© 2008 Prentice Hall, Inc.5 – 1 Operations Management Chapter 5 – Product Design PowerPoint presentation to accompany Heizer/Render Operations Management, 11 Ed. Extensive changes have been made to this slide set by Ömer Yağız. (revised March 2015)

© 2008 Prentice Hall, Inc.5 – 2 Outline ► Regal Marine ► Global Company Profile: Regal Marine ► Goods and Services Selection ► Generating New Products ► Product Development ► Issues for Product Design ► Product Development Continuum

© 2008 Prentice Hall, Inc.5 – 3 Outline - Continued ► Defining a Product ► Documents for Production ► Service Design ► Application of Decision Trees to Product Design ► Transition to Production

© 2008 Prentice Hall, Inc.5 – 4 © 2011 Pearson Regal Marine  Global market  3-dimensional CAD system  Reduced product development time  Reduced problems with tooling  Reduced problems in production  Assembly line production  JIT

© 2008 Prentice Hall, Inc.5 – 5 ► Organizations exist to provide goods or services to society ► Great products are the key to success ► 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 Goods and Services Selection

© 2008 Prentice Hall, Inc.5 – 6 ► Goods or services are the basis for an organization's existence ► Limited and predicable life cycles requires constantly looking for, designing, and developing new products ► New products generate substantial revenue Goods and Services Selection

© 2008 Prentice Hall, Inc.5 – 7 Goods and Services Selection Figure 5.1 The higher the percentage of sales from the last 5 years, the more likely the firm is to be a leader. 50% – 40% – 30% – 20% – 10% – 0% – Industry leader Top third Middle third Bottom third Position of firm in its industry Percent of sales from new products

© 2008 Prentice Hall, Inc.5 – 8 The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage Product Decision

© 2008 Prentice Hall, Inc.5 – 9 Product Strategy Options ► Differentiation ► Shouldice Hospital ► Low cost ► Taco Bell ► Rapid response ► Toyota

© 2008 Prentice Hall, Inc.5 – 10 Product strategy Product strategy is vital for a company’s success Product strategy is vital for a company’s success Top companies focus on only a few products and then concentrate on those products Top companies focus on only a few products and then concentrate on those products –Honda – engine technology –Intel – microprocessors –Logitech – mice, keyboards –Microsoft – PC software –HP – laptops, printers

© 2008 Prentice Hall, Inc.5 – 11 © Product Life Cycles  May be any length from a few hours to decades  The operations function must be able to introduce new products successfully

© 2008 Prentice Hall, Inc.5 – 12 © Product Life Cycles Negative cash flow IntroductionGrowthMaturityDecline Sales, cost, and cash flow Cost of development and production Cash flow Net revenue (profit) Sales revenue Loss Figure 5.1

© 2008 Prentice Hall, Inc.5 – 13 © Product Life Cycle Introductory Phase  Fine tuning may warrant unusual expenses for 1.Research 2.Product development 3.Process modification and enhancement 4.Supplier development

© 2008 Prentice Hall, Inc.5 – 14 © Product Life Cycle Growth Phase  Product design begins to stabilize  Effective forecasting of capacity becomes necessary  Adding or enhancing capacity may be necessary

© 2008 Prentice Hall, Inc.5 – 15 © Product Life Cycle Maturity Phase  Competitors now established  High volume, innovative production may be needed  Improved cost control, reduction in options, paring down of product line

© 2008 Prentice Hall, Inc.5 – 16 © Product Life Cycle Decline Phase  Unless product makes a special contribution to the organization, must plan to terminate offering

© 2008 Prentice Hall, Inc.5 – 17 Product Life Cycle Costs Costs incurred Costs committed Ease of change ConceptDetailedManufacturingDistribution, designdesignservice, prototypeand disposal Percent of total cost 100 – 80 – 60 – 40 – 20 – 0 –

