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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

SYSTEMS DESIGNPART THREE

•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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Chapter 4

Product and Service Design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Major factors in strategy– Cost– Quality– Time-to-market– Customer satisfaction– Competitive advantage

Product and Service Design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Trends in Product & Service Design (Cont’d)

• Increased emphasis on or attention to:– The organization’s 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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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• 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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

Objectives of Product and Service Design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Taking into account the capabilities of the organization in designing goods and services

Design For Operations

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Kano Model

Customer Needs

Cu

sto

mer

Sati

sfa

cti

on

Excitement

Expected

Must Have

Kano Model

Customer Needs

Cu

sto

mer

Sati

sfa

cti

on

Excitement

Expected

Must Have

The Kano Model

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Internal– Employees– Marketing department– R&D department

• External– Customers (QFD)– Competitors– Suppliers

Sources of Ideas for Products and Services

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Quality Function Deployment– Voice of the customer– House of quality

Quality Function Deployment

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

4-13

McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Reverse Engineering

Reverse engineering is the

dismantling and inspecting of a competitor’s product to discover product improvements.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Legal– FDA, OSHA, IRS– Product liability– Uniform commercial code

• Ethical– Releasing products with defects

• Environmental– EPA

Legal, Ethical, and Environmental Issues

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Product Design

• Product Life Cycles

• Robust Design

• Concurrent Engineering

• Computer-Aided Design

• Modular Design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Life Cycles of Products or Services

Time

Incubation

Growth

Maturity

Saturation

Decline

Dem

and

Figure 4-2

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Mass customization:– A strategy of producing standardized

goods or services, but incorporating some degree degree of customization

– Delayed differentiation– Modular design

Mass Customization

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Delayed differentiation is a postponement tactic– Producing but not quite completing a

product or service until customer preferences or specifications are known

Delayed Differentiation

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Improving Reliability

• Component design

• Production/assembly techniques

• Testing

• Redundancy/backup

• Preventive maintenance procedures

• User education

• System design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

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

Robust Design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

4-30

McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Concurrent Engineering

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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

“Over the Wall” Approach

DesignMfg

New Product

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Manufacturability

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

– Cost

– Productivity

– Quality

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Design for manufacturing (DFM)

• Design for assembly (DFA)

• Design for recycling (DFR)

• Remanufacturing

• Design for disassembly (DFD)

• Robust design

Product design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Recycling: recovering materials for future use

• Recycling reasons– Cost savings– Environment concerns– Environment regulations

Recycling

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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

Differences Between Product and Service Design

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Service Variability & Customer Influence Service Design

Variabilityin

ServiceRequire-

ments

Figure 4-3

Degree of Contact with Customer

High

Moderate

Low

None

None Low Moderate High

TelephonePurchase

Dept. StorePurchase

CustomizedClothing

InternetPurchase

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• Quality Function Deployment– Voice of the customer– House of quality

Quality Function Deployment

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

4-39

McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

The House of Quality

Correlation matrix

Designrequirements

Customerrequire-ments

Competitiveassessment

Relationshipmatrix

Specificationsor

target values

Figure 4-5

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

Customer Requirements

Importance to Cust.Easy to close

Stays open on a hill

Easy to open

Doesn’t leak in rain

No road noise

Importance weighting

Engineering Characteristics

Ene

rgy

need

ed

to c

lose

doo

r

Che

ck f

orce

on

leve

l gr

ound

Ene

rgy

need

ed

to o

pen

door

Wat

er r

esis

tanc

e

10 6 6 9 2 3

7

5

3

3

2

X

X

X

X

X

Correlation:Strong positivePositiveNegativeStrong negative

X*Competitive evaluation

X = UsA = Comp. AB = Comp. B(5 is best)

1 2 3 4 5

X AB

X AB

XAB

A X B

X A B

Relationships:Strong = 9Medium = 3Small = 1Target values

Red

uce

ener

gy

leve

l to

7.5

ft/lb

Red

uce

forc

eto

9 lb

.

Red

uce

ener

gy to

7.5

ft/l

b.

Mai

ntai

ncu

rren

t lev

el

Technical evaluation(5 is best)

54321

B

A

X

BAX B

AX

BXA

BXABA

X

Doo

r se

al

resi

stan

ce

Acc

oust

. Tra

ns.

Win

dow

Mai

ntai

ncu

rren

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el

Mai

ntai

ncu

rren

t lev

el

House of Quality Example

4-41

McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Product and Service Design

• 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

Operations Strategy