Products and Services
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Design of Products
Humor in Product Design
As the customer wanted
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 Engineering
designed it.
© 1984-1994 T/Maker Co.
What is a Product?
• 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
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
Product or Service Design Activities
• Translate customer wants and needs into product and service
requirements (marketing, operations)
• Refine existing products and services (marketing)
• Develop new products and services (marketing, operations)
• Formulate quality goals (marketing, operations)
• Formulate cost targets (accounting, finance, operations)
• Construct and test prototypes (operations, marketing,
engineering)
• Document specifications
• Translate product and service specifications into process
specifications (engineering, operations)
Reasons for Design or Re-Design
• The driving forces for product and service design or
redesign are market opportunities or threats:
– Economic
– Social and Demographic
– Political, Liability, or Legal
– Competitive
– Cost or Availability
– Technological
Major Factors to be Considered in the
(Product and Service) Design Strategy
•Function of product/service
•Cost
•Quality
•Time-to-market
•Appearance
•Customer satisfaction
•Ease of production/assembly
•Ease of maintenance/service
Product and service design – or redesign – should be
closely tied to an organization’s strategy
Product Design
 Specifies materials
 Determines dimensions &
tolerances
 Defines appearance
 Sets performance standards
Service Design
 Specifies what the customer is to experience
 Physical items
 Sensual benefits
 Psychological
benefits
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
Few Successes
2000
1500
1000
500
0
Number of
Ideas
1750
Design review,
Testing, Introduction
Market
requirement
1000
Functional
specifications
500
Product
specification
100
Development Stage
25
One
success!
Key Questions (1 of 2)
• Is there a demand for it?
– Market size
– Demand profile
• Can we do it?
– Manufacturability - the capability of an organization
to produce an item at an acceptable profit
– Serviceability - the capability of an organization to
provide a service at an acceptable cost or profit
Key Questions (2 of 2)
• What level of quality is appropriate?
– Customer expectations
– Competitor quality
– Fit with the current offering
• Does it make sense from an economic standpoint?
– Liability issues, ethical considerations,
sustainability issues, costs and profits
Legal Considerations
• Legal Considerations
– Product liability
• The responsibility a manufacturer has for any
injuries or damages caused by as faulty product
• Some of the concomitant costs
– Litigation
– Legal and insurance costs
– Settlement costs
– Costly product recalls
– Reputation effects
Normative Behavior in Product Design
• Produce designs that are consistent with the goals of
the organization
– e.g., Do not compromise on quality, or cut corners,
even in areas that are not apparent to the customer
• Give customers the value they expect
• Make health and safety a concern
– Do not place employees, customers, or third parties
at risk because of faulty products and services
Sustainability
• Sustainability
– Using resources in ways that do not harm the
ecological systems that support human existence
• Key aspects of designing for sustainability
– Life cycle assessment
– Reduction of costs and materials used
– Re-using parts of returned products
– Recycling
Life Cycle Assessment (LCA)
• LCA
– The assessment of the environmental impact of a
product or service throughout its useful life
• Focuses on such factors as
– Global warming
– Smog formation
– Oxygen depletion
– Solid waste generation
• LCA procedures are part of the ISO 14000
environmental management procedures
Reduce: Costs and Materials
• Value Analysis/Value Engineering
– Examination of the function of parts and materials
in an effort to reduce the cost and/or improve the
performance of a product
– 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 improvments
during production
Common Questions Used in Value Analysis/
Value Engineering
• Could a less expensive part of material be
used?
• Is the function necessary?
• Can the function of two or more parts be
performed by a single part?
• Can a part be simplified?
• Could product specifications be relaxed?
• Could standard parts be substituted for nonstandard parts?
Common Questions Used in Value Analysis/
Value Engineering
Assessment of value :
– Can we do without it?
– Does it do more than is required
– Does it cost more than it is worth?
– Can something else do a better job
– Can it be made by less costly method, tools, material?
– Can it be made cheaper, better or faster by someone
else?
– Does the item have any design features that are not
necessary?
– Can two or more parts be combined into one?