© 2008 Prentice Hall, Inc.5 – 18 Product-by-Value Analysis  Lists products in descending order of their individual dollar contribution to the firm  Lists the total annual dollar contribution of the product  Helps management evaluate alternative strategies This is in line with the Pareto priciple (vital few; not the trivial many)

© 2008 Prentice Hall, Inc.5 – 19 Product-by-Value Analysis Individual Contribution ($) Total Annual Contribution ($) Love Seat$102$36,720 Arm Chair$87$51,765 Foot Stool$12$6,240 Recliner$136$51,000 Sam’s Furniture Factory

© 2008 Prentice Hall, Inc.5 – 20 New Product Opportunities 1.Understanding the customer is basic 2.Economic change 3.Sociological and demographic change 4.Technological change 5.Political/legal change 6.Market practice, professional standards, suppliers, distributors Brainstorming is a useful tool

© 2008 Prentice Hall, Inc.5 – 21 Product Development System Fig. 5-3

© 2008 Prentice Hall, Inc.5 – 22 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  Compare performance to desirable technical attributes

© 2008 Prentice Hall, Inc.5 – 23 QFD House of Quality Relationship matrix How to satisfy customer wants Interrelationships Competitive assessment Technical evaluation Target values What the customer wants Customer importance ratings Weighted rating

© 2008 Prentice Hall, Inc.5 – 24 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

© 2008 Prentice Hall, Inc.5 – 25 House of Quality Example Customerimportancerating (5 = highest) Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color correction1 What the customer wants What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

© 2008 Prentice Hall, Inc.5 – 26 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 Paint pallet Ergonomic design How to Satisfy Customer Wants

© 2008 Prentice Hall, Inc.5 – 27 Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color corrections1 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

© 2008 Prentice Hall, Inc.5 – 28 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 Paint pallet Ergonomic design Relationships between the things we can do

© 2008 Prentice Hall, Inc.5 – 29 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 Color corrections1 Our importance ratings

© 2008 Prentice Hall, Inc.5 – 30 House of Quality Example Company A Company B GPGPFGGPPPGPGPFGGPPPP Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color corrections1 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

© 2008 Prentice Hall, Inc.5 – 31 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Target values (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

© 2008 Prentice Hall, Inc.5 – 32 House of Quality Example Completed House of Quality Lightweight3 Easy to use4 Reliable5 Easy to hold steady2 Color correction1 Our importance ratings Low electricity requirements Aluminum components Auto focus Auto exposure Paint pallet Ergonomic design Company A Company B GPGPFGGPPPGPGPFGGPPPP Target values (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

© 2008 Prentice Hall, Inc.5 – 33 Another Example A company is asked to install a new computer server system at a customer’s facilities to better serve growing demands for more information and faster response time. The company appoints a team to ensure the new system includes customer requirements.A company is asked to install a new computer server system at a customer’s facilities to better serve growing demands for more information and faster response time. The company appoints a team to ensure the new system includes customer requirements. After conducting a series of interviews and focus groups with the information technology resources from a carefully chosen sample size, the team captures the VOC and enters the data into the customer needs section of the house of quality. The team also determines the relative importance of these needs to customers.After conducting a series of interviews and focus groups with the information technology resources from a carefully chosen sample size, the team captures the VOC and enters the data into the customer needs section of the house of quality. The team also determines the relative importance of these needs to customers. The engineering group develops the functional requirements and evaluates their values, as shown in the correlation matrix below.The engineering group develops the functional requirements and evaluates their values, as shown in the correlation matrix below.

