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1 Chapter 4 Product and Service Design. 2 Trends in Product & Service Design –Customer satisfaction Designing products & services that are user friendly.

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Presentation on theme: "1 Chapter 4 Product and Service Design. 2 Trends in Product & Service Design –Customer satisfaction Designing products & services that are user friendly."— Presentation transcript:

1 1 Chapter 4 Product and Service Design

2 2 Trends in Product & Service Design –Customer satisfaction Designing products & services that are user friendly –User friendly software –Reducing time to introduce/produce new product or service –PhD degree in 6 months –The organizations capabilities to produce or deliver the right item on time –Compaq could not deliver enough laptops in mid 90s –Environmental concerns Designing products that use less material –Toyota Prius

3 3 Major factors in design strategy –Cost –Quality –Time-to-market –Customer satisfaction –Competitive advantage Product and Service Design Product and service design – or redesign – should be closely tied to an organizations strategy

4 4 Translate customer wants and needs into product and service requirements Refine existing products and services Develop new products and services Formulate –quality goals –cost targets Construct and test prototypes Document specifications Activities of Product or Service Design

5 5 Reasons for Product or Service Design Economic Low demand, excessive warranty claims –SUVs easily topple over and have high warranty claims Social and demographic Changing tastes, aging population –SUVs for generation X people who age but want to stay dynamic Political, liability, or legal Safety issues, new regulations, government changes –SUVs easily topple over and manufacturers are sued Competitive New products and services in the market, promotions –SUV sales are increased with promotions. –The profit margins on SUVs are huge so a lot of room for promotions Cost or availability Raw materials, components, labor Technological Components, production processes

6 6 Objectives of Product and Service Design Main focus –Customer satisfaction Secondary focus –Function of product/service –Cost/profit –Quality –Appearance –Ease of production/assembly –Ease of maintenance/service

7 7 Taking into account the capabilities of the organization in designing goods and services Location of facilities Suppliers Transportation fleet Current workforce Current technology Standing contracts –All can all limit the implementation of a new design Design For Operations

8 8 Legal –IRS, FDA, OSHA –Product liability: A manufacturer is liable for any injuries or damages caused by a faulty product. –Uniform commercial code: Products carry an implication of merchantability and fitness Ethical –Releasing products with defects Releasing Software with bugs Sending genetically altered food to nations suffering food shortages Environmental –EPA Legal, Ethical, and Environmental Issues

9 9 Designers Adhere to Guidelines Produce designs that are consistent with the goals of the company Give customers the value they expect Make health and safety a primary concern Consider potential harm to the environment

10 10 Forthcoming Aspects of Product Design Product Life Cycles Standardization Mass Customization Modular Design Robust Design Concurrent Engineering Computer-Aided Design

11 11 Other Issues in Product and Service Design Product/service life cycles How much standardization Product/service reliability Range of operating conditions

12 12 Life Cycles of Products or Services Time Introduction Growth Maturity Saturation Decline Deman d Flash memory Compact discs cassettes Design for low volume

13 13 Standardization –Extent to which there is an absence of variety in a product, service or process The degree of Standardization? Standardized products are immediately available to customers Calculators & car wash

14 14 Advantages of Standardization Fewer parts to deal with in inventory & manufacturing –Less costly to fill orders from inventory Reduced training costs and time More routine purchasing, handling, and inspection procedures Opportunities for long production runs, automation Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.

15 15 Disadvantages of Standardization Decreased variety results in less consumer appeal. Designs may be frozen with too many imperfections remaining. High cost of design changes increases resistance to improvements –Who likes optimal Keyboards? Standard systems are more vulnerable to failure –Epidemics: People with non-standard immune system stop the plagues. –Computer security: Computers with non-standard software stop the dissemination of viruses.

