Operations Management

BBA
Academic Year 2021-22

Dr. Hasanuzzaman
Assistant Professor
Operations & Information Technology
ICFAI Business School Hyderabad
Product and Services Design
Product and Services Design
 Product and Services Design
■ Product design is the process of deciding on the unique characteristics and features of the
company’s product.
– It combines users need with business goal
 Driving Forces of Product and Service Design or Redesign

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
 What Does Product & Service Design Do?
■ 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
■ Translate product and service specifications into process specifications
■ Involve Inter-functional Collaboration
 Key Questions
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. It is important for cost, productivity, and quality.
■ Serviceability - the capability of an organization to provide a service at an acceptable cost or
profit
What level of quality is appropriate?
■ Customer expectations
■ Competitor quality
■ Fit with current offering
Does it make sense from an economic standpoint?
■ Liability issues, ethical considerations, sustainability issues, costs and profits
 Product and Services Design - Objective
Main focus
■ Customer satisfaction
Secondary focus
■ Function of product/service
■ Cost/profit
■ Quality
■ Appearance
■ Ease of production/assembly
■ Ease of maintenance/service
Considerations of Product and Service Design
■ Idea Generation
■ Legal and ethical consideration
■ Human Factor
■ Cultural Factor
■ Global Product and Service Design
■ Environmental Factors – Sustainability
■ Product/service life cycles
■ How much standardization
■ Design for Mass Customization
■ Product/service reliability
■ Range of operating conditions
 Idea Generation
Various source of idea generation
■ Customer
– surveys, focus groups, complaints, and unsolicited suggestions
■ Supply Chain Based
– suppliers, distributors, and employees can be obtained from interviews, direct or
indirect suggestions, and complaints.
■ Competitor based
– Reverse engineering - Dismantling and inspecting a competitor’s product to discover
product improvements.
■ Research based
– Organized efforts to increase scientific knowledge or product innovation.
– Basic research has the objective of advancing the state of knowledge about a subject
without any near-term expectation of commercial applications.

– Applied research has the objective of achieving commercial applications.

– Development converts the results of applied research into useful commercial

applications
 Legal and Ethical Consideration
■ Product Liability
– The responsibility of a manufacturer for any
injuries or damages caused by a faulty
product.
■ Uniform Commercial Code
– Products carry an implication of
merchantability and fitness
– Product must be usable for its intended
purposes
 Human and Cultural Consideration
■ Human Factor
– Safety and liability are two
critical issues in many
instances, and they must be
carefully considered.
– Adding new features to their
products or services.
■ Cultural Factor
– Different designs for
different countries or
regions
 Global Product and Service Design
■ Organizations that operate glob-
ally are discovering advantages
in global product design,
■ It uses the combined efforts of
a team of designers who work in
different countries and even on
different continents.
■ Virtual teams can provide a
range of comparative
advantages over traditional
teams
– Time to market
 Environmental Factors - Sustainability
■ Cradle-to-grave Assessment Cradle-to-grave Assessment
■ End-of-life Programs ■ life cycle analysis
■ 3R – The assessment of the environmental
– Reduction of Costs and Materials impact of a product or service throughout
used its useful life
– Reuse of Parts of Returned – Global warming, smog formation, oxygen
Products
depletion, and solid waste generation
– Recycling
– To choose products and services that
have the least environmental impact
End-of-life Programs while still taking into account economic
considerations
■ To reduce the dumping of products in landfills or
third-world countries, as has been the common
practice
– Particularly electronic equipment
■ Incineration
– converts materials into hazardous air and
water emissions and generates toxic ash
 3R
■ Designers often reflect on three particular aspects of potential cost saving and reducing
environmental impact
Reduction: Costs and Materials used
■ It refers to value analysis
– Examination of the function of parts and materials in an effort to reduce cost and/or
improve product performance.
■ Could a cheaper part or material be used?
■ Is the function necessary?
■ Can the function of two or more parts or components be performed by a single part for a lower
cost?
■ Can a part be simplified?
■ Could product specifications be relaxed, and would this result in a lower price?
■ Could standard parts be substituted for nonstandard parts ?
 3R
■ Designers often reflect on three particular aspects of potential cost saving and reducing
environmental impact
Reuse: Parts of Returned Products
■ It refers to remanufacturing of products
– Refurbishing used products by replacing worn-out or defective components.
■ Reasons
– Cost Saving
– The process requires mostly unskilled and semiskilled workers
– Reducing environmental impact
■ This can be done by the original manufacturer, or another company.
– Automobiles, Printers, Copiers, Cameras, Computers, Telephones
■ Design for disassembly (DFD)
– Design so that used products can be easily taken apart.
 3R
■ Designers often reflect on three particular aspects of potential cost saving and reducing
environmental impact
Recycle
■ Recovering materials for future use
■ Reasons for recycling
– Cost savings.
– Environment concerns.
– Environmental regulations.
■ Design for recycling (DFR)
– Design that facilitates the recovery of materials and components in used products for
reuse.
Product/service life cycles
Product/service life cycles – Strategies
Product/service life cycles – Strategies