© 2008 Prentice Hall, Inc.5 – 34

© 2008 Prentice Hall, Inc.5 – 35 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 Figure 5.4 Deploying resources through the organization in response to customer requirements

© 2008 Prentice Hall, Inc.5 – 36 QFD Sources QFD Institute ( QFD Institute ( QFDhttp:// QFDhttp:// KFG Türkiye (Kalite Fonksiyonu Göçerimi) KFG Türkiye (Kalite Fonksiyonu Göçerimi) KFG Glenn Mazur Glenn MazurMazur ( ( International Council for QFD (ICQFD) ( International Council for QFD (ICQFD) ( Akao Prize ( Akao Prize ( Akaohttp://qfdi.org/akaoprize.htm Akaohttp://qfdi.org/akaoprize.htm Isixsigma ( Isixsigma (

© 2008 Prentice Hall, Inc.5 – 37 QFD Sources DRM Associates DRM Associates QFD at Univ. of Sheffield QFD at Univ. of Sheffield Sheffield.htmQFD Sheffield.htmQFD2000

© 2008 Prentice Hall, Inc.5 – 38 QFD Software QFD/CAPTURE by QFD Capture QFD/CAPTURE by QFD CaptureQFD CaptureQFD Capture

© 2008 Prentice Hall, Inc.5 – 39 Quality Function Deployment 20th International Symposium on QFD 20th International Symposium on QFD20th International Symposium on QFD20th International Symposium on QFD 4-5 September 2014 İstanbul, Turkey

© 2008 Prentice Hall, Inc.5 – 40 Quality Function Deployment ‘QUALITY FUNCTION DEPLOYMENT (QFD)’ by QUALITY FUNCTION DEPLOYMENT QUALITY FUNCTION DEPLOYMENT Ömer Yağız available at the Course Page

© 2008 Prentice Hall, Inc.5 – 41 © Organizing for Product Development  Historically – distinct departments  Duties and responsibilities are defined  Difficult to foster forward thinking  A Champion  Product manager drives the product through the product development system and related organizations

© 2008 Prentice Hall, Inc.5 – 42 © Organizing for Product Development  Team approach  Cross functional – representatives from all disciplines or functions  Product development teams, design for manufacturability teams, value engineering teams  Japanese “whole organization” approach  No organizational divisions

© 2008 Prentice Hall, Inc.5 – 43 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 (serviceability) of the product 6.Robust design

© 2008 Prentice Hall, Inc.5 – 44 Cost Reduction of a Bracket via Value Engineering Figure 5.5

© 2008 Prentice Hall, Inc.5 – 45 Issues for Product Development  Robust design  Modular design  Computer-aided design (CAD)  Computer-aided manufacturing (CAM)  Virtual reality technology  Value analysis  Environmentally friendly design

© 2008 Prentice Hall, Inc.5 – 46 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

© 2008 Prentice Hall, Inc.5 – 47 Modular Design  Products designed in easily segmented components  Adds flexibility to both production and marketing  Improved ability to satisfy customer requirements A computer is actually one of the best examples of modular design - typical modules are power supply units, processors, mainboards, graphics cards, hard drives, optical drives, etc. All of these parts should be easily interchangeable as long as you use parts that support the same standard interface as the part you replaced.power supply unitsprocessorsmainboardsgraphics cardshard drivesoptical drives

© 2008 Prentice Hall, Inc.5 – 48  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)

© 2008 Prentice Hall, Inc.5 – 49  Design for Manufacturing and Assembly (DFMA)  Solve manufacturing problems during the design stage  3-D Object Modeling  Small prototype development  CAD through the internet  International data exchange through STEP Extensions of CAD

© 2008 Prentice Hall, Inc.5 – 50 Computer-Aided Manufacturing (CAM)  Utilizing specialized computers and program to control manufacturing equipment  Often driven by the CAD system (CAD/CAM)

© 2008 Prentice Hall, Inc.5 – 51 1.Product quality 2.Shorter design time 3.Production cost reductions 4.Database availability 5.New range of capabilities Benefits of CAD/CAM

© 2008 Prentice Hall, Inc.5 – 52 Goals for Ethical and Environmentally Friendly Designs 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

© 2008 Prentice Hall, Inc.5 – 53 Service Design  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 as late in the process as possible  Modularization (health insurance packages, ISP services)  Reduce customer interaction, often through automation (ATM’s, e-ticket)

