Chapter 5

Products and Services

Operations Management - 5th Edition

Roberta Russell & Bernard W. Taylor, III

 Design Process

 Effective design can provide a competitive

edge
 Matches product or service characteristics with
customer requirements
 Ensures that customer requirements are met in the
simplest and least costly manner
 Reduces time required to design a new product or
service
 Minimizes revisions necessary to make a design
workable

5-2
 Design Process (cont.)
 Product design
 Defines appearance of
product
 Sets standards for
performance
 Specifies which materials
are to be used
 Determines dimensions
and tolerances
 Service design
 Specifies what physical
items, sensual benefits,
and psychological
benefits customer is to
receive from service
 Defines environment in
which service will take
place
5-3
 Outline of the Design Process
Idea Feasibility
generation study Performance
Product or
service concept specifications

Suppliers Customers Form design

R&D

Marketing Competitors Revising and testing

prototypes

Functional Production
design design

Design Manufacturing
New product or specifications or delivery
service launch specifications

Pilot run
Final design and final tests
& process plans

5-4
 Idea Generation – Sources

 Company’s own  Salespersons in the

R&D department field
 Customer complaints  Factory workers
or suggestions  New technological
 Marketing research developments
 Suppliers  Competitors
 Anywhere else??

5-5
 Idea Generation – Competitor
Source

 Perceptual Maps
 Visual comparison of
customer perceptions
 Benchmarking
 Comparing product/service
against best-in-class
 Reverse engineering
 Dismantling competitor’s product to
improve your own product

5-6
 Perceptual Map of
Breakfast Cereals
GOOD
TASTE

Cocoa Puffs

LOW HIGH
NUTRITION NUTRITION

Rice
Rice Cheerios
Cheerios
Krispies
Krispies
Wheaties
Wheaties

Shredded
Shredded
Wheat
Wheat
BAD
TASTE

5-7
 Feasibility Study

 Market analysis
 Economic analysis
 Technical/strategic analysis
 Performance specifications are written
for product concepts that pass the
feasibility study

5-8
Rapid Prototyping

 Build a prototype
 Form design
 Functional design
 Production design
 Test prototype
 Revise design
 Retest
5-9
Form and Functional Design

 Form Design
 How product will
look?
 Functional Design
 Reliability
 Maintainability
 Usability

5-10
 Reliability

 The probability that a given part or

product will perform its intended function
for a specified length of time under
normal conditions of use

5-11
Computing Reliability

Components in series

0.90 0.90 0.90 x 0.90 = 0.81

5-12
 Computing Reliability

Components in parallel

0.90
R2

0.95 0.95 + 0.90(1-0.95) = 0.995

R1

5-13
System Reliability

0.90

0.98 0.92 0.98

0.98 0.92+(1-0.92)(0.90)=0.99 0.98

0.98 x 0.99 x 0.98 = 0.951

5-14
 Reliability Example

 You work in a hospital as an

administrator of the lab (blood tests,
etc.). Other departments have been
recently complaining that lab results and
service is unreliable. You decide to
determine the reliability of your “system”.

5-15
 Reliability Example, cont’d.

A B C D

 A = 0.99
B
 B = 0.95
 C = 0.97
 D = 0.99 A C D

5-16
System Availability (SA)

MTBF
SA =
MTBF + MTTR
where:
MTBF = mean time between failures
MTTR = mean time to repair

5-17
System Availability
(cont.)

PROVIDER MTBF (HR) MTTR (HR)

A 60 4.0
B 36 2.0
C 24 1.0

SAA = 60 / (60 + 4) = .9375 or 93.75%

SAB = 36 / (36 + 2) = .9474 or 94.74%
SAC = 24 / (24 + 1) = .9600 or 96.00%

5-18
 System Availability Example

 The hospital wants to explore changing

its paging service. You have three
different vendors to choose from. Each
guarantees a maximum number of
failures per day and a maximum time to
regain service once a failure occurs.
Which vendor should you choose and
why?
5-19
SA Example, cont’d.

