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

2. Design of Products

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

4. 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?

5. Major factors in design strategy Cost Quality Time-to-market Customer satisfaction Competitive advantage Product and Service Design Product and service design – or redesign – should be closely tied to an organization’s strategy

6. 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 Product or Service Design Activities

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

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

9. Degree of Newness of a Product/Service 1. 1.Modification of an existing product/service 2. 2.Expansion of an existing product/service 3. 3.Clone of a competitor’s product/service 4. 4.New product/service

10. Degree of Design Change Type of Design Change Newness of the organization Newness to the market ModificationLow ExpansionLow CloneHighLow NewHigh

11. 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

12. 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

13. 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

14. Main Reasons for Product or Service Design Economic Social and demographic Political, liabili Cost or availability Competitive Technological

15. Objectives of Product and Service Design Main focus – –Customer satisfaction Secondary focus – –Function of product/service – –Cost/profit – –Quality – –Appearance – –Ease of production/assembly – –Ease of maintenance/service

16. 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

17. Few Successes 0 500 1000 1500 2000 Development Stage Number of 1000 Market requirement Design review, Testing, Introduction 25 Ideas 1750 Product specification 100 Functional specifications One success! 500

18. Stages in the Design Process 1.Idea Generation — Product Concept 2.Feasibility Study — Performance Specifications 3.Preliminary Design — Prototype 4.Final Design — Final Design Specifications 5.Process Planning — Manufacturing Specifications

19. 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 MarketingCompetitors

20. Step 1: Idea Generation 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

21. 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.

22. More Idea Generators 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

23. Perceptual Map of Breakfast Cereals (1 of 2) HIGH NUTRITION LOW NUTRITION GOOD TASTE BAD TASTE

24. Perceptual Map of Breakfast Cereals (2 of 2) HIGH NUTRITION LOW NUTRITION GOOD TASTE Cocoa Puffs BAD TASTE RiceKrispies Wheaties Cheerios ShreddedWheat

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

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

27. 3.1. Form Design (How the Product Looks) Cellular Personal Safety Alarm Personal Computer

28. 3.2. Functional Design (How the Product Performs) 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 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

29. How to improve Reliability  Component design  Production/assembly techniques  Testing  Redundancy/backup  Preventive maintenance procedures  User education  System design

30. 3.3. Production Design Part of the preliminary design phase Simplification Standardization Mass customization

31. 3.3.1. Design Simplification (1 of 3) (a) The original design Assembly using common fasteners

32. 3.3.1. Design Simplification (2 of 3) (a) The original design Assembly using common fasteners (b) Revised design One-piece base & elimination of fasteners

33. 3.3.1. Design Simplification (3 of 3) (a) The original design Assembly using common fasteners (b) Revised design One-piece base & elimination of fasteners (c) Final design Design for push-and-snap assembly

34. 3.3.2. Standardization Standardization Extent to which there is absence of variety in a product, service or process Standardized products are immediately available to customers

35. 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

36. 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.

37. 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.

38. Mass customization: A strategy of producing basically standardized goods or services, but incorporating some degree of customization by: – –Delayed differentiation – –Modular design 3.3.3. Mass Customization

39. Delayed differentiation is a postponement tactic   Producing but not quite completing a product or service until customer preferences or specifications are known 3.3.3.1. Delayed Differentiation

40. 3.3.3.2. 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 And it adds flexibility to both production and marketing

41. 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

42. Improving the Design Process Design teams & concurrent design Design for manufacture & assembly Design for disassembly Design to prevent failures and ensure value Design for environment Measure design quality Utilize quality function deployment Utilize Computer Aided Design Design for robustness Engage in collaborative design

43. 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

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

45. “Over the Wall” Approach Design Mfg New Product

46. Breaking Down Barriers to Effective Design

47. Design Teams Marketing, manufacturing, engineering Suppliers, dealers, customers Lawyers, accountants, insurance companies

48. 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

49. Concurrent Design Improves quality of early design decisions Scheduling and management can be complex as tasks are done in parallel

50. Design for Manufacture and Assembly Design a product for easy & economical production Incorporate production design early in the design phase Taking into account the manufacturing capabilities 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

51. DFM Guidelines 1.Simplify products by reducing the number of separate parts 2.Minimize the number of parts, tools, fasteners, and assemblies 3.Use standard parts and repeatable processes 4.Design parts for many uses 5.Incorporate modularity in design 6.Design for ease of assembly, minimal handling 7.Allow for efficient testing and parts replacement

52. Design for Assembly (DFA) Procedure for reducing the number of parts Evaluate methods for assembly Determine the sequence of assembly operations

53. Design for Disassembly Designing products so that they can be more easily taken apart. Includes fewer parts and less material and using snap-fits where possible instead of screws or nuts and bolts

54. Value Analysis/Value Engineering (VA/VE) ( 1 of 4) 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 improvements during production

55. Value Analysis/Value Engineering (2 of 4) 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? 7. Does the item have any design features that are not necessary? 8. Can two or more parts be combined into one?

56. Benefits of VA/VE (3 of 4) 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

57. Cost Reduction of a Bracket via Value Engineering (4 of 4)

58. Design for 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 Recycling: Recovering materials for future use

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

60. Design for Environment

61. 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 Displays requirements in matrix diagrams First matrix called “house of quality” Series of connected houses

62. 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

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

64. House of Quality Example Customer requirements information forms the basis for this matrix, used to translate them into operating or engineering goals.

