MBA (SCM)

OPERATIONS MANAGEMENT
 Unit 2

Design & Selection of Products and Processes

Suggested Reading Material
1. Operations Management - Richard B Chase, Jacops, Aquilavo, Agarwal – TMH
2. Production & Operations Management – Mantrich – Wiley
3. Modern Production & Operations Management – Buff & Sarin - Wiley
4. Production Management – T.Telsang – S.Chand
5. The Management & Control of Quality – Evans & Lindsay – Thomson Cengage
Learning
6. Production and Operations Management - K Aswathappa & K Shridhara Bhat - HPH
7. Production and Operations Management - Adam Jr Everetl E. R J (Prentice Hall, 1992)
8. Production and Operations Management - Chary (Tata McGraw Hill, 1997, 9th Ed)
9. Cases in Operations Management (Pitman, 1993) - Johnston R et al
10. Operations Management - Hill T (Palgrave, 2000)
11. Production and Operations - Morton (Vikas)
12. Production and Operations Management - Haleem A (Galgotia Books, 2004)
13. Industrial Engineering - Shanker Ravi (Galgotia)
14. Production and Operation Management, Chase & Richard Irwin London; 1995, 7th ed
15. Production & Operations Management - Kanishka Bedi, (Oxford University Press)
Unit 2 – Design and Selection of Products and Processes
Design and Selection of Products and
Processes – The Framework

Unit 2 – Design and Selection of Products and Processes

Product Design
 Deals with conversion of idea into reality
 Reasons for New Products
 To be in business on a continuous basis, believing a fact
that business is a long lasting institution
 To satisfy unfulfilled needs of the customers
 Company's existing product line becomes saturated and
the sales are on the decline
 To enter into new prospective business through related or
unrelated diversification
 Fierce competition in the existing product line
 Profit is on the decline

Unit 2 – Design and Selection of Products and Processes

Product Strategy
The fundamental strategies
that guide new product
introduction
 Market Pull: Produce
what you can Sell
 Technology Push: Sell
what you Produce
 Inter-functional
Approach: In Co-
operation with all the
functions

Unit 2 – Design and Selection of Products and Processes

New Products introduction to Market

Unit 2 – Design and Selection of Products and Processes

Various Product Policies of an Organization
 Lowest Price
 Highest Quality
 Compromise between
Cost and Quality
 Safety
 Environmental
concern & Focus

Unit 2 – Design and Selection of Products and Processes

Product Life Cycle

Unit 2 – Design and Selection of Products and Processes

Product Design Process
 Specifies
 Functions to be performed
 Materials to be used
 Determines dimensions and tolerances,
 Defines the appearance of the product
 Standards for performance of the
product.
 Quality aspect should be built in design
 Poor designs may not satisfy customer needs
 Costly designs can result in higher product
cost

Unit 2 – Design and Selection of Products and Processes

Product Design Process
Aspects to be considered
 A perfect match between products/service characteristics
with customer needs
 Customer's expectations from the product should be met
in the simplest and least costly manner
 The design lead time should be minimum
 Easy to manufacture

Unit 2 – Design and Selection of Products and Processes

Product Design Process
 Idea Generation
 Sources – Internal, External, Competitors, Bench Marking,
Reverse Engineering
 Screening of Ideas – People, Technology, Templates
 Feasibility Study
 Market analysis
 Economic analysis
 Technical Analysis
 Strategic analysis
 Quantitative Techniques

Unit 2 – Design and Selection of Products and Processes

Product Design Process
 Preliminary Design
 Involves building a prototype, testing the prototype,
revising the design, retesting and so on until a viable
design is determined
 Design incorporates both form and function
 Form design refers to the physical appearance of a
product, its shape, size, color, styling etc.
 Production design is concerned with how the product
will be made
 Design Simplification and Standardization are prime
aspects to be considered