Designing the Designing the Processes

Product/Service that produce
the Product/Service

Products and Services Processes should be designed

should be designed so that they can create
so that they can be all products and services
created effectively decided

Decisions taken during the design of Product/Service impacts

the Process that will produce the Product/Service and vice-versa
 Design for Mass Customization
Advantages
■ Fewer parts to deal with in inventory and in manufacturing.
■ Reduced training costs and time.
■ More routine purchasing, handling, and inspection procedures.
■ 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
■ 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.
 Product/service life cycles

Saturation

Maturity
Demand

Decline
Growth

Introduction

Time
Product/service life cycles
 How much standardization?
■ Standardization
– Extent to which there is an absence of variety in a product, service, or process
■ Products are made in large quantities of identical items
■ Every customer or item processed receives essentially the same service
■ Standardized products - Large volume of units produced is easier
– Demand for units of the product similar/identical must exist or be created
■ Standardization - Low variety of units produced
– Extent to which there is an absence of variety in a product or service
 Standardization – Advantages
■ Fewer parts to deal with in inventory & manufacturing
■ Design costs are lower – spread over more units produced – due to scale economies
■ Reduced training costs and time – since unit of product/service encounter is similar to
every other unit of product/service encounter
■ More routine purchasing, handling, and inspection procedures – since product is
standardized raw material as well as processing is also standardized.
■ Orders fillable from inventory – Make to Stock
■ Opportunities for long production runs and automation – Setup Time short; Run time
long
■ Need for fewer parts justifies increased expenditures on perfecting designs and
improving quality control procedures.
How much standardization?
 Standardization – Disadvantages
■ Designs may be frozen with too many imperfections remaining.
■ High cost of design changes increases resistance to improvements.
■ Decreased variety may attract variety-seeking customers away
 Design for Mass Customization
■ A strategy of producing basically standardized goods, but incorporating some degree of customization.
Tactic
■ Delayed differentiation
– The process of producing, but not quite completing, a product or service until customer
preferences are known.
– In the case of goods, almost-finished units might be held in inventory until customer orders are
received, at which time customized features are incorporated, according to customer requests.
■ Modular Design
– A form of standardization in which component parts are grouped 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

■ Example - Computer
 Product / Service 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.
Ways to improve reliability
■ Improve component design.
■ Improve production and/or assembly techniques.
■ Improve testing.
■ Use backups.
■ Improve preventive maintenance procedures.
■ Improve user education.
■ Improve system design.
 Range of Operating Conditions
■ The set of conditions under which an item’s reliability is specified.
■ Operating conditions are a set of conditions for operating a particular system or process
■ Check spark plugs and wires
■ Go easy when accelerating and braking
■ Don’t empty out your fuel tank completely
■ Inspect your engine oil
■ Keep your engine bay clean
■ Check the cooling system
■ Inspect the timing belts or chain
■ Limit the speed
 Design Strategy – Factor to be Considered
■ Cost
■ Quality
■ Time-to-market
■ Customer satisfaction
■ Competitive advantage
 Product or Service Design
Idea
Generation
Follow-up Feasibility
Evaluation Analysis

Product Product
Introduction Phases Specifications

Market Test Process

Specifications

Design Review Prototype

Development
 Design for Production
■ Concurrent Engineering
■ Computer Aided Design (CAD)
■ Production Requirement
– Design for manufacturing (DFM)
– Design for assembly (DFA)
– Design for recycling (DFR)
– Manufacturability
– Remanufacturing
– Design for disassembly (DFD)
■ Component Commonality
■ Robust design
 Concurrent Engineering
■ Bringing engineering design and manufacturing personnel together early in the design phase to simultaneously
develop the product and the processes for creating the product.
– The purpose, of course, is to achieve product designs that reflect customer wants as well as
manufacturing capabilities
Advantages
■ Manufacturing personnel are able to identify production capabilities and capacities
■ Reduce the product development time
■ Improves quality of early design decisions
■ Decentralized - suppliers complete detailed design
■ Incorporates production process
■ Often uses a price-minus system
Disadvantages
■ Scheduling and management can be complex as tasks are done in parallel
■ Long-standing boundaries between design and manufacturing can be difficult to overcome
■ There must be extra communication and flexibility if the process is to work, and these can be difficult to
achieve.
 Concurrent Engineering

“Over the Wall”

Approach

New
Product

Mfg Design
 Computer Aided Product Design
■ Product design using
computer graphics.
■ A growing number of
products are being
designed in this way,
including
– Transformers
– Automobile parts
– Aircraft parts
– Integrated circuits,
– electric motors.
 Design for manufacturing (DFM)
■ The designing of products that are compatible with an organization’s capabilities.
Advantages
■ Minimize the number of parts, tools, fasteners, and assemblies
■ Use standard parts and repeatable processes
■ Modular design
■ Design for ease of assembly, minimal handling
■ Allow for efficient testing and parts replacement

Design for assembly (DFA)