65. 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: Computer Aided Design (CAD)

66. Benefits of CAD Produces better designs faster Builds database of designs and creates documentation to support them Shortens time to market Reduces time to manufacture Enlarges design possibilities Enhances communication and promotes innovation in design teams Provides possibility of engineering and cost analysis on proposed designs

67. Design for Robustness Product can fail due to poor design quality Products subjected to many conditions Robust Design 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 Robust design studies Controllable factors - under designer’s control Uncontrollable factors - from user or environment Design products for consistent performance

68. Consistency is Important 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

69. Remanufacturing Refurbishing used products by replacing worn out or defective components and reselling the products.

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

71. The Kano Model

72. 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

73. 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

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

75. Design of Services

76. Characteristics of Services (1 of 2) 1.Services are acts, they are intangible but highly visible to the customers 2.Services are idiosyncratic 3.Services are created and delivered at the same time and are not consumed but experienced, cannot be inventoried. 4.Service requirements are variable 5.Service have customer contact 6.Services are perishable

77. Characteristics of Services (2 of 2) 7. 7.Services have low barriers to entry 8. 8.Location is yimportant for service 9. 9.Service inseparable from delivery 1. 1.Tend to be decentralized and dispersed 2. 2.Consumed more often than products 3. 3.Services can be easily emulated

78. Service Businesses Defined Facilities-based services: Where the customer must go to the service facility Field-based services: Where the production and consumption of the service takes place in the customer’s environment A service business is the management of organizations whose primary business requires interaction with the customer to produce the service

79. Internal Services Defined Internal Supplier Internal Customer External Customer Internal services is the management of services required to support the activities of the larger organization. Services including data processing, accounting, etc

80. Differences Between Product and Service Design (1 of 2)  Service design often focuses more on intangible factors  Less latitude in finding and correcting errors before the customer, so training & process design are important  As services are noninventoriable, capacity issues are very important

81. Differences Between Product and Service Design (2 of 2)  Services are highly visible to consumers and must be designed with that in mind  Some services have low barriers to entry and exit, so service design has to be innovative and cost-effective  As convenience is a major factor, location is important to service design  Service design with high customer contact generally requires inclusion of the service delivery package

82. Service Delivery System Components of service delivery system:  Facilities  Processes  Skills

83. Service Design Service design involves –The physical resources needed –The goods that are purchased or consumed by the customer –Explicit services –Implicit services

84. Service Demand Variability   Demand variability creates waiting lines and idle service resources   Service design perspectives:   Cost and efficiency perspective   Customer perspective   Customer participation makes quality and demand variability hard to manage   Attempts to achieve high efficiency may depersonalize service and change customer’s perception of quality

85. Phases in Service Design Determine performance specifications Translate performance specifications into design specifications Translate design specifications into delivery specifications

86. Service Systems Service systems range from those with little or no customer contact to very high degree of customer contact such as: – –Insulated technical core (software development) – –Production line (automatic car wash) – –Personalized service (hair cut, medical service) – –Consumer participation (diet program) – –Self service (supermarket)

87. Service-System Design Matrix 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 Internet & on-site technology Sales Opportunity Production Efficiency

88. Phases in Service Design 1.Conceptualize 2.Identify service package components 3.Determine performance specifications 4.Translate performance specifications into design specifications 5.Translate design specifications into delivery specifications

89. Service Blueprinting   Service blueprinting   A method used in service design to describe and analyze a proposed service   A useful tool for conceptualizing a service delivery system

90. Major Steps in Service Blueprinting 1.Establish boundaries 2.Identify sequence of customer interactions Prepare a flowchart 3.Develop time estimates 4.Identify potential failure points

91. Example of Service Blueprinting

92. Service Fail-safing Poka-Yokes (A Proactive Approach) Keeping a mistake from becoming a service defect How can we fail- safe the three Ts? Task TangiblesTreatment

93. Have we compromised one of the 3 Ts? 1. 1.Task 2. 2.Treatment 3. 3.Tangible 1. 1.Task 2. 2.Treatment 3. 3.Tangible

94. Characteristics of a Well- Designed Service System (1 of 2) 1. Each element of the service system is consistent with the operating focus of the firm 2. It is user-friendly 3. It is robust and easy to sustain 4. It is structured so that consistent performance by its people and systems is easily maintained

95. Characteristics of a Well-Designed Service System (2 of 2) 5. It provides effective links between the back office and the front office so that nothing falls between the cracks 6. It manages the evidence of service quality in such a way that customers see the value of the service provided 7. It is cost-effective 8. It ensures reliability and high quality

96. Challenges of Service Design 1.Variable requirements 2.Difficult to describe 3.High customer contact 4.Service – customer encounter

97. Guidelines for Successful Service Design 1.Define the service package 2.Focus on customer’s perspective 3.Consider image of the service package 4.Recognize that designer’s perspective is different from the customer’s perspecticve 5.Make sure that managers are involved 6.Define quality for tangible and intangibles 7.Make sure that recruitment, training and rewards are consistent with service expectations 8.Establish procedures to handle exceptions 9.Establish systems to monitor service