Unit 2 – Design and Selection of Products and Processes

Product Design Process
 Pilot Runs and Testing
 Manufacturing Process, Performance test, Market test
 Final Design and Process Plans
 Consists of detailed drawings and specifications for the
new product.
 Accompanying process plans are workable instructions
for manufacture including necessary equipments and
tooling, component sources job descriptions, work
instructions and Programmers for computer-assisted
machines
 New Product Launch

Unit 2 – Design and Selection of Products and Processes

Process Design
1. Processes by Market Orientation
a. Make to Stock: Eg: Standard mature products like milk, shirt office furniture
b. Assemble to order: Assembled from in-stock subassemblies. Assembly as per
customer specification. Eg: Computers
c. Make to order: Engineered designs, but are made only after an order is
received. Eg: B2B Automobile Parts
d. Engineer to order: Unique Products that have not been previously
engineered. Eg: Industrial machines.
2. Processes as Production Systems: Intermittent or Continuous
3. Processes and Customer Involvement:
a. Self service by Customer
b. Product Selection: Customization specified by the Customer Eg: Maruti 800
c. Partnerships: Customers deciding the time and location on service or
product delivery. Pricing and Billing are modified to Customer convenience.

Unit 2 – Design and Selection of Products and Processes

Design Review Techniques
Formal procedures for analyzing possible failures in Design
 Failure Mode Effect and Criticality Analysis (FMECA)
 A systematic approach which analyzes the causes and effects of product
failures
 It anticipates failures and prevents them from occurring
 Value Engineering (VE)
 Focuses on the function of the product, rather than on its structure or
form
 Tries to maximize the economic value of a product or component
relative to its cost
 Fault Tree Analysis (FTA)
 Emphasizes the interrelationship among failures
 It lists failures and their causes in a tree format

Unit 2 – Design and Selection of Products and Processes

 World’s First Robotic Kitchen

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DOE & QFD
 Design for Environment (DOE)
 A global movement targeting design initiatives and incorporating
environmental motives to improve product design in order to minimize
health and environmental impacts

 Quality Function Deployment (QFD)

 Understanding Customer Requirements
 Quality Systems Thinking + Psychology + Knowledge
 Maximizing Positive Quality that Adds Value
 Comprehensive Quality System for Customer Satisfaction
 Strategy to Stay Ahead of The Game

Unit 2 – Design and Selection of Products and Processes

Process Planning
 Systematic determination of methods by which a product is to
be manufactured economically and competitively
 Selecting the proper machines
 Determining the sequence of operations
 Specifying the inspection stages
 Choosing Tools, Jigs and Fixtures
 Process Selection
 A Strategic level Decision
 Selection will bind the organization with equipment,
facilities and particular type of labor force, which limits the
future strategic actions

Unit 2 – Design and Selection of Products and Processes

Types of Production System

Watches
/ Mobiles

Machine
Building

Car
Consoles Dairy
Products
Assembly Lines
Chemical
s

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Intermittent Production System

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Continuous Production System

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Unit 1– Intro to Operations Management
Type of Processes
 Conversion Processes – RM to FG (Iron ore to Steel)
 Fabrication Processes – RM to some shape (Tins)
 Assembly Processes – Assembling Components into Sub or
Final Assembly
 Analytic – Breaking RM to its Constituent elements (Crude oil,
Petroleum Products)
 Synthetic - Combines parts into larger products. (Automobile,
Refrigerator)
 Modifying Processes – Used in Metal Working (Casting,
Moulding)

Unit 2 – Design and Selection of Products and Processes

Make or Buy Decision
 Factors influencing Make or Buy Decision
 Volume of Production
 Cost Analysis
 Utilization of Production Capacity
 Integration of Production System
 Manpower Availability
 Secrecy of Protection of Patent Right
 Fixed Cost – Low: Make & High: Buy
 Availability of competent suppliers or vendors
 Quality and reliability of vendors

