5 Product and Service Design

4-1 Product and Service Design
CHAPTER
Product and Service Design
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. Stevenson Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Design Process
Copyright 2011 John
4-2
Product and Service Design
Major factors in design strategy
Cost Quality Time-to-market Customer satisfaction Competitive advantage

Product and service design or redesign should be closely tied to an organizations strategy
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
Reasons for Product or Service Design

Economic Social and demographic Political, liability, or legal Competitive Technological
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
Designing For Operations
Taking into account the capabilities of the organization in designing goods and services
Legal, Ethical, and Environmental Issues
Legal
FDA, OSHA, IRS Product liability Uniform commercial code

Ethical
Releasing products with defects
Environmental
EPA
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.
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
Other Issues in Product and Service Design
Product/service life cycles How much standardization Product/service reliability Range of operating conditions
Product Life Cycle
Introduction Growth Maturity Decline
Product Life Cycle Introduction
Fine tuning
research product development process modification and enhancement supplier development
Product Life Cycle Growth
Product design begins to stabilize Effective forecasting of capacity becomes necessary Adding or enhancing capacity may be necessary
Product Life Cycle Maturity
Competitors now established High volume, innovative production may be needed Improved cost control, reduction in options, paring down of product line
Product Life Cycle Decline
Unless product makes a special contribution, must plan to terminate offering
Product Life Cycle, Sales, Cost, and Profit

Cost of Development & Manufacture
Sales, Cost & Profit .
Sales Revenue
Profit Loss
Growth
Cash flow Time
Introduction
Maturity
Decline
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
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.
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
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 items reliability is specified
Computing Reliability
Components in series 0.90 0.90
0.90 x 0.90 = 0.81
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Computing Reliability
Components in parallel
0.90 R2 0.95 + 0.90(1-0.95) = 0.995 R1
0.95
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System Reliability
0.90
0.98
0.92
0.98
0.98
0.92+(1-0.92)(0.90)=0.99
0.98
0.98 x 0.99 x 0.98 = 0.951
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Improving Reliability
Component design Production/assembly techniques Testing Redundancy/backup
Preventive maintenance procedures

User education
System design
Robust Design
Robust Design: Design that results in products or services that can function over a broad range of conditions
Design for Robustness
Robust product
designed to withstand variations in environmental and operating conditions yields a product or service designed to withstand variations
Robust design
Controllable factors
design parameters such as material used, dimensions, and form of processing

users control (length of use, maintenance, settings, etc.)
Uncontrollable factors
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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
Product Development Stages
Scope of product development team
Idea generation Assessment of firms ability to carry out Customer Requirements Functional Specification Scope of design for Product Specifications manufacturability and Design Review value engineering teams Test Market Introduction to Market Evaluation
Idea Generation
Supply chain based
Ideas
Competitor based
Research based
Idea Generation Stage
Provides basis for entry into market Sources of ideas
Market need (60-80%); engineering & operations (20%); technology; competitors; inventions; employees Identifies, defines, & selects best market opportunities
Follows from marketing strategy
Customer Requirements Stage
Identifies & positions key product benefits

Stated in core benefits proposition (CBP) Example: Long lasting with more power (Sears Die Hard Battery)
Identifies detailed list of product attributes desired by customer
House of Quality
Product Characteristics
Focus groups or 1-on-1 interviews

Customer Requirements
Functional Specification Stage
Defines product in terms of how the product would meet desired attributes Identifies products engineering characteristics Example: printer noise (dB) Prioritizes engineering characteristics May rate product compared to competitors
House of Quality
Customer Requirements
Product Specification Stage
Determines how product will be made Gives products physical specifications Example: Dimensions, material etc. Defined by engineering drawing House of Quality Done often on computer Computer-Aided Component Design (CAD) Specifications
Reverse Engineering
Reverse engineering is the dismantling and inspecting of a competitors 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
Value Engineering
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
Concurrent Engineering
Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase.
Concurrent Design
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4-45
Humor in Product Design

As Marketing interpreted it.
As the customer wanted it.
1984-1994 T/Maker Co.
1984-1994 T/Maker Co.
As Operations made it.
As Engineering designed it.
1984-1994 T/Maker Co.
1984-1994 T/Maker Co.
PowerPoint presentation to accompany Heizer/Render -
5-46
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
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
Product Documents
Engineering drawing

