4 -1 Product and Service Design Chapter 4

4 -1 Product and Service Design Chapter 4 Product and Service Design Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -2 Product and Service Design Sources of Ideas for Products and Services • Internal – Employees – Marketing department – R&D department • External – Customers (QFD) – Competitors – Suppliers Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -3 Product and Service Design Reverse Engineering Reverse engineering is the dismantling and inspecting of a competitor’s product to discover product improvements. Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

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

4 -5 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 Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -6 Product and Service Design Product Design—Other Issues • Product Life Cycles • Standardization – Benefits and disadvantages – Key trade-off, Variety vs. volume • Design for mass customizations • Reliability • Robust Design Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -7 Product and Service Design Life Cycles of Products or Services Figure 4 -2 Saturation Demand Maturity Decline Growth Incubation Time Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -8 Product and Service Design Standardization: The Key Trade-off Volume Variety Efficiency Flexibility Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -9 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 Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -10 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. Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -11 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. Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -12 Product and Service Design Mass Customization • A strategy of producing standardized goods or services, but incorporating some degree of customization • Implications – Product implications—modular design – Process implications—postponement – Sales implications—internet Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -13 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 Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -14 Product and Service Design Improving Reliability • Component design • Production/assembly techniques • Testing • Redundancy/backup • Preventive maintenance procedures • User education • System design Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -15 Product and Service Design Robust Design: Design that results in products or services that can function over a broad range of conditions Insensitive to environmental factors either in manufacturing or in use. Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -16 Product and Service Designing for Manufacturing • Concurrent engineering • CAD • Production requirements – DFM, DFA • Recycling • Remanufacturing • Component commonality Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -17 Product and Service Design Differences Between Product and Service (Mfg vs. Services) • Tangible – intangible • Services cannot be inventoried • Services created and delivered at the same time—customer is in the system • Location and layout important to services • Customers bring more variety • Services are more labor intensive • Services have low barrier to entry Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -18 Product and Service Design Service Variability & Customer Figure 4 -3 Influence Service Design High Variability in Service Requirements Customized Clothing Moderate Dept. Store Purchase Low Telephone Purchase None Internet Purchase None Low Moderate High Degree of Contact with Customer Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -19 Product and Service Design Continuum of Characteristics More like a manufacturing organization • • • Physical, durable product Output can be inventoried Low customer contact Long response time Regional, national or International markets • Large facilities • Capital intensive • Quality easily measured Mc. Graw-Hill/Irwin More like a service organization • • Intangible, perishable product Output cannot be inventoried High customer contact Short response time Local markets Small facilities Labor intensive Quality not easily measured Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -20 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. Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -21 Product and Service Design The House of Quality Figure 4 -5 Correlation matrix Design requirements Customer requirements Relationship matrix Competitive assessment Specifications or target values Mc. Graw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

4 -22 Product and Service Design House of Quality Example Correlation: X X nc Customer Requirements Easy to close et o. C us t. Water resistance rta Engineering Characteristics Door seal resistance po Energy needed to close door Im Check force on level ground Energy needed to open door X Accoust. Trans. Window X X X * Strong positive Positive Negative Strong negative Competitive evaluation X = Us A = Comp. A B = Comp. B (5 is best) 1 2 3 4 7 5 X AB Easy to open 3 Doesn’t leak in rain 3 No road noise Importance weighting 2 AB X Stays open on a hill 5 XAB A XB X A Technical evaluation (5 is best) Mc. Graw-Hill/Irwin 5 4 3 2 1 B A X B X A BXA 3 Maintain current level 2 Maintain current level 9 Reduce energy to 7. 5 ft/lb. 6 Reduce force to 9 lb. Target values 6 Maintain current level Reduce energy level to 7. 5 ft/lb 10 B Relationships: Strong = 9 Medium = 3 Small = 1 BA X Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The Mc. Graw-Hill Companies, Inc. All rights reserved.