Reliability and Decision Theory ( critical Thinking )

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SEU_MGT530_Module06_PPT_Ch04.pptx

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Product & Service Design

Chapter 4

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You should be able to:

LO 4.1 Explain the strategic importance of product and service design

LO4.2 Describe what product and service design does

LO4.3 Name the key questions of product and service design

LO4.4 Identify some reasons for design or redesign

LO4.5 List some of the main sources of design ideas

LO4.6 Discuss the importance of legal, ethical, and sustainability considerations in product and service design

LO4.7 Explain the purpose and goal of life cycle assessment

LO4.8 Explain the phrase “the 3 Rs”

LO4.9 Discuss several key issues in product or service design

LO4.10 Discuss the two key issues in service design

LO4.11 Name the phases in service design

LO4.12 List the characteristics of well-designed service systems

LO4.13 List some guidelines for successful service design

Chapter 4: Learning Objectives

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The essence of an organization is the goods and services it offers

Every aspect of the organization is structured around them

Product and service design – or redesign – should be closely tied to an organization’s strategy

Strategic Product and Service Design

LO 4.1

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Translate customer wants and needs into product and service requirements

Refine existing products and services

Develop new products and services

Formulate quality goals

Formulate cost targets

Construct and test prototypes

Document specifications

Translate product and service specifications into process specifications

Involve inter-functional collaboration

What Does Product & Service Design Do?

LO 4.2

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Is there a demand for it?

Market size

Demand profile

Can we do it?

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

Key Questions

LO 4.3

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What level of quality is appropriate?

Customer expectations

Competitor quality

Fit with current offering

Does it make sense from an economic standpoint?

Liability issues, ethical considerations, sustainability issues, costs and profits

Key Questions (cont.)

LO 4.3

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Reasons to Design or Re-Design

The driving forces for product and service design or redesign are market opportunities or threats:

Economic

Social and demographic

Political, liability, or legal

Competitive

Cost or availability

Technological

LO 4.4

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Idea Generation

Supply-chain based

Competitor based

Research based

LO 4.5

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Ideas can come from anywhere in the supply chain:

Customers

Suppliers

Distributors

Employees

Maintenance and repair personnel

Supply-Chain Based

LO 4.5

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Competitor Based

By studying how a competitor operates and its products and services, many useful ideas can be generated

Reverse engineering

Dismantling and inspecting a competitor’s product to discover product improvements

LO 4.5

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Research and development (R&D)

Organized efforts to increase scientific knowledge or product innovation

Basic research

Has the objective of advancing the state of knowledge about a subject without any near-term expectation of commercial applications

Applied research

Has the objective of achieving commercial applications

Development

Converts the results of applied research into useful commercial applications.

Research Based

LO 4.5

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Legal considerations

Product liability

The responsibility a manufacturer has for any injuries or damages caused by as faulty product

Some of the concomitant costs

Litigation

Legal and insurance costs

Settlement costs

Costly product recalls

Reputation effects

Uniform Commercial Code

Under the UCC, products carry an implication of merchantability and fitness

Legal Considerations

LO 4.6

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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

Ethical Considerations

LO 4.6

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Sustainability

Using resources in ways that do not harm ecological systems that support human existence

Key aspects of designing for sustainability

Cradle-to-grave assessment (Life-Cycle assessment)

End-of-life programs

The 3-Rs

Reduction of costs and materials used

Re-using parts of returned products

Recycling

LO 4.6

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Cradle-to-Grave Assessment

aka Life-Cycle Assessment (LCA)

The assessment of the environmental impact of a product or service throughout its useful life

Focuses on such factors as

Global warming

Smog formation

Oxygen depletion

Solid waste generation

LCA procedures are part of the ISO 14000 environmental management procedures

Cradle-to-Grave Assessment

LO 4.7

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Value analysis

Examination of the function of parts and materials in an effort to reduce the cost and/or improve the performance of a product

Common questions used in value analysis

Is the item necessary; does it have value; could it be eliminated?

Are there alternative sources for the item?

Could another material, part, or service be used instead?

Can two or more parts be combined?

Can specifications be less stringent to save time or money?

Do suppliers/providers have suggestions for improvements?

Can packaging be improved or made less costly?

Reduce: Costs and Materials

LO 4.8

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Remanufacturing

Refurbishing used products by replacing worn-out or defective components

Can be performed by the original manufacturer or another company

Reasons to remanufacture:

Remanufactured products can be sold for about 50% of the cost of a new product

The process requires mostly unskilled and semi-skilled workers

In the global market, European lawmakers are increasingly requiring manufacturers to take back used products

Design for disassembly (DFD)

Designing a product to that used products can be easily taken apart

Re-Use: Remanufacturing

LO 4.8

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Recycling

Recovering materials for future use

Applies to manufactured parts

Also applies to materials used during production

Why recycle?

