Operations

Management
Chapter 3 –
Design of the
Operations System

© 2008 Prentice Hall, Inc. 5–1

 Reasons for Product or Service
Design
• Economic
• Social and demographic
• Political, liability, or legal
• Competitive
• Cost or availability
• Technological

© 2008 Prentice Hall, Inc. 5–2

 Considerations in Product or
Service Design
 Legal and Ethical Considerations
 Sustainability
 Strategies for product or service life cycle
 Degree of standardization
 Designing for mass customization
 Reliability
 Robust Design
 Degree of newness
© 2008 Prentice Hall, Inc. 5–3
 Considerations in Product or
Service Design
 Modular Design
 Computer-Aided Design (CAD)
 Computer-Aided Manufacturing
(CAM)
 Virtual Reality technology
 Value Analysis

© 2008 Prentice Hall, Inc. 5–4

 Legal and Ethical
Considerations
 Designers are often under pressure to
-Speed up the design process
-Cut costs
 These pressures force trade-off decisions
-What if a product has bugs?
• Release the product and risk damage
to your reputation
• Work out the bugs and forego
revenue

© 2008 Prentice Hall, Inc. 5–5

 Legal and Ethical
Considerations

-Product Liability - A manufacturer is

liable for any injuries or damages
caused by a faulty product.
-Uniform Commercial Code – Says
that products carry an implication of
merchantability and fitness; i.e., a
product must be usable for its
intended purpose.
© 2008 Prentice Hall, Inc. 5–6
 Designers Adhere to Guidelines
• Produce designs that are
consistent with the goals of the
company
• Give customers the value they
expect
• Make health and safety a primary
concern
• Consider potential harm to the
environment
© 2008 Prentice Hall, Inc. 5–7
 Life Cycles of Products or
Services

© 2008 Prentice Hall, Inc. 5–8

 Life Stage Strategies
Introduction
-Weigh trade-offs between eliminating
‘bugs’ and getting the product or service
to the market at an advantageous time
-Accurate demand forecasts are
important to ensuring adequate capacity
availability
Growth
-Demand forecasts are important to
ensuring a continued adequate capacity
availability
-Design improvements
-Emphasis on improved product or
service reliability and lower cost
© 2008 Prentice Hall, Inc. 5–9
 Life Stage Strategies
Maturity
-Relatively few design changes
-Emphasis is on high
productivity and low cost
Decline
-Continue or discontinue product
or service
-Identify alternative uses for
product or service
-Continued emphasis on high
productivity and low cost
© 2008 Prentice Hall, Inc. 5 – 10
 Degree Standardization
Standardization: Extent to
which there is an absence of
variety in a product, service or
process

© 2008 Prentice Hall, Inc. 5 – 11

 Mass Customization
•Mass customization:
-A strategy of producing
standardized goods or
services, but incorporating
some degree of customization
-Delayed differentiation
-Modular design
© 2008 Prentice Hall, Inc. 5 – 12
 Mass Customization
 Delayed differentiation: is a postponement
tactic
 Producing but not quite completing a
product or service until customer
preferences or specifications are known
 Modular Design: is a form of standardization in
which component parts are subdivided into
modules that are easily replaced or
interchanged.

© 2008 Prentice Hall, Inc. 5 – 13

 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
• Normal operating conditions: The set of
conditions under which an item’s
reliability is specified
© 2008 Prentice Hall, Inc. 5 – 14
 Robust Design

Robust Design:
Design that results in
products or services
that can function over
a broad range of
conditions
© 2008 Prentice Hall, Inc. 5 – 15
 Degree of Newness
1.Modification of an existing
product/service
2.Expansion of an existing
product/service
3.Clone of a competitor’s
product/service
4.New product/service
© 2008 Prentice Hall, Inc. 5 – 16
 Value Analysis
 Focuses on design improvement
during production
 Examination of the function of
parts and materials in an effort to
reduce cost and/or improve
product performance
 Seeks improvements leading
either to a better product or a
product which can be produced
more economically
© 2008 Prentice Hall, Inc. 5 – 17
 Product Design(PD)
PD: is defined as the process of
imagining, creating, and iterating
products that solve user problems or
address specific needs in a given market.
Designing for Manufacturing(DFM)
The design of products that are
compatible with an organization’s
capabilities.

© 2008 Prentice Hall, Inc. 5 – 18

 Product Design
Virtual Reality Technology
Computer technology used to
develop an interactive, 3-D model of a
product from the basic CAD data
It allows people to ‘see’ the finished
design before a physical model is
built
Very effective in large-scale designs
such as plant layout

© 2008 Prentice Hall, Inc. 5 – 19

 Product Design
Design for assembly (DFA): design
that focuses on reducing the number
of parts in a product and on assembly
methods and sequences.
Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.
© 2008 Prentice Hall, Inc. 5 – 20
 Product Design
Manufacturability
•Manufacturability is the ease of fabrication
and/or assembly which is important for:
– Cost
– Productivity
– Quality

© 2008 Prentice Hall, Inc. 5 – 21

 Product Design
• Computer-Aided Design (CAD): is
product design using computer
graphics.
It increases productivity of designers, 3 to
10 times

© 2008 Prentice Hall, Inc. 5 – 22

 Product Design
• Recycling: recovering materials
for future use
• Recycling reasons
–Cost savings
–Environment concerns
–Environment regulations

© 2008 Prentice Hall, Inc. 5 – 23

 Product Design
• Computer-Aided Manufacturing
(CAM)
Utilizing specialized computers
and program to control
manufacturing equipment
Often driven by the CAD
system.

