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