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4-1 Product and Service Design

PART
SYSTEMS DESIGN
THREE
•Chapter Four Product and Service
Design
•Chapter Four Supplement Reliability
•Chapter Five Capacity Planning
•Chapter Five Supplement Decision
Theory
•Chapter Six Process Design and Facility
Layout
•Chapter Six Supplement Linear
Programming
•Chapter Seven Design of Work Systems
•Chapter Seven Supplement
Learning Curves
•Chapter Eight Location Planning and
Analysis
•Chapter Eight Supplement The
Operations Management, Seventh Edition, by William J. Stevenson
Transportation Model
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4-2 Product and Service Design

Chapter 4

Product and
Service Design

Operations Management, Seventh Edition, by William J. Stevenson


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4-3 Product and Service Design

Product and Service Design


• Major factors in strategy
– Cost
– Quality
– Time-to-market
– Customer satisfaction
– Competitive advantage

Operations Management, Seventh Edition, by William J. Stevenson


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4-4 Product and Service Design

Trends in Product & Service Design

• Increased emphasis on or attention to:


– Customer satisfaction

– Reducing time to introduce new product


or service

– Reducing time to produce product

Operations Management, Seventh Edition, by William J. Stevenson


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4-5 Product and Service Design

Trends in Product & Service Design (Cont’d)

• Increased emphasis on or attention to:


– The organization’s capabilities to produce or
deliver the item
– Environmental concerns
– Designing products & services that are “user
friendly”
– Designing products that use less material

Operations Management, Seventh Edition, by William J. Stevenson


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4-6 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

Operations Management, Seventh Edition, by William J. Stevenson


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4-7 Product and Service Design

Reasons for Product or Service Design

• Be competitive
• Increase business growth & profits
• Avoid downsizing with development of
new products
• Improve product quality
• Achieve cost reductions in labor or
materials

Operations Management, Seventh Edition, by William J. Stevenson


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4-8 Product and Service Design

Objectives of Product and Service Design

• Development time and cost


• Product or service cost
• Resulting product or service quality
• Capability to produce or deliver a given
product or service

Operations Management, Seventh Edition, by William J. Stevenson


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4-9 Product and Service Design

Design For Operations

• Taking into account the capabilities of


the organization in designing goods and
services

Operations Management, Seventh Edition, by William J. Stevenson


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4-10 Product and Service Design

The Kano Model

Kano Model
Customer Satisfaction

Excitement
Expected
Must Have

Customer Needs

Operations Management, Seventh Edition, by William J. Stevenson


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4-11 Product and Service Design

Sources of Ideas for Products and Services

• Internal
– Employees
– Marketing department
– R&D department
• External
– Customers (QFD)
– Competitors
– Suppliers

Operations Management, Seventh Edition, by William J. Stevenson


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4-12 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.

Operations Management, Seventh Edition, by William J. Stevenson


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4-13 Product and Service Design

Reverse Engineering

Reverse engineering is the


dismantling and inspecting
of a competitor’s product to
discover product improvements.

Operations Management, Seventh Edition, by William J. Stevenson


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4-14 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.

Operations Management, Seventh Edition, by William J. Stevenson


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4-15 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

Operations Management, Seventh Edition, by William J. Stevenson


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4-16 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.

Operations Management, Seventh Edition, by William J. Stevenson


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4-17 Product and Service Design

Product Design

• Product Life Cycles


• Robust Design
• Concurrent Engineering
• Computer-Aided Design
• Modular Design

Operations Management, Seventh Edition, by William J. Stevenson


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4-18 Product and Service Design

Life Cycles of Products or Services


Figure 4-2

Saturation

Maturity
Demand

Decline
Growth

Incubation

Time
Operations Management, Seventh Edition, by William J. Stevenson
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4-19 Product and Service Design

Advantages of Standardization

• Fewer parts to deal with in inventory &


manufacturing
• Reduced training costs and time
• More routine purchasing, handling, and
inspection procedures

Operations Management, Seventh Edition, by William J. Stevenson


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4-20 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.

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-21 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.

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-22 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

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-23 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

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-24 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

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-25 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

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-26 Product and Service Design

Improving Reliability

• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
Operations Management, Seventh Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-27 Product and Service Design

Robust Design

Robust Design: Design that results in


products or services that can function
over a broad range of conditions

Operations Management, Seventh Edition, by William J. Stevenson


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4-28 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

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-29 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

Operations Management, Seventh Edition, by William J. Stevenson


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4-30 Product and Service Design

Concurrent Engineering

Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.

Operations Management, Seventh Edition, by William J. Stevenson


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4-31 Product and Service Design

“Over the Wall” Approach

New
Product

Mfg Desig
n
Operations Management, Seventh Edition, by William J. Stevenson
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4-32 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

Operations Management, Seventh Edition, by William J. Stevenson


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4-33 Product and Service Design

Manufacturability

• Manufacturability is the ease of fabrication


and/or assembly which is important for:
– Cost
– Productivity
– Quality

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-34 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

Operations Management, Seventh Edition, by William J. Stevenson


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4-35 Product and Service Design

Recycling

• Recycling: recovering materials for


future use
• Recycling reasons
– Cost savings
– Environment concerns
– Environment regulations

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-36 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

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-37 Product and Service Design

Service Variability & Customer


Figure 4-3 Influence Service Design

High Customized
Clothing
Variability
in Moderate Dept. Store
Service
Purchase
Require-
ments Low Telephone
Purchase
None Internet
Purchase
None Low Moderate High

Degree of Contact with Customer


Operations Management, Seventh Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-38 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.

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-39 Product and Service Design

The House of Quality


Figure 4-5

Correlation
matrix

Design
requirements

Customer
Relationship Competitive
require-
matrix assessment
ments

Specifications
or
target values

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-40 Product and Service Design

House of Quality Example


Correlation:
X Strong positive
Positive
X X
X X X Negative
Strong negative

Water resistance
*

Accoust. Trans.
Energy needed

Energy needed
Im

to close door
Engineering

to open door
Check force
po

resistance
Competitive evaluation

Door seal
rta Characteristics

Window
X = Us

on level
nc

ground
A = Comp. A
et B = Comp. B
Customer oC (5 is best)
Requirements us 1 2 3 4 5
t.
X AB
Easy to close 7
Stays open on a hill X AB
5
Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Importance weighting 10 6 6 9 2 3 Relationships:


level to 7.5 ft/lb

Strong = 9
Reduce energy

Reduce energy
Reduce force
current level

current level
current level
to 7.5 ft/lb.
Medium = 3
Target values

Maintain
Maintain

Maintain
to 9 lb. Small = 1

5 B
BA BA
B B BXA X
Technical evaluation 4
A
X
A X
3
(5 is best) 2 X
X A
1

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-41 Product and Service Design

Operations Strategy

• Shorten time-to-market
• Package products and services
• Increase emphasis on component
commonality
• Use multiple-use platforms
• Consider tactics for mass customization
• Look for continual improvement

Operations Management, Seventh Edition, by William J. Stevenson


McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.