4-1

Product and Service Design

SYSTEMS DESIGN
Chapter Four Product and Service Design Chapter Four Supplement Reliability Chapter Five Capacity Planning Chapter Five Supplement Decision Theory Chapter Six Process Design and Facility Layout Chapter Six Supplement Linear Programming Chapter Seven Design of Work Systems Chapter Seven Supplement Learning Curves Chapter Eight Location Planning and Analysis Chapter Eight Supplement The Transportation Model

PART THREE

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-2

Product and Service Design

Chapter 4

Product and Service Design

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-3

Product and Service Design

Product and Service Design Major factors in strategy

Cost Quality Time-to-market Customer satisfaction Competitive advantage

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-4

Product and Service Design

Trends in Product & Service Design Increased emphasis on or attention to:

Customer satisfaction Reducing time to introduce new product or service Reducing time to produce product

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-5

Product and Service Design

Trends in Product & Service Design (Contd) Increased emphasis on or attention to:
The organizations capabilities to produce or deliver the item Environmental concerns

Designing products & services that are user friendly

Designing products that use less material

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-6

Product and Service Design

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

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-7

Product and Service Design

Reasons for Product or Service Design

Be competitive Increase business growth & profits Avoid downsizing with development of new products

Improve product quality

Achieve cost reductions in labor or materials
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McGraw-Hill/Irwin

4-8

Product and Service Design

Objectives of Product and Service Design Development time and cost Product or service cost Resulting product or service quality Capability to produce or deliver a given product or service

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-9

Product and Service Design

Design For Operations Taking into account the capabilities of the organization in designing goods and services

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-10

Product and Service Design

The Kano Model

Kano Model

Customer Satisfaction

Excitement Expected Must Have

Customer Needs

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-11

Product and Service Design

Sources of Ideas for Products and Services Internal

Employees Marketing department R&D department

External
Customers (QFD) Competitors Suppliers

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-12

Product and Service Design

Quality Function Deployment Quality Function Deployment

Voice of the customer House of quality

QFD: An approach that integrates the voice of the customer into the product and service development process.

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-13

Product and Service Design

Reverse Engineering

Reverse engineering is the dismantling and inspecting of a competitors product to discover product improvements.

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-14

Product and Service Design

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.

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-15

Product and Service Design

Legal, Ethical, and Environmental Issues Legal

FDA, OSHA, IRS Product liability Uniform commercial code

Ethical
Releasing products with defects

Environmental
EPA

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-16

Product and Service Design

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.

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-17

Product and Service Design

Product Design Product Life Cycles Robust Design Concurrent Engineering Computer-Aided Design Modular Design

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-18

Product and Service Design

Life Cycles of Products or Services

Figure 4-2

Saturation
Maturity

Deman d

Decline
Growth

Incubation

Time
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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-19

Product and Service Design

Advantages of Standardization Fewer parts to deal with in inventory & manufacturing Reduced training costs and time More routine purchasing, handling, and inspection procedures

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-20

Product and Service Design

Advantages of Standardization (Contd) 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.

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-21

Product and Service Design

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.

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-22

Product and Service Design

Mass Customization Mass customization:

A strategy of producing standardized goods or services, but incorporating some degree degree of customization Delayed differentiation Modular design

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-23

Product and Service Design

Delayed Differentiation Delayed differentiation is a postponement tactic

Producing but not quite completing a product or service until customer preferences or specifications are known

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-24

Product and Service Design

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

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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-25

Product and Service Design

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 items reliability is specified

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-26

Product and Service Design

Improving Reliability Component design Production/assembly techniques Testing Redundancy/backup Preventive maintenance procedures User education

System design
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-27

Product and Service Design

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

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-28

Product and Service Design

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
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-29

Product and Service Design

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 organizations manufacturing capabilities when designing a product. The more general term design for operations encompasses services as well as manufacturing

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-30

Product and Service Design

Concurrent Engineering

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

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-31

Product and Service Design

Over the Wall Approach

New Product

Mfg
McGraw-Hill/Irwin

Design
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-32

Product and Service Design

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

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-33

Product and Service Design

Manufacturability
Manufacturability is the ease of fabrication and/or assembly which is important for:
Cost Productivity

Quality

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-34

Product and Service Design

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

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-35

Product and Service Design

Recycling Recycling: recovering materials for future use Recycling reasons

Cost savings Environment concerns Environment regulations

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-36

Product and Service Design

Differences Between Product and Service Design

Tangible intangible Services created and delivered at the same time Services cannot be inventoried Services highly visible to customers Services have low barrier to entry Location important to service

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-37

Product and Service Design

Service Variability & Customer Figure 4-3 Influence Service Design

High
Variability in Service Requirements

Customized Clothing Dept. Store Purchase Telephone Purchase Internet Purchase None

Moderate Low

None

Low

Moderate

High

Degree of Contact with Customer

McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-38

Product and Service Design

Quality Function Deployment Quality Function Deployment

Voice of the customer House of quality

QFD: An approach that integrates the voice of the customer into the product and service development process.

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-39

Product and Service Design

The House of Quality

Figure 4-5

Correlation matrix

Design requirements

Customer requirements

Relationship matrix

Competitive assessment

Specifications or target values

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

4-40

Product and Service Design

House of Quality Example

Correlation:
X X X

Water resistance

Accoust. Trans. Window

Energy needed to close door

Door seal resistance

Engineering Characteristics

Check force on level ground Energy needed to open door

Strong positive Positive Negative Strong negative

X = Us A = Comp. A B = Comp. B (5 is best) 1 2 3 4

Competitive evaluation

Customer Requirements Easy to close Stays open on a hill Easy to open

7 5 3 3 2
Reduce energy level to 7.5 ft/lb

X
X AB

AB

XAB A XB

Doesnt leak in rain

No road noise Importance weighting Target values

X A

10

6
Maintain current level

6
Reduce force to 9 lb.

9
Reduce energy to 7.5 ft/lb.

2
Maintain current level

3
Maintain current level

Relationships:
Strong = 9 Medium = 3 Small = 1

Technical evaluation (5 is best)

5 4 3 2 1

B A X

BA X

B A X

B X A

BXA

BA X

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4-41

Product and Service Design

Operations Strategy Shorten time-to-market Package products and services Increase emphasis on component commonality Use multiple-use platforms Consider tactics for mass customization Look for continual improvement

McGraw-Hill/Irwin

Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.