16 16 Mass customization: –A strategy of producing standardized goods or services, but incorporating some degree of customization –Modular design –Delayed differentiation Mass Customization

17 17 Mass Customization I: Customize Services Around Standardized Products DEVELOPMENTPRODUCTIONMARKETING DELIVERY Deliver customized services as well as standardized products and services Market customized services with standardized products or services Continue producing standardized products or services Continue developing standardized products or services Source: B. Joseph Pine Warranty for contact lenses:

18 18 Mass Customization II: Create Customizable Products and Services DEVELOPMENTPRODUCTIONMARKETING DELIVERY Deliver standard (but customizable) products or services Market customizable products or services Produce standard (but customizable) products or services Develop customizable products or services Gillette sensor adjusting to the contours of the face:

19 19 Mass Customization III: Provide Quick Response Throughout Supply Chain DEVELOPMENTPRODUCTIONMARKETING DELIVERY Reduce Delivery Cycle Times Reduce selection and order processing cycle times Reduce Production cycle time Reduce development cycle time Skiing parkas manufactured abroad vs in USA

20 20 Mass Customization IV: Provide Point of Delivery Customization DEVELOPMENTPRODUCTIONMARKETING DELIVERY Deliver standardize portion Market customized products or services Produce standardized portion centrally Develop products where point of delivery customization is feasible Point of delivery customization Paint mixing:

21 21 Delayed Differentiation Delayed differentiation is a postponement tactic –Producing but not quite completing a product or service until customer preferences or specifications are known Postponing the completion until customer specification are known Examples: Wheeled loaders

22 22 Postponement Case Study: Hewlett & Packard H&P produces printers for Europe market. Product manuals (different languages), labels and power supplies (plugs are different for UK, Continental EU and US) were used to be packaged along with printers in US. HP postpones commitment of a printer to a certain geographic market by producing universal printers and then applying power supplies and labels (the parts that differentiate printers for local markets) at the last stage once demand is more certain Packaging was postponed to local distribution centers in each European country. Packaging is closer to demand (in location and time) so H&P can respond faster and redistribute the supply: –Ireland has 1600 with demand 1100 –Portugal has 800 with demand 1000 –Send 200 from Ireland to Portugal For more read: H.L. Lee and C. Billington, "Evolution of Supply Chain Management Models and Practice at Hewlett-Packard Company," Interfaces, 25, 5, 1995:

23 23 Delayed Differentiation=Postponement Postponement is delaying customization step as much as possible. Producing but not quite completing a product or service until customer preferences or specifications are known. (Salad) + (Dressings ={1000 Islands, Vinaigrette, …}) Need: –Indistinguishable products before customization –Customization step is high value added –Unpredictable, negatively correlated demand for finished products –Flexible processes to allow for postponement

24 24 Modular Design Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. It allows: – easier diagnosis and remedy of failures – easier repair and replacement – simplification of manufacturing and assembly Disadvantage: variety decreases

25 25 Modular Design Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. –A bad example: Earlier Ford SUVs shared the lower body with Ford cars Due to standardization, it allows: –easier diagnosis and remedy of failures –easier repair and replacement –simplification of manufacturing and assembly

26 26 Types of Modularity for Mass Customization Component Sharing Modularity, Dell Cut-to-Fit Modularity, Gutters that do not require seams Bus Modularity, E-books Mix Modularity, Paints Sectional Modularity, LEGO +=

27 27 Mass Customization V: Modularize Components to Customize End Products DEVELOPMENTPRODUCTIONMARKETING DELIVERY Deliver customized product Market customized products or services Produce modularized components Develop modularized products Computer industry, Dell computers:

28 28 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, part, or system does not perform as intended Normal operating conditions : The set of conditions under which an items reliability is specified –A regular car is not to be driven at 200 mph –A bed is not to be used as a trampoline

29 29 Improving Reliability Good component design improve system reliability Production/assembly techniques Testing To figure out defectives / weak units Dell tests each computers electric circuitry after the assembly Redundancy/backup Exactly why your car has a spare tire Preventive maintenance procedures Medical check-ups to discover potential diseases User education System design

30 30 Design that can function over a broad range of conditions Taguchis Approach: Design a robust product –Insensitive to environmental factors either in manufacturing or in use. Columbia parkas with fleece inside –For skiing and rainy weather: Take out the fleece use the outer shell –For dry cold air: Wear the fleece without the outer shell –For a snow storm: Wear the fleece with the shell –When you put on weight: Ease the belts for a relaxed fit –When you are sweating: Open air ducts for breathing your body Central feature is Parameter Design. How to set design parameters? –Design of experiments – a Statistics concept Determines: –factors that are controllable and those not controllable –their optimal levels relative for good product performance Robust Design

31 31 Phases in Product Development Process 1.Idea generation 2.Feasibility analysis (Demand, cost/profit, capacity) 3.Product specifications (customer requirement) 4.Process specifications (produce in economic way) 5.Prototype development 6.Design review 7.Market test 8.Product introduction (promotion) 9.Follow-up evaluation