– Are there nonstandard parts that can be eliminated
Benefits of VA/VE
• 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
reduction in cost
Cost Reduction of a Bracket via Value
Engineering
Re-Use: Remanufacturing
• Remanufacturing
– Refurbishing used products by replacing worn-out or
defective components (and reselling the products)
• Can be performed by the original manufacturer or
another company
– Design for disassembly (DFD)
• Designing products so that they can be easily taken
apart
• Includes fewer parts and less material and using
snap-fits where possible instead of screws or nuts
and bolts
Recycle
• Recycling
– Recovering materials for future use
• Applies to manufactured parts
• Also applies to materials used during
production
– Why recycle?
• Cost savings
• Environmental concerns
• Environmental regulations
– Design for recycling (DFR)
• Product design that takes into account the
ability to disassemble a used product to recover
the recyclable parts
Design for the 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
“Green Manufacturing”
•
•
•
•
•
•
Make products recyclable
Use recycled materials
Use less harmful ingredients
Use lighter components
Use less energy
Use less material
Benefits of Environmentally Friendly
Designs
• Benefits
– Safe and environmentally sound products
– Minimum raw material and energy waste
– Product differentiation
– Environmental liability reduction
– Cost-effective compliance with environmental regulations
– Recognition as good corporate citizen
Design for the
Environment
Other Considerations in Product and
Service Design
•
•
•
•
Product or service life cycles
Standardization
Product or service reliability
Product or service robustness
Product or service life stages
Products in Various Stages of Life Cycle
Sales
Growth
Introduction
CD-ROM
Internet
Maturity
Decline
Jet Ski, fax machines
Boeing
727
3½
Floppy
disks
Flatscreen
monitors
Time
Standardization
 Standardization
Extent to which there is absence of variety in a
product, service or process
 Standardized products are immediately available to
customers
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
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.
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.
Designing for Mass Customization
 Mass customization: A strategy of producing basically
standardized goods or services, but incorporating
some degree of customization in the final product or
service
 Facilitating Techniques
Delayed differentiation
Modular design
Delayed Differentiation
 Delayed differentiation is the process of producing
but not quite completing a product or service until
customer preferences or specifications are known
 It is a postponement tactic (produce a piece of
furniture, but do not stain it until the customer
chooses the stain)
Modular Design
Modular design is a form of standardization in which
component parts are subdivided into modules that are
easily replaced or interchanged.
 Advantages
•
•
•
•
easier diagnosis and remedy of failures
easier repair and replacement
simplification of manufacturing and assembly
And it adds flexibility to both production and marketing
Disadvantages
• Limited number of possible product configurations
• Limited ability to repair a faulty module; the entire module must
be scrapped
Reliability
 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 its 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
Computing Reliability (1 of 2)
Components in series
0.90
0.90
0.90 x 0.90 = 0.81
Computing Reliability (2 of 2)
Components in series
0.90
0.90 x 0.90 = 0.81
0.90
Components in parallel
0.90
R2
0.95 + 0.90(1-0.95) = 0.995
0.95
R1
Robust Design
• Robust design
A design that 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
Pertains to product as well as process design
Consider the following automobiles:
Ferrari 599
Toyota Avalon
Which is design is more robust?
Design for Robustness
 Product can fail due to poor design quality
 Products are subjected to many conditions
 Product is designed so that small variations in
production or assembly do not adversely affect the
product
 Design products for consistent performance
 Robust design studies
• Controllable factors - under designer’s control
• Uncontrollable factors - from user or environment
 Central feature is parameter design
Degree of Newness
• Product or service design changes can be in the form of:
– Modification of an existing product or service
– Expansion of an existing product line or service
offering
– Clone of a competitor’s product or service
– New product or service
• The degree of change affects the newness of the product
or service to the market and to the organization
– Risks and benefits?
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Industry Leader
Percent of Sales From New Product
Top
Third
Middle
Third
Bottom
Third
Position of Firm in Its Industry
Phases in Design & Development
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
Main Phases in the Design Process
1.
2.
3.
4.
5.
