Product Development
Summer 2013
Increasing Importance of
Product Development
1. Customers demand greater product variety.
2. Customers are causing shorter product life cycles.
3. Improving technology is causing new products to
be introduced
4. The impact of increasing product variety and
shortening product life cycles is having a
multiplicative effect on the need for product
development.
5. Today, in order to be competitive, the firm may
have to produce many different products with a
life cycle of only five years or less. End of Life
issues
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 simplest, most
cost-effective manner
 Reduces time to market - haste vs. speed to
market
 Minimizes revisions - quality designed into the
product
Stages in the Design Process
 Idea Generation — Product Concept - can you
create your own market? What role does the
voice of the customer play in idea generation?
 Feasibility Study — Performance Specifications
 Preliminary Design — Prototype - testing and
redesign
 Final Design — Final Design Specifications
 Process Planning — Manufacturing
Specifications - make to order/stock – assembly
line?
Idea Generation
 Suppliers, distributors, salespersons
 Trade journals and other published material
 Warranty claims, customer complaints,
failures
 Customer surveys, focus groups, interviews
 Field testing, trial users
 Research and development
More Idea Generators
 Perceptual Maps
 Visual comparison of
customer perceptions
 Benchmarking
 Comparing product/service
against best-in-class
 Reverse engineering
 Dismantling competitor’s product to
improve your own product
Perceptual Map of Breakfast Cereals
GOOD
TASTE
LOW
NUTRITION
HIGH
NUTRITION
BAD
TASTE
Perceptual Map of Breakfast Cereals
GOOD
TASTE
Cocoa Puffs
LOW
NUTRITION
HIGH
NUTRITION
Rice
Krispies
Cheerios
Wheaties
Shredded
Wheat
BAD
TASTE
© Russell and Taylor, Prentice Hall,
2004
Perceptual Map of Breakfast Cereals
GOOD
TASTE
How do I get here?
Cocoa Puffs
LOW
NUTRITION
HIGH
NUTRITION
Rice
Krispies
Cheerios
Wheaties
Shredded
Wheat
BAD
TASTE
© Russell and Taylor, Prentice Hall,
2004
Feasibility Study
 Market Analysis Market Segmentation
 Economic Analysis
 Technical / Strategic Analysis
 Performance Specifications
 Risk Analysis
Economic Analysis
• Can we produce it at a volume to make a
profit?
• If not, why produce?
• How many do we have to make to break
even?
Break Even Analysis
Total Costs = Total Revenues
(Volume x Price) =
(Fixed Costs + Variable Costs)
Profit = (Total Revenue –
Total Costs)
Fixed
Costs
B/E Point =
Sales Price – Variable Costs
Example
Fixed Costs = $2000
Variable Costs = $5/item
Sales Price = $10/item
Fixed
Costs
($2000)
B/E PT =
Sales Price ($10) – Variable
Costs ($5)
B/E point = ($2000/$5) 400 items
Risk Analysis
1. Identify the Hazards
2.Assess hazards to determine risks.
3.Develop controls and make risk decisions.
4.Implement controls.
5.Supervise and evaluate.
Preliminary Design
How will it look?
Create form & functional design
Build prototype
Test prototype
Revise prototype
Retest
Functional Design
(How the Product Performs)
 Reliability
 Probability product performs intended
function for specified length of time
 Maintainability
 Ease and/or cost or maintaining/repairing
product
System Availability
System Availability, SA =
MTBF
MTBF + MTTR
PROVIDER
MTBF (HR)
MTTR (HR)
A
B
C
60
36
24
4.0
2.0
1.0
System Availability
PROVIDER
MTBF (HR)
MTTR (HR)
A
B
C
60
36
24
4.0
2.0
1.0
SAA = 60 / (60 + 4) = .9375 or 93.75%
SAB = 36 / (36 + 2) = .9473 or 94.73%
SAC = 24 / (24 + 1) = .96 or 96%
Production Design
 Part of the preliminary design
phase
 Simplification
 Standardization
 Modularity
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
Improving the Design Process
 Design teams
 Concurrent design
 Design for manufacture & assembly
 Design to prevent failures and ensure value
 Design for environment
 Measure design quality
 Utilize quality function deployment
 Design for robustness
 Engage in collaborative design
Design Teams
Preferred solution = cross functional teams
Marketing, manufacturing, engineering
Suppliers, dealers, customers
Lawyers, accountants, insurance
companies
Concurrent Design
 Improves quality of early design decisions
 Decentralized - suppliers complete
detailed design
 Incorporates production process
 Scheduling and management can be
complex as tasks are done in parallel
 include the customer in the process!!
Design for
Manufacture and Assembly
 Design a product for easy
& economical production
 Incorporate production
design early in the design phase
 Improves quality and reduces costs
 Shortens time to design and manufacture
 also known as Design for Six Sigma
Design for Six Sigma
• Define – the goals of the design activity
• Measure – customer input to determine what is
critical to quality from the customers’ perspective –
what are customer delighters? What aspects are
critical to quality?
• Analyze – innovative concepts for products and
services to create value for the customer
• Design – new processes, products, and services to
deliver customer value
• Verify – new systems perform as expected
DFM Guidelines
1. Minimize the number of parts, tools,
fasteners, and assemblies
2. Use standard parts and repeatable
processes
3. Modular design
4. Design for ease of assembly, minimal
handling
5. Allow for efficient testing and parts
replacement
Design for Assembly (DFA)
 Procedure for reducing number of parts
 Evaluate methods for assembly
 Determine assembly sequence
Design Review
 Failure Mode and Effects Analysis (FMEA)
A systematic approach for analyzing causes
& effects of failures
Prioritizes failures
Attempts to eliminate causes
Value Analysis
(Value Engineering)
Is there value added?
