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Chapter 4

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Chapter 4

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  1. Chapter 4 Product and Service Design

  2. Trends in Product & Service Design • Customer satisfaction • Designing products & services that are “user friendly” • User friendly software • Reducing time to introduce/produce new product or service • PhD degree in 6 months • The organization’s capabilities to produce or deliver the right item on time • Compaq could not deliver enough laptops in mid 90s • Environmental concerns • Designing products that use less material • Toyota Prius

  3. 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. Activities of Product or 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 • cost targets • Construct and test prototypes • Document specifications

  5. Reasons for Product or Service Design • Economic • Low demand, excessive warranty claims • SUVs easily topple over and have high warranty claims • Social and demographic • Changing tastes, aging population • SUVs for generation X people who age but want to stay dynamic • Political, liability, or legal • Safety issues, new regulations, government changes • SUVs easily topple over and manufacturers are sued • Competitive • New products and services in the market, promotions • SUV sales are increased with promotions. • The profit margins on SUVs are huge so a lot of room for promotions • Cost or availability • Raw materials, components, labor • Technological • Components, production processes

  6. Objectives 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

  7. Design For Operations • Taking into account the capabilities of the organization in designing goods and services • Location of facilities • Suppliers • Transportation fleet • Current workforce • Current technology • Standing contracts • All can all limit the implementation of a new design

  8. Legal, Ethical, and Environmental Issues • Legal • IRS, FDA, OSHA • 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 • Ethical • Releasing products with defects • Releasing Software with bugs • Sending genetically altered food to nations suffering food shortages • Environmental • EPA

  9. 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

  10. Forthcoming Aspects of Product Design • Product Life Cycles • Standardization • Mass Customization • Modular Design • Robust Design • Concurrent Engineering • Computer-Aided Design

  11. Other Issues in Product and Service Design • Product/service life cycles • How much standardization • Product/service reliability • Range of operating conditions

  12. Saturation Maturity Decline Demand Growth Introduction Time Life Cycles of Products or Services cassettes Compact discs Design for low volume Flash memory

  13. Standardization • Standardization • Extent to which there is an absence of variety in a product, service or process • The degree of Standardization? • Standardized products are immediately available to customers Calculators & car wash

  14. Advantages of Standardization • Fewer parts to deal with in inventory & manufacturing • Less costly to fill orders from inventory • Reduced training costs and time • More routine purchasing, handling, and inspection procedures • Opportunities for long production runs, automation • Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.

  15. Disadvantages of Standardization • Decreased variety results in less consumer appeal. • Designs may be frozen with too many imperfections remaining. • High cost of design changes increases resistance to improvements • Who likes optimal Keyboards? • Standard systems are more vulnerable to failure • Epidemics: People with non-standard immune system stop the plagues. • Computer security: Computers with non-standard software stop the dissemination of viruses.

  16. Mass Customization Mass customization: • A strategy of producing standardized goods or services, but incorporating some degree of customization • Modular design • Delayed differentiation

  17. DEVELOPMENT PRODUCTION MARKETING DELIVERY Mass Customization I: Customize Services Around Standardized Products Warranty for contact lenses: Source: B. Joseph Pine Deliver customized services as well as standardized products and services Market customized services with standardized products or services Continue producing standardized products or services Continue developing standardized products or services

  18. DEVELOPMENT PRODUCTION MARKETING DELIVERY Mass Customization II: Create Customizable Products and Services Gillette sensor adjusting to the contours of the face: Deliver standard (but customizable) products or services Market customizable products or services Produce standard (but customizable) products or services Develop customizable products or services

  19. DEVELOPMENT PRODUCTION MARKETING DELIVERY Mass Customization III: Provide Quick Response Throughout Supply Chain Skiing parkas manufactured abroad vs in USA Reduce Delivery Cycle Times Reduce selection and order processing cycle times Reduce Production cycle time Reduce development cycle time

  20. DEVELOPMENT PRODUCTION MARKETING DELIVERY Mass Customization IV: Provide Point of Delivery Customization Paint mixing: Point of delivery customization Deliver standardize portion Market customized products or services Produce standardized portion centrally Develop products where point of delivery customization is feasible