32 32 Idea Generation Ideas Competitor based Supply chain based Research based

33 33 Internal –Employees –Marketing department –R&D department External –Customers, sometimes misleading –Competitors Reverse engineering is the dismantling and inspecting of a competitors product to discover product improvements. Benchmarking is comparing and contrasting product and process characteristics against those of competitors Both can be classified as environmental scanning activity –Suppliers & Customers, Ford helps its suppliers in designing components Sources of Ideas for Products and Services

34 34 Research & Development (R&D) Organized efforts to increase scientific knowledge or product innovation & may involve: –Basic Research advances Universities, IBM research centers –Applied Research Motorola, Alcatel –Development All companies

35 35 Manufacturability Manufacturability is the ease of fabrication and/or assembly which is important for the following aspects: – Cost – Productivity – Quality

36 36 Design for Manufacturing Beyond the overall objective to achieve customer satisfaction while making a reasonable profit is: Design for Manufacturing (DFM) : The designers consideration of the organizations manufacturing capabilities when designing a product. The more general term design for operations encompasses transportation, services as well as manufacturing

37 37 Over the Wall Approach vs Concurrent Engineering Design Mfg New Product

38 38 Concurrent Engineering Concurrent engineering: Bringing engineering design and manufacturing personnel together early in the design phase. Manufacturing personnel helps to identify production capabilities, selecting suitable materials and process, the conflicts during production can be reduced. Early consideration of technical feasibility. Shortening the product development process. Manufacturing personnel helps to identify production capabilities, selecting suitable materials and process, the conflicts during production can be reduced. Early consideration of technical feasibility. Shortening the product development process.

39 39 Design for manufacturing (DFM) Design for assembly (DFA) number of parts, methods, sequence. Design for recycling (DFR) Remanufacturing Design for disassembly (DFD) Product design

40 40 Computer-Aided Design Computer-Aided Design (CAD) is product design using computer graphics. increases productivity of designers, 3 to 10 times creates a database for manufacturing information on product specifications Simplifies communication of a design. Design teams at various locations can work together. provides possibility of engineering and cost analysis on proposed designs Transonic Systems Inc. manufactures customized medical devices; pomps, blood vessel, blood pressure measurement equipment. –Design to manufacturing was long, problematic, designers and manufacturing engineers could not work on designs simultaneously, some of the previous designs were lost (talking of knowledge management). –Savior: CAD

41 41 –Recycling: recovering materials for future use –Recycling reasons Cost savings Environment concerns Environment regulations –Remanufacturing: replacing worn out parts in used products Kodak cameras –Design for disassembly is considering ease of disassembly while designing a product –Reverse supply chains Recycling-Remanufacturing

42 42 Quality Function Deployment –Voice of the customer –House of quality Quality Function Deployment QFD: An approach that integrates the voice of the customer into the product and service development process.

43 43 The House of Quality Correlation matrix Design requirements Customer require- ments Competitive assessment Relationship matrix Specifications or target values

44 44 A structured and disciplined process that provides a means to identify and carry the voice of the customer through each stage of product or service development and implementation QFD is for: Communication Documentation Analysis Prioritization breakthroughs Quality Function Deployment

45 45 House of Quality Example for a Car Door

46 46 The QFD and Kano Model Japanese QFD Results –Design time reduced by ¼ to ½ –Problems with initial quality decreased –Comparison and analysis of competitive products became possible –Communication between divisions improved The Kano Model Product Characteristics: –Must have = Order qualifiers –Expected = Order qualifiers, winners –Excitement = Order winners 1.Make sure that you have the order qualifiers 2.Determine the level of order winners with a cost/benefit analysis

47 47 Service Design Service is an act Service delivery system –Facilities –Processes –Skills Explicit services –Core of the service: Hair styling Implicit services –Excitement characteristics: Courtesy Many services are bundled with products –Maintenance services –Conecpt of selling solutions: Products and Services E.g. IBM

48 48 Phases in Service Design 1.Conceptualize 2.Identify service components 3.Determine performance specifications 4.Translate performance specifications into design specifications 5.Translate design specifications into delivery specifications

49 49 Service Blueprinting Service blueprinting: A method used in service design to describe and analyze a proposed service A useful tool for conceptualizing a service delivery system Major Steps in Service Blueprinting 1.Establish boundaries 2.Identify steps involved 3.Prepare a flowchart, see the next page, source in justice-flowchart.pdf 4.Identify potential failure points 5.Establish a time frame 6.Analyze profitability

