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

Design of Products

Humor in Product Design As the customer wanted it. © 1984-1994 T/Maker Co. As Marketing interpreted it. © 1984-1994 T/Maker Co. As Operations made it. © 1984-1994 T/Maker Co. As Engineering designed it. © 1984-1994 T/Maker Co.

What is a Product? 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 This slide provides an opportunity to introduce the complex nature of a product. There are a number of examples one can discuss here: McDonald’s/ Burger King/Wendys (their product is more than hamburgers); your particular college or university; Microsoft; auto manufacturers.

Why Companies Design New Products and Services To be competitive To increase business growth and profits To avoid downsizing with development of new products To improve product quality To achieve cost reductions in labor or materials

Product or Service Design Activities Translate customer wants and needs into product and service requirements (marketing, operations) Refine existing products and services (marketing) Develop new products and services (marketing, operations) Formulate quality goals (marketing, operations) Formulate cost targets (accounting, finance, operations) Construct and test prototypes (operations, marketing, engineering) Document specifications Translate product and service specifications into process specifications (engineering, operations)

Reasons for Design or Re-Design The driving forces for product and service design or redesign are market opportunities or threats: Economic Social and Demographic Political, Liability, or Legal Competitive Cost or Availability Technological

Major Factors to be Considered in the (Product and Service) Design Strategy Function of product/service Cost Quality Time-to-market Appearance Customer satisfaction Ease of production/assembly Ease of maintenance/service Product and service design – or redesign – should be closely tied to an organization’s strategy

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 the simplest, most cost-effective manner Reduces time to market Minimizes revisions

Few Successes 2000 1500 1000 500 Development Stage 1000 500 100 Number of Ideas 1750 2000 Design review, Testing, Introduction Market requirement 1500 1000 Functional specifications 1000 500 Product specification 500 One success! 100 25 Development Stage

Key Questions (1 of 2) Is there a demand for it? Market size Demand profile Can we do it? Manufacturability - the capability of an organization to produce an item at an acceptable profit Serviceability - the capability of an organization to provide a service at an acceptable cost or profit

Key Questions (2 of 2) What level of quality is appropriate? Customer expectations Competitor quality Fit with the current offering Does it make sense from an economic standpoint? Liability issues, ethical considerations, sustainability issues, costs and profits

Legal Considerations Legal Considerations Product liability The responsibility a manufacturer has for any injuries or damages caused by as faulty product Some of the concomitant costs Litigation Legal and insurance costs Settlement costs Costly product recalls Reputation effects

Normative Behavior in Product Design Produce designs that are consistent with the goals of the organization e.g., Do not compromise on quality, or cut corners, even in areas that are not apparent to the customer Give customers the value they expect Make health and safety a concern Do not place employees, customers, or third parties at risk because of faulty products and services

Sustainability Sustainability Using resources in ways that do not harm the ecological systems that support human existence Key aspects of designing for sustainability Life cycle assessment Reduction of costs and materials used Re-using parts of returned products Recycling

Life Cycle Assessment (LCA) The assessment of the environmental impact of a product or service throughout its useful life Focuses on such factors as Global warming Smog formation Oxygen depletion Solid waste generation LCA procedures are part of the ISO 14000 environmental management procedures

Reduce: Costs and Materials Value Analysis/Value Engineering Examination of the function of parts and materials in an effort to reduce the cost and/or improve the performance of a product Achieve equivalent or better performance at a lower cost while maintaining all functional requirements defined by the customer Ratio of Value/Cost Value analysis focuses on design improvments during production

Common Questions Used in Value Analysis/ Value Engineering Could a less expensive part of material be used? Is the function necessary? Can the function of two or more parts be performed by a single part? Can a part be simplified? Could product specifications be relaxed? Could standard parts be substituted for non-standard parts?

