4-1 Product and Service Design

Operations Management

William J. Stevenson

8th edition
 4-2 Product and Service Design

CHAPTER
4

Product and
Service Design

Operations Management, Eighth Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
4-3 Product and Service Design

Trends in Product Design

 Increased emphasis on customer satisfaction and
increased pressure to be competitive
 Increased emphasis on reducing the time needed
to introduce a new product
 Increased emphasis on reducing the time needed
to produce a product
 Greater attention to the capabilities of the
organisation to produce the product
4-4 Product and Service Design

Trends in Product Design

 Greater attention to environmental concerns
including waste minimisation, recycling parts, and
disposal of worn-out products
 Increased emphasis on designing products that are
user-friendly
 Increased effort to use less material for products
(consolidation of parts) and less packaging
4-5 Product and Service Design

Product and Service Design

 Major factors in design strategy
 Cost
 Quality

 Time-to-market

 Customer satisfaction

 Competitive advantage

Product and service design – or redesign – should be

closely tied to an organization’s strategy
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
4-7 Product and Service Design

Reasons for Product or Service Design

 Economic
 Social and demographic
 Political, liability, or legal
 Competitive
 Technological
4-8 Product and Service Design

Objectives of Product and Service Design

 Main focus
 Customer satisfaction
4-9 Product and Service Design

CUSTOMER SATISFACTION
4-10 Product and Service Design

Objectives of Product and Service Design

 Main focus
 Customer satisfaction
 Secondary focus
 Function of product/reliability
 Cost/profit
 Quality
 Appearance
 Ease of production/assembly
 Ease of maintenance/service
4-11 Product and Service Design

Legal, Ethical, and Environmental Issues

 Legal
 FDA, OSHA, IRS
 Product liability
 Uniform commercial code
4-12 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.
4-13 Product and Service Design

Design for Safety

 Is it a reasonably safe product for the end user?
 Does this product meet the international safety
requirements?
 What could possibly go wrong with this product?
 Are the dangers obvious or concealed?
 Are needed safety devices absent from the design?
 Do you know what to do if the testing produces
unfavorable results?
 How could this product possibly lend itself to personal
injury or property damage?
4-14 Product and Service Design

Design for Safety

 What kind of warning labels or instructions should be
included with this product?
 What legal complications might arise by introducing
this product to the marketplace?
 Are there any codes or regulations that this may be
expected to comply with?
 What similarities does this product have with others
that may have historically led to problems in the field?
 What other types of unique tests should be done to
ensure that the product or its materials will prove to
be reliable?
4-15 Product and Service Design

Product Liability
4-16 Product and Service Design
4-17 Product and Service Design

Legal, Ethical, and Environmental Issues

 Ethical
 Releasing products with defects
 Environmental
 EPA
4-18 Product and Service Design

Designers Adhere to Guidelines

 Produce designs that are consistent 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

4-19 Product and Service Design

Other Issues in Product and Service Design

 Product/service life cycles

 Degree of standardization

 Mass customization

 Product/service reliability

 Robustness of design

 Degree of newness

 Cultural differences

 Range of operating conditions

4-20 Product and Service Design

STAGES OF A PRODUCT LIFE CYCLE

4-21 Product and Service Design

Life Cycles of Products or Services

Figure 4.1

Saturation

Maturity
Demand

Decline
Growth

Introduction

Time
4-22 Product and Service Design

PRODUCT LIFE CYCLE

4-23 Product and Service Design

Stages in New Product Development

4-24 Product and Service Design

Standardization

 Standardization
 Extent to which there is an absence of variety
in a product, service or process
 Standardized products are immediately
available to customers
4-25 Product and Service Design

Advantages 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
 Opportunities for long production runs and
automation
4-26 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.
4-27 Product and Service Design

Mass Customization

• Mass customization:
 A strategy of producing standardized goods
or services, but incorporating some degree
of customization
 Delayed differentiation

 Modular design
4-28 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
4-29 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
4-30 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
4-31 Product and Service Design

Failure Rate
Failure Rate

Infant Failures due

Few (random) failures
mortality to wear-out
Time, T
4-32 Product and Service Design

Reliability
 90% reliable?

 98.5% reliable?
4-33 Product and Service Design

Reliability is a Probability

 Probability that the product or system will:

 Function when activated
 Function for a given length of time
 Independent events
 Events whose occurrence or
nonoccurrence do not influence each other
 Redundancy
 The use of backup components to increase
reliability
4-34 Product and Service Design

Improving Reliability
• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
4-35 Product and Service Design

Product Design

 Product Life Cycles

 Robust Design
 Concurrent Engineering
 Computer-Aided Design
 Modular Design
4-36 Product and Service Design

Robust Design

Robust Design: Design that results in

products or services that can function over
a broad range of conditions
4-37 Product and Service Design

Degree 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
4-38 Product and Service Design

Cultural Differences

 Multinational companies must take into account

cultural differences related to the product design.
4-39 Product and Service Design

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
4-40 Product and Service Design

Phases 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
4-41 Product and Service Design

Idea Generation

Supply chain based

Ideas Competitor based

Research based
4-42 Product and Service Design

Reverse Engineering

Reverse engineering is the

dismantling and inspecting
of a competitor’s product to discover
product improvements.
4-43 Product and Service Design

Manufacturability

 Manufacturability is the ease of fabrication

and/or assembly which is important for:
 Cost
 Productivity
 Quality
4-44 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
4-45 Product and Service Design

Concurrent Engineering

Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.
4-46 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
4-47 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
4-48 Product and Service Design

DFA
4-49 Product and Service Design

Poka Yoke
4-50 Product and Service Design

Recycling
 Recycling: recovering materials for future use
 Recycling reasons
 Cost savings
 Environment concerns

 Environment regulations
4-51 Product and Service Design
DFR
4-52 Product and Service Design

DFR
4-53 Product and Service Design

Component Commonality
 Multiple products or product families that have a
high degree of similarity can share components
 Automakers using internal parts
 Engines and transmissions
 Water pumps
 Etc.
 Other benefits
 Reduced training for assemble and installation
 Reduced repair time and costs

4-53
4-54 Product and Service Design

Quality Function Deployment

 Quality Function Deployment

 Voice of the customer

QFD: An approach that integrates the “voice of the customer” into

the product and service development process.
4-55 Product and Service Design

Operations Strategy

1. Increase emphasis on component

commonality
2. Package products and services
3. Use multiple-use platforms
4. Consider tactics for mass
customization
5. Look for continual improvement
6. Shorten time to market
4-56 Product and Service Design

Shorten Time to Market

1. Use standardized components

2. Use technology
3. Use concurrent engineering
4-57 Product and Service Design