Idea Generation — Product Concept
Feasibility Study — Performance
Specifications
Preliminary Design — Prototype
Final Design — Final Design Specifications
Process Planning — Manufacturing
Specifications
The Design Process
Idea
generation
Suppliers
Product or
service concept
Feasibility
study
Performance
specifications
Form design
Customers
R&D
Marketing
Competitors
Revising and testing
prototypes
Production
design
Functional
design
New product or
service launch
Final design
& process plans
Design
specifications
Pilot run
and final tests
Manufacturing
or delivery
specifications
Step 1: Idea Generation (1 of 5)
 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
Idea Generation (2 of 5)
1. Supply-chain based
2. Competitor based
3. Research based
Supply-Chain Based (3 of 5)
• Ideas can come from anywhere in the supply chain:
– Customers
– Suppliers
– Distributors
– Employees
– Maintenance and repair personnel
Competitor-Based (4 of 5)
• By studying how a competitor operates and its
products and services, many useful ideas can be
generated
• Reverse engineering
– Dismantling and inspecting a competitor’s product to
discover product improvements
Research Based (5 of 5)
• Research and Development (R&D)
– Organized efforts to increase scientific knowledge or product
innovation & may involve:
– Basic research
• Has the objective of advancing the state of knowledge about a
subject without any near-term expectations of commercial
applications
– Applied research
• Has the objective of achieving commercial applications
– Development
• Converts the results of applied research into useful commercial
applications.
Tools of Idea Generation
 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
Step 2: Feasibility Study
 Market
Analysis
 Economic
Analysis
 Technical / Strategic Analysis
Performance Specifications are written for product
concepts that pass the feasibility study
Step 3: Preliminary Design





Create form & functional design
Build prototype
Test prototype
Revise prototype
Retest
3.1. Form Design
(How the Product Looks)
Cellular Personal Safety
Alarm
Personal Computer
3.2. Functional Design
 Relates to how the product performs
 Relates to the concept of Reliability and Maintainability
3.3. Production Design
Part of the preliminary design phase
 Simplification
 Standardization
 Mass customization
3.3.1. Design Simplification (1 of 3)
(a) The original design
Assembly using
common fasteners
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
3.3.1. Design Simplification (3 of 3)
(a) The original design
Assembly using
common fasteners
(b) Revised design
(c) Final design
One-piece base &
elimination of
fasteners
Design for
push-and-snap
assembly
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
Product Strategy Options
Product differentiation
Low cost
Rapid response (product life cycles are becoming
shorter, therefore faster developers of new products
gain on slower developers and obtain a competitive
advantage)
Improving the Design Process
 Design teams & concurrent design
 Design for manufacturing - Manufacturability
 Component commonality
 Design for assembly
 Design for disassembly
 Design to prevent failures and ensure value
 Design for the environment
 Measure design quality
 Utilize quality function deployment
 Utilize Computer Aided Design
 Design for robustness
 Engage in collaborative design
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
Organizing for Product Development (2 of 2)
• Traditional Approach
– “We design it, you build it” or “Over the wall”
• Concurrent Engineering
– “Let’s work together simultaneously”
“Over the Wall” Approach
New
Product
Mfg
Design
Breaking Down Barriers to Effective
Design
Design Teams
 Marketing, manufacturing, engineering
purchasing personnel
 Suppliers, dealers, customers
 Lawyers, accountants, insurance
companies
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
DFM and DFA
• Design for manufacturing (DFM)
The designing of products that are compatible with
an organization’s abilities
• Design for assembly (DFA)
Design that focuses on:
reducing the number of parts in a
product
the assembly methods
 the sequence of assembly operations
Design for Manufacturing and Assembly
 Design a product for easy & economical production
 Incorporate production design early in the
design phase
 Taking into account the manufacturing capabilities (equipment, skills,
types of materials, schedules, technologies) 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
DFMA 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
Design for Manufacturing and Assembly
DFMA software allows designers to examine the integration of
part designs before the product is manufactured.
Answers are required for such questions as:
• During the operation of the product, does the part move
relative to all other parts already assembled?
• Must the part be of a different material or be isolated
from other parts already assembled?
• Must the part be separate from all other parts to allow the
disassembly of the product for adjustment or
maintenance?