 Ratio of value / cost
 Assessment of value :
1. Can we do without it?
2. Does it do more than is required?
3. Does it cost more than it is worth?
4. Can something else do a better job
5. Can it be made by less costly method, tools,
material?
6. Can it be made cheaper, better or faster by
someone else?
Should we contract it out?
Design for Environment
 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 laws in Europe -
Design for Robustness
 Product can fail due to poor design quality
 Products subjected to many conditions
 Robust design studies
Controllable factors - under designer’s
control
Uncontrollable factors - from user or
environment
 Designs products for consistent performance
A Well-Designed
Service System is
 Consistent with firm’s strategic focus
 Customer friendly
 Easy to sustain
 Effectively linked between front & back
office
 Cost effective
 Visible to customer
Process Design
Process Selection affects the
outcome – in production or
sports:
35
What is Process Selection?
• Series of decisions that includes
technical/engineering issues and volume/scale
issues
• Technical/engineering: basic methods that
produce a good or service
• Scale: how many or how much to produce;
how many to serve at a time
• Trade off analysis between capacity and costs
36
Why process selection is critical
• Dell – from make/assemble to order in Texas
to make/assemble to stock off shore
• Does this work?
• Break even analysis may depend on process
costs
• Which process gives the lowest costs –
assumption?
37
Trade off analysis
• Customer demanded quantity drives the trade
off analysis and decision process
• Example:
→ retail stocks at Christmas 2008 and 2009
season - goal save money by stocking less
→ At what point do you lose sales due to
lower stockage levels?
38
Process Design/Selection/Capacity
• Have to be simultaneous operations – some
texts suggest sequential steps
• Decision process has to be customer based
→ what should it be?
→ how many should be produced/how many
are we capable of producing?
→ how should it be produced?
39
Process Strategy - Defines
•
•
•
•
Capital intensity
Process flexibility
Vertical integration
Customer involvement
40
Goal of Process Design
• Reduce lead time for product to the customer
• Is it best to be the first to market and establish
the market?
• Or, be the follower and let someone else do
the R&D/design/risk?
41
Process Planning
 Make-or-buy decisions
 Process selection
 Specific equipment selection
 Process plans
 Process analysis
42
Make-or-Buy Decisions
1.
2.
3.
4.
5.
6.
Cost
Capacity
Quality
Speed
Reliability
Expertise
What about
Proprietary Information?
Barrier to Make-or-Buy?
43
Process Plans
 Blueprints
 Bill of material Flat or multiple layers part or assembly
 Assembly chart /
product structure diagram
 Operations process chart - list of
operations involved in assembly
 Routing sheet - sequence of events
44
Process Analysis
 The systematic examination of all aspects
of a process to improve its operation




Faster
More efficient
Less costly
More responsive
 Basic tools
 Process flowchart
 Process diagrams
 Process maps
45
Operations Process Chart
Part name
Crevice Tool
Part No.
52074
Usage
Hand-Vac
Assembly No. 520
Oper. No. Description
Dept.
Machine/Tools
Time
10
Pour in plastic bits
041
Injection molding
2 min
20
Insert mold
041
#076
2 min
30
Check settings
& start machine
041
113, 67, 650
20 min
40
Collect parts & lay flat
051
Plastics finishing
10 min
50
Remove & clean mold
042
Parts washer
15 min
60
Break off rough edges
051
Plastics finishing
10 min
46
Process Analysis – What processes feed other
processes?
47
Process Flowchart
Description
of
process
1
Unload apples from truck
2
Move to inspection station
3
Weigh, inspect, sort
4
Move to storage
5
Wait until needed
6
Move to peeler
7
Apples peeled and cored
15
8
Soak in water until needed
20
9
Place in conveyor
5
10
Move to mixing area
11
Weigh, inspect, sort
Page 1 0f 3
Total
Distance
(feet)
Location: Graves Mountain
Process: Apple Sauce
Time
(min)
Operation
Transport
Inspect
Delay
Storage
Step
Date: 9-30-02
Analyst: TLR
20
100 ft
30
50 ft
360
20 ft
20 ft
30
480
190 ft
48
Principles for Redesigning Processes
•
•
•
•
•
Walk the Process!
Remove waste, simplify, consolidate
Link processes to create value
Let the swiftest and most capable
execute
Capture information digitally, data mine,
and use information to improve
operations
49
Principles for Redesigning Processes
•
•
•
•
•
Provide visibility through information
about process status
Fit the process with sensors and
feedback loops
Add analytic capabilities
Connect, collect and create knowledge
around the process
Personalize the process
50
Techniques for Generating Innovative Ideas




Vary entry point to a problem
Draw analogies
Change your perspective
Use attribute brainstorming
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RFID
•
•
•
•
Active Tags
Always on
Battery powered
Can be read from up to
300 ft
• US Army
• Savi Tags
•
•
•
•
•
•
•
Passive Tags
Small
Must be activated
May be turned off
England
California
Rolex
52
Robotics
 Programmable manipulators
 Follow specified path
 Better than humans with respect to
 Hostile environments
 Long hours
 Consistency
 Adoption has been slowed by ineffective
integration and adaptation of systems
 Welding at Harley Davidson Plant
Questions?
53