Common Questions Used in Value Analysis/ Value Engineering Assessment of value : Can we do without it? Does it do more than is required Does it cost more than it is worth? Can something else do a better job Can it be made by less costly method, tools, material? Can it be made cheaper, better or faster by someone else? Does the item have any design features that are not necessary? Can two or more parts be combined into one? Are there nonstandard parts that can be eliminated

Benefits of VA/VE Benefits: simplified products additional standardization of products improved functional aspects of product improved job design and job safety improved maintainability of the product robust design reduction in cost

Cost Reduction of a Bracket via Value Engineering

Re-Use: Remanufacturing Refurbishing used products by replacing worn-out or defective components (and reselling the products) Can be performed by the original manufacturer or another company Design for disassembly (DFD) Designing products so that they can be easily taken apart Includes fewer parts and less material and using snap-fits where possible instead of screws or nuts and bolts

Recycle Recycling Recovering materials for future use Applies to manufactured parts Also applies to materials used during production Why recycle? Cost savings Environmental concerns Environmental regulations Design for recycling (DFR) Product design that takes into account the ability to disassemble a used product to recover the recyclable parts

Design for the Environment Design safe and environmentally sound (eg. recyclable) products 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

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

Benefits of Environmentally Friendly Designs 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

Design for the Environment

Other Considerations in Product and Service Design Product or service life cycles Standardization Product or service reliability Product or service robustness

Product or service life stages

Products in Various Stages of Life Cycle Sales Growth Maturity Decline CD-ROM Internet Introduction Jet Ski, fax machines Boeing 727 3 ½ Floppy disks Flat-screen monitors Time

Standardization Standardization Extent to which there is absence of variety in a product, service or process Standardized products are immediately available to customers

Advantages of Standardization (1 of 2) Fewer parts to deal with in inventory & manufacturing Design costs are generally lower Reduced training costs and time More routine purchasing, handling, and inspection procedures

Advantages of Standardization (2 of 2) Orders fillable from inventory Opportunities for long production runs and automation Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.

Disadvantages of Standardization Designs may be frozen with too many imperfections remaining. High cost of design changes increases resistance to improvements. Decreased variety results in less consumer appeal.

Designing for Mass Customization Mass customization: A strategy of producing basically standardized goods or services, but incorporating some degree of customization in the final product or service Facilitating Techniques Delayed differentiation Modular design

Delayed Differentiation Delayed differentiation is the process of producing but not quite completing a product or service until customer preferences or specifications are known It is a postponement tactic (produce a piece of furniture, but do not stain it until the customer chooses the stain)

Modular Design Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. Advantages easier diagnosis and remedy of failures easier repair and replacement simplification of manufacturing and assembly And it adds flexibility to both production and marketing Disadvantages Limited number of possible product configurations Limited ability to repair a faulty module; the entire module must be scrapped

Reliability Reliability: The ability of a product, part or system to perform its intended function under a prescribed set of conditions over a specified length of time. It is expressed as the probability that the product performs its intended function for a specified length of time Normal Operating Conditions: the set of conditions under which an item’s reliability is specified Maintainability: Ease and/or cost of maintaining/ repairing product

Computing Reliability (1 of 2) Components in series 0.90 0.90 x 0.90 = 0.81

Computing Reliability (2 of 2) 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

Robust Design Robust design A design that results in products or services that can function over a broad range of conditions A robust product is to be designed that is insensitive to environmental factors either in manufacturing or in use Pertains to product as well as process design Consider the following automobiles: Ferrari 599 Toyota Avalon Which is design is more robust?

Design for Robustness Product can fail due to poor design quality Products are subjected to many conditions Product is designed so that small variations in production or assembly do not adversely affect the product Design products for consistent performance Robust design studies Controllable factors - under designer’s control Uncontrollable factors - from user or environment Central feature is parameter design

Degree of Newness Product or service design changes can be in the form of: Modification of an existing product or service Expansion of an existing product line or service offering Clone of a competitor’s product or service New product or service The degree of change affects the newness of the product or service to the market and to the organization Risks and benefits?

