Wiley Good .Session7-ProductandProcessDesign

7/31/2019 Wiley Good .Session7-ProductandProcessDesign

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2-508-97 Production and Operations Management

Product and Service DesignProcess Design


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Designing the Operations :Strategic Level

Technology

Capacity Work Systems

Location

ProcessDesign

ProductDesign

Facility Layout


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Product Design Strategies

Design a product according

to market needs and then,try to adapt our processes

Design products according

to the limits of our processesand then, find a market

Sell what the

market wants

Sell only what

we can make

Find the right balance : a simultaneous evolution of products and processes, taking into account the needs of the market AND our distinctive competencies.


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A multi-functional approach

HumanResources

OM

Marketing

EngineeringR&D

Finance

OtherPartners

Customers

Suppliers

Multi-functionalTeam


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Products and ProcessesIn Constant Evolution

Design mistakes / Customer complaintsCustomer needs / Opportunities

Maturity of actual product line

Competitive pressures

Innovation strategy

New technology

Too much capacity

Social and legal pressures


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Product Life Cycle

Introductionresearch / product development

process modification and enhancement

supplier development

Growth

Product design begins to stabilizeEffective forecasting of capacity becomes necessary

Adding or enhancing capacity may be necessary

Maturity

Competitors now establishedHigh volume, innovative production may be needed

Improved cost control, reduction in options, paring down of product line

DeclineUnless product makes a special contribution, must plan to terminateoffering

2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458


7/4772-508-97 Production and Operations Management

Product Life Cycle

D e m a n

d

Time

Source: Adapted from Stevenson, Hojati, (2007), p 122



Product Life Cycle, Sales, Cost, and Profit

S

a l e s

, C o s

t &

P r o

f i t

.

Introduction Maturity DeclineGrowth

Cost of Development

& ManufactureSales Revenue

TimeCash flowLoss

Profit




Idea Generation Sources

Companys own R&D department

Customer complaints or suggestions

Marketing research / Perceptual MapsVisual comparison of customer perceptions

SuppliersSalespersons in the field

Factory workers

New technological developments

Competitors / Reverse engineeringDismantling competitors product to improve your own product

Benchmarking

Comparing product/service against best-in-class



Types of products

Standardized productOne size fits all

Intended to satisfy majority of customers

Produced in large quantities

Planning is simple

Make-to-stock

Customized productUnique product for each customer

Produced in small quantities

Planning is difficult

Make-to-order



Production Design Strategies

Simplification

reducing number of parts, assemblies, or options in a product

Standardization

using commonly available and interchangeable parts

Modularity

combining standardized building blocks, or modules, to createunique finished products

Copyright 2006 John Wiley & Sons, Inc.



(b) Revised design

One-piece base &elimination offasteners

(c) Final design

Design forpush-and-snapassembly

(a) Original design

Assembly usingcommon fasteners


Design Simplification

24 parts84 seconds to assemble





Advantages of Standardization

Fewer parts to deal with in inventory & manufacturing

Reduced training costs and time

More routine purchasing, handling, and inspection

proceduresOrders fillable from inventory

Opportunities for long production runs and automation

Need for fewer parts justifies increased expenditures onperfecting designs and improving quality controlprocedures.

Operations Management, 2 nd Canadian Edition, by Stevenson & HojatiCopyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.



Disadvantages of Standardization

Difficult to develop a product that must satisfiy the need of many different customers.

Designs may be frozen with too many imperfectionsremaining.

High cost of design changes increases resistance toimprovements.

Decreased variety results in less consumer appeal.




Component commonality

An example of standardizationThe use of the same component in many differentproducts

In the same product line

In different product lines

Between competitors



Example

Sony could reshape industry with plan to cut parts by 90%. (7 Oct 2003)Sony is planning to reduce the number of parts it uses for consumer electronics products by

nearly 90 per cent in a move that could force widespread restructuring across theindustry. The Japanese giant hopes to reduce the number of components used in itscomplex manufacturing processes from 840,000 to 100,000 by 2005.

For more than half a century, carmakers have been trying to share parts between differentmodels to increase volumes and reduce tooling costs. But in the past two decades thepush to make different cars more similar under the skin has gone faster and further thanever before as the same underlying "platform" is used for many different models. PSAPeugeot Citroen and Volkswagen are more advanced in platform-sharing than most rivals,reaping billions of euros of cost savings by producing different-looking models to sellunder different names with almost identical underlying engineering.

