Products and Services

To Accompany Russell and Taylor, Operations Management, 4th Edition,

2003 Prentice-Hall, Inc. All rights reserved.

Design of Products

Humor in Product Design

As the customer wanted
it.

1984-1994 T/Maker Co.

As Operations made it.

1984-1994 T/Maker Co.

As Marketing
interpreted it.

1984-1994 T/Maker Co.

As Engineering
designed it.

1984-1994 T/Maker Co.

What is a Product?
Need-satisfying offering of an organization
Example
P&G does not sell laundry detergent
P&G sells the benefit of clean clothes
Customers buy satisfaction, not parts
May be a good or a service

Why Companies Design New Products

and Services
To be competitive
To increase business growth and profits
To avoid downsizing with development of new
products
To improve product quality
To achieve cost reductions in labor or materials

Product or Service Design Activities

Translate customer wants and needs into product and service requirements
(marketing, operations)
Refine existing products and services (marketing)
Develop new products and services (marketing, operations)
Formulate quality goals (marketing, operations)
Formulate cost targets (accounting, finance, operations)
Construct and test prototypes (operations, marketing, engineering)
Document specifications
Translate product and service specifications into process specifications
(engineering, operations)

Reasons for Design or Re-Design

The driving forces for product and service design or redesign are
market opportunities or threats:
Economic
Social and Demographic
Political, Liability, or Legal
Competitive
Cost or Availability
Technological

Major Factors to be Considered in the

(Product and Service) Design Strategy
Function of product/service
Cost
Quality
Time-to-market
Appearance
Customer satisfaction
Ease of production/assembly
Ease of maintenance/service
Product and service design or redesign should be
closely tied to an organizations strategy

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 the
simplest, most cost-effective manner
Reduces time to market
Minimizes revisions

Few Successes

2000
1500
1000
500
0

Number of
Ideas
1750

Design review,
Testing, Introduction

Market
requirement

1000

Functional
specifications

500

Product
specification

100

Development Stage

25

One
success!

Key Questions (1 of 2)
Is there a demand for it?
Market size
Demand profile
Can we do it?
Manufacturability - the capability of an organization to
produce an item at an acceptable profit
Serviceability - the capability of an organization to provide a
service at an acceptable cost or profit

Key Questions (2 of 2)
What level of quality is appropriate?
Customer expectations
Competitor quality
Fit with the current offering
Does it make sense from an economic standpoint?
Liability issues, ethical considerations, sustainability
issues, costs and profits

Legal Considerations
Legal Considerations
Product liability
The responsibility a manufacturer has for any injuries or damages
caused by as faulty product
Some of the concomitant costs
Litigation
Legal and insurance costs
Settlement costs
Costly product recalls
Reputation effects

Normative Behavior in Product Design

Produce designs that are consistent with the goals of the
organization
e.g., Do not compromise on quality, or cut corners, even in
areas that are not apparent to the customer
Give customers the value they expect
Make health and safety a concern
Do not place employees, customers, or third parties at risk
because of faulty products and services

Sustainability
Sustainability
Using resources in ways that do not harm the ecological
systems that support human existence
Key aspects of designing for sustainability
Life cycle assessment
Reduction of costs and materials used
Re-using parts of returned products
Recycling

Life Cycle Assessment (LCA)

LCA
The assessment of the environmental impact of a product or service
throughout its useful life
Focuses on such factors as
Global warming
Smog formation
Oxygen depletion
Solid waste generation
LCA procedures are part of the ISO 14000 environmental management
procedures

Reduce: Costs and Materials

Value Analysis/Value Engineering
Examination of the function of parts and materials in an effort to
reduce the cost and/or improve the performance of a product
Achieve equivalent or better performance at a lower cost while
maintaining all functional requirements defined by the customer
Ratio of Value/Cost
Value analysis focuses on design improvments during
production

Common Questions Used in Value Analysis/

Value Engineering
Could a less expensive part of material be
used?
Is the function necessary?
Can the function of two or more parts be
performed by a single part?
Can a part be simplified?
Could product specifications be relaxed?
Could standard parts be substituted for nonstandard parts?

