Chipotle Project

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The purpose of this chapter is to show how product design relates to the operations function along with collaboration with customers and suppliers in the supply chain. The chapter stresses the steps in product design and the interaction between product design and process design. The chapter also discusses cross-functional design, quality function deployment, and reduction of product variety through the use of modular design.

Imagine a company’s R&D department spending 4 weeks in designing a product just to have the finance department send the plans back saying there’s no money in the budget for the required capital investment on equipment. R&D then redesigns its plans just to have the operations department inform them that they do not have the specialized personnel capable of producing the product. So then the plans go over to the human resources department where it’s discovered there would need to be a 4 month pipeline from recruiting, orienting, and training, to place the right personnel in position. When products are designed, they must simultaneously design the process. You must have the capability to make the product in house. You must set up your supply chain to support your product’s input needs.

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Product design follows from the development of a business strategy. The business strategy will include a value proposition that defines the target market, the differentiation of your product, and why the customer should buy from you. This is the starting point for designing a new product. These new-product designs should reflect the business strategy. There are three different ways to introduce new products. These approaches are called market pull, technology push, and interfunctional view.

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Not only is there a wall that blocks communication, there is also a language barrier. Not all departments speak the same business language. There’s the left-brain, right-brain theory. The theory is that people are either left-brained or right-brained, meaning that one side of their brain is dominant. If you’re mostly analytical and methodical in your thinking, you’re said to be left-brained. If you tend to be more creative or artistic, you’re thought to be right-brained.

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Most firms have an organized new-product development (NPD) process that follows specific phases or prescribed steps. The typical phases followed by firms in developing new products are concept development where idea generation and the evaluation of alternative ideas for the new product are defined to meet specific market needs. Product design is the next phase concerned with designing the physical new product. At the end of this product design phase the company has a set of product specifications and digital images or engineering drawings specified in sufficient detail that production prototypes can be built and tested. In the third phase, products require testing of production prototypes before they are put into production.

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The “over the wall” approach to product design is riddled with constant rework, redesign, and waste of scarce resources. In the concurrent approach, all functions are involved from the beginning, frequently by forming NPD teams.

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Just as internal collaboration is important, so is external collaboration with supply chain customers and suppliers. While relationships with customers and suppliers often are established in new-product development, collaboration is something different, requiring actual participation in the design process. Remember, if customers determine value a company must value its customer relationships.

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Suppliers can be asked to join the NPD team or to provide input at critical points in the design process. Imagine a company designing a product simply to discover there are no suppliers capable of producing parts needed because they lack the capability in regards to labor cost, equipment cost (capital), throughput time, or expertise needed to producing a quality product.

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Quality function deployment (QFD) is a tool for linking customer requirements as defined by the customer to technical specifications. QFD is very useful in translating the ordinary language obtained from the customers to technical requirements understood by engineers. It also facilitates interfunctional cooperation between marketing, engineering, and manufacturing. A customer’s use of terms like “light weight” can be translated by the engineering department as needing to qualify the use of different metals like aluminum, titanium, or carbon fiber.

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When using QFD, the company identifies various customer attributes. Each of these attributes can be met by one or more engineering characteristics of the product. By using the matrix shown here in Figure 3.4, the customer attributes on the left side of the matrix can be related to the engineering characteristics on the top of the matrix. When the matrix, is completed, it is called the “house of quality.”

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Remember the saying that “time is money.” The faster we can produce a product, the less time we waste, and the more efficient we become. Also remember the “cookie cutter” concept that the more we can standardize a product, again, the less time we waste and, equally, more efficient we become. Usually products are designed one at a time without much regard for commonality of parts or modular properties that can aid production and still meet customer needs. Modular design makes it possible to have relatively high product variety and low component variety at the same time. The core idea is to develop a series of basic product components, or modules, that can be assembled into a large number of different products. To the customer, it appears there are a great number of different products. To operations, there are only a limited number of basic components and processes. Modular design is a prerequisite to mass customization. Also note that limiting the number of components in your raw materials inventory reduces ordering cost, limits touches, lowers transportation and holding costs. All leading to increased productivity while reducing expenses.

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Here are examples of modular components that are used by auto manufacturers. Common components are used to build multiple automobile models.

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