"To produce parts in millions rather than hundreds of thousands generates huge savings for

the supplier which can be passed back to the vehicle manufacturer," said Philip Wylie,head of the automotive group at PwC, the accountants. Prof Rhys points to other gains,too. The reduction of complexity makes it far easier to manage inventories, while havingfewer suppliers simplifies management of relationships.

In the case of the electronics industry, much depends on whether product designers can beencouraged to simplify new products without sacrificing product cycles and innovation

rates far higher than in the automotive industry.



Example

Can Mercedes Help Revive Chrysler? --- Daimler Is to TieUnits More Closely Together (Wall Street Journal, Feb. 6, 2007)

"We can't compete in this area [small cars] without cooperating. It's abrutally competitive market," said a person familiar with the company's

internal deliberations. He added that senior executives from thecompany's German and American sides are mindful of the need toprotect Mercedes 's exclusive image and agree in principle thatincreased component sharing between the brands should be in areasthat aren't visible to customers -- for example, sharing steering columns

rather than seating materials.Other people familiar with the matter said that Mr. Zetsche has also

privately raised the idea of allowing Chrysler and Mercedes to sharethe platforms of some of their SUVs, such as the Mercedes M-Classand the Jeep Grand Cherokee.



Modular Design

Modular design is a form of standardization in whichcomponent parts are subdivided into modules that areeasily replaced or interchanged.

It allows:easier diagnosis and remedy of failures

easier repair and replacement

simplification of manufacturing and assembly

Lower training costs

But higher replacement cost (as you have to replace the wholemodule)



19/47192-508-97 Production and Operations ManagementSlide 19

Modular vs. Integral Design

One-to-one mapping between functional elements and componentsInterfaces

Complex mapping from functional elements to components

Modular design

Integral design

integral modular



Mass Customization

Mass customization: A strategy of producing standardized goods or services, butincorporating some degree degree of customization

Delayed differentiation

Modular designComponent commonality




Example : Nike ID

www.nikeid.com
http://www.nikeid.com/http://images.google.ca/imgres?imgurl=http://philenain.free.fr/fonds_ecrans/nike/800_600/nike004.jpg&imgrefurl=http://philenain.free.fr/fonds_ecrans/nike.htm&h=600&w=800&sz=8&hl=fr&start=4&tbnid=oPAnnU4TAQjLdM:&tbnh=107&tbnw=143&prev=/images%3Fq%3Dnike%26svnum%3D10%26hl%3Dfr%26rls%3DGGLJ,GGLJ:2006-36,GGLJ:frhttp://www.nikeid.com/



Design for Environment

Design for environmentdesigning a product from material that can be recycled

design from recycled material

design for ease of repair

minimize packagingminimize material and energy used during manufacture,consumption and disposal

Extended producer responsibilityholds companies responsible for their product even after its usefullife




Organizing for Product and Process Development

Historically distinct departmentsFunctional approach

Duties and responsibilities are defined

Difficult to foster forward thinking

Today team approachCross-functional approach

Representatives from all disciplines or functions

Concurrent engineering cross functional team




Design Team


C E i i



Concurrent Engineering :Principles

Design and Operations personnel are reunited , very early in thedesign phase, to simultaneously design products and processes.

We include people from Operations, Purchasing, Marketing.Customers and suppliers are also invited to participate in certainstages of development.

Traditional

Approach

Concurrent

Engineering

Idea Design Manufacturing

Idea / Design / Manufacturing



Concurrent Engineering : Objectives

Smoother transition between Engineering andOperations

Shorten the new product introduction cycle

Obtain a product that reflects the needs of the

customers and our processing capabilities


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Concurrent Engineering : Advantages

Operations personnel contribute early on to avoidtrial and errors and adapt the product to our capabilities.

New equipment can be ordered more quickly andreduce the time to market.

Approach is based on problem resolution asopposed to conflict resolutions.


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Special Considerations in Service Design

Services are intangibleService output is variable

Services have higher customer contact

Services are perishable

Service inseparable from delivery

Services tend to be decentralized and dispersed

Services are consumed more often than products

Services can be easily emulated



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Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210

High v. Low Contact Services (cont.)

