Chapter 4 product and service design operations management
- 1. Because learning changes everything.® Chapter 4 Product and Service Design Operations Management FOURTEENTH EDITION William J. Stevenson © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
- 2. © McGraw Hill 2 Chapter 4: Learning Objectives You should be able to: LO 4.1 Explain the strategic importance of product and service design LO4.2 Describe what product and service design does LO4.3 Name the key questions of product and service design LO4.4 Identify some reasons for design or redesign LO4.5 List some of the main sources of design ideas LO4.6 Discuss the importance of legal, ethical, and sustainability considerations in product and service design LO4.7 Explain the purpose and goal of life-cycle assessment LO4.8 Explain the phrase “the 3 Rs” LO4.9 Briefly describe the phases in product design and development LO4.10 Discuss several key issues in product or service design LO4.11 Discuss the two key issues in service design LO4.12 List the characteristics of well-designed service systems LO4.13 List some guidelines for successful service design
- 3. © McGraw Hill 3 Strategic Product and Service Design LO 4.1 The essence of an organization is the goods and services it offers Every aspect of the organization is structured around them Product and service design – or redesign – should be closely tied to an organization’s strategy
- 4. © McGraw Hill 4 What Does Product & Service Design Do? LO 4.2 Activities and responsibilities of product and service design include: 1. Translate customer wants and needs into product and service requirements 2. Refine existing products and services 3. Develop new products and services 4. Formulate quality goals 5. Formulate cost targets 6. Construct and test prototypes 7. Document specifications 8. Translate product and service specifications into process specifications 9. Involve inter-functional collaboration
- 5. © McGraw Hill 5 Key Questions LO 4.3 1. Is there a demand for it? Market size Demand profile 2. Can we do it? 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
- 6. © McGraw Hill 6 Key Questions (cont.) LO 4.3 3. What level of quality is appropriate? Customer expectations Competitor quality Fit with current offering 4. Does it make sense from an economic standpoint? Liability issues, ethical considerations, sustainability issues, costs and profits
- 7. © McGraw Hill 7 Reasons to Design or Re-Design LO 4.4 The driving forces for product and service design or redesign are market opportunities or threats: • Economic • Social and demographic • Political, liability, or legal • Competitive • Cost or availability • Technological
- 8. © McGraw Hill 8 Idea Generation LO 4.5 1. Supply-chain based 2. Competitor based 3. Research based
- 9. © McGraw Hill 9 Supply-Chain Based LO 4.5 Ideas can come from anywhere in the supply chain: Customers Suppliers Distributors Employees Maintenance and repair personnel
- 10. © McGraw Hill 10 Competitor Based LO 4.5 By studying how a competitor operates and its products and services, many useful ideas can be generated Reverse engineering Dismantling and inspecting a competitor’s product to discover product improvements
- 11. © McGraw Hill 11 Research Based LO 4.5 Research and development (R&D) Organized efforts to increase scientific knowledge or product innovation Basic research • Has the objective of advancing the state of knowledge about a subject without any near-term expectation of commercial applications Applied research • Has the objective of achieving commercial applications Development • Converts the results of applied research into useful commercial applications
- 12. © McGraw Hill 12 Legal Considerations LO 4.6 Legal considerations Product liability • The responsibility a manufacturer has for any injuries or damages caused by a faulty product • Some of the concomitant costs • Litigation • Legal and insurance costs • Settlement costs • Costly product recalls • Reputation effects Uniform Commercial Code • Under the UCC, products carry an implication of merchantability and fitness
- 13. © McGraw Hill 13 Ethical Considerations LO 4.6 Designers are often under pressure to Speed up the design process Cut costs These pressures force trade-off decisions What if a product has bugs? • Release the product and risk damage to your reputation • Work out the bugs and forego revenue
- 14. © McGraw Hill 14 Other considerations LO 4.6 Human factors Safety and liability Cultural factors Colors, preferred food, product labels Global design Design teams can be in different countries
- 15. © McGraw Hill 15 Sustainability LO 4.7 Sustainability Using resources in ways that do not harm ecological systems that support human existence Key aspects of designing for sustainability Cradle-to-grave assessment (life cycle analysis) End-of-life programs The Three Rs • Reduction of costs and materials used • Reusing parts of returned products • Recycling
- 16. © McGraw Hill 16 Cradle-to-Grave Assessment LO 4.7 Cradle-to-Grave Assessment Also known as life cycle analysis (LCA) The assessment of the environmental impact of a product or service throughout its useful life • Focuses on such factors as • Global warming • Smog formation • Oxygen depletion • Solid waste generation • LCA procedures are part of the ISO 14000 environmental management procedures
- 17. © McGraw Hill 17 The Three Rs LO 4.8 Designers often reflect on three particular aspects of potential cost savings and reducing environmental impact Reduce Reuse Recycle
- 18. © McGraw Hill 18 Reduce: Costs and Materials LO 4.8 Value analysis Examination of the function of parts and materials in an effort to reduce the cost and/or improve the performance of a product Common questions used in value analysis • Is the item necessary; does it have value; could it be eliminated? • Are there alternative sources for the item? • Could another material, part, or service be used instead? • Can two or more parts be combined? • Can specifications be less stringent to save time or money? • Do suppliers/providers have suggestions for improvements? • Can packaging be improved or made less costly?