Percent of Sales From New Product

Phases in Design & Development Idea generation Feasibility analysis Product specifications Process specifications Prototype development Design review Market test Product introduction Follow-up evaluation

Main Phases 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

Step 1: Idea Generation (1 of 5) Suppliers, distributors, salespersons, competitors Trade journals and other published material Warranty claims, customer complaints, failures Customer surveys, focus groups, interviews Field testing, trial users Research and development

Idea Generation (2 of 5) Supply-chain based Competitor based Research based

Supply-Chain Based (3 of 5) Ideas can come from anywhere in the supply chain: Customers Suppliers Distributors Employees Maintenance and repair personnel

Competitor-Based (4 of 5) By studying how a competitor operates and its products and services, many useful ideas can be generated Reverse engineering Dismantling and inspecting a competitor’s product to discover product improvements

Research Based (5 of 5) Research and Development (R&D) Organized efforts to increase scientific knowledge or product innovation & may involve: Basic research Has the objective of advancing the state of knowledge about a subject without any near-term expectations of commercial applications Applied research Has the objective of achieving commercial applications Development Converts the results of applied research into useful commercial applications.

Tools of Idea Generation Perceptual Maps Visual comparison of customer perceptions Benchmarking Comparing product/service against best-in-class Reverse engineering Dismantling and inspecting a competitor’s product to discover product improvements

Step 2: Feasibility Study Market Analysis Economic Analysis Technical / Strategic Analysis Performance Specifications are written for product concepts that pass the feasibility study

Step 3: Preliminary Design Create form & functional design Build prototype Test prototype Revise prototype Retest

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

3.2. Functional Design Relates to how the product performs Relates to the concept of Reliability and Maintainability

3.3. Production Design Part of the preliminary design phase Simplification Standardization Mass customization

3.3.1. Design Simplification (1 of 3) (a) The original design Assembly using common fasteners

3.3.1. Design Simplification (2 of 3) (b) Revised design One-piece base & elimination of fasteners (a) The original design Assembly using common fasteners

3.3.1. Design Simplification (3 of 3) (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

Steps 4&5: 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

Product Strategy Options Product differentiation Low cost Rapid response (product life cycles are becoming shorter, therefore faster developers of new products gain on slower developers and obtain a competitive advantage) Ask students to identify products or companies which rely on each of these strategies.

Improving the Design Process Design teams & concurrent design Design for manufacturing - Manufacturability Component commonality Design for assembly Design for disassembly Design to prevent failures and ensure value Design for the environment Measure design quality Utilize quality function deployment Utilize Computer Aided Design Design for robustness Engage in collaborative design

Organizing for Product Development (1 of 2) 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 team

Organizing for Product Development (2 of 2) Traditional Approach “We design it, you build it” or “Over the wall” Concurrent Engineering “Let’s work together simultaneously”

“Over the Wall” Approach Design Mfg New Product

Breaking Down Barriers to Effective Design

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

Concurrent Engineering: Defined Concurrent engineering is the bringing together of personnel from various functions together early in the design phase. CE can be defined as the simultaneous development of project design functions, with open and interactive communication existing among all team members for the purposes of reducing time to market, decreasing cost, and improving quality and reliability Time savings are created by performing activities in parallel

DFM and DFA Design for manufacturing (DFM) The designing of products that are compatible with an organization’s abilities Design for assembly (DFA) Design that focuses on: reducing the number of parts in a product the assembly methods the sequence of assembly operations

Design for Manufacturing and Assembly Design a product for easy & economical production Incorporate production design early in the design phase Taking into account the manufacturing capabilities (equipment, skills, types of materials, schedules, technologies) of the organization in designing goods The more general term “design for operations” encompasses services as well as manufacturing Improves quality, productivity and reduces costs Shortens time to design and manufacture

DFMA Guidelines Simplify products by reducing the number of separate parts Minimize the number of parts, tools, fasteners, and assemblies Use standard parts and repeatable processes Design parts for many uses Incorporate modularity in design Design for ease of assembly, minimal handling Allow for efficient testing and parts replacement

Design for Manufacturing and Assembly DFMA software allows designers to examine the integration of part designs before the product is manufactured. Answers are required for such questions as: During the operation of the product, does the part move relative to all other parts already assembled? Must the part be of a different material or be isolated from other parts already assembled? Must the part be separate from all other parts to allow the disassembly of the product for adjustment or maintenance?