PROVIDER # of Failures MTTR (MIN)

Enera 12 2.5
Verizon 10 3.0
Sprint 8 3.5

5-20
 Usability

 Ease of use of a product or service

 Ease of learning
 Ease of use
 Ease of remembering how to use
 Frequency and severity of errors
 User satisfaction with experience

5-21
 Production Design

 Simplification
 Reducing number of parts, assemblies, or options
in a product
 Standardization
 Using commonly available and interchangeable
parts
 Modularity
 Combining standardized building blocks, or
modules, to create unique finished products

5-22
 Design Simplification
(a) Original design (b) Revised design (c) Final design

Assembly using One-piece base & Design for

common fasteners elimination of push-and-snap
fasteners assembly

5-23
 Final Design and Process Plans

 Final design  Process plans

 Detailed drawings  Workable instructions
and specifications  Necessary equipment
for new product or and tooling
service  Component sourcing
recommendations
 Job descriptions and
procedures
 Computer programs for
automated machines

5-24
 Reducing Time-to-Market

 Establish multifunctional design teams

 Make design decisions concurrently
rather than sequentially
 Design for manufacture and assembly
 Use technology in the design process
 Engage in collaborative design

5-25
Design Team

5-26
 Concurrent Design

 A new approach to  Improves quality of early

design that involves design decisions
simultaneous design of  Involves suppliers
products and processes  Incorporates production
by design teams process
 Uses a price-minus
system
 Scheduling and
management can be
complex as tasks are
done in parallel

5-27
 Technology in the
Design Process
 Computer Aided Design (CAD)
 Assists in creation, modification, and
analysis of a design
 Includes
 Computer-aided engineering (CAE)
 Tests and analyzes designs on computer screen
 Computer-aided manufacturing (CAM)
 Ultimate design-to-manufacture connection

5-28
 Collaborative Design

 A software system for collaborative design and

development among trading partners
 Follows life cycle of the product
 Accelerates product development, helps to resolve
product launch issues, and improves quality of the
design
 Designers can
 Conduct virtual review sessions
 Test “what if” scenarios
 Assign and track design issues
 Communicate with multiple tiers of suppliers
 Create, store, and manage project documents

5-29
 Improving Quality of
Design

 Review designs to prevent failures

and ensure value
 Design for environment
 Measure design quality
 Use quality function deployment
 Design for robustness

5-30
Design for Environment

5-31
 Design for Robustness

 Robust product
 Designed to withstand variations in environmental
and operating conditions
 Robust design
 Yields a product or service designed to withstand
variations
 Controllable factors
 Design parameters such as material used,
dimensions, and form of processing
 Uncontrollable factors
 User’s control (length of use, maintenance,
settings)

5-32
 Tolerance and Consistency

 Tolerance
 Allowable ranges of variation in the dimension of a
part
 Consistency
 Consistent errors are easier to correct than random
errors
 Parts within tolerances may yield assemblies that
are not within limits
 Consumers prefer product characteristics near their
ideal values

5-33
 Special Considerations in
Service Design
 Services are  Service inseparable
intangible from delivery
 Service output is  Services tend to be
variable decentralized and
 Services have higher dispersed
customer contact  Services are
 Services are consumed more often
perishable than products
 Services can be easily
emulated

5-34
 Desired service
experience
Service Concept Service Package
Targeted
customer Physical Sensual Psychological
items benefits benefits

Performance Specifications

Customer Customer
requirements expectations

Design Specifications Service

Customer
Provider

Provider Cost and time

Activities Facility
skills estimates

Service Delivery Specifications

Design Schedule Deliverables Location

Process Service

5-35
 Service Design
Process (cont.)
 Service concept
 Purpose of a service; it defines target
market and customer experience
 Service package
 Mixture of physical items, sensual
benefits, and psychological benefits
 Service specifications
 Performance specifications
 Design specifications
 Delivery specifications

5-36