- 19. © McGraw Hill 19 Reuse: Remanufacturing LO 4.8 Remanufacturing Refurbishing used products by replacing worn-out or defective components • Can be performed by the original manufacturer or another company Reasons to remanufacture: • Remanufactured products can be sold for about 50% of the cost of a new product • The process requires mostly unskilled and semiskilled workers • In the global market, European lawmakers are increasingly requiring manufacturers to take back used products Design for disassembly (DFD) • Designing a product to that used products can be easily taken apart
- 20. © McGraw Hill 20 Recycle LO 4.8 Recycling Recovering materials for future use • Applies to manufactured parts • Also applies to materials used during production Why recycle? • Cost savings • Environmental concerns • Environmental regulations Companies doing business in the EU must show that a specified proportion of their products are recyclable Design for recycling (DFR) • Product design that takes into account the ability to disassemble a used product to recover the recyclable parts
- 21. © McGraw Hill 21 Product or Service Life Stages LO 4.9
- 22. © McGraw Hill 22 Standardization LO 4.10 Standardization Extent to which there is an absence of variety in a product, service, or process • Products are made in large quantities of identical items • Every customer or item processed receives essentially the same service
- 23. © McGraw Hill 23 Standardization – Advantages and Disadvantages LO 4.10
- 24. © McGraw Hill 24 Designing for Mass Customization LO 4.10 Mass customization A strategy of producing basically standardized goods or services, but incorporating some degree of customization in the final product or service Facilitating techniques • Delayed differentiation • Modular design
- 25. © McGraw Hill 25 Delayed Differentiation LO 4.10 Delayed differentiation The process of producing a product or service but not quite completing production until customer preferences are known It is a postponement tactic • Produce a piece of furniture, but do not stain it; the customer chooses the stain
- 26. © McGraw Hill 26 Modular Design LO 4.10 Modular design A form of standardization in which component parts are grouped into modules that are easily replaced or interchanged • Advantages • Easier diagnosis and remedy of failures • Easier repair and replacement • Simplification of manufacturing and assembly • Training costs are relatively low • Disadvantages • Limited number of possible product configurations • Limited ability to repair a faulty module; if it cannot be disassembled, the entire module must often be scrapped
- 27. © McGraw Hill 27 Reliability LO 4.10 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 Reliabilities are always specified with respect to certain conditions Normal operating conditions • The set of conditions under which an item’s reliability is specified
- 28. © McGraw Hill 28 Potential ways to improve reliability LO 4.10 Improve component design Improve production and/or assembly techniques Improve testing Use backups Improve preventive maintenance procedures Improve user education Improve system design
- 29. © McGraw Hill 29 Robust Design LO 4.10 Robust design • A design that results in products or services that can function over a broad range of conditions The more robust a product or service, the less likely it will fail due to a change in the environment in which it is used or in which it is performed • Pertains to product as well as process design Consider the following automobiles: • Ferrari Enzo • Toyota Avalon Which design is more robust?