Shows dimensions, tolerances, & materials Shows codes for Group Technology Lists components, quantities & where used Shows product structure
Bill of Material
1984-1994 T/Make
Engineering Drawing Example
13/16 diameter
2-1/2 1
13/32 diameter
1/4 R 2-1/4
45 3/8 1-5/8 13/16
13/16 5/16
Bracket
Scale: FULL Drawn: J. Thomas
A- 435-038
Engineering Drawings - Show Dimensions, Tolerances, etc.
Bill of Material Example
1995 Corel Corp.
Bill of Material P/N: 1000 Name: Bicycle P/N Desc Qty 1001 Handle Bars 1 1002 Frame Assy 1 1003 Wheels 2 1004 Frame 1
Units Level Each 1 Each 1 Each 2 Each 2
Bill of Materials Manufacturing Plant and Fast-Food Restaurant

Bill of Material for a Panel Weldment Hard Rock Cafs Hickory BBQ Bacon Cheeseburger Qt y 1 Description Qty Number
A60-71
Description
Panel Weldmt
A 60-7 R 60-17 R 60-428 P 60-2

60-72 R 60-57-1 A 60-4 02-50-1150 A 60-73 A 60-74 R 60-99 02-50-1150
Lower Roller Assembly Roller Pin Locknet

Guide Assem. Rear Support Angle Roller Assem. Bolt Guide Assm, Front Support Weldmt Wear Plate Bolt
1 1 1 1
1 1 1 1 1 1 1 1
Bun Hamburger Patty Cheddar Cheese Bacon BBQ Onions Hickory BBQ Sauce Burger Set Lettuce Tomato Red Onion Pickle French Fries Seasoned Salt 11-inch Plate HRC Flag
1 8 oz. 2 slices 2 strips cup 1 oz. 1 leaf 1 slice 4 rings 1 slice 5 oz. 1 tsp 1 1
PowerPoint presentation to accompany Heizer/Render -
5-52
2004 by Prentice Hall, Inc., Upper Saddle River, N.J.
Assembly Drawing
Shows exploded view of product
Head
Neck
End Cap
Handle
Assembly Chart for A Tuna Sandwich
Tuna Fish SA1 Tuna Assy
A1
Sandwich
Mayonnaise
FG
Bread
A2
Assembly Drawing and Assembly Chart
Route Sheet
Lists all operations

Route Sheet for Bracket
Sequence 1 2 3 4 Machine Shear # 3 Shear # 3 Drill press Brake press Operation Shear to length Shear 45 corners Drill both holes Bend 90 Setup Time 5 8 15 10 Operation Time/Unit .030 .050 3.000 .025
Work Order
Authorizes producing a given item, usually to a schedule
1984-1994 T/Maker Co.
Engineering Change Notice (ECN)
A correction or modification of an engineering drawing or bill of material
Service Design
Service
Something that is done to or for a customer
Service delivery system
The facilities, processes, and skills needed to provide a service The combination of goods and services provided to a customer The physical resources needed to perform the service
Product bundle
Service package
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
Phases in Service Design
1.
2. 3. 4.
5.
Conceptualize Identify service package components Determine performance specifications Translate performance specifications into design specifications Translate design specifications into delivery specifications
Service Design Process
Copyright 2011 John
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
Major Steps in Service Blueprinting

1.
2. 3. 4. 5.
6.
Establish boundaries Identify steps involved Prepare a flowchart Identify potential failure points Establish a time frame Analyze profitability
Copyright 2011 John
Copyright 2011 John
Characteristics of Well Designed Service Systems
1.
2. 3.
4.
5. 6.
7.
8. 9.
Consistent with the organization mission User friendly Robust Easy to sustain Cost effective Value to customers Effective linkages between back operations Single unifying theme Ensure reliability and high quality
Challenges of Service Design
Variable requirements Difficult to describe High customer contact Service customer encounter
High vs. Low Contact Services

High-Contact Service Low-Contact Service
Design Decision
Facility location
Facility layout
Convenient to customer
Near labor or transportation source
Must look presentable, accommodate customer needs, and facilitate interaction with customer
Designed for efficiency
Copyright 2011 John