© 2008 Prentice Hall, Inc.5 – 54  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 (c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating Service Design Figure 5.12 (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

© 2008 Prentice Hall, Inc.5 – 55 Moments of Truth “Kritik an” or “zurnanın zırt dediği an”  Concept created by Jan Carlzon of Scandinavian Airways  Critical moments between the customer and the organization that determine customer satisfaction  There may be many of these moments  These are opportunities to gain or lose business

© 2008 Prentice Hall, Inc.5 – 56 The technician was sincerely concerned and apologetic about my problem He asked intelligent questions that allowed me to feel confident in his abilities The technician offered various times to have work done to suit my schedule Ways to avoid future problems were suggested Experience Enhancers Only one local number needs to be dialed I never get a busy signal I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem A timely resolution to my problem is offered The technician is able to explain to me what I can expect to happen next Standard Expectations Moments-of-Truth Computer Company Hotline I had to call more than once to get through A recording spoke to me rather than a person While on hold, I get silence,and wonder if I am disconnected The technician sounded like he was reading a form of routine questions The technician sounded uninterested I felt the technician rushed me Experience Detractors Figure 5.13

© 2008 Prentice Hall, Inc.5 – 57 Documents for Services  High levels of customer interaction necessitates different documentation  Often explicit job instructions for moments-of-truth  Scripts and storyboards are other techniques

© 2008 Prentice Hall, Inc.5 – 58 SERVICE BLUEPRINTING & FAILSAFING

© 2008 Prentice Hall, Inc.5 – 59 SERVICE BLUEPRINTING & FAILSAFING

© 2008 Prentice Hall, Inc.5 – 60 YOU ARE NOT RESPONSIBLE FOR THE SUBSEQUENT MATERIAL

© 2008 Prentice Hall, Inc.5 – 61 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

© 2008 Prentice Hall, Inc.5 – 62 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

© 2008 Prentice Hall, Inc.5 – 63 Ethics and Environmentally Friendly Designs It is possible to enhance productivity, drive down costs, and preserve resources Effective at any stage of the product life cycle  Design  Production  Destruction

© 2008 Prentice Hall, Inc.5 – 64 The Ethical Approach  View product design from a systems perspective  Inputs, processes, outputs  Costs to the firm/costs to society  Consider the entire life cycle of the product

© 2008 Prentice Hall, Inc.5 – 65 Guidelines for Environmentally Friendly Designs 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

© 2008 Prentice Hall, Inc.5 – 66 Defining The Product  First definition is in terms of functions  Rigorous specifications are developed during the design phase  Manufactured products will have an engineering drawing  Bill of material (BOM) lists the components of a product

© 2008 Prentice Hall, Inc.5 – 67  Engineering drawing  Shows dimensions, tolerances, and materials  Shows codes for Group Technology  Bill of Material  Lists components, quantities and where used  Shows product structure Product Documents

© 2008 Prentice Hall, Inc.5 – 68 Engineering Drawings Figure 5.8

© 2008 Prentice Hall, Inc.5 – 69 Bills of Material BOM for Panel Weldment NUMBERDESCRIPTIONQTY A 60-71PANEL WELDM’T1 A 60-7LOWER ROLLER ASSM.1 R ROLLER1 R PIN1 P 60-2 LOCKNUT1 A 60-72GUIDE ASSM. REAR1 R SUPPORT ANGLE1 A 60-4 ROLLER ASSM BOLT1 A 60-73GUIDE ASSM. FRONT1 A SUPPORT WELDM’T1 R WEAR PLATE BOLT1 Figure 5.9 (a)

