PRODUCT &

PROCESS DESIGN
CONTENT
•Product Design
•The Product Design Process
•Factors Affecting Product Design
•Process Selection
•Designing Processes
•Process Performance Metrics
•Linking Product Design and Process Selection
•Technology Decision
•Designing Services
PRODUCT DESIGN
Product design – the
process of defining all of
the companies product
characteristics
• Product design must
support product
manufacturability (the
ease with which a
product can be made)
PRODUCT DESIGN & PROCESS
SELECTION
– Product design defines a product’s
characteristics of:
appearance,
materials,
dimensions,

tolerances, and
performance
standards.
PROCESS SELECTION
Process
Selection – the
development
of the process
necessary to
produce the
designed
product.
DESIGN OF SERVICES VERSUS
GOODS
•Service design is unique
in that the service and
entire service concept
are being designed
• must define both the
service and concept
- Physical
elements, aesthetic &
psychological benefits
e.g. promptness,
friendliness, ambiance
DESIGN OF SERVICES VERSUS GOODS

•Product and
service design
must match the
needs and
preferences of
the targeted
customer group
PRODUCT DESIGN
PROCESS

Idea Development

Product Screening
Preliminary Design and
Testing
Final Design
STEP 1: IDEA DEVELOPMENT

Idea developments
selection affects
 Product quality
 Product cost
 Customer satisfaction
 Overall
manufacturability –
the ease with which
the product can be
made
STEP 1: IDEA
DEVELOPMENT
Idea development: all products
begin with an idea whether from:
customers,
competitors or
 suppliers
STEP 1: IDEA DEVELOPMENT
PART 1 - CUSTOMERS
• Idea
development on
customers are
basically
acquired from
market research
STEP 1: IDEA DEVELOPMENT
PART 2: COMPETITORS - BENCHMARKING

Competitors are source

of ideas. The process
of studying the
practices of
companies considered
the best and
comparing you
company against
theirs is called
benchmarking
STEP 1: IDEA DEVELOPMENT
PART 2: COMPETITORS-
REVERSE ENGINEERING

The process of
disassembling a product
to analyze its design
features is called
reverse engineering
STEP 1: IDEA
DEVELOPMENT
PART 3: SUPPLIERS
Involving Suppliers in the early stages of product
design is called Early Suppliers Involvement
STEP 2: PRODUCT SCREENING
• Product Screening is
the evaluation of the
product design idea
according to the needs
of the major business
functions
PRODUCT SCREENING TOOL –
BREAK-EVEN ANALYSIS
Break Even Analysis is a technique used to
compute the quantity of goods company needs to
sell to cover its costs
 QBE = F/ (SP - VC)
 QBE means Break even quantity
 F means Fixed costs
 SP means selling price/unit
 VC means Variable cost
PRODUCT SCREENING TOOL
– BREAK-EVEN ANALYSIS

Fixed Cost – cost a company

incurs regardless of how much
it produces

Variable Cost – Cost that vary

directly with the amount of units
produced
Leverage: Breakeven Analysis (cont.)
Assume that Cheryl’s Posters, a small poster retailer,
has fixed operating costs of $2,500. Its sale price is $10
per poster, and its variable operating cost is $5 per
poster. What is the firm’s breakeven point?

13-18
Figure 13.1
Breakeven Analysis

13-19
PRODUCT SCREENING TOOL
– BREAK-EVEN ANALYSIS
CON’T
•Break-even analysis also includes calculating
• Total cost – sum of fixed and variable cost
Total cost = F + (VC)*Q

• Revenue – amount of money brought in from sales

Revenue = (SP) * Q

Q = number of units sold

Step 3: Preliminary Design and Testing

Preliminary Design
and Testing - is the
stage where the
translation of
general performance
specifications into
technical
specifications takes
place
 Step 4: Final Design

Final Design is the

stage where final
specifications are
translated into
specific processing
instructions to
manufacture the
product
FACTORS AFFECTING PRODUCT
DESIGN

•Design for
Manufacture –
a series of
guidelines to
follow in order
to produce a
product easily
and profitably.
TWO ISSUES IN DESIGN
FOR MANUFACTURE
Design Simplification –
reducing number of parts
and features of the product
whenever is possible.
Design Standardization –
refers to the use of
common interchangeable
parts to make a greater
variety of products with
less inventory, lower cost
and provide greater
flexibility
FACTORS IN PRODUCT LIFE
CYCLE
•Product life cycle – series of changing product demands
over time
•Product life cycle stages
• Introduction
• Growth
• Maturity
• Decline
REMANUFACTURING

Uses components of
old products in the
production of new
ones and has:
– Environmental
benefits
– Cost benefits
BROAD CATEGORIES OF
PROCESSES
• Intermittent processes:
– Processes used to produce a
variety of products with
different processing
requirements in lower
volumes.

