Product and Service Design Chapter 4

Product or Service Design Activities Translate customer wants and needs into product and service requirements Refine existing products and services Develop new products and services Formulate quality goals Formulate cost targets Construct and test prototypes Document specifications Note that we take product and service together. This follows in that the processes for the design for both are similar.

Product and Service Design Major factors in design strategy Cost Quality Time-to-market Customer satisfaction Competitive advantage We will tie in these factors during class during a lecture and new product development and TQM (Total Quality Management). Product and service design – or redesign – should be closely tied to an organization’s strategy

Reasons for Product or Service Design Economic Social and demographic Political, liability, or legal Competitive Cost or availability Technological These reasons listed above, either separately or in some combination, could trigger an effort in a company for new product or service design.

Objectives of Product and Service Design Main focus Customer satisfaction Understand what the customer wants Secondary focus Function of product/service Cost/profit Quality Appearance Ease of production/assembly Ease of maintenance/service This customer focus in particularly applicable to a firm in a very competitive environment.

Designing For Operations Taking into account the capabilities of the organization in designing goods and services. Failure to take this into account can: Reduce productivity Reduce quality Increase costs The company must have the talent, capacity, and other resources to successfully carry out the new design. Or, find a way to get the talent, capacity, and other necessary resources.

Legal, Ethical, and Environmental Issues FDA, OSHA, IRS Product liability Uniform commercial code Ethical Releasing products with defects Environmental EPA The above slide reflects the business environment that must be faced by business organizations in the real world. Companies must first anticipate what could go wrong in any of the above areas (i.e., legal, ethical, and environmental).

Regulations & Legal Considerations Product Liability - A manufacturer is liable for any injuries or damages caused by a faulty product. Uniform Commercial Code - Products carry an implication of merchantability and fitness. Product liability can fall on any member or members in the supply chain, and the one with the deepest pockets tends to get the biggest hit from a lawsuit if a product is harmful. The UCC acts as an implied warranty for products in almost all of the states in the USA. It applies only to products and not services, unless the services are bundled with the product [e.g., such as buying computer hardware (a product) that comes with a service for updates (service)].

Designers Adhere to Guidelines Produce designs that are consistent with the goals of the company Give customers the value they expect Make health and safety a primary concern Consider potential harm to the environment Note item 2, which relates to satisfying the customer, especially if the company is in a competitive market.

Other Issues in Product and Service Design Product/service life cycles How much standardization Mass customization Product/service reliability Robust design Degree of newness Cultural differences The above considerations must also be considered by management for a successful product or service design.

Life Cycles of Products or Services Time Introduction Growth Maturity Saturation Decline Demand

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

Advantages of Standardization 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 Quality is more consistent

Advantages of Standardization (Cont’d) 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.

Mass Customization Mass customization: A strategy of producing standardized goods or services, but incorporating some degree degree of customization Delayed differentiation Modular design Definitions to clarify the above slide and the two slides that follow are in the margins of your textbook on pp 146-147.

Delayed Differentiation Delayed differentiation is a postponement tactic Producing but not quite completing a product or service until customer preferences or specifications are known

Modular Design Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. It allows: easier diagnosis and remedy of failures easier repair and replacement simplification of manufacturing and assembly

Reliability Reliability: The ability of a product, part, or system to perform its intended function under a prescribed set of conditions Failure: Situation in which a product, part, or system does not perform as intended Normal operating conditions: The set of conditions under which an item’s reliability is specified The above must also be consistent with customer expectations in competitive industries.

Improving Reliability Component design Production/assembly techniques Testing Redundancy/backup Preventive maintenance procedures User education System design Obviously, this is of great concern to airline manufactures.

Product Design Robust Design Concurrent Engineering Computer-Aided Design Modular Design Concurrent engineering brings together design and manufacturing engineers early in the design phase.

Robust Design Robust Design: Design that results in products or services that can function over a broad range of conditions

Taguchi Approach Robust Design Design a robust product Insensitive to environmental factors either in manufacturing or in use. Central feature is Parameter Design. Determines: factors that are controllable and those not controllable their optimal levels relative to major product advances As stated on page 148, this approach is controversial

Degree of Newness Modification of an existing product/service Expansion of an existing product/service Clone of a competitor’s product/service New product/service

Cultural Differences Multinational companies must take into account cultural differences related to the product design. Notable failures: Chevy Nova in Mexico Ikea beds in U.S.

Concurrent Engineering Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase.

Computer-Aided Design Computer-Aided Design (CAD) is product design using computer graphics. increases productivity of designers, 3 to 10 times creates a database for manufacturing information on product specifications provides possibility of engineering and cost analysis on proposed designs

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

Idea Generation Supply chain based Competitor based Research based Ideas Competitor based To make this work for supply chain based idea generation, supplier relationships management must be effective. The second item refers to studying the competitor’s successes and failures. The third improves scientific knowledge and/or product innovation. Research based

Reverse Engineering Reverse engineering is the dismantling and inspecting of a competitor’s product to discover product improvements.

Research & Development (R&D) Organized efforts to increase scientific knowledge or product innovation & may involve: Basic Research advances knowledge about a subject without near-term expectations of commercial applications. Applied Research achieves commercial applications. Development converts results of applied research into commercial applications.

Manufacturability Manufacturability is the ease of fabrication and/or assembly which is important for: Cost Productivity Quality The prototype must be mass produced with reasonable cost, at an acceptable level of productivity, and meet the customer’s expectations for quality.

Designing for Manufacturing Beyond the overall objective to achieve customer satisfaction while making a reasonable profit is: Design for Manufacturing(DFM) The designers’ consideration of the organization’s manufacturing capabilities when designing a product. The more general term design for operations encompasses services as well as manufacturing

Product design Design for manufacturing (DFM) Design for assembly (DFA) Design for recycling (DFR) Remanufacturing Design for disassembly (DFD) Robust design

Recycling Recycling: recovering materials for future use Recycling reasons Cost savings Environment concerns Environment regulations

This is the end of the presentation for Chapter 4 on Product and Service Design