© 2008 Prentice Hall, Inc.5 – 70 Bills of Material Hard Rock Cafe’s Hickory BBQ Bacon Cheeseburger DESCRIPTIONQTY Bun1 Hamburger patty8 oz. Cheddar cheese2 slices Bacon2 strips BBQ onions1/2 cup Hickory BBQ sauce1 oz. Burger set Lettuce1 leaf Lettuce1 leaf Tomato1 slice Tomato1 slice Red onion4 rings Red onion4 rings Pickle1 slice Pickle1 slice French fries5 oz. Seasoned salt1 tsp. 11-inch plate1 HRC flag1 Figure 5.9 (b)

© 2008 Prentice Hall, Inc.5 – 71  Parts grouped into families with similar characteristics  Coding system describes processing and physical characteristics  Part families can be produced in dedicated manufacturing cells Group Technology

© 2008 Prentice Hall, Inc.5 – 72 Group Technology Scheme Figure 5.10 (a) Ungrouped Parts (b) Grouped Cylindrical Parts (families of parts) GroovedSlotted ThreadedDrilledMachined

© 2008 Prentice Hall, Inc.5 – 73 1.Improved design 2.Reduced raw material and purchases 3.Simplified production planning and control 4.Improved layout, routing, and machine loading 5.Reduced tooling setup time, work-in- process, and production time Group Technology Benefits

© 2008 Prentice Hall, Inc.5 – 74 Documents for Production  Assembly drawing  Assembly chart  Route sheet  Work order  Engineering change notices (ECNs)

© 2008 Prentice Hall, Inc.5 – 75 Assembly Drawing  Shows exploded view of product  Details relative locations to show how to assemble the product Figure 5.11 (a)

© 2008 Prentice Hall, Inc.5 – 76 Assembly Chart R 209 Angle R 207 Angle Bolts w/nuts (2) R 209 Angle R 207 Angle Bolt w/nut R 404 Roller Lock washer Part number tag Box w/packing material Bolts w/nuts (2) SA 1 SA 2 A1 A2 A3 A4 A5 Left bracket assembly Right bracket assembly Poka-yoke inspection Figure 5.11 (b) Identifies the point of production where components flow into subassemblies and ultimately into the final product

© 2008 Prentice Hall, Inc.5 – 77 Route Sheet Lists the operations and times required to produce a component SetupOperation ProcessMachineOperationsTimeTime/Unit 1Auto Insert 2Insert Component Set 56 2Manual Insert Component.52.3 Insert 1 Set 12C 3Wave SolderSolder all components to board 4Test 4Circuit integrity.25.5 test 4GY

© 2008 Prentice Hall, Inc.5 – 78 Work Order Instructions to produce a given quantity of a particular item, usually to a schedule Work Order ItemQuantityStart DateDue Date ProductionDelivery DeptLocation 157C1255/2/085/4/08 F32Dept K11

© 2008 Prentice Hall, Inc.5 – 79 Engineering Change Notice (ECN)  A correction or modification to a product’s definition or documentation  Engineering drawings  Bill of material Quite common with long product life cycles, long manufacturing lead times, or rapidly changing technologies

© 2008 Prentice Hall, Inc.5 – 80 Configuration Management  The need to manage ECNs has led to the development of configuration management systems  A product’s planned and changing components are accurately identified and control and accountability for change are identified and maintained

© 2008 Prentice Hall, Inc.5 – 81 Product Life-Cycle Management (PLM)  Integrated software that brings together most, if not all, elements of product design and manufacture  Product design  CAD/CAM, DFMA  Product routing  Materials  Assembly  Environmental

© 2008 Prentice Hall, Inc.5 – 82 Transition to Production  Know when to move to production  Product development can be viewed as evolutionary and never complete  Product must move from design to production in a timely manner  Most products have a trial production period to insure producibility  Develop tooling, quality control, training  Ensures successful production

© 2008 Prentice Hall, Inc.5 – 83 Transition to Production  Responsibility must also transition as the product moves through its life cycle  Line management takes over from design  Three common approaches to managing transition  Project managers  Product development teams  Integrate product development and manufacturing organizations