Unit 2 – Design and Selection of Products and Processes

Process and Equipment Selection
Considerations while selecting a process or machine.
 Economic Considerations - Due analysis should be made with
respect to the initial cost, maintenance and running cost
 Production Rate and unit cost of production
 Durability and dependability i.e. quality and reliability aspects
 Lower process rejection
 Minimum set-ups and put away times
 Longer productive life of machines or equipment's
 Functional versatility - Should be able to perform more than
one functions
 ROI - Important to optimally invest in plant and machinery

Unit 2 – Design and Selection of Products and Processes

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Facility selection and Layout
“Facility layout ideally involves the allocation of space and the
arrangement of equipment in such a manner that overall
operations costs be minimized”.
Objectives of Facility Layout
1. Integrate the Production Centers
2. Reduce Material Handling
3. Effective utilization of Available space
4. Worker convenience and Job Satisfaction
5. Flexibility
6. Quick Disposal of Work
7. Avoids Industrial accidents

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Factors affecting Plant Location

Other Factors
 Cost of Land  Soil and topography
 Suitability of Land  Climatic Conditions

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Plant Layout
 A plant layout refers to the arrangement of
machinery, equipment and other industrial facilities.

 A plant layout involves:

1. Planning and arranging manufacturing machinery,
equipment, and services for the first time in
completely new plants.
2. The improvements in layouts already in use in
order to introduce new methods and
improvements in manufacturing procedures.

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Features of Plant Layout
 Ensure smooth and continuous flow of production
 Provide adequate safety and security
 Sufficient gangway space for materials
 Stores should be at convenient place
 Arrangement of machines and equipments

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Objectives of Good Plant Layout
 Cater to Production capacity
 Reduce material handling costs
 Reduce congestion-that impedes the movement of
people or material
 Reduce hazards to personnel
 Utilize labour efficiently
 Increase employee morale
 Reduce accidents
 Utilize available space efficiently and effectively
 Provide for volume and product flexibility
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Types of Facility Layout
Product
Layout

Fixed Position Process

Layout Layout

Hybrid or Cellular
Combined Manufacturing
Layout Layout

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Product Layout
Characteristics
 Arrangement of Machines in one
line, depending upon the sequence
of operations
 There should be no points where
one line crosses another line
 Material may be fed at any point
 All operations should be included
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Suitability
 Mass production
 Simple and repetitive
manufacturing process
 Operation time for different
process is more or less equal
 Stable demand for the product
 Continuous supply of materials
Process Layout
Characteristics
 Machines are grouped on a
functional bases and operations of
the same type at the same area
 Distance between functions
should be shorter
 Convenience for inspection and
supervision
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Suitability
 Products are not standardized
 Intermittent process and less
quantity
 Frequent changes in design and
style
 Expensive Machinery required
 Large variety of items
Cellular Manufacturing Layout
Characteristics
 Machines are grouped according
to the process requirements for a
set of similar items that require
similar processing
 Groups are called cells called
group technology
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Suitability
 Specialist requirements where
quantity is less but need a
dedicated cell for manufacturing
parts to the quality requirements
of the customer
Fixed Position Layout

Characteristics Suitability
 Product is fixed at one location  Bulky and Heavy Products like
 Equipment, Labour and ship, Air craft, Construction
components are moved to that
location
 All facilities are brought and
arranged around one work center

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Combined layout

Characteristics Suitability
 Combination of • Cement Manufacturing
Product and
Process Layout

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Types of Plant Layout
Service Facility Layout (Hospital)

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Planning
 Concurrent Planning: Planning of different Phases of Project
concurrently instead of sequencing – Ex:Vendor identification by
Procurement team and Setting up the shop floor
 Synchronized Planning: Different functions planning and
working together in sync towards the Objectives and Goals of
the Organization. For eg: Sales and Operations Planning ties
together your operational plan with your strategic business plan.
 Collaborative Planning, Forecasting and Replenishment
(CPFR): A concept that aims to enhance supply chain
integration by supporting and assisting joint practices.
 Real Time Planning: Planning with real time data inputs and
transfer

Unit 2 – Design and Selection of Products and Processes

And, that’s the end of Unit 2

Unit 2 – Design and Selection of Products and Processes