MAN3506 Product and Service Design

MAN3506

Operations Management

Midterm Exam Notes

Ch. 4

Product and Service Design

Product or Service Design

Translates customer wants & needs into product & Service requirements

Refine existing products/services

Formulate quality goals & cost targets

Construct & test prototypes

Document Specifications

Translate product & Service specifications into process qualifications.

Key Questions in Product/Service design:

Buyers Standpoint:

Cost

Quality

Organizations standpoint:

Is there demand for it? Potential size of the market long & short term

Can we do it? Do we have knowledge, skills, equipment, capacity, & supply chain capacity. Manufacturability: The capability of an organization to produce an item at an acceptable profit. Serviceability: the capability of an organization to provide a service at an acceptable cost or profit

What level of quality is appropriate? Customer expectations, competitors quality, How does it tie to current offerings

Does it make since from an economic standpoint: potential liability, ethical considerations, sustainability issues, costs, and profits?

Reasons for Product & Service Design or Redesign

Market Opportunities & Threats:

Economic-Low demand, excessive warranty claims, need to reduce cost

Social & Demographic- aging baby boomers, population shifts

Political, liability, or legal- government changes, safety issues, new regulations

Competitive- new or changed products/services, new advertising/promotions

Cost or Availability- raw materials, components, labor, water, energy

Technological- in product components, advances in processing technology that require altering an existing design to make it compatible with the new processing technology

S. manufactures to lower cost through redesign instead of outsourcing

Consider potential for design improvement

Outsourcing has hidden additional cost: shipping & logistics can add 24%

Idea Generation for new or redesigned products/services

Redesign Engineering- Dismantling and inspecting a competitors product to discover product improvements

Research & Development: Organized efforts to increase scientific knowledge or product innovation. Most advances in semiconductors, medicine, communications, Space technology can be attributed to Universities, research foundations, government agencies, private enterprises. Efforts may involve:

Basic Research- has the objective of advancing the state of knowledge about a subject w/o any near-term expectation of commercial applications( generally underwritten by government & large corporations)

Applied Research- has the objective of achieving commercial applications (wide spectrum of organizations)

Development- converts the results of applied research into useful commercial applications.

Benefits include: patents, licensing & royalties, Temp monopoly/higher prices

Legal & Ethical Considerations:

Product liability: The responsibility of a manufacturer for any injuries or damages caused by a faulty product

Uniform Commercial Code: law says that products carry an implication of merchantability and fitness: that is a product must be useable for its intended purposes.

Ethical: organizations want designers to adhere to the following: produce designs consistent with goals/mission stmt. Give customers value they expect, and make health & safety a primary concern.

Vaporware: when a software company doesn’t release software that is scheduled

Human Factors

Safety & Liability: Crashworthiness of a car is of much interest to customers, insurance, auto producers, and government

Adding too much to features: “too much of a good thing” electronic products so advance customers rate bad on ease of use.

Cultural Factors:

Different regions or cultures impact different designs. MCdonalds and big Mac

Global product & Service Design

Virtual teams: teams of designers around the world that are able to engage in the best human resources w/o the need to assemble all in one place and operating on a 24 hr basis, thereby decreasing the time to market.

Environmental Factors: Sustainability

Cradle to grave assessment: the assessment of the environmental impact of a product or service throughout its useful life. Also known as life cycle analysis. Takes into account every phase of the products life cycle. Raw materials extraction from the Earth, growing plant materials, fab of parts, use of consumption, and the disposal.

Goal: to chose products & services that have the least environmental impact while still taking into affect economic considerations.

End of Life Programs: purpose to reduce the dumping of products. (Incineration, materials converted into hazardous waste) Best buy and electronics

3 R’s Reduce, Reuse, & Recycle

Reduce:

Value Analysis- refers to an examination of the function of parts and materials in an effort to reduce cost and/or improve the performance of a product. Could a cheaper part be used? Is the function necessary? Can a part be simplified? Could product specifications be relaxed and would that result in a lower price? Could standard parts be substituted for nonstandard parts?

