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4-1 Product and Service Design
William J. Stevenson
Operations Management
8th edition
4-2 Product and Service Design
CHAPTER4
Product and Service Design
McGraw-Hill/IrwinOperations Management, Eighth Edition, by William J. StevensonCopyright © 2005 by The McGraw-Hill Companies, Inc. All rights
reserved.
4-3 Product and Service Design
Major factors in design strategy Cost Quality Time-to-market Customer satisfaction Competitive advantage
Product and Service DesignProduct and Service Design
Product and service design – or redesign – should be closely tied to an organization’s strategy
4-4 Product and Service Design
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
Product or Service Design ActivitiesProduct or Service Design Activities
4-5 Product and Service Design
Reasons for Product or Service DesignReasons 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 DesignObjectives 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
Taking into account the capabilities of the organization in designing goods and services
Designing For OperationsDesigning For Operations
4-8 Product and Service Design
Legal FDA, OSHA, IRS Product liability Uniform commercial code
Ethical Releasing products with defects
Environmental EPA
Legal, Ethical, and Environmental IssuesLegal, Ethical, and Environmental Issues
4-9 Product and Service Design
Regulations & Legal ConsiderationsRegulations & 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 GuidelinesDesigners 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 DesignOther 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 ServicesLife Cycles of Products or Services
Time
Introduction
Growth
Maturity
Saturation
Decline
Dem
and
Figure 4.1
4-13 Product and Service Design
StandardizationStandardization
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 StandardizationAdvantages 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 Advantages of Standardization (Cont’d)(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 StandardizationDisadvantages 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: A strategy of producing standardized goods
or services, but incorporating some degree degree of customization
Delayed differentiation Modular design
Mass CustomizationMass Customization
4-18 Product and Service Design
• Delayed differentiation is a postponement tactic Producing but not quite completing a product
or service until customer preferences or specifications are known
Delayed DifferentiationDelayed Differentiation
4-19 Product and Service Design
Modular DesignModular 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
ReliabilityReliability
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 ReliabilityImproving Reliability
• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
4-22 Product and Service Design
Product DesignProduct Design
Product Life Cycles
Robust Design
Concurrent Engineering
Computer-Aided Design
Modular Design
4-23 Product and Service Design
Robust Design: Design that results in products or services that can function over a broad range of conditions
Robust DesignRobust Design
4-24 Product and Service Design
Taguchi Approach Robust DesignTaguchi 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 NewnessDegree of Newness
1. Modification of an existing product/service
2. Expansion of an existing product/service
3. Clone of a competitor’s product/service
4. New product/service
4-26 Product and Service Design
Degree of Design ChangeDegree of Design Change
Type of Design Change
Newness of the organization
Newness to the market
Modification Low Low
Expansion Low Low
Clone High Low
New High High
Table 4.3
4-27 Product and Service Design
Phases in Product Development ProcessPhases in Product Development Process
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation
4-28 Product and Service Design
Idea GenerationIdea Generation
Ideas Competitor based
Supply chain based
Research based
4-29 Product and Service Design
Reverse EngineeringReverse 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)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
ManufacturabilityManufacturability
Manufacturability is the ease of fabrication and/or assembly which is important for:
Cost
Productivity
Quality
4-32 Product and Service Design
Designing for ManufacturingDesigning 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 EngineeringConcurrent 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 DesignComputer-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
Design for manufacturing (DFM) Design for assembly (DFA) Design for recycling (DFR) Remanufacturing Design for disassembly (DFD) Robust design
Product designProduct design
4-36 Product and Service Design
Recycling: recovering materials for future use Recycling reasons
Cost savings Environment concerns Environment regulations
RecyclingRecycling
4-37 Product and Service Design
Service DesignService Design
Service is an act Service delivery system
Facilities Processes Skills
Many services are bundled with products
4-38 Product and Service Design
Service DesignService 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 DesignService Design
Service Something that is done to or for a customer
Service delivery system The facilities, processes, and skills needed to
provide a service Product bundle
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
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
Differences Between Product Differences Between Product and Service Designand Service Design
4-41 Product and Service Design
Phases in Service DesignPhases in Service Design
1. Conceptualize
2. Identify service package components
3. Determine performance specifications
4. Translate performance specifications into design specifications
5. Translate design specifications into delivery specifications
4-42 Product and Service Design
Service BlueprintingService 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 BlueprintingMajor Steps in Service Blueprinting
1. Establish boundaries
2. Identify steps involved
3. Prepare a flowchart
4. Identify potential failure points
5. Establish a time frame
6. Analyze profitability
4-44 Product and Service Design
Characteristics of Well Designed Characteristics of Well Designed Service SystemsService Systems
1. Consistent with the organization mission
2. User friendly
3. Robust
4. Easy to sustain
5. Cost effective
6. Value to customers
7. Effective linkages between back operations
8. Single unifying theme
9. Ensure reliability and high quality
4-45 Product and Service Design
Challenges of Service DesignChallenges of Service Design
Variable requirements Difficult to describe High customer contact Service – customer encounter
4-46 Product and Service Design
Quality Function Deployment Voice of the customer House of quality
Quality Function DeploymentQuality Function Deployment
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 QualityThe House of Quality
Correlation matrix
Designrequirements
Customerrequire-ments
Competitiveassessment
Relationshipmatrix
Specificationsor
target values
Figure 4.4
4-48 Product and Service Design
Customer Requirements
Importance to Cust.Easy to close
Stays open on a hill
Easy to open
Doesn’t leak in rain
No road noise
Importance weighting
Engineering Characteristics
Ene
rgy
need
ed
to c
lose
doo
r
Che
ck f
orce
on
leve
l gr
ound
Ene
rgy
need
ed
to o
pen
door
Wat
er r
esis
tanc
e
10 6 6 9 2 3
7
5
3
3
2
X
X
X
X
X
Correlation:Strong positivePositiveNegativeStrong negative
X*Competitive evaluation
X = UsA = Comp. AB = Comp. B(5 is best)
1 2 3 4 5
X AB
X AB
XAB
A X B
X A B
Relationships:Strong = 9Medium = 3Small = 1Target values
Red
uce
ener
gy
leve
l to
7.5
ft/lb
Red
uce
forc
eto
9 lb
.
Red
uce
ener
gy to
7.5
ft/l
b.
Mai
ntai
ncu
rren
t lev
elTechnical evaluation(5 is best)
54321
B
A
X
BAX B
AX
BXA
BXABA
X
Doo
r se
al
resi
stan
ce
Acc
oust
. Tra
ns.
Win
dow
Mai
ntai
ncu
rren
t lev
el
Mai
ntai
ncu
rren
t lev
el
House of Quality ExampleHouse of Quality ExampleFigure 4.5
4-49 Product and Service Design
Kano Model
Customer Needs
Cu
sto
mer
Sati
sfa
cti
on
Excitement
Expected
Must Have
Kano Model
Customer Needs
Cu
sto
mer
Sati
sfa
cti
on
Excitement
Expected
Must Have
The Kano ModelThe Kano ModelFigure 4.6
4-50 Product and Service Design
1. Increase emphasis on component commonality
2. Package products and services3. Use multiple-use platforms4. Consider tactics for mass
customization5. Look for continual improvement6. Shorten time to market
Operations StrategyOperations Strategy
4-51 Product and Service Design
Shorten Time to MarketShorten Time to Market
1. Use standardized components
2. Use technology
3. Use concurrent engineering
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