Chapter Three: Product Design and

Process Selection:

3.1. Product Design

 3.2. The product design process
3.3. Factors Impacting product Design
3.4. Process Selection
 Introduction

Operations Strategy & Competitiveness

Quality Management
Strategic Decisions (some)
Design of Products Process Selection Capacity and
and Services and Design Facility
Decisions

Forecasting
Project Management

Tactical & Operational Decisions

 Introduction

Operations Strategy & Competitiveness

Quality Management
Strategic Decisions (some)
Design of Products Process Selection Capacity and
and Services and Design Facility
Decisions

Forecasting
Project Management

Tactical & Operational Decisions

The first rule of business:

“You have to have products that sell”

Product Design is a Business Issue

 3.1. Product Design

 The process of defining all of the product’s

characteristics.
 defines a product’s characteristics, such as
 its appearance,
 the materials it is made of,
 its dimensions and tolerances, and
 its performance standards
Cont.

In the design process, the product and process

development are integrated so that at the end
of the design stage there is a product with the
optimum qualities, and a process to produce it.
9 2.3 Product vs. services
goods
1-tangible, durable products.
2- Output can be inventoried.
3-consumption/use takes more
time.
4-low costumer’s involvement.
5-long response time.
6-available at regional, national
and international market.
7-Reqire large facilities.
8-Capital intensive.
9-Quality easily measured.
10-Demand variable on weekly,
monthly, seasonally.
Services
1- Intangible, perishable products.
2- Output can’t be inventoried.
3-Immidiate consumption.
4- High costumer’s involvement.
5- Short response time.
6-local market.
7- Require small facilities.
8-Labour intensive.
9- Quality not easily measured.
10- Demand variable on hourly,
daily, weekly basis.
3.2. The product design process
 steps common to the development of most product designs:
 idea generation: customers, competitors , suppliers and etc.
 product screening: product ideas need to be evaluated for
technical, financial, marketing and operational feasibility
 preliminary design and testing: At this stage design engineers
translate general performance specifications into technical
specifications.
 final design: This is where final product specifications are
drawn up. The final specifications are then translated into
specific processing instructions to manufacture the product like
selecting equipment, outlining jobs, materials needed and
suppliers, and all the other aspects of organizing the process of
product production.
Cont.
Cont.
3.3. Factors Impacting product Design
Design for manufacture (DFM):A series of guidelines to follow in order to produce a
product easily and profitably.
 Design simplification means reducing the number of parts and features of the
product whenever possible. A simpler product is easier to make, costs less, and
gives higher quality.
 Design standardization refers to the use of common and interchangeable parts.
Product life cycle: A series of stages that products pass through in their lifetime,
characterized by changing. There are typically four stages of the product life cycle:
introduction, growth, maturity, and decline.
 Cont.
Concurrent engineering: An approach that brings together
multifunction teams in the early phase of product design in order to
simultaneously design the product and the process.
 achieve a smooth transition from the design stage to actual production
in a shorter amount of development time with improved quality
results.
Remanufacturing: The concept of using components of old products in
the production of new ones. Remanufacturing has been quite popular in
the production of computers, televisions,
and automobiles.
Why Firms Develop New Products

1. Competitive Advantage
2. Market Share Gain
3. Higher Profitability
4. Enhancement of Brand
5. Faster Competitive
Response
6. Improved Operating
Cost & Resource
Utilization
Competitive Advantage
 Firms innovate and develop new products for unique
opportunities for competitive advantages.

