Chapter 3 Products and Services

Product Design Specifies materials Determines dimensions & tolerances Defines appearance Sets performance standards

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

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

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

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 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 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 (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

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

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

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

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

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