Cost savings

Environmental concerns

Environmental regulations

Companies doing business in the EU must show that a specified proportion of their products are recyclable

Design for recycling (DFR)

Product design that takes into account the ability to disassemble a used product to recover the recyclable parts

Recycle

LO 4.8

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Product or Service Life Stages

LO 4.9

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Standardization

Extent to which there is an absence of variety in a product, service, or process

Products are made in large quantities of identical items

Every customer or item processed receives essentially the same service

LO 4.10

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Mass customization

A strategy of producing basically standardized goods or services, but incorporating some degree of customization in the final product or service

Facilitating techniques

Delayed differentiation

Modular design

Designing for Mass Customization

LO 4.10

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Delayed differentiation

The process of producing, but not quite completing, a product or service until customer preferences are known

It is a postponement tactic

Produce a piece of furniture, but do not stain it; the customer chooses the stain

Delayed Differentiation

LO 4.10

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Modular Design

Modular design

A form of standardization in which component parts are grouped into modules that are easily replaced or interchanged

Advantages

Easier diagnosis and remedy of failures

Easier repair and replacement

Simplification of manufacturing and assembly

Training costs are relatively low

Disadvantages

Limited number of possible product configurations

Limited ability to repair a faulty module; the entire module must often be scrapped

LO 4.10

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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

Reliabilities are always specified with respect to certain conditions

Normal operating conditions

The set of conditions under which an item’s reliability is specified

Reliability

LO 4.10

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Robust design

A design that results in products or services that can function over a broad range of conditions

The more robust a product or service, the less likely it will fail due to a change in the environment in which it is used or in which it is performed

Pertains to product as well as process design

Consider the following automobiles:

Ferrari Enzo

Toyota Avalon

Which is design is more robust?

Robust Design

LO 4.10

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Degree of Newness

Product or service design changes:

Modification of an existing product or service

Expansion of an existing product line or service offering

Clone of a competitor’s product or service

New product or service

The degree of change affects the newness of the product or service to the market and to the organization

Risks and benefits?

LO 4.10

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Quality Function Deployment

Quality Function Deployment (QFD)

An approach that integrates the “voice of the customer” into both product and service development

The purpose is to ensure that customer requirements are factored into every aspect of the process

Listening to and understanding the customer is the central feature of QFD

LO 4.10

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The House of Quality Sequence

LO 4.10

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Basic quality

Refers to customer requirements that have only limited effect on customer satisfaction if present, but lead to dissatisfaction if absent

Performance quality

Refers to customer requirements that generate satisfaction or dissatisfaction in proportion to their level of functionality and appeal

Excitement quality

Refers to a feature or attribute that was unexpected by the customer and causes excitement

Kano Model

LO 4.10

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The Kano Model – As Time Passes

LO 4.10

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Concurrent engineering

Bringing engineering design and manufacturing personnel together early in the design phase

Also may involve manufacturing, marketing and purchasing personnel in loosely integrated cross-functional teams

Views of suppliers and customers may also be sought

The purpose is to achieve product designs that reflect customer wants as well as manufacturing capabilities

Concurrent Engineering

LO 4.10

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CAD

Product design using computer graphics

Advantages

Increases productivity of designers, 3 to 10 times

Creates a database for manufacturing information and product specifications

Provides possibility of engineering and cost analysis on proposed designs

CAD that includes finite element analysis (FEA) can significantly reduce time to market

Enables developers to perform simulations that aid in the design, analysis, and commercialization of new products

Computer-Aided Design (CAD)

LO 4.10

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Designers must take into account production capabilities

Equipment

Skills

Types of materials

Schedules

Technologies

Special abilities

Production Requirements

LO 4.10

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Manufacturability

Ease of fabrication and/or assembly

It has important implications for

Cost

Productivity

Quality

Manufacturability

LO 4.10

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When products have a high degree of similarity in features and components, a part can be used in multiple products

Benefits:

Savings in design time

Standard training for assembly and installation

Opportunities to buy in bulk from suppliers

Commonality of parts for repair

Fewer inventory items must be handled

Component Commonality

LO 4.10

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Service Design

Begins with a choice of service strategy, which determines the nature and focus of the service, and the target market

Key issues in service design

Degree of variation in service requirements

Degree of customer contact and involvement

LO 4.11

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Differences between Service and Product Design

Products are generally tangible, services intangible

Services are created and delivered at the same time

Services cannot be inventoried

Services are highly visible to consumers

Some services have low barriers to entry and exit

Location is often important to service design, with convenience as a major factor

Service systems range from those with little or no customer contact to those that have a very high degree of customer contact

Demand variability alternately creates waiting lines or idle service resources

LO 4.11

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Characteristics

Being consistent with the organization mission

Being user-friendly

Being robust if variability is a factor

Being easy to sustain

Being cost-effective

Having value that is obvious to the customer

Having effective linkages between back- and front-of-the-house operations

Having a single, unifying theme

Having design features and checks that will ensure service that is reliable and of high quality

The Well-Designed Service System

LO 4.12

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Define the service package in detail

Focus on the operation from the customer’s perspective

Consider the image that the service package will present both to customers and to prospective customers

Recognize that designers’ familiarity with the system may give them a quite different perspective than that of the customer, and take steps to overcome this

Make sure that managers are involved and will support the design once it is implemented

Define quality for both tangibles and intangibles

Make sure that recruitment, training, and reward policies are consistent with service expectations

Establish procedures to handle both predictable and unpredictable events

Establish system to monitor, maintain, and improve service

Successful Service Design

LO 4.13

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Effective product and service design can help the organization achieve competitive advantage:

Packaging products and ancillary services to increase sales

Using multiple-use platforms

Implementing tactics that will achieve the benefits of high volume while satisfying customer needs for variety

Continually monitoring products and services for small improvement opportunities

Reducing the time it takes to get a new or redesigned product or service to the market

Operations Strategy

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