DesignDecision

High-Contact Service Low-Contact Service

QualityControl

More variable sincecustomer is involved in

process; customer expectations and perceptionsof quality may differ;customer present whendefects occur

Measured againstestablished standards;testing and reworkpossible to correctdefects

Capacity Excess capacity required tohandle peaks in demand

Planned for averagedemand



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DesignDecision

High-Contact Service Low-ContactService

Worker skills Must be able to interact well with customers and

use judgment in decisionmaking

Technical skills

Scheduling Must accommodate

customer schedule

Customer concerned

only with completiondate




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DesignDecision

High-Contact Service Low-ContactService

Service process Mostly front-room activities; service maychange during delivery inresponse to customer

Mostly back-room activities; planned and

executed with minimalinterference

Servicepackage

Varies with customer;includes environment aswell as actual service

Fixed, less extensive



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Process Design

Source : Stevenson W. Benedetti C., (2001), p 151

ProcessSelection

Product orServiceDesign

Technology

Forecast

Workmethods

Layout

Facilities andMaterial

CapacityRequirements

External Environment (political, economical, social,technological and ecological)


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Process Design :Caracteristics of processes

Level of technologyCapacity

FlexibilityQuantity

Product

Lead Time

Effectiveness and EfficiencyMeet the objectives (do the right thing)

Optimize resources (do it correctly)


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From the following criteria :

Quantity to be produced(Lot size)

Variety of products

Desired flexibility

Process Selection


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Process Selection: Process Types

Projectsone-of-a-kind production of a product to customer order

Job ShopsSmall runs

Batch productionsystems process many different jobs through the system in groupsor batches

Mass production (repetitive)produces large volumes of a standard product for a mass market

Continuous productionused for very-high volume commodity products


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Projects

Produced one at a time, from beginning to end.

Crafts

Construction projects

Consultations


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Batch Processing

Job Shop : Small quantityproduced highlydifferentiated products

Batch : Moderate quantityproduced of similar goods or services.


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Mass Production and Continuous Production

Mass production : (repetitive,assembly line)

Production in large quantities of verysimilar products

Continuous :

Non-stop production of a highly

standardized product


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Product-Process Matrix

Continuousprocess

Projectprocess

Line

process

Batchprocess

Jobprocess

L o w

V a r i e

t y

H i g h V a r i e

t y

Low Volume High Volume

High Cost

High Cost

Project

Job Shop

Batch

Line

Continuous


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Types of Processes


PROJECT BATCH

Type of product UniqueMade-to-order

/ or to stock

Type of customer One-at-a-time

Few individual

customers

MASS

Made-to-stock(standardized)

Mass

market

Continuous

Commodity

Mass

market

Productdemand Infrequent Fluctuates Stable Very stable


JobShop

Made-to-order (customized)

Few individual

customers

Fluctuates


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Types of Processes (cont.)


PROJECT BATCH

Demandvolume

Very low Low tomedium

No. of differentproducts

Infinitevariety Many, varied

MASS

High

Few

Continuous

Very high

Very few

Productionsystem

Long-termproject

Discrete /batches

Repetitive,assembly lines

Continuous,process

industries


JobShop

Low

Many, varied

Discrete, jobshops


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Project BATCH

Equipment Varied General-purpose

Primarytype of work

Specializedcontracts Fabrication

MASS

Special-purpose

Assembly

Continuous

Highlyautomated

Mixing,treating,refining

Worker skills

Experts,crafts-

persons

Significantrange of skills

Limited rangeof skills

Equipmentmonitors


Job shop

General-purpose

Fabrication

Wide rangeof skills


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Project BATCH

AdvantagesCustom work,

latesttechnology

Flexibility,quality

DisadvantagesNon-repetitive,small customer

base, expensive

Costly, slow,difficult tomanage

MASS

Efficiency,speed,

low cost

Capitalinvestment;

lack of responsiveness

Continuous

Highly efficient,large capacity,ease of control

Difficult tochange,

far-reachingerrors,

limited variety

ExamplesConstruction,shipbuilding,

spacecraft

Bakeries,education

Automobiles,televisions,computers,

fast food

Paint, chemicals,foodstuffs


Job Shop

Flexibility,quality

Costly, slow,difficult tomanage

Machineshops,

print shops


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442-508-97 Production and Operations Management 44

Basic Process Selection


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Video

Product-ProcessMatrix

O.M. vol 11-The product-process Matrix 00:13:53 Anglais


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Processes in ServicesExamples:

Projects: Hair Salon Hospital

Batch Air travel Education

Continuous Cable companies


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In preparation of session 8:

Review Reading class 7:SlidesS&H, parts of Chapter 4 & 6 (see Zonecours for detailed list)

Readings class 8 : S&H, chap. 5 pp 159-168

chap. 6 pp 197-208chap. 8 pp 279-288

Documents

Wiley Good .Session7-ProductandProcessDesign