© 2008 Prentice Hall, Inc. 5 – 24

 Phases in Product Development
Process
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation
© 2008 Prentice Hall, Inc. 5 – 25
 1. Idea Generation: comes from
various sources
Supply chain based

Ideas Competitor based

Research based

© 2008 Prentice Hall, Inc. 5 – 26

 Reverse Engineering
Reverse engineering is the
dismantling and inspecting
of a competitor’s product to
discover product improvements.

© 2008 Prentice Hall, Inc. 5 – 27

 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.
© 2008 Prentice Hall, Inc. 5 – 28
 2. Feasibility Analysis
• Market analysis (demand)
• Economic analysis (development
cost and production cost, profit
potential)
• Technical analysis (capacity
requirements and availability, & skills
needed)
• Requires collaboration among
marketing, finance, accounting,
engineering and operations
© 2008 Prentice Hall, Inc. 5 – 29
 3. Product Specification
• Detailed descriptions of what is needed
to meet (exceed) customer wants and
requires collaboration among legal,
marketing and operations

4. Process Specification
• Alternative process specifications must
be weighed in terms of cost, availability of
resources, profit potential and quality.
• Involves collaboration between
accounting and operations.
© 2008 Prentice Hall, Inc. 5 – 30
 5. Prototype Development
• One (few) units are made to see if
there are any problems with the
product or process specifications.
6. Design Review
• Make any necessary changes or
abandon
• Involves collaboration among
marketing, finance, engineering,
design and operations
© 2008 Prentice Hall, Inc. 5 – 31
 7. Market Test
• Used to determine the extent of consumer
acceptance
• If un successful, return to the design review
phase; this phase is handled by marketing

8. Product Introduction
• Promote the product; Handled by marketing

9. Follow-up Evaluation
• Determines if changes are needed & refine
forecasts; handled by marketing.
© 2008 Prentice Hall, Inc. 5 – 32
 Service Design
Service
 Something that is done to or for a
customer
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
Service package
 The physical resources needed to
perform the service
© 2008 Prentice Hall, Inc. 5 – 33
 Phases in Service Design
1.Conceptualize: Idea generation,
assessment of customer wants /needs,
assessment of demand potential
2.Identify service package components
3.Determine performance specifications
4.Translate performance specifications into
design specifications
5.Translate design specifications into
delivery specifications

© 2008 Prentice Hall, Inc. 5 – 34

 Service Blueprinting
• Service blueprinting
–A method used in service
design to describe and
analyze a proposed service
• A useful tool for
conceptualizing a service
delivery system

© 2008 Prentice Hall, Inc. 5 – 35

 Major Steps in Service
Blueprinting
1. Establish boundaries
2. Identify steps involved
3. Prepare a flowchart
4. Identify potential failure points
5. Establish a time frame
6. Analyze profitability
© 2008 Prentice Hall, Inc. 5 – 36
 Characteristics of Well Designed
Service Systems
1. Consistent with the organization mission
2. User friendly
3. Robust
4. Easy to sustain
5. Cost effective
6. Value to customers
7. Effective linkages between back operations
8. Single unifying theme
9. Ensure reliability and high quality
© 2008 Prentice Hall, Inc. 5 – 37
 Challenges of Service Design

Variable requirements
Difficult to describe
High customer contact
Service – customer
encounter

© 2008 Prentice Hall, Inc. 5 – 38

 Ethics and Environmentally
Friendly Designs
It is possible to enhance productivity,
drive down costs, and preserve
resources
Effective at any stage of the product life cycle

 Design
 Production
 Destruction

© 2008 Prentice Hall, Inc. 5 – 39

 Goals for Ethical and
Environmentally Friendly
Designs
1. Develop safe and more environmentally
sound products
2. Minimize waste of raw materials and energy
3. Reduce environmental liabilities
4. Increase cost-effectiveness of complying
with environmental regulations
5. Be recognized as a good corporate citizen
© 2008 Prentice Hall, Inc. 5 – 40
 Guidelines for
Environmentally Friendly
Designs
• Make products recyclable
• Use recycled materials
• Use less harmful ingredients
• Use lighter components
• Use less energy
• Use less material

© 2008 Prentice Hall, Inc. 5 – 41

 THANK YOU

© 2008 Prentice Hall, Inc. 5 – 42