Common Questions Used in Value Analysis/

Value Engineering
Assessment of value :
Can we do without it?
Does it do more than is required
Does it cost more than it is worth?
Can something else do a better job
Can it be made by less costly method, tools, material?
Can it be made cheaper, better or faster by someone else?
Does the item have any design features that are not
necessary?
Can two or more parts be combined into one?
Are there nonstandard parts that can be eliminated

Benefits of VA/VE
Benefits:
simplified products
additional standardization of products
improved functional aspects of product
improved job design and job safety
improved maintainability of the product
robust design
reduction in cost

Cost Reduction of a Bracket via Value

Engineering

Re-Use: Remanufacturing
Remanufacturing
Refurbishing used products by replacing worn-out or
defective components (and reselling the products)
Can be performed by the original manufacturer or
another company
Design for disassembly (DFD)
Designing products so that they can be easily taken
apart
Includes fewer parts and less material and using snapfits where possible instead of screws or nuts and bolts

Recycle
Recycling
Recovering materials for future use
Applies to manufactured parts
Also applies to materials used during production
Why recycle?
Cost savings
Environmental concerns
Environmental regulations
Design for recycling (DFR)
Product design that takes into account the ability to disassemble
a used product to recover the recyclable parts

Design for the Environment

Design safe and environmentally sound (eg.
recyclable) products
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 Manufacturing

Make products recyclable

Use recycled materials
Use less harmful ingredients
Use lighter components
Use less energy
Use less material

Benefits of Environmentally Friendly

Designs
Benefits
Safe and environmentally sound products
Minimum raw material and energy waste
Product differentiation
Environmental liability reduction
Cost-effective compliance with environmental regulations
Recognition as good corporate citizen

Design for the

Environment

Other Considerations in Product and

Service Design

Product or service life cycles

Standardization
Product or service reliability
Product or service robustness

Product or service life stages

Products in Various Stages of Life Cycle

Sales

Growth

Introduction

CD-ROM
Internet

Maturity

Decline

Jet Ski, fax machines

Boeing
727
3
Floppy
disks

Flatscreen
monitors
Time

Standardization
Standardization
Extent to which there is absence of variety in a
product, service or process
Standardized products are immediately available to
customers

Advantages of Standardization
(1 of 2)
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

Advantages of Standardization (2 of 2)
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.

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.

Designing for Mass Customization

Mass customization: A strategy of producing basically
standardized goods or services, but incorporating some
degree of customization in the final product or service
Facilitating Techniques
Delayed differentiation
Modular design

Delayed Differentiation
Delayed differentiation is the process of producing
but not quite completing a product or service until
customer preferences or specifications are known
It is a postponement tactic (produce a piece of
furniture, but do not stain it until the customer
chooses the stain)

Modular Design
Modular design is a form of standardization in which component
parts are subdivided into modules that are easily replaced or
interchanged.
Advantages

easier diagnosis and remedy of failures

easier repair and replacement
simplification of manufacturing and assembly
And it adds flexibility to both production and marketing

Disadvantages
Limited number of possible product configurations
Limited ability to repair a faulty module; the entire module must be
scrapped

Reliability
Reliability: The ability of a product, part or system to perform
its intended function under a prescribed set of conditions
over a specified length of time. It is expressed as the
probability that the product performs its intended function for
a specified length of time
Normal Operating Conditions: the set of conditions under
which an items reliability is specified
Maintainability: Ease and/or cost of maintaining/ repairing
product

Computing Reliability (1 of 2)
Components in series
0.90

0.90

0.90 x 0.90 = 0.81

Computing Reliability (2 of 2)
Components in series
0.90

0.90 x 0.90 = 0.81

0.90

Components in parallel
0.90
R2

0.95 + 0.90(1-0.95) = 0.995

0.95
R1

Robust Design
Robust design
A design that results in products or services that can
function over a broad range of conditions
A robust product is to be designed that is insensitive to
environmental factors either in manufacturing or in use
Pertains to product as well as process design
Consider the following automobiles:
Ferrari 599
Toyota Avalon

Which is design is more robust?

