Operations Management

Product Design Chapter 3
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Outline
♦ Goods and services selection ♦ Generating new products ♦ Product development ♦ Issues for product design ♦ Time-based competition ♦ Defining the product
♦ Documents for production ♦ Service design

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When you complete this chapter, you should be able to : Identify or Define:
Product life cycle ♦ Product development team ♦ Manufacturabililty and value engineering ♦ Robust design ♦ Time-based competition ♦ Modular design ♦ Computer aided design ♦ Value analysis ♦ Group technology ♦ Configuration management Prepared by : Shatina Saad 3-3

Learning Objectives

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Learning Objectives Continued When you complete this chapter, you
should be able to: Explain:

Alliances ♦ Concurrent engineering ♦ Product-by-value analysis ♦ Product documentation

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Humor in Product Design
As the customer wanted it. As Marketing
interpreted

it.
© 1984-1994 T/Maker Co. © 1984-1994 T/Maker Co.

As Operations made it.

As
Engineering

designed it.
© 1984-1994 T/Maker Co. Prepared by : Shatina Saad © 1984-1994 T/Maker Co. OPM 533

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What is a Product?
♦ Need-satisfying offering of an organization

Example ♦ P&G does not sell laundry detergent ♦ P&G sells the benefit of clean clothes

♦ Customers buy satisfaction, not parts ♦ May be a good or a service
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Product Strategy Options
♦ Product differentiation ♦ Low cost ♦ Rapid response

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Generation of New Product Opportunities
♦ Economic change ♦ Sociological and demographic change ♦ Technological change ♦ Political/legal change ♦ Changes in
♦ ♦ ♦

market practice professional standards suppliers and distributors
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Product Components
Product

Brand (Name)

Product Idea

Package

Physical Good

Features

Quality Level

Service (Warranty)

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Product Life Cycle
♦ Introduction ♦ Growth ♦ Maturity ♦ Decline

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Product Life Cycle Introduction
♦ Fine tuning
research ♦ product development ♦ process modification and enhancement ♦ supplier development

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Product Life Cycle Growth
♦ Product design begins to stabilize ♦ Effective forecasting of capacity becomes necessary ♦ Adding or enhancing capacity may be necessary

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Product Life Cycle Maturity
♦ Competitors now established ♦ High volume, innovative production may be needed ♦ Improved cost control, reduction in options, paring down of product line

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Product Life Cycle Decline
♦ Unless product makes a special contribution, must plan to terminate offering

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Product Life Cycle, Sales, Cost, and Profit
Sales, Cost & Profit Cost of Development & Manufacture . Sales Revenue

Profit Loss
Cash flow Time

IntroductionGrowth Maturity
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Decline
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Product-by-Value Analysis
♦ Lists products in descending order of their individual dollar contribution to the firm. ♦ Helps management evaluate alternative strategies.

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Product Development Stages
♦ Idea generation ♦ Assessment of firm’s ability to carry out ♦ Customer Requirements ♦ Functional Specification Scope of design ♦ Product Specifications for manufacturabilit ♦ Design Review y and value ♦ Test Market engineering ♦ Introduction to Market teams ♦ Evaluation
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Scope of product development team

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♦ Identify customer wants ♦ Identify how the good/service will satisfy customer wants ♦ Relate customer wants to product hows ♦ Identify relationships between the firm’s hows ♦ Develop importance ratings ♦ Evaluate competing products
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Quality Function Deployment

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QFD House of Quaoity

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House of Quality Sequence Indicates How to Deploy Resources to Achieve Customer Requirements

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Idea Generation Stage
♦ Provides basis for entry into market ♦ Sources of ideas

Market need (60-80%); engineering & operations (20%); technology; competitors; inventions; employees Identifies, defines, & selects best market opportunities
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♦ Follows from marketing strategy

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Customer Requirements Stage
♦ Identifies & positions key product benefits
Stated in core benefits proposition (CBP) ♦ Example: Long lasting with more House of Quality ♦ Identifies detailed list of power (Energizer Die Hard product attributes Battery)

desired by customer

Focus groups or 1-on-1 interviews

Product Characteristics

Customer Requirements
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♦ Defines product in terms of how the product would meet desired attributes ♦ Identifies product’s engineering characteristics

Functional Specification Stage

Example: printer noise (dB)

♦ Prioritizes engineering characteristics ♦ May rate product compared Customer to competitors’
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House of Quality
Product Characteristics

Requirements
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Product Specification Stage
♦ Determines how product will be made ♦ Gives product’s physical specifications
♦ Example: Dimensions, material etc.