Reuse:

Remanufacturing- Refurbishing used products by replacing worn-out or defective components. Reason for remanufacturing because: European Laws, product can be sold about 50% of the cost of a new product, process requires mostly unskilled or semiskilled workers.

Design for disassembly: Design so that used products can be easily taken apart.

Recycling

Recovering materials for future use.

Cost Savings

Environmental concerns

Environmental Regulations

Design for recycling- design that facilitates the recovery of materials and components in used products for reuse.

Other Design Considerations:

Strategies for product or service Life stages: Every phase calls for different strategies. In every phase forecasts of demand and cash flow are key inputs to strategy.

Introduction Phase: introducing high tech products or features during peak back to school buying periods or holiday periods

Growth Phase: design improvements & increasing demand yield higher reliability and lower costs leading to the growth. During this phase, obtain accurate projections of demand growth rate, how long it will last and ensure capacity coincides

Maturity: demand levels fall off. Design changes not needed, cost is low productivity is high

Decline: decide whether to discontinue and replace with new or abandoned the market or attempt to find new uses or users. (duct tape & baking soda)

Design of Standardization:

Standardization- refers to the extent to which there is absence of variety in a product, service, or process. Ex. Car wash receives same service standardized process.

Benefits:

Fewer parts to deal with

Reduced training cost/time

Routine purchasing, handling, inspection, procedures

Orders fillable from inventory

Opportunities for long production runs

Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures

Disadvantages

Reduction in variety

Limits range of customers

May resist modification

Designing for mass customization:

Mass Customization: a strategy of producing basically standardized goods, but incorporating some degree of customization. Several tactics make this possible; delayed differentiation and modular design.

Delayed Differentiation the process of producing but not quite completing a product or service until customer preferences are known.

Modular design- a form of standardization in which component parts are grouped into modules that are easily replaced or interchanged. Ex. IKEA

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 or system does not preform as intended

Not operate at all- Fire alarm fails to respond to smoke

Substandard performance- Smoke alarm sounds an alarm to faint to provide an adequate warning

Unintended response- Fire Alarm sounds alarm when no smoke is present

Normal Operating Conditions – The set of conditions under which an items reliability is specified. Failure of users to use specified conditions results in premature failure. Ex. Driving over potholes

Improving Reliability

Improve component design

Production and/or assembly techniques

Testing

Use backups

Preventative maintenance procedures

User education

System design

Phases in Production and Development

Feasibility analysis- Market analysis (demand), economic analysis (development cost and production cost, profit potential), technical analysis (capacity requirements & availability, & skills needed). Last Does it fit with the mission

Product Specifications- detailed descriptions of what is needed to meet/exceed customer wants and requires collaboration btwn legal, marketing, and operations

Process Specifications- specifications that will be needed to produce the product. Alternatives must be weighed in terms of cost, availability of resources, profit potential, and quality. (Collaboration btwn accounting & operations)

Prototype development- one or a few units are made to see if there are problems with product or process specifications

Design Review- any necessary changes are made or the project is abandoned. Marketing, finance, operations, engineering, & design collaborate

Market test- used to determine the extent of consumer acceptance. Marketing

Product Introduction- new product is promoted, marketing

Follow up evaluation- Based on feedback changes made or forecast refined, marketing.

Designing for Production

Concurrent engineering- Brining engineering design and manufacturing personnel together early in the design phase.

Computer assisted design- Product design using computer graphics

Designing for assembly and disassembly

Use of components for similar products

Design for manufacturing DFM- The designing of products that are compatible with organizations capabilities

Design for Assembly DFA- Design that focuses on reducing the number of parts in a product and on assembly methods and sequence.

Manufacturability- The ease of fabrication/ assembly.

Service Design-

Service- something that is done to or for a customer

Service delivery system- the faculties, processes, and skills need 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, the accompanying goods, and explicit and implicit service included.

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