OMChap004

Report
4-1 Product and Service Design
Operations Management
William J. Stevenson
8th edition
4-2 Product and Service Design
CHAPTER
4
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.
4-3 Product and Service Design
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 organization’s strategy
4-4 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
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

Main focus


Customer satisfaction
Secondary focus

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

Taking into account the capabilities of the
organization in designing goods and
services
4-8 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
4-9 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.
4-10 Product and Service Design
Designers Adhere to Guidelines

Produce designs that are consistant 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
4-11 Product and Service Design
Other Issues in Product and Service Design

Product/service life cycles
 How much standardization
 Product/service reliability
 Range of operating conditions
4-12 Product and Service Design
Life Cycles of Products or Services
Figure 4.1
Saturation
Deman
d
Maturity
Decline
Growth
Introduction
Time
4-13 Product and Service Design
Standardization

Standardization


Extent to which there is an absence of variety
in a product, service or process
Standardized products are immediately
available to customers
4-14 Product and Service Design
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
4-15 Product and Service Design
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.
4-16 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.
4-17 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
4-18 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
4-19 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
4-20 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 item’s reliability is
specified
4-21 Product and Service Design
Improving Reliability
• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
4-22 Product and Service Design
Product Design

Product Life Cycles

Robust Design

Concurrent Engineering

Computer-Aided Design

Modular Design
4-23 Product and Service Design
Robust Design
Robust Design: Design that results in
products or services that can function over
a broad range of conditions
4-24 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
4-25 Product and Service Design
Degree of Newness
1.
2.
3.
4.
Modification of an existing product/service
Expansion of an existing product/service
Clone of a competitor’s product/service
New product/service
4-26 Product and Service Design
Degree of Design Change
Table 4.3
Type of Design
Change
Modification
Newness of the
organization
Low
Newness to the
market
Low
Expansion
Low
Low
Clone
High
Low
New
High
High
4-27 Product and Service Design
Phases in Product Development Process
1.
2.
3.
4.
5.
6.
7.
8.
9.
Idea generation
Feasibility analysis
Product specifications
Process specifications
Prototype development
Design review
Market test
Product introduction
Follow-up evaluation
4-28 Product and Service Design
Idea Generation
Supply chain based
Ideas
Competitor based
Research based
4-29 Product and Service Design
Reverse Engineering
Reverse engineering is the
dismantling and inspecting
of a competitor’s product to discover
product improvements.
4-30 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.
4-31 Product and Service Design
Manufacturability

Manufacturability is the ease of fabrication
and/or assembly which is important for:

Cost

Productivity

Quality
4-32 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
organization’s manufacturing capabilities when
designing a product.
The more general term design for operations
encompasses services as well as manufacturing
4-33 Product and Service Design
Concurrent Engineering
Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.
4-34 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
4-35 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
4-36 Product and Service Design
Recycling

Recycling: recovering materials for future use
 Recycling reasons

Cost savings
 Environment concerns
 Environment regulations
4-37 Product and Service Design
Service Design

Service is an act
 Service delivery system

Facilities
 Processes
 Skills

Many services are bundled with products
4-38 Product and Service Design
Service Design

Service design involves

The physical resources needed
 The goods that are purchased or consumed by
the customer
 Explicit services
 Implicit services
4-39 Product and Service Design
Service Design

Service


Service delivery system


The facilities, processes, and skills needed to
provide a service
Product bundle


Something that is done to or for a customer
The combination of goods and services
provided to a customer
Service package

The physical resources needed to perform the
service
4-40 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

4-41 Product and Service Design
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
4-42 Product and Service Design
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
4-43 Product and Service Design
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
4-44 Product and Service Design
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
4-45 Product and Service Design
Challenges of Service Design

Variable requirements
 Difficult to describe
 High customer contact
 Service – customer encounter
4-46 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.
4-47 Product and Service Design
The House of Quality
Figure 4.4
Correlation
matrix
Design
requirements
Customer
requirements
Relationship
matrix
Specifications
or
target values
Competitive
assessment
4-48 Product and Service Design
House of Quality Example
Figure 4.5
Correlation:
X
X
Water resistance
Accoust. Trans.
Window
Check force
on level
ground
Energy needed
to open door
Door seal
resistance
Energy needed
to close door
Engineering
Characteristics
X
X
X
X
*
Strong positive
Positive
Negative
Strong negative
Competitive evaluation
X = Us
A = Comp. A
B = Comp. B
(5 is best)
1 2 3 4
Customer
Requirements
Easy to close
7
X
Stays open on a hill
5
X AB
Easy to open
3
Doesn’t leak in rain
3
No road noise
Importance weighting
2
AB
XAB
A XB
X
BA
X
9
Reduce energy
to 7.5 ft/lb.
B
A
X
B
X
A
2
3
Maintain
current level
B
A
6
Maintain
current level
5
4
3
2
1
6
Maintain
current level
Reduce energy
level to 7.5 ft/lb
10
Reduce force
to 9 lb.
X A
Target values
Technical evaluation
(5 is best)
5
BXA
BA
X
Relationships:
Strong = 9
Medium = 3
Small = 1
B
4-49 Product and Service Design
The Kano Model
Figure 4.6
Customer Satisfaction
Kano Model
Excitement
Expected
Must Have
Customer Needs
4-50 Product and Service Design
Operations Strategy
1. Increase emphasis on component
commonality
2. Package products and services
3. Use multiple-use platforms
4. Consider tactics for mass
customization
5. Look for continual improvement
6. Shorten time to market
4-51 Product and Service Design
Shorten Time to Market
1. Use standardized components
2. Use technology
3. Use concurrent engineering
4-52 Product and Service Design
CHAPTER
4
Additional PowerPoint slides
contributed by
Geoff Willis,
University of Central Oklahoma.
4-53 Product and Service Design
Volume
Product Life Cycle
time
Introduction
Growth
Maturity
Decline
4-54 Product and Service Design
Product Development

# Ideas
Dis-integrated design processes
 Standardization
 Modular design
 R&D versus benchmarking
Proposed
Prototype
Mkt. Test
Produced
4-55 Product and Service Design
Actors & the Arena
Physical Evidence
Customer
Onstage Service
Backstage Service
Support
Line of Interaction
Line of Visibility
4-56 Product and Service Design
Quality Function Deployment
A structured and disciplined process that provides a means to
identify and carry the voice of the customer through each stage
of product or service development and implementation
QFD is:
Communication
Documentation
Analysis
Prioritization
breakthroughs
4-57 Product and Service Design
Japanese QFD Results

Design time reduced by ¼ to ½
 Problems with initial quality decreased
 Comparison and analysis of competitive products
became possible
 Communication between divisions improved
4-58 Product and Service Design
Product Design Time Line
product
definition
old
system
new
system
design
redesign
4-59 Product and Service Design
PPM/Assembly
MP5
Ford
4-60 Product and Service Design
PPM/Continuous
MP6
Nucor Steel
4-61 Product and Service Design
Service Design
STA05
Crash carts/ St. Alexius Hospital

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