Manufacturability Manufacturability Ease of fabrication and/or assembly It has important implications for Cost Productivity Quality

Component Commonality When products have a high degree of similarity in features and components, a part can be used in multiple products Benefits: Savings in design time Standard training for assembly and installation Opportunities to buy in bulk from suppliers Commonality of parts for repair Fewer inventory items must be handled

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 Value Analysis (VA)

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

Designing for the Customer: Quality Function Deployment (QFD) QFD is an approach that integrates the “voice of the customer” into the product and service development process. Translates customer preferences into specific product characteristics Enables to design for the customer Cross functional teams are used Displays requirements in matrix diagrams First matrix called “house of quality” Series of connected houses

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

House of Quality (1 of 2) Correlation matrix Design requirements Customer requirements Target values Relationship matrix Competitive assessment Importance 1 2 3 4 5 6

House of Quality (2of 2)

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

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

Technology in Design: Computer Aided Design (CAD) Product design using computer graphics 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.

Technology in Design CAD - Computer Aided Design Assists in creating and modifying designs CAE - Computer Aided Engineering Tests & analyzes designs on computer screen CAM refers to the use of specialized computer programs to direct and control manufacturing equipment CAD/CAM - Design & Manufacturing Automatically converts CAD data into processing instructions for computer controlled equipment

Benefits of CAD (1 of 2) Produces better designs faster Increases the productivity of designers, 3 to 10 times and thus allows more time for designers to work on creative projects Reduces costs and increases product quality Creates a database for manufacturing information on product specifications (Builds database of designs and creates documentation to support them) Shortens time to market

Benefits of CAD (1 of 2) Reduces time to manufacture Enlarges design possibilities Enhances communication and promotes innovation in design teams Provides the possibility of engineering and cost analysis on proposed designs CAD that includes finite element analysis (FEA) can significantly reduce time to market Enables developers to perform simulations that aid in the design, analysis, and commercialization of new products

Consistency is Important in Design 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

Kano Model Basic quality Performance quality Excitement quality Refers to customer requirements that have only limited effect on customer satisfaction if present, but lead to dissatisfaction if absent Performance quality Refers to customer requirements that generate satisfaction or dissatisfaction in proportion to their level of functionality and appeal Excitement quality Refers to a feature or attribute that was unexpected by the customer and causes excitement

The Kano Model

Trends in Product & Service Design (1 of 2) Increased emphasis on or attention to: Customer satisfaction (by translating customer wants and needs into product and service requirements) Reducing time to introduce new product or service Reducing time to produce product

Trends in Product & Service Design (2 of 2) Increased emphasis on or attention to: The organization’s capabilities to produce or deliver the item Refining existing products and services Environmental concerns Designing products & services that are “user friendly” Designing products that use less material

Global Product Design Virtual teams Uses combined efforts of a team of designers working in different countries Provides a range of comparative advantages over traditional teams such as: Engaging the best human resources around the world Possibly operating on a 24-hr basis Global customer needs assessment Global design can increase marketability

Design Guidelines (1 of 2) Produce designs that are consistent with the goals of the company Take into account the operations capabilities of the organization in order to achieve designs that fit with those capabilities Take into account the cultural differences related to product design (for multinationals) Give customers the value they expect Make health and safety a primary concern Consider potential harm to the environment

Design Quidelines (2 of 2) Increased emphasis on components commonality Package products and services Use multiple-use platforms Consider tactics for mass customization Look for continual improvement Shorten time to market