  21. Delayed Differentiation • Delayed differentiation is a postponement tactic • Producing but not quite completing a product or service until customer preferences or specifications are known • Postponing the completion until customer specification are known • Examples: Wheeled loaders

  22. Postponement Case Study: Hewlett & Packard • H&P produces printers for Europe market. Product manuals (different languages), labels and power supplies (plugs are different for UK, Continental EU and US) were used to be packaged along with printers in US. • HP postpones commitment of a printer to a certain geographic market by producing universal printers and then applying power supplies and labels (the parts that differentiate printers for local markets) at the last stage once demand is more certain • Packaging was postponed to local distribution centers in each European country. Packaging is closer to demand (in location and time) so H&P can respond faster and redistribute the supply: • Ireland has 1600 with demand 1100 • Portugal has 800 with demand 1000 • Send 200 from Ireland to Portugal • For more read: H.L. Lee and C. Billington, "Evolution of Supply Chain Management Models and Practice at Hewlett-Packard Company," Interfaces, 25, 5, 1995: 42-63.

  23. Delayed Differentiation=Postponement • Postponement is delaying customization step as much as possible. Producing but not quite completing a product or service until customer preferences or specifications are known. • (Salad) + (Dressings ={1000 Islands, Vinaigrette, …}) • Need: • Indistinguishable products before customization • Customization step is high value added • Unpredictable, negatively correlated demand for finished products • Flexible processes to allow for postponement

  24. 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 Disadvantage: variety decreases

  25. Modular Design Modular designis a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. • A bad example: Earlier Ford SUVs shared the lower body with Ford cars Due to standardization, it allows: • easier diagnosis and remedy of failures • easier repair and replacement • simplification of manufacturing and assembly

  26. Types of Modularity for Mass Customization Component Sharing Modularity, Dell Cut-to-Fit Modularity, Gutters that do not require seams Bus Modularity, E-books + = Mix Modularity, Paints Sectional Modularity, LEGO

  27. DEVELOPMENT PRODUCTION MARKETING DELIVERY Mass Customization V: Modularize Components to Customize End Products Computer industry, Dell computers: Deliver customized product Market customized products or services Produce modularized components Develop modularized products

  28. 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 • A regular car is not to be driven at 200 mph • A bed is not to be used as a trampoline

  29. Improving Reliability • Good component design improve system reliability • Production/assembly techniques • Testing • To figure out defectives / weak units • Dell tests each computer’s electric circuitry after the assembly • Redundancy/backup • Exactly why your car has a spare tire • Preventive maintenance procedures • Medical check-ups to discover potential diseases • User education • System design

  30. Robust Design Design that can function over a broadrange of conditions Taguchi’s Approach: • Design a robust product • Insensitive to environmental factors either in manufacturing or in use. • Columbia parkas with fleece inside • For skiing and rainy weather: Take out the fleece use the outer shell • For dry cold air: Wear the fleece without the outer shell • For a snow storm: Wear the fleece with the shell • When you put on weight: Ease the belts for a relaxed fit • When you are sweating: Open air ducts for breathing your body • Central feature is Parameter Design. How to set design parameters? • Design of experiments – a Statistics concept • Determines: • factors that are controllable and those not controllable • their optimal levels relative for good product performance

  31. Phases in Product Development Process • Idea generation • Feasibility analysis (Demand, cost/profit, capacity) • Product specifications (customer requirement) • Process specifications (produce in economic way) • Prototype development • Design review • Market test • Product introduction (promotion) • Follow-up evaluation

  32. Ideas Idea Generation Supply chain based Competitor based Research based

  33. Sources of Ideas for Products and Services • Internal • Employees • Marketing department • R&D department • External • Customers, sometimes misleading • Competitors • Reverse engineering is thedismantling and inspecting of a competitor’s product to discover product improvements. • Benchmarking is comparing and contrasting product and process characteristics against those of competitors • Both can be classified as environmental scanning activity • Suppliers & Customers, • Ford helps its suppliers in designing components