■ Design that focuses on reducing the number of parts in a product and on assembly
methods and sequence.
 Component Commonality
■ Companies often have multiple products or services to offer customers.
■ These products or services have a high degree of similarity of features and components.
■ This is particularly true of product families, but it is also true of many services.
■ For example, car manufacturers employ this tactic by using internal components such as
water pumps, engines, and transmissions on several automobile, nameplates.
Benefits
■ Save design time
■ Companies reap benefits through standard training for assembly and installation,
■ Increased opportunities for savings by buying in bulk from suppliers, and
■ Commonality of parts for repair, which reduces the inventory dealers and auto parts
stores must carry.
 Robust Design
■ Design that results in products or services
that can function over a broad range of
conditions.
■ Taguchi’s Approach
■ Japanese engineer Genichi Taguchi’s
approach is based on the concept of
robust design.
■ It is often easier to design a product that
is insensitive to environmental factors,
either in manufacturing or in use, than to
control the environmental factors.
■ The central feature of Taguchi’s
approach—and the feature used most
often by U.S. companies—is parameter
design
 Degree of Newness
■ Product or service design change can range from the modification of an existing product
or service to an entirely new product or service.
– Modification of an existing product or service.
– Expansion of an existing product line or service offering.
– Clone of a competitor’s product or service.
– New product or service.
■ A low level of newness can mean a fairly quick and easy transition to producing the new
product.
– little difficulty with market acceptance, but possibly low profit potential.
■ A high level of newness would likely mean a slower and more difficult, and therefore more
costly, transition.
– More difficulty with acceptance, or it might mean a rapid gain in market share with
a high potential for profits
 Quality Function Deployment
■ A structured approach that integrates
the “voice of the customer” into both
product and service development.
– Listening to and understanding
the customer is the central
feature of QFD

■ Example
– The data relate to a commercial
printer (customer) and the
company that supplies the paper
 House of Quality – Sequence

QFD Result (Japanese)

■ Design time reduced by ¼ to ½
■ Problems with initial quality decreased
■ Comparison and analysis of competitive products became possible
■ Communication between divisions improved
 Design Simplification
(a) The original design (b) Revised design (c) Final design

Assembly using One-piece base Design for

common fasteners & elimination push-and-
of fasteners snap
assembly
 The Design Funnel
Large # of
Design Options

Choice and Evaluation

Screens
Uncertainty
regarding
final design

Certainty
regarding
final design

One Design choice

 Service Design
■ Service refers to an act, something that is done to or for a customer (client, patient, etc.)
■ Service delivery system
– The facilities, processes, and skills needed to provide a service.
■ Product bundle
– The combination of goods and services provided to a customer
■ System design involves development or refinement of the overall service package
■ Service Package
– The physical resources needed to perform the service, the accompanying goods, and
the explicit and implicit services included.
 Service Characteristics
■ Intangible (Expected Value)
■ Heterogeneous (Variability)
■ Simultaneous Consumption-Production (Inseparable)
■ Perishable (cannot be inventoried/stocked)
■ Lack of Ownership (Cannot be owned)
 Service Design – Considerations
■ The physical resources needed.
■ The accompanying goods that are purchased or consumed by the customer, or provided
with the service.
■ Explicit services (the essential/core features of a service, such as tax preparation).
■ Implicit services (ancillary/extra features, such as friendliness, courtesy).
 Service Design vs. Product Design
Two key issues in service design are
■ The degree of variation in service requirements and
■ The degree of customer contact and customer involvement in the delivery system.

■ The lower the degree of customer contact and service requirement variability, the more
standardized the service can be.
– Service design with no contact and little or no processing variability is very much like
product design.
■ Conversely, high variability and high customer contact generally mean the service must be
highly customized.
■ A related consideration in service design is the opportunity for selling
– The greater the degree of customer contact, the greater the opportunities for selling.
Service Design Process – Phases
 Service Blue Print
■ A method used in service design to describe and analyse a proposed service.
Service Blue Print - Example
Service Design Matrix
 Poka Yoke
■ Its Japanese equivalent poka-yoke (pronounced PO-ka yo-KAY)
– Meaning Mistake proofing
– It is a common process analysis tool
■ It is the use of any automatic device or method that either makes it impossible for an error
to occur or makes the error immediately obvious once it has occurred.
 Poka Yoke – Principles
■ Elimination (“don’t do it anymore”) is to eliminate the possibility of error by redesigning the
product or process so that the task or part is no longer necessary.
■ Prevention (“make sure it can never be done wrong”) is to design and engineer the product
or process so that it is impossible to make a mistake at all.
■ Replacement (“use something better”) is to substitute a more reliable process to improve
consistency.
■ Facilitation (“make tasks easier to perform”) is to employ techniques and to combine steps
to make work easier to perform.
■ Detection (“notice what is going wrong and stop it”) is to identify an error before further
processing occurs so that the user can quickly correct the problem.
■ Mitigation (“don’t let the situation get too bad”) is to seek to minimize the effects of errors.

■ Elimination, Prevention, Replacement and Facilitation are to avoid the occurrence of

mistakes. Detection and Mitigation are to minimize the effects of mistakes once they
occur.
Poka Yoke – Implementation