SECTION 2 STRATEGIC DESIGN Departamento de Organización de Empresas y Marketing Área de Organización de Empresas Operations Management I Dirección de Operaciones I- English teaching 3º GADI- 5º DG-ADI-DER Slide presentation Chapter 3

2 CHAPTER 3 PRODUCT DESIGN 3.1. Product Decision 3.2. Generating New Products 3.3. Product Development 3.4. Techniques for Product Design 3.5. Service Design

3  The good or service the organization provides society  Top organizations typically focus on core products  Customers buy satisfaction, not just a physical good or particular service  Fundamental to an organization's strategy with implications throughout the operations function  Product decision: develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage 3.1 Product Decision

4 Product-by-Value Analysis  Lists products in descending order of their individual dollar contribution to the firm  Lists the total annual euro contribution of the product  Helps management evaluate alternative strategies 3.1 Product Decision

5 Individual Contribution (€) Total Annual Contribution (€) Love Seat102€36,720€ Arm Chair87€51,765€ Foot Stool12€6,240€ Recliner136€51,000€ Sam’s Furniture Factory 3.1 Product Decision Product-by-Value Analysis (Example)

6 Industry leader Top third Middle third Bottom third Percentage of Sales from New Products 50% 40% 30% 20% 10% Position of Firm in Its Industry 3.2 Generating New Products Importance of New Products

7 Brainstorming is a useful tool 1.Understanding the customer 2.Economic change 3.Sociological and demographic change 4.Technological change 5.Political/legal change 6.Market practice, professional standards, suppliers, distributors 3.2 Generating New Products New Product Opportunities

8 Scope of product development team Product Development System Scope for design and engineering teams Evaluation Introduction Test Market Functional Specifications Design Review Product Specifications Customer Requirements Ability Ideas 3.3 Product Development

9 Quality Function Deployment  Identify customer wants  Identify how the good/service will satisfy customer wants  Relate customer wants to product hows  Identify relationships between the firm’s hows  Develop importance ratings  Evaluate competing products  Tool: House of Quality 3.3 Product Development

Product Development What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

11 House of Quality Example Your team has been charged with designing a new camera for Great Cameras, Inc. The first action is to construct a House of Quality 3.3 Product Development

12 House of Quality ExampleCustomerimportancerating (5 = highest) Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 No double exposures1 What the customer wants What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

13 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Low electricity requirements Aluminum components Auto focus Auto exposure Auto film advance Ergonomic design How to Satisfy Customer Wants

14 Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 No double exposures1 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors High relationship Medium relationship Low relationship Relationship matrix

15 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Low electricity requirements Aluminum components Auto focus Auto exposure Auto film advance Ergonomic design Relationships between the things we can do

16 House of Quality Example Weighted rating What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 No double exposures1 Our importance ratings

17 House of Quality Example Company A Company B GPGPFGGPPPGPGPFGGPPPP Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 No double exposures1 Our importance ratings225 How well do competing products meet customer wants What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

18 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Technical attributes Technical evaluation Company A0.760%yes1okG Company B0.650%yes2okF Us0.575%yes2okG 0.5 A 75% 2’ to ∞ 2 circuits Failure 1 per 10,000 Panel ranking

19 House of Quality Example Completed House of Quality

20 House of Quality Sequence Design characteristics Specific components House 2 Customer requirements Design characteristics House 1 Specific components Production process House 3 Production process Quality plan House 4 Deploying resources through the organization in response to customer requirements

21 Organizing for Product Development  Historically – distinct departments  Duties and responsibilities are defined  Difficult to foster forward thinking  Today – team approach  Cross functional – representatives from all disciplines or functions  Concurrent engineering – cross functional team 3.3 Product Development

22 Manufacturability and Value Engineering  Benefits: 1. Reduced complexity of products 2. Additional standardization of products 3. Improved functional aspects of product 4. Improved job design and job safety 5. Improved maintainability of the product 6. Robust design 3.3 Product Development

23  Robust design  Modular design  Computer-aided design (CAD)  Computer-aided manufacturing (CAM)  Virtual reality technology  Value analysis  Environmentally friendly design 3.4 Techniques for Product Design

24 Robust Design  Product is designed so that small variations in production or assembly do not adversely affect the product  Typically results in lower cost and higher quality 3.4 Techniques for Product Design Modular Design Products designed in easily segmented components Adds flexibility to both production and marketing Improved ability to satisfy customer requirements

25  Using computers to design products and prepare engineering documentation  Shorter development cycles, improved accuracy, lower cost  Information and designs can be deployed worldwide Computer Aided Design (CAD) 3.4 Techniques for Product Design Computer Aided Manufacturing (CAM)  Utilizing specialized computers and program to control manufacturing equipment  Often driven by the CAD system

26 1. Product quality 2. Shorter design time 3. Production cost reductions 4. Database availability 5. New range of capabilities Benefits of CAD/CAM 3.4 Techniques for Product Design

27 Virtual Reality Technology  Computer technology used to develop an interactive, 3- D model of a product from the basic CAD data  Allows people to ‘see’ the finished design before a physical model is built  Very effective in large-scale designs such as plant layout 3.4 Techniques for Product Design Value Analysis  Focuses on design improvement during production  Seeks improvements leading either to a better product or a product which can be produced more economically

28 Ethics and Environmentally Friendly Designs It is possible to enhance productivity, drive down costs, and preserve resources The Ethical Approach 1.View product design from a systems perspective 2.Consider the entire life cycle of the product Goals 3.4 Techniques for Product Design 1.Develop safe and more environmentally sound products 2.Minimize waste of raw materials and energy 3.Reduce environmental liabilities 4.Increase cost-effectiveness of complying with environmental regulations 5.Be recognized as a good corporate citizen

29 1. Make products recyclable 2. Use recycled materials 3. Use less harmful ingredients 4. Use lighter components 5. Use less energy 6. Use less material Guidelines 3.4 Techniques for Product Design Ethics and Environmentally Friendly Designs

30  Service typically includes direct interaction with the customer  Increased opportunity for customization  Reduced productivity  Cost and quality are still determined at the design stage  Delay customization  Modularization  Reduce customer interaction, often through automation 3.5 Service Design

31 (c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating (a) Customer participation in design such as pre-arranged funeral services or cosmetic surgery (b) Customer participation in delivery such as stress test for cardiac exam or delivery of a baby 3.5 Service Design