High-Contact Service
Design Decision
Low-Contact Service
Measured against established standards; testing and rework possible to correct defects
Quality control
More variable since customer is involved in process; customer expectations and perceptions of quality may differ; customer present when defects occur
Excess capacity required to handle peaks in demand
Capacity
Planned for average demand
Copyright 2011 John

Design Decision
Low-Contact Service
Technical skills
Worker skills
Must be able to interact well with customers and use judgment in decision making
Must accommodate customer schedule
Scheduling
Customer concerned only with completion date
Copyright 2011 John

Design Decision
Low-Contact Service
Mostly backroom activities; planned and executed with minimal interference Fixed, less extensive
Service process
Mostly front-room activities; service may change during delivery in response to customer
Service package
Varies with customer; includes environment as well as actual service
Copyright 2011 John
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.
The House of Quality
Figure 4.4
Correlation matrix
Design requirements
Customer requirements
Relationship matrix
Competitive assessment
Specifications or target values
House of Quality Example

Correlation:
X X X
Figure 4.5
Strong positive Positive Negative Strong negative
X = Us A = Comp. A B = Comp. B (5 is best) 1 2 3 4
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
Competitive evaluation
Customer Requirements Easy to close
7 5 3 3 2
Reduce energy level to 7.5 ft/lb
X X AB
AB
Stays open on a hill

Easy to open Doesnt leak in rain No road noise Importance weighting Target values
XAB A XB X A B
63
63
Maintain current level
45
Reduce force to 9 lb.
27
Reduce energy to 7.5 ft/lb.
6
27
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
Operations Strategy
1. 2. 3. 4.
5. 6. 7. 8. 9.
Invest in R & D Shift from short-term to long-term focus Continuous Improvement Increase emphasis on component commonality Package products and services Use multiple-use platforms Consider tactics for mass customization Look for continual improvement Shorten time to market
Shorten Time to Market
1. Use standardized components 2. Use technology 3. Use concurrent engineering

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4-1 Product and Service Design

Product and Service Design

4-2 Product and Service Design

Copyright 2011 John

4-3 Product and Service Design

Product and Service Design

Major factors in design strategy

Cost Quality Time-to-market Customer satisfaction Competitive advantage

4-4 Product and Service Design

Product or Service Design Activities

4-5 Product and Service Design

Reasons for Product or Service Design

Economic Social and demographic Political, liability, or legal Competitive Technological

4-6 Product and Service Design

Objectives of Product and Service Design

Function of product/service Cost/profit Quality Appearance Ease of production/assembly Ease of maintenance/service

4-7 Product and Service Design

Designing For Operations

4-8 Product and Service Design

Legal, Ethical, and Environmental Issues

FDA, OSHA, IRS Product liability Uniform commercial code

Releasing products with defects

4-9 Product and Service Design

Regulations & Legal Considerations

4-10 Product and Service Design

Designers Adhere to Guidelines

4-11 Product and Service Design

Other Issues in Product and Service Design

4-12 Product and Service Design

Product Life Cycle

Introduction Growth Maturity Decline

4-13 Product and Service Design

Product Life Cycle Introduction

research product development process modification and enhancement supplier development

4-14 Product and Service Design

Product Life Cycle Growth

4-15 Product and Service Design

Product Life Cycle Maturity

4-16 Product and Service Design

Product Life Cycle Decline

Unless product makes a special contribution, must plan to terminate offering

4-17 Product and Service Design

Product Life Cycle, Sales, Cost, and Profit

Sales, Cost & Profit .

4-18 Product and Service Design

Extent to which there is an absence of variety in a product, service or process

Standardized products are immediately available to customers

4-19 Product and Service Design

Reduced training costs and time

4-20 Product and Service Design

Advantages of Standardization (Contd)

4-21 Product and Service Design

Designs may be frozen with too many imperfections remaining.

High cost of design changes increases resistance to improvements.

4-22 Product and Service Design

4-23 Product and Service Design

Delayed differentiation is a postponement tactic

4-24 Product and Service Design

easier diagnosis and remedy of failures

easier repair and replacement