycles of encounters involving face-to-face, phone, electromechanical, and/or mail interactions. 49

Service Types Facilities-based vs. Field-based services Internal Services - - External Services 50

Irwin/McGraw-Hill 19 Service Strategy: Focus and Advantage Performance Priorities Treatment of the customer Speed and convenience of service delivery Price Variety Unique skills that constitute the service offering 51

Irwin/McGraw-Hill 20 Classifications of Services Amount of customer contact Low versus High Standard or Custom Service The mix of tangible and intangible goods 52

Irwin/McGraw-Hill 21 Service-System Design Matrix Exhibit 6.7 Mail contact Face-to-face loose specs Face-to-face tight specs Phone Contact Face-to-face total customization Buffered core (none) Permeable system (some) Reactive system (much) High Low High Low Degree of customer/server contact On-site technology Sales Opportunity Production Efficiency 53

Irwin/McGraw-Hill 22 Service Blueprinting 55

Irwin/McGraw-Hill 23 Failure Mode and Effects Criticality Analysis (FMECA or FMEA) Risk Priority Number (RPN) = Occurrence * Severity * Detection Occurrence = Frequency of failure mode (1=remote, 9=inevitable, 10=certain) Severity = How serious is the failure to the process; to business results? (1=minor, 2-3=annoyance, 9-10=very high/most severe) Detection = Likelihood that a defect will be detected by controls before the next (subsequent) process (1-2=very high, 9=very low, 10=absolutely cannot detect)

Irwin/McGraw-Hill 24 Service Recovery (Just in case) A real-time response to a service failure. Blueprinting can guide recovery planning (fail points). Recovery planning involves training front- line workers to respond to such situations as overbooking, lost luggage, or a bad meal. 56

Irwin/McGraw-Hill 25 Service Recovery (Just in case) “Empowerment can only take place when every associate can personally assure customer satisfaction every time!” Gary Johnson

Irwin/McGraw-Hill 26 Service Recovery Processes: Fundamental Questions to Ask Who are my customers? What is my product or service? What are my customer’s expectations and measures? Does my product or service meet their expectations? What is the process for providing my product or service? What action is required to improve the process? What are my customer’s moments of truth?

Irwin/McGraw-Hill 27 Service Recovery - How it Works Process Identification Incidents Remedies Cost of Incident Measurement of Frequency Customer Identification Mission Statement Cost of Poor Quality

Irwin/McGraw-Hill 28 Service Failsafing: Poka-Yokes Keeping a mistake from becoming a service defect. 57 A proactive approach

Irwin/McGraw-Hill 29 Service Failsafing: Poka-Yokes 58

Irwin/McGraw-Hill 30 Three Contrasting Service Designs The production line approach The self-service approach The personal attention approach 59

Irwin/McGraw-Hill 31 Designing the Service System Major Design Issues Product & Process are designed simultaneously Scheduling of Capacity due to uncertainty in demand inability to store inventory Dealing will uncertainty in demand preemptive tactics flexibility forecasting use of waiting lines 60

Irwin/McGraw-Hill 32 Characteristics of a Well-Designed Service System 1. Each element of the service system is consistent with the operating focus of the firm. 2. It is structured so that consistent performance by its people and systems is easily maintained. 3. It provides effective links between the back & front office so that nothing falls between the cracks. 4. It manages the evidence of service quality in such a way that customers see the value of the service. 5. The service system is: cost-effective user-friendly robust 61