Design for Robustness

Product can fail due to poor design quality
Products are subjected to many conditions
Product is designed so that small variations in
production or assembly do not adversely affect the
product
Design products for consistent performance
Robust design studies
Controllable factors - under designers control
Uncontrollable factors - from user or environment
Central feature is parameter design

Degree of Newness
Product or service design changes can be in the form of:
Modification of an existing product or service
Expansion of an existing product line or service offering
Clone of a competitors product or service
New product or service
The degree of change affects the newness of the product
or service to the market and to the organization
Risks and benefits?

Percent of Sales From New Product

Phases in Design & Development

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

Main Phases in the Design Process

1.
2.
3.
4.
5.

Idea Generation Product Concept

Feasibility Study Performance
Specifications
Preliminary Design Prototype
Final Design Final Design Specifications
Process Planning Manufacturing
Specifications

The Design Process

Idea
generation

Suppliers

R&D

Marketing

Product or
service concept

Feasibility
study

Form design

Customers

Competitors

Performance
specifications

Revising and testing

prototypes

Production
design

Functional
design
New product or
service launch
Final design
& process plans

Design
specifications

Pilot run
and final tests

Manufacturing
or delivery
specifications

Step 1: Idea Generation (1 of 5)

Suppliers, distributors, salespersons, competitors
Trade journals and other published material
Warranty claims, customer
complaints, failures
Customer surveys, focus
groups, interviews
Field testing, trial users
Research and development

Idea Generation (2 of 5)
1. Supply-chain based
2. Competitor based
3. Research based

Supply-Chain Based (3 of 5)
Ideas can come from anywhere in the supply chain:
Customers
Suppliers
Distributors
Employees
Maintenance and repair personnel

Competitor-Based (4 of 5)
By studying how a competitor operates and its
products and services, many useful ideas can be
generated
Reverse engineering
Dismantling and inspecting a competitors product to
discover product improvements

Research Based (5 of 5)
Research and Development (R&D)
Organized efforts to increase scientific knowledge or product
innovation & may involve:
Basic research
Has the objective of advancing the state of knowledge about a
subject without any near-term expectations of commercial
applications

Applied research
Has the objective of achieving commercial applications

Development
Converts the results of applied research into useful commercial
applications.

Tools of Idea Generation

Perceptual Maps
Visual comparison of
customer perceptions

Benchmarking
Comparing product/service
against best-in-class

Reverse engineering
Dismantling and inspecting a competitors product to
discover product improvements

Step 2: Feasibility Study

Market
Analysis
Economic
Analysis
Technical / Strategic Analysis
Performance Specifications are written for product
concepts that pass the feasibility study

Step 3: Preliminary Design

Create form & functional design
Build prototype
Test prototype
Revise prototype
Retest

3.1. Form Design

(How the Product Looks)

Cellular Personal Safety

Alarm

Personal Computer

3.2. Functional Design

Relates to how the product performs

Relates to the concept of Reliability and Maintainability

3.3. Production Design

Part of the preliminary design phase
Simplification
Standardization
Mass customization

3.3.1. Design Simplification (1 of 3)

(a) The original design

Assembly using
common fasteners

3.3.1. Design Simplification (2 of 3)

(a) The original design

Assembly using
common fasteners

(b) Revised design

One-piece base &

elimination of
fasteners

3.3.1. Design Simplification (3 of 3)

(a) The original design

Assembly using
common fasteners

(b) Revised design

(c) Final design

One-piece base &

elimination of
fasteners

Design for
push-and-snap
assembly

Steps 4&5: 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

Product Strategy Options

Product differentiation
Low cost
Rapid response (product life cycles are becoming
shorter, therefore faster developers of new products
gain on slower developers and obtain a competitive
advantage)

Improving the Design Process

Design teams & concurrent design
Design for manufacturing - Manufacturability
Component commonality
Design for assembly
Design for disassembly
Design to prevent failures and ensure value
Design for the environment
Measure design quality
Utilize quality function deployment
Utilize Computer Aided Design
Design for robustness
Engage in collaborative design