♦ Defined by engineering drawing ♦ Done often on computer

House of Quality
Component Specifications

Computer-Aided Design (CAD)
Product Characteristics

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Quality Function Deployment
♦ Product design process using cross-functional teams

Marketing, engineering, manufacturing

♦ Translates customer preferences into specific product characteristics ♦ Involves creating 4 tabular ‘Matrices’ or ‘Houses’

Breakdown product design into increasing levels of detail
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Organizing for Product Development
♦ Historically – distinct departments
Duties and responsibilities are defined ♦ Difficult to foster forward thinking

♦ Today – team approach
Representatives from all disciplines or functions ♦ Concurrent engineering – cross functional team

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Manufacturability and Value Engineering
♦ Benefits: ♦ reduced complexity of products ♦ additional standardization of products ♦ improved functional aspects of product ♦ improved job design and job safety ♦ improved maintainability of the product 3-27

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Issues for Product Development
♦ Robust design ♦ Time-based competition ♦ Modular design ♦ Computer-aided design ♦ Value analysis ♦ Environmentally friendly design
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Robust Design
♦ Product is designed so that small variations in production or assembly do not adversely affect the product

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Modular Design
♦ Products designed in easily segmented components. ♦ Adds flexibility to both production and marketing

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♦ Designing products at a computer terminal or work station

Computer Aided Design (CAD)

Design engineer develops rough sketch of product Uses computer to draw product
© 1995 Corel Corp.

♦ Often used with
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Benefits of CAD/CAM
♦ Shorter design time ♦ Database availability ♦ New capabilities

Example: Focus more on product ideas

♦ Improved product quality ♦ Reduced production costs

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Extensions of CAD
♦ Design for Manufacturing and Assembly (DFMA) ♦ 3-D Object Modeling ♦ CAD/CAM – CAD info is translated into machine control instructions (CAM)
© 1995 Corel Corp. Prepared by : Shatina Saad

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Virtual Reality
♦ Computer technology used to develop an interactive, 3-D model of a product. ♦ Especially helpful in design of layouts (factory, store, home, office)

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Value Analysis
♦ Focuses on design improvement during production ♦ Seeks improvements leading either to a better product or a product which can be more economically produced.

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Environmentally Friendly Designs
♦ Benefits
Safe and environmentally sound products ♦ Minimum raw material and energy waste ♦ Product differentiation ♦ Environmental liability reduction ♦ Cost-effective compliance with environmental regulations ♦ Recognition as good corporate citizen

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“Green” Manufacturing
♦ Make products recyclable ♦ Use recycled materials ♦ Use less harmful ingredients ♦ Use lighter components ♦ Use less energy ♦ Use less material
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Time-based Competition
♦ Product life cycles are becoming shorter. ∴Faster developers of new products gain on slower developers and obtain a competitive advantage
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Product Development Continuum Strategies External Development
Purchase Technology or Expertise by Acquiring the Developer Internal Development Strategies Migrations of Existing Products Enhancement to Existing Products New Internally Developed Products Internal ←----------------------Cost of Product Development ---------------------→ Shared Lengthy ←--------------------Speed of Product Development---------------→Rapid and/or

Alliances Joint Ventures

Existing
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Product Documents
♦ Engineering drawing
♦ ♦

Shows dimensions, tolerances, & materials Shows codes for Group Technology Lists components, quantities & where used Shows product structure
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♦ Bill of Material
♦ ♦

© 1984-1994 T/Make Prepared by : Shatina Saad

Make-or-Buy Decisions
♦ Decide whether or not you want (or need) to produce an item ♦ May be able to purchase the item as a “standard item” from another manufacturer

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Group Technology Characteristics
♦ Parts grouped into families

Similar, more standardized parts Describes processing & physical characteristics

♦ Uses coding system

♦ Part families produced in manufacturing cells

Mini-assembly lines
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♦ Improved product design ♦ Reduced purchases ♦ Reduced work-in-process inventory ♦ Improved routing & machine loading ♦ Reduced setup & production times ♦ Simplified production planning & 3-43 control
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Group Technology Benefits

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Production Documents
♦ Assembly Drawing ♦ Assembly chart ♦ Route sheet ♦ Work order

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Engineering Change Notice (ECN)
♦ A correction or modification of an engineering drawing or bill of material

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Configuration Management
♦ A system by which a product’s planned and changing components are accurately identified and for which control and accountability of change are maintained

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Service Design Nature of Customer Participation

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Improving Customer Relations at a Drive-up Window
♦ Be especially discreet when talking with customer through the microphone ♦ Provide written instructions for customers who must fill out forms you provide ♦ Mark lines to be completed or attach a note with instructions ♦ Always say ”please” and “thank you” ♦ Establish eye contact with the customer if the distance allows it ♦ If the transaction requires that the customer park
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