Repetitive processes:
– Processes used to produce
one or a few standardized
products in high volume. (such
as a cafeteria, or car wash)
TYPES OF PROCESSES BASED
ON PRODUCT VOLUME AND
PRODUCT STANDARDIZATION
•Process types can be:
• Project process – make a one-at-a-time
product exactly to customer specifications
• Batch process – small quantities of product in
groups or batches based on customer orders
or specifications
• Line process – large quantities of a standard
product
• Continuous process – very high volumes of a
fully standard product
UNDERLYING PROCESS RELATIONSHIP
BETWEEN VOLUME AND
STANDARDIZATION CONTINUUM
DESIGNING PROCESSES
Design considerations include
• Make-to-stock strategy
• Assemble-to-order strategy
• Make-to-order strategy
See flowcharts for different product strategies at
Antonio’s Pizzeria (next slide)
PRODUCT AND SERVICE
STRATEGY
• Type of operation is directly related to
product and service strategy
• Three basic strategies include
1. Make-to-stock; in anticipation of
demand
2. Assemble-to-order; built from
standard components on order
3. Make-to-order; produce to customer
specification at time of order
FLOWCHART FOR DIFFERENT
PRODUCT STRATEGIES AT ANTONIO’S
PIZZARIA

© 2010 WILEY
PROCESS PERFORMANCE
METRICS
Process performance metrics –
defined: Measurement of different
process characteristics that tell us how a
process is performing
– Determining if a process is functioning
properly is required
– Determination requires measuring
performance
PROCESS PERFORMANCE METRICS
 LINKING DESIGN & PROCESS
SELECTION
Organizational Decisions appropriate for different types of operations
LINKING PRODUCT DESIGN &
PROCESS SELECTION CON’T
Product Design Decisions:
Intermittent and repetitive operations
typically focus on producing products
in different stages of the product life
cycle. Intermittent is best for early in
product life; repetitive is better for later
when demand is more predictable.
LINKING PRODUCT DESIGN &
PROCESS SELECTION, CON’T
• Competitive Priorities: decisions of
how a company will compete in
the marketplace. Intermittent
operations are typically less
competitive on cost than repetitive
operations.
TECHNOLOGY DECISIONS
Information Technology
ERP (enterprise resource planning), GPS (global
positioning system), RFID (radio frequency
identification)
Automation
Automated Material Handling: Automated guided
vehicles (AGV), Automated storage & retrieval
systems (AS/RS)
Flexible Manufacturing Systems (FMS)
Robotics & Numerically-Controlled (NC) equipment
TECHNOLOGY DECISIONS

Enterprise Resource
Planning – Large
software programs
used for planning and
coordinating all
resources throughout
the entire enterprise.
TECHNOLOGY DECISIONS

Global Positioning
Systems – a type of
wireless technology
that uses
transmission to
communicate exact
locations
TECHNOLOGY DECISIONS

Radio Frequency Identification – a wireless

technology that uses memory chips equipped
with radio antennas attached to objects
AUTOMATION

• Using
Machinery to
perform work
without
human
operators
FLEXIBLE MANUFACTURING
SYSTEM

• A type of automated
system that combines
the flexibility of
intermittent operations
with the efficiency of
continuous operations.
NUMERICALLY
CONTROLLED MACHINE
• A machine that
can control a
variety of tasks
E-MANUFACTURING
•Web-based environment creates numerous
business opportunities to include;
•Product design collaboration
•Process design collaboration
•Computer-aided design – uses computer
graphics to design new products
•Computer-integrated manufacturing –
integration of product design, process
planning, and manufacturing using an
integrated computer system
DESIGNING SERVICES: HOW DO
THEY DIFFER FROM
MANUFACTURING?
• Services are different from
manufacturing as they;
– Produce intangible products
– Involve a high degree of customer
contact
• Type of service is classified according
to degree of customer contact
PRODUCT DESIGN AND PROCESS
SELECTION ACROSS THE
ORGANIZATION
• Strategic and financial of product
design and process selection mandates
operations work closely across the
organization
– Marketing is impacted by product that
is produced
– Finance is integral to the product
design and process selection issues
due to frequent large financial outlays
PRODUCT DESIGN AND PROCESS
SELECTION ACROSS THE
ORGANIZATION – CON’T
– Information services has to be
developed to match the needs of the
production process
– Human resources provides important
input to the process selection
decisions for staffing needs
Thank you for listening!

© 2010 WILEY