Design of Goods and Services
10 July
Introduction
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What: Design of goods and services
Where: Answer “what should we
produce”
Why: Produce goods to achieve the
mission
Product Strategy and
Competitive Advantage
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Differentiation Strategy
Cost-Leader Strategy
Response Strategy
Where New Product
Opportunities Come From
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Economic Change
Sociological and Demographic Change
Technological Change
Political / Legal Change
Other Changes
Product Life Cycle
Sales, Cost & Profit .
Cost of
Development
& Manufacture
Sales Revenue
Profit
Cash flow
Loss
Time
Introduction
Growth
Maturity
Decline
Life Cycle and Strategy
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Strategies change as products move
through their life cycle
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Introduction
Growth
Maturity
Decline
Product By Value Analysis
Individual
Dollar
Contribution
Total Annual
Dollar
Contribution
Stampede
Pancakes
$3
$2.2M
Whoop-up
Bacon
$2.50
$3.4M
Product Development Stages
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Idea Generation
Does Firm Have Ability to Carry Out?
Customer Requirements
Functional Specification
Product Specification
Design Review
Test Market
Introduction
Evaluation
Quality Function Deployment
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Identify customer wants
Identify how product will satisfy wants
Relate customer wants to product hows
Identify relationships between hows
Develop importance ratings
Evaluate competing products
House of Quality
Relationship
Between Things
We Can Do
Competitors
Cust Importance
What
The
Customer
Wants
What We Can Do
Organizing for Product
Development
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Classic Approach
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Research and Development
Engineering
Manufacturing
Departments hand product off
Organizing for Product
Development
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Product Development Team Approach
Team moves product from requirements
definition to production
Manufacturability
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Value Engineering
Focuses on pre-production design
improvement
Reduces costs of production
Product Design Issues
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Robust Design
Modular Design
Computer Aided Design
Value Analysis
Environmentally Friendly Design
Time-Based Competition
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Rapidly develop products and move
them to market
Acquire a Firm
Joint Venture
Alliance
Defining the Product
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Engineering Drawing
Bill of Materials
Assembly Drawing
Assembly Chart
Route Sheet
Work Order
Engineering Change Notice