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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