 Example: The iPod was instrumental in the survival

and emergence of a stronger and more competitive
Apple Inc., resulting in market share gain and higher
profitability.
Market Share Gain

 New products introduced in the marketplace provide

additional “first mover advantages” to the company.
 By developing new products, a company can quickly
capture a big share of the market before competitive
products are introduced.
 Example: Toyota’s successful introduction of the Prius hybrid
car prior to its competitors’ development of such a car has
allowed the company to establish a dominant position in the
emerging market segment of fuel-efficient and
environmentally friendly automobiles.
 Who else is in this ‘green’ automotive marketplace?
Higher Profitability

 During the early stages, a new product faces less

competition than a product in a mature market;
therefore, its profitability tends to be higher.
 As the market becomes saturated with several
competitive products, prices start falling, and
profit margins decrease.
Enhancement of
Corporate Image and Brand Name

 The developments of innovative and creative

new products is a very powerful source of
goodwill and creates a positive corporate image.
 Brand equity measures used in marketing show that
firms with more successful new product
development efforts command higher respect from
customers and profitability.
 brand equity: the monetary or relative value of a
brand perceived in the marketplace by its customers.
Faster Competitive Response

 Having a systematic process for new product

development in place can introduce new
products quickly after a competitor’s product is
launched.
 Sony’s Playstation, Microsoft’s X-Box, and
Nintendo’s Wii compete fiercely in the video
game industry. Each company tries to quickly
introduce new products to compete with others.
Operating Cost and Capacity Utilization

 The product development

effort is often closely
linked with process
development.
 New products provide the
opportunity for enhanced
Source: © Image Source/Corbis
sales as the demand for
older products decreases
over time.
Product Development
Tradeoffs
How much will
it cost us?
Development
Cost Does it meet
the customer's
needs?
Development Product
Speed Performance
How fast can
we get it to
market? Product
Cost
How much will it
cost the customer?
Process Choice

 Selection of inputs, operations, workflows, and

methods for producing goods and services
Process Example
2:
How to Make a
Burger
Elements of Product Design:
Design Simplification
(a) The original design

Assembly using
common fasteners

Figure 3.3
Design Simplification
(a) The original design (b) Revised design

Assembly using One-piece base &

common fasteners elimination of
fasteners
Design Simplification
(a) The original design (b) Revised design (c) Final design

Assembly using One-piece base & Design for

common fasteners elimination of push-and-snap
fasteners assembly
3.4
Process Selection
and
Facility Layout
Though product design is important for a
company, it cannot be considered
separately from the selection of the process
26
Introduction

Process selection
Deciding on the way production of goods or services will
be organized Process selection occurs as a matter of
course when a new product or service is being planned,
OR
it also occurs periodically due to technological change
in equipment
Major implications
Capacity planning
Layout of facilities
Equipment
Design of work systems
27
Process Selection and System Design

Facilities and
Forecasting Capacity Equipment
Planning

Product and Layout

Service Design

Process
Technological Selection Work
Change Design

28
Process Strategy
• Key aspects of process strategy
– Capital intensive – equipment/labor
– Make or buy decision
– Process flexibility
– Adjust to changes
– Design
– Volume
– Technology

29
Process Selection
Variety
How much Batch
Flexibility
What degree
Volume Job Shop Repetitive
Expected output
Continuous

30
Process Types
Job shop
Small scale, it varies with varying customer
specification. (E.g. health care, automobile
maintenance)
Batch
Moderate volume of similar products ( E.g. ice
cream bakeries, canneries)
Repetitive/assembly line: allows some
customization
Varity product High volumes of standardized goods or
services (E.g. car designs, TV designs),
Continuous
Single product Very high volumes of non-discrete goods
31
(E.g. newsprint, oil products)
Product – Process Matrix
Process Type Customizati Semi- Standardiza Highly
on standardiza tion Standardizatio
tion n
Job Shop Appliance Not
repair feasible
Emergency
room
Batch Commercial
bakery
Classroom
Lecture
Repetitive Automotive
assembly
Automatic
carwash
Continuous Not Oil refinery
feasible Water
(flow) purification
Product – Process Matrix

Dimensi Job shop Batch Repetitiv Continuo

on e us
Job Very High Moderate Low Very low
variety
Process Very High Moderate Low Very low
flexibility

Unit cost Very High Moderate Low Very low

Volume Low Low- High Very high
of output Moderate
The End !!!