  34. Research & Development (R&D) • Organized efforts to increase scientific knowledge or product innovation & may involve: • Basic Research advances • Universities, IBM research centers • Applied Research • Motorola, Alcatel • Development • All companies

  35. Manufacturability • Manufacturability is the ease of fabrication and/or assembly which is important for the following aspects: • Cost • Productivity • Quality

  36. Design 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 operationsencompasses transportation, services as well as manufacturing

  37. New Product Design Mfg “Over the Wall” Approach vsConcurrent Engineering

  38. Concurrent Engineering Concurrent engineering: Bringing engineering design and manufacturing personnel together early in the design phase. • Manufacturing personnel helps to identify production capabilities, selecting suitable materials and process, the conflicts during production can be reduced. • Early consideration of technical feasibility. • Shortening the product development process.

  39. Product design • Design for manufacturing (DFM) • Design for assembly (DFA) number of parts, methods, sequence. • Design for recycling (DFR) • Remanufacturing • Design for disassembly (DFD)

  40. 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 • Simplifies communication of a design. Design teams at various locations can work together. • provides possibility of engineering and cost analysis on proposed designs • Transonic Systems Inc. manufactures customized medical devices; pomps, blood vessel, blood pressure measurement equipment. • Design to manufacturing was long, problematic, designers and manufacturing engineers could not work on designs simultaneously, some of the previous designs were lost (talking of knowledge management). • Savior: CAD

  41. Recycling-Remanufacturing • Recycling: recovering materials for future use • Recycling reasons • Cost savings • Environment concerns • Environment regulations • Remanufacturing: replacing worn out parts in used products • Kodak cameras • Design for disassembly is considering ease of disassembly while designing a product • Reverse supply chains

  42. 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.

  43. Correlation matrix Design requirements Customer require- ments Relationship matrix Competitive assessment Specifications or target values The House of Quality

  44. Quality Function Deployment A structured and disciplined process that provides a means to identify and carry the voice of the customer through each stage of product or service development and implementation QFD is for: • Communication • Documentation • Analysis • Prioritization breakthroughs

  45. Correlation: Strong positive X Positive X X Negative X X X Strong negative * Engineering Characteristics Competitive evaluation Check force on level ground Energy needed to close door Energy needed to open door Accoust. Trans. Window Door seal resistance X = Us Water resistance A = Comp. A Importance to Cust. B = Comp. B Customer Requirements (5 is best) 1 2 3 4 5 AB X Easy to close 7 X AB Stays open on a hill 5 Easy to open 3 XAB A X B Doesn’t leak in rain 3 63 63 45 27 6 27 No road noise 2 X A B Importance weighting Relationships: Strong = 9 Medium = 3 Target values Reduce energy level to 7.5 ft/lb Reduce energy to 7.5 ft/lb. Reduce force to 9 lb. Maintain current level Maintain current level Maintain current level Small = 1 5 BA BA B B BXA X Technical evaluation (5 is best) B 4 X A X A 3 A X 2 X 1 House of Quality Example for a Car Door

  46. The QFD and Kano Model Japanese QFD Results • Design time reduced by ¼ to ½ • Problems with initial quality decreased • Comparison and analysis of competitive products became possible • Communication between divisions improved The Kano Model • Product Characteristics: • Must have = Order qualifiers • Expected = Order qualifiers, winners • Excitement = Order winners • Make sure that you have the order qualifiers • Determine the level of order winners with a cost/benefit analysis

  47. Service Design • Service is an act • Service delivery system • Facilities • Processes • Skills • Explicit services • Core of the service: Hair styling • Implicit services • Excitement characteristics: Courtesy • Many services are bundled with products • Maintenance services • Conecpt of selling solutions: Products and Services • E.g. IBM

  48. Phases in Service Design • Conceptualize • Identify service components • Determine performance specifications • Translate performance specifications into design specifications • Translate design specifications into delivery specifications

  49. Service 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 • Major Steps in Service Blueprinting • Establish boundaries • Identify steps involved • Prepare a flowchart, see the next page, source in justice-flowchart.pdf • Identify potential failure points • Establish a time frame • Analyze profitability