Manufacturability
• Manufacturability
– Ease of fabrication and/or assembly
– It has important implications for
• Cost
• Productivity
• Quality
Component Commonality
• When products have a high degree of similarity in
features and components, a part can be used in
multiple products
• Benefits:
– Savings in design time
– Standard training for assembly and installation
– Opportunities to buy in bulk from suppliers
– Commonality of parts for repair
– Fewer inventory items must be handled
Design Review
 Failure Mode and Effects Analysis (FMEA)
A systematic approach for analyzing causes &
effects of failures
Prioritizes failures
Attempts to eliminate causes
 Fault Tree Analysis (FTA)
Study interrelationship between failures
 Value Analysis (VA)
Fault Tree for Potato Chips
FMEA for Potato Chips
FAILURE
MODE
CAUSE OF FAILURE
EFFECT OF FAILURE
CORRECTIVE ACTION
Stale
Low moisture
content, expired shelf
life, poor packaging
Tastes bad, won’t
crunch, thrown out,
lost sales
Add m cure longer,
better package seal,
shorter shelf life
Broken
Too thin, too brittle,
rough handling,
rough use, poor
packaging
Can’t dip, poor
display, injures
mouth, chocking,
perceived as old, lost
sales
Change recipe,
change process,
change packaging
Too Salty
Outdated receipt,
process not in
control, uneven
distribution of salt
Eat less, drink more,
health hazard, lost
sales
Experiment with
recipe, experiment
with process,
introduce low salt
version
Designing for the Customer:
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
 Cross functional teams are used
 Displays requirements in matrix diagrams
 First matrix called “house of quality”
 Series of connected houses
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
Importance
House of Quality (1 of 2)
5
Correlation matrix
3
Design
requirements
1
4
2
Customer
requirements
Relationship
matrix
Competitive
assessment
6
Target values
House of Quality (2of 2)
Series of QFD Houses
Part
characteristics
Process
characteristics
A-2
Parts
deployment
Operations
A-3
Process
planning
Process
characteristics
House
of
quality
Part
characteristics
A-1
Product
characteristics
Customer
requirements
Product
characteristics
A-4
Operating
requirements
Benefits of QFD
 Promotes better understanding of customer
demands
 Promotes better understanding of design
interactions
 Involves manufacturing in the
design process
 Breaks down barriers between
functions and departments
 Provides documentation of
the design process
Technology in Design: Computer
Aided Design (CAD)
• Product design using
computer graphics
• 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
 CAD - Computer Aided Design
 Assists in creating and
modifying designs
 CAE - Computer Aided Engineering
 Tests & analyzes designs
on computer screen
 CAM refers to the use of specialized
computer programs to direct and
control manufacturing equipment
 CAD/CAM - Design & Manufacturing
 Automatically converts CAD data into processing instructions
for computer controlled equipment
Benefits of CAD (1 of 2)
 Produces better designs faster
 Increases the productivity of designers, 3 to 10 times and thus
allows more time for designers to work on creative projects
 Reduces costs and increases product quality
 Creates a database for manufacturing information on product
specifications (Builds database of designs and creates
documentation to support them)
 Shortens time to market
Benefits of CAD (1 of 2)
 Reduces time to manufacture
 Enlarges design possibilities
 Enhances communication and promotes innovation in design
teams
 Provides the possibility of engineering and cost analysis on
proposed designs
CAD that includes finite element analysis (FEA) can
significantly reduce time to market
Enables developers to perform simulations that aid in
the design, analysis, and commercialization of new
products
Consistency is Important in Design
 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
Kano Model
• Basic quality
– Refers to customer requirements that have only limited
effect on customer satisfaction if present, but lead to
dissatisfaction if absent
• Performance quality
– Refers to customer requirements that generate
satisfaction or dissatisfaction in proportion to their level of
functionality and appeal
• Excitement quality
– Refers to a feature or attribute that was unexpected by the
customer and causes excitement
The Kano Model
Customer Satisfaction
Kano Model
Excitement
Expected
Must Have
Customer Needs
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
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
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
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
Design Quidelines (2 of 2)
•
•
•
•
•
•
Increased emphasis on components commonality
Package products and services
Use multiple-use platforms
Consider tactics for mass customization
Look for continual improvement
Shorten time to market