Organizing for Product Development (1 of 2)

Historically distinct departments
Duties and responsibilities are defined
Difficult to foster forward thinking
Today team approach
Representatives from all disciplines or functions
Concurrent engineering cross functional team

Organizing for Product Development (2 of 2)

Traditional Approach
We design it, you build it or Over the wall
Concurrent Engineering
Lets work together simultaneously

Over the Wall Approach

New
Product

Mfg

Design

Breaking Down Barriers to Effective

Design

Design Teams
Marketing, manufacturing, engineering
purchasing personnel
Suppliers, dealers, customers
Lawyers, accountants, insurance
companies

Concurrent Engineering: Defined

Concurrent engineering is the bringing together of personnel
from various functions together early in the design phase.
CE can be defined as the simultaneous development of
project design functions, with open and interactive
communication existing among all team members for the
purposes of reducing time to market,
market decreasing cost, and
improving quality and reliability
Time savings are created by performing activities in parallel

DFM and DFA

Design for manufacturing (DFM)
The designing of products that are compatible with an
organizations abilities
Design for assembly (DFA)
Design that focuses on:
reducing the number of parts in a
the assembly methods
the sequence of assembly operations

product

Design for Manufacturing and Assembly

Design a product for easy & economical production
Incorporate production design early in the
design phase
Taking into account the manufacturing capabilities (equipment, skills,
types of materials, schedules, technologies) of the organization in
designing goods
The more general term design for operations encompasses services
as well as manufacturing
Improves quality, productivity and reduces costs
Shortens time to design and manufacture

DFMA Guidelines
1. Simplify products by reducing the number of separate
parts
2. Minimize the number of parts, tools, fasteners, and
assemblies
3. Use standard parts and repeatable processes
4. Design parts for many uses
5. Incorporate modularity in design
6. Design for ease of assembly, minimal handling
7. Allow for efficient testing and parts replacement

Design for Manufacturing and Assembly

DFMA software allows designers to examine the integration of
part designs before the product is manufactured.
Answers are required for such questions as:
During the operation of the product, does the part move
relative to all other parts already assembled?
Must the part be of a different material or be isolated
from other parts already assembled?
Must the part be separate from all other parts to allow the
disassembly of the product for adjustment or
maintenance?

Manufacturability
Manufacturability
Ease of fabrication and/or assembly
It has important implications for
Cost
Productivity
Quality

Component Commonality
When products have a high degree of similarity in
features and components, a part can be used in
multiple products
Benefits:
Savings in design time
Standard training for assembly and installation
Opportunities to buy in bulk from suppliers
Commonality of parts for repair
Fewer inventory items must be handled

Design Review
Failure Mode and Effects Analysis (FMEA)
A systematic approach for analyzing causes &
effects of failures
Prioritizes failures
Attempts to eliminate causes
Fault Tree Analysis (FTA)
Study interrelationship between failures
Value Analysis (VA)

Fault Tree for Potato Chips

FMEA for Potato Chips

FAILURE
MODE

CAUSE OF FAILURE

EFFECT OF FAILURE

CORRECTIVE ACTION

Stale

Low moisture
content, expired shelf
life, poor packaging

Tastes bad, wont

crunch, thrown out,
lost sales

Add m cure longer,

better package seal,
shorter shelf life

Broken

Too thin, too brittle,

rough handling,
rough use, poor
packaging

Cant dip, poor

display, injures
mouth, chocking,
perceived as old, lost
sales

Change recipe,
change process,
change packaging

Too Salty

Outdated receipt,
process not in
control, uneven
distribution of salt

Eat less, drink more,

health hazard, lost
sales

Experiment with
recipe, experiment
with process,
introduce low salt
version

Designing for the Customer:

Quality Function Deployment (QFD)
QFD is an approach that integrates the voice of the customer into
the product and service development process. Translates customer
preferences into specific product characteristics
Enables to design for the customer
Cross functional teams are used
Displays requirements in matrix diagrams
First matrix called house of quality
Series of connected houses

