4-1 Product and Service Design Operations Management William J. Stevenson 8th edition 4-2 Product and Service Design CHAPTER 2.1 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 What Does Product and Service Design Do? Translate customer wants and needs into product and service requirements Refine existing products and services. Develop new products/services. Formulate quality goals Formulate cost targets. Construct and test prototypes. Translate product and service specifications into process specifications. 4-4 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 4-5 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 4-6 Product and Service Design Reasons for Product or Service Design Economic (e.g.. low demand, need to reduce costs) Social and demographic (e.g. shifts in population parameters) Political, liability, or legal (e.g. new regulations, safety issues) Competitive (e.g. new improved products) Technological (e.g. product components, processes) Cost/availability (e.g. of raw materials or labor) 4-7 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 4-8 Product and Service Design Issues in Product Design Legal and Ethical Factors Environmental Factors Human Factors Cultural Factors 4-9 Product and Service Design Regulations & Legal Considerations Designers must be careful to take into account a wide array of legal and ethical 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 i.e. a product must be usable for its intended purpose. 4-10 Product and Service Design Human Factors Human factor issues often arise in the design of consumer products. Safety and liability are two critical issues and must be carefully considered. Another issue to take into account is adding new features to their products or services. 4-11 Product and Service Design Cultural Factors Designers in global companies must also take into account any cultural differences across regions related to the product. 4-12 Product and Service Design Environmental Factors Cradle to grave assessments: The assessment of the environmental impact of a product or service throughout its useful life. End of life programs: Managing the disposal of products that have reached the end of their useful life. Reduce, Reuse, Recycle through value analysis, remanufacturing and recycling. 4-13 Product and Service Design Other Issues in Product and Service Design Strategies for product life cycle stages Degree of standardization Designing for mass customization Reliability Robust Design Degree of Newness 4-14 Product and Service Design Life Cycles of Products or Services Figure 4.1 Saturation Deman d Maturity Decline Growth Introduction Time 4-15 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 4-16 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 4-17 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. 4-18 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. 4-19 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 4-20 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 4-21 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 4-22 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 4-23 Product and Service Design Improving Reliability • Component design • Production/assembly techniques • Testing • Redundancy/backup • Preventive maintenance procedures • User education • System design 4-24 Product and Service Design Robust Design Some products or services will function only within a narrow range of conditions, while others will perform as designed over a much broader range of conditions Robust Design: Design that results in products or services that can function over a broad range of conditions. Robust design decreases the likelihood of product failure due to a change in the environment in which the product is used. 4-25 Product and Service Design Taguchi’s Approach: it is often easier to design a product that is insensitive to environmental factors, either in manufacturing or in use, than to control the environmental factors. 4-26 Product and Service Design Degree of Newness Product or service design change can range from modification of an existing product or service to an entirely new product or service. 1. Modification of an existing product/service 2. Expansion of an existing product line or service 3. Clone of a competitor’s product/service 4. New product/service 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 Feasibility Analysis Feasibility analysis entails market analysis (demand), economic analysis (development cost and production cost, profit potential), and technical analysis (capacity requirements and availability. 4-32 Product and Service Design Product Specifications This involves detailed descriptions of what is needed to meet (or exceed) customer wants, and requires collaboration between legal, marketing, and operations. 4-33 Product and Service Design Process Specifications Once product specifications have been set, attention turns to specifications for the process that will be needed to produce the product. Alternatives must be weighed in terms of cost, availability of resources, profit potential, and quality. 4-34 Product and Service Design Prototype Development With product and process specifications complete, one (or a few) units are made to see if there are any problems with the product or process specifications. 4-35 Product and Service Design Design Review At this stage, any necessary changes are made or the project is abandoned. All departments collaborate to determine whether to proceed or to abandon. 4-36 Product and Service Design Market Test This is done to determine the extent of customer acceptance. The product returns to the design review phase if unsuccessful. This is handled by marketing. 4-37 Product and Service Design Introduction and Follow up Evaluation The new product is launched and promoted. Based on user feedback, changes may be made or forecasts refined. These are handled by marketing. 4-38 Product and Service Design Designing for Manufacturing These include design techniques that have greater applicability for the design of products than the design of services. These include: Concurrent engineering Computer assisted design Designing for assembly and disassembly The use of components for similar products 4-39 Product and Service Design Concurrent Engineering Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase. 4-40 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 4-41 Product and Service Design Designing for assembly and disassembly A good design must take into account not only how a product will be fabricated but also how it will be assembled. Design for assembly focuses on reducing the number of parts in an assembly, as well as on the assembly methods and sequence that will be employed. Manufacturability is the ease of fabrication and/or assembly. 4-42 Product and Service Design Component commonality Companies can realize significant benefits when a part can be used in multiple products. In addition to savings in design time, companies reap benefits through standard training for assembly and installation, increased opportunities for savings by buying in bulk, and commonality of parts in repair, which reduces inventory levels. 4-43 Product and Service Design Service Design Service is an act, something that is done to or for a customer. It is provided by a service delivery system, which includes facilities, processes, and skills needed to provide the service. Many services are bundled with products. 4-44 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 4-45 Product and Service Design Service Design Service design begins with the choice of a service strategy, which determines the nature and focus of the service, and the target market. Two key issues in service design are the degree of variation in service requirements and the degree of customer contact and customer involvement in the service delivery system. The lower the degree of contact and service requirement variability, the more standardized the service can be. 4-46 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 4-47 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 4-48 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 4-49 Product and Service Design Major Steps in Service Blueprinting 1. 2. 3. 4. Establish boundaries for the service and decide on the level of detail required. Identify and determine the sequence of customer and service actions and interactions. Preparing a flowchart is useful. Determine time estimates for each phase of the process, as well as time variability. Identify potential failure points and develop a plan to minimize them and a develop a plan to respond to service errors. 4-50 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 4-51 Product and Service Design Challenges of Service Design Variable requirements Difficult to describe High customer contact Service – customer encounter 4-52 Product and Service Design Guidelines for effective service design Define the service package in detail. Focus on operations from the customers’ perspective.