50 50

51 51 Characteristics of Well Designed Service Systems 1.Consistent with the organization mission 2.User friendly: Do we understand it? 3.Robust: Can it function under various conditions? 4.Easy to sustain: Requires to much effort? 5.Cost effective: Does it cost too much? 6.Value to customers: Who are the customers? 7.Effective linkages between back-office operations 8.Single unifying theme: What does the justice system do? 9.Ensure reliability and high quality 10.Consistency. 11.Up-to-date: Does it evolve? You be the judge for the justice system How do you rate the system in terms of

52 52 Challenges of Service Design Variable requirements –Criminals and the cases are different Difficult to describe –How do you describe a criminal action? –We need the court system. Descriptions are not exact because they are based on words. This is exactly why lawyers make a living; or perhaps more. High customer contact –Service cannot be inventoried Service – customer encounter

53 53 Most often product and services are provided together. Products vs. Services are Tangible – intangible Services created and delivered at the same time Services cannot be inventoried Services highly visible to customers Services have low barrier to entry Location important to service –Ambiance –Convenience Differences Between Product and Service Design

54 54 Service Variability & Customer Influence Service Design Variability in Service Require- ments Figure 4-3 Degree of Contact with Customer Where are medical services, internet law consultants?

55 55 Shorten time-to-market Package products and services –Sell solutions not products Increase emphasis on component commonality Use multiple-use platforms Consider tactics for mass customization Look for continual improvement Operations Strategy

56 56 Remanufacturing-recycling Robust design Design for manufacturing (DFM) Design for assembly (DFA) Design for disassembly (DFD) Design for recycling (DFR) Reliability Summary: Product design

57 57 Practice Questions True/ False: 1.One of the main advantages of standardization is that it increases the potential variety of products. 2. Product failures can be easier to remedy with modular design. 3. Quality function deployment (QFD) is based on a set of standards which relate customer requirements to company capabilities. 1.Answer: False Page: Answer: True Page: Answer: False Page: Answer: False Page: Answer: True Page: Answer: False Page: 143

58 58 Practice Question Multiple-Choice: 4. The term standardization is closely associated with: A)customization B)high cost C)longer lead times D)variety E)interchangeability Answer: E Page: 127

59 59 Practice Question 4. A formal way to document customer requirements is: A)consumer surveys B)quality function deployment (QFD) C)focus groups D)Delphi technique E)sales/marketing matrix Answer: B Page: 142

60 60 Practice Question 6.The stage in a product or service life cycle where some firms adopt a defensive research posture is: A)incubation B)growth C)maturity D)saturation E)decline Answer: E Page: 126

61 61 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, part, or system does not perform as intended Normal operating conditions: The set of conditions under which an items reliability is specified Reliability is a Probability, that the product or system will: – Function when activated – Function for a given length of time Independent events Redundancy; Why to have spare tires on the car?

62 62 Parallel vs Serial Components A product is composed of several components. Suppose components fail/work independently. If all components must function for the product to function, components are serial. Example: Laptop and projector. If at least one component must function for the product to function, components are parallel. Example: Two batteries of a laptop. P(System fails)=P(A fails) P(B fails) AABB Water flowing from left to right analogy. P(System works)=P(A works) P(B works) AA BB

63 63 Example: Reliability Diagram Determine the reliability of the system shown Compare this diagram to that of Example S-1

64 64 Example The system can be reduced to a series of three components By collapsing parallel components (0.10)(0.10)1-(0.05)(0.08) 0.98 x 0.99 x 0.996

65 65 Failure Rate: Personal life expectancy – Strike life expectancy Few (random) failures Infant mortality Failures due to wear-out Time, T Figure 4S-1

66 66 Exponential Distribution for Life X T Time Reliability=P(x>T)=1-F(T) pdf f(x) cdf F(T)=P(X

67 67 Use Exponential Distribution to Model Lifetime Exponential distribution is a simple density used to model lifetimes Its failure rate is constant –So does not apply to human life. Insurers use more complicated densities. The reliability of each part in a system Reliability=P(Part works at T)=1-F(T) Once reliabilities are computed for all parts, combine parts according to whether serial or parallel

68 68 Improving Reliability Component design Production/assembly techniques Testing Redundancy/backup Preventive maintenance procedures User education System design How much of reliability is good? Cost-benefit analysis.

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