Quality Function Deployment Process

Identify customer wants
Identify how the good/service will satisfy customer
wants
Relate customer wants to product hows
Identify relationships between the firms hows
Develop importance ratings
Evaluate competing products

Importance

House of Quality (1 of 2)
5
Correlation matrix
3
Design
requirements
1

Customer
requirements

Relationship
matrix

Competitive
assessment

Target values

House of Quality (2of 2)

Series of QFD Houses

Part
characteristics

Process
characteristics

A-2
Parts
deployment

A-3
Process
planning

Operations
Process
characteristics

House
of
quality

Part
characteristics

A-1
Product
characteristics

Customer
requirements

Product
characteristics

A-4

Operating
requirements

Benefits of QFD
Promotes better understanding of customer
demands
Promotes better understanding of design
interactions
Involves manufacturing in the
design process
Breaks down barriers between
functions and departments
Provides documentation of
the design process

Technology in Design: Computer

Aided Design (CAD)
Product design using
computer graphics
Designing products at
a computer terminal or
work station
Design engineer
develops rough
sketch of product
Uses computer to
draw product
Often used with CAM

1995 Corel Corp.

Technology in Design
CAD - Computer Aided Design
Assists in creating and
modifying designs

CAE - Computer Aided Engineering

Tests & analyzes designs
on computer screen

CAM refers to the use of specialized

computer programs to direct and
control manufacturing equipment
CAD/CAM - Design & Manufacturing
Automatically converts CAD data into processing instructions
for computer controlled equipment

Benefits of CAD (1 of 2)
Produces better designs faster
Increases the productivity of designers, 3 to 10 times and thus
allows more time for designers to work on creative projects
Reduces costs and increases product quality
Creates a database for manufacturing information on product
specifications (Builds database of designs and creates
documentation to support them)
Shortens time to market

Benefits of CAD (1 of 2)
Reduces time to manufacture
Enlarges design possibilities
Enhances communication and promotes innovation in design
teams
Provides the possibility of engineering and cost analysis on
proposed designs
CAD that includes finite element analysis (FEA) can
significantly reduce time to market
Enables developers to perform simulations that aid in
the design, analysis, and commercialization of new
products

Consistency is Important in Design

Consistent errors are easier to correct than
random errors
Parts within tolerances
may yield assemblies
which arent
Consumers prefer
product characteristics
near their ideal values

Kano Model
Basic quality
Refers to customer requirements that have only limited effect
on customer satisfaction if present, but lead to dissatisfaction if
absent

Performance quality
Refers to customer requirements that generate satisfaction or
dissatisfaction in proportion to their level of functionality and
appeal

Excitement quality
Refers to a feature or attribute that was unexpected by the
customer and causes excitement

The Kano Model

Customer
erSSatisfaction
atisfaction
Custom

Kano
KanoModel
Model

Excitement
Excitement
Expected
Expected
Must
MustHave
Have

Customer
CustomerNeeds
Needs

Trends in Product & Service Design (1 of 2)

Increased emphasis on or attention to:
Customer satisfaction (by translating customer wants and
needs into product and service requirements)
Reducing time to introduce new product or service
Reducing time to produce product

Trends in Product & Service Design (2 of 2)

Increased emphasis on or attention to:
The organizations capabilities to produce or deliver the
item
Refining existing products and services
Environmental concerns
Designing products & services that are user friendly
Designing products that use less material

Global Product Design

Virtual teams
Uses combined efforts of a team of designers working
in different countries
Provides a range of comparative advantages over
traditional teams such as:
Engaging the best human resources around the
world
Possibly operating on a 24-hr basis
Global customer needs assessment
Global design can increase marketability

Design Guidelines (1 of 2)
Produce designs that are consistent with the goals of the
company
Take into account the operations capabilities of the organization
in order to achieve designs that fit with those capabilities
Take into account the cultural differences related to product
design (for multinationals)
Give customers the value they expect
Make health and safety a primary concern
Consider potential harm to the environment

Design Quidelines (2 of 2)

Increased emphasis on components commonality

Package products and services
Use multiple-use platforms
Consider tactics for mass customization
Look for continual improvement
Shorten time to market