1. Product and Service Design
Chapter 4

2. Product or Service Design Activities
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
Note that we take product and service together. This follows in that the processes for the design for both are similar.

3. Product and Service Design
Major factors in design strategy
Cost
Quality
Time-to-market
Customer satisfaction
Competitive advantage
We will tie in these factors during class during a lecture and new product development and TQM (Total Quality Management).
Product and service design – or redesign – should be
closely tied to an organization’s strategy

4. Reasons for Product or Service Design
Economic
Social and demographic
Political, liability, or legal
Competitive
Cost or availability
Technological
These reasons listed above, either separately or in some combination, could trigger an effort in a company for new product or service design.

5. Objectives of Product and Service Design
Main focus
Customer satisfaction
Understand what the customer wants
Secondary focus
Function of product/service
Cost/profit
Quality
Appearance
Ease of production/assembly
Ease of maintenance/service
This customer focus in particularly applicable to a firm in a very competitive environment.

6. Designing For Operations
Taking into account the capabilities of the organization in designing goods and services.
Failure to take this into account can:
Reduce productivity
Reduce quality
Increase costs
The company must have the talent, capacity, and other resources to successfully carry out the new design. Or, find a way to get the talent, capacity, and other necessary resources.

7. Legal, Ethical, and Environmental Issues
FDA, OSHA, IRS
Product liability
Uniform commercial code
Ethical
Releasing products with defects
Environmental
EPA
The above slide reflects the business environment that must be faced by business organizations in the real world. Companies must first anticipate what could go wrong in any of the above areas (i.e., legal, ethical, and environmental).

8. Regulations & Legal Considerations
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.
Product liability can fall on any member or members in the supply chain, and the one with the deepest pockets tends to get the biggest hit from a lawsuit if a product is harmful. The UCC acts as an implied warranty for products in almost all of the states in the USA. It applies only to products and not services, unless the services are bundled with the product [e.g., such as buying computer hardware (a product) that comes with a service for updates (service)].

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
Note item 2, which relates to satisfying the customer, especially if the company is in a competitive market.

10. Other Issues in Product and Service Design
Product/service life cycles
How much standardization
Mass customization
Product/service reliability
Robust design
Degree of newness
Cultural differences
The above considerations must also be considered by management for a successful product or service design.

11. Life Cycles of Products or Services
Time
Introduction
Growth
Maturity
Saturation
Decline
Demand

12. Standardization Standardization
Extent to which there is an absence of variety in a product, service or process
Standardized products are immediately available to customers

13. Advantages of Standardization
Fewer parts to deal with in inventory & manufacturing
Design costs are generally lower
Reduced training costs and time
More routine purchasing, handling, and inspection procedures
Quality is more consistent

14. Advantages of Standardization (Cont’d)
Orders fillable from inventory
Opportunities for long production runs and automation
Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.

15. Disadvantages of Standardization
Designs may be frozen with too many imperfections remaining.
High cost of design changes increases resistance to improvements.
Decreased variety results in less consumer appeal.

16. Mass Customization Mass customization:
A strategy of producing standardized goods or services, but incorporating some degree degree of customization
Delayed differentiation
Modular design
Definitions to clarify the above slide and the two slides that follow are in the margins of your textbook on pp

17. Delayed Differentiation
Delayed differentiation is a postponement tactic
Producing but not quite completing a product or service until customer preferences or specifications are known

18. 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

19. 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 item’s reliability is specified
The above must also be consistent with customer expectations in competitive industries.

20. Improving Reliability
Component design
Production/assembly techniques
Testing
Redundancy/backup
Preventive maintenance procedures
User education
System design
Obviously, this is of great concern to airline manufactures.

21. Product Design Robust Design Concurrent Engineering
Computer-Aided Design
Modular Design
Concurrent engineering brings together design and manufacturing engineers early in the design phase.

22. Robust Design
Robust Design: Design that results in products or services that can function over a broad range of conditions

23. Taguchi Approach Robust Design
Design a robust product
Insensitive to environmental factors either in manufacturing or in use.
Central feature is Parameter Design.
Determines:
factors that are controllable and those not controllable
their optimal levels relative to major product advances
As stated on page 148, this approach is controversial

24. Degree of Newness Modification of an existing product/service
Expansion of an existing product/service
Clone of a competitor’s product/service
New product/service

25. Cultural Differences
Multinational companies must take into account cultural differences related to the product design.
Notable failures:
Chevy Nova in Mexico
Ikea beds in U.S.

26. Concurrent Engineering
Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase.

27. 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
provides possibility of engineering and cost analysis on proposed designs

28. Global Product Design Virtual teams
Uses combined efforts of a team of designers working in different countries
Provides a range of comparative advantages over traditional teams such as:
Engaging the best human resources around the world
Possibly operating on a 24-hr basis
Global customer needs assessment
Global design can increase marketability

29. Idea Generation Supply chain based Competitor based Research based
Ideas
Competitor based
To make this work for supply chain based idea generation, supplier relationships management must be effective. The second item refers to studying the competitor’s successes and failures. The third improves scientific knowledge and/or product innovation.
Research based

30. Reverse Engineering Reverse engineering is the
dismantling and inspecting of a competitor’s product to discover product improvements.

31. Research & Development (R&D)
Organized efforts to increase scientific knowledge or product innovation & may involve:
Basic Research advances knowledge about a subject without near-term expectations of commercial applications.
Applied Research achieves commercial applications.
Development converts results of applied research into commercial applications.

32. Manufacturability
Manufacturability is the ease of fabrication and/or assembly which is important for:
Cost
Productivity
Quality
The prototype must be mass produced with reasonable cost, at an acceptable level of productivity, and meet the customer’s expectations for quality.

33. Designing 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 organization’s manufacturing capabilities when designing a product.
The more general term design for operations encompasses services as well as manufacturing

34. Product design Design for manufacturing (DFM)
Design for assembly (DFA)
Design for recycling (DFR)
Remanufacturing
Design for disassembly (DFD)
Robust design

35. Recycling Recycling: recovering materials for future use
Recycling reasons
Cost savings
Environment concerns
Environment regulations

36. This is the end of the presentation for Chapter 4 on Product and Service Design