- 30. © McGraw Hill 30 Degree of Newness LO 4.10 Product or service design changes: 1. Modification of an existing product or service 2. Expansion of an existing product line or service offering 3. Clone of a competitor’s product or service 4. New product or service The degree of change affects the newness of the product or service to the market and to the organization Risks and benefits?
- 31. © McGraw Hill 31 Quality Function Deployment LO 4.10 Quality Function Deployment (QFD) An approach that integrates the “voice of the customer” into both product and service development • The purpose is to ensure that customer requirements are factored into every aspect of the process • Listening to and understanding the customer is the central feature of QFD House of Quality
- 32. © McGraw Hill 32 FIGURE 4.4 An example of the house of quality LO 4.10 Access the text alternative for slide images.
- 33. © McGraw Hill 33 The House of Quality Sequence LO 4.10
- 34. © McGraw Hill 34 Kano Model LO 4.10 Basic quality Refers to customer requirements that have only limited effect on customer satisfaction if present, but lead to dissatisfaction if absent Performance quality Refers to customer requirements that generate satisfaction or dissatisfaction in proportion to their level of functionality and appeal Excitement quality Refers to a feature or attribute that was unexpected by the customer and causes excitement
- 35. © McGraw Hill 35 The Kano Model – As Time Passes LO 4.10 Access the text alternative for slide images.
- 36. © McGraw Hill 36 Phases in Product Design and Development LO 4.10 1. Feasibility analysis 2. Product specifications 3. Process specifications 4. Prototype development 5. Design review 6. Market test 7. Product introduction 8. Follow-up evaluation
- 37. © McGraw Hill 37 Concurrent Engineering LO 4.10 Concurrent engineering Bringing engineering design and manufacturing personnel together early in the design phase • Also may involve manufacturing, marketing and purchasing personnel in loosely integrated cross-functional teams • Views of suppliers and customers may also be sought The purpose is to achieve product designs that reflect customer wants as well as manufacturing capabilities
- 38. © McGraw Hill 38 Computer-Aided Design (CAD) LO 4.10 CAD Product design using computer graphics Advantages • Increases productivity of designers, 3 to 10 times • Creates a database for manufacturing information and product specifications • Provides possibility of engineering and cost analysis on proposed designs CAD that includes finite element analysis (FEA) can significantly reduce time to market • Enables developers to perform simulations that aid in the design, analysis, and commercialization of new products
- 39. © McGraw Hill 39 Production Requirements LO 4.10 Designers must take into account production capabilities Equipment Skills Types of materials Schedules Technologies Special abilities
- 40. © McGraw Hill 40 Manufacturability LO 4.10 Manufacturability Ease of fabrication and/or assembly It has important implications for • Cost • Productivity • Quality Design for manufacturing Design for assembly
- 41. © McGraw Hill 41 Component Commonality LO 4.10 When products have a high degree of similarity in features and components, a part can be used in multiple products Benefits: Savings in design time Standard training for assembly and installation Opportunities to buy in bulk from suppliers Commonality of parts for repair Fewer inventory items must be handled
- 42. © McGraw Hill 42 Service Design LO 4.11 Begins with a choice of service strategy, which determines the nature and focus of the service, and the target market Key issues in service design • Degree of variation in service requirements • Degree of customer contact and involvement
- 43. © McGraw Hill 43 Differences between Service and Product Design LO 4.11 1. Products are generally tangible; services are intangible 2. Services are created and delivered at the same time 3. Services cannot be inventoried 4. Services are highly visible to consumers 5. Some services have low barriers to entry and exit 6. Location is often important to service design, with convenience as a major factor 7. Service systems range from those with little or no customer contact to those that have a very high degree of customer contact 8. Demand variability alternately creates waiting lines or idle service resources
- 44. © McGraw Hill 44 Phases in Service Design Process LO 4.11 1. Conceptualize Idea generation Assessment of customer wants/needs Assessment of demand potential 2. Identify service package components needed 3. Determine performance specifications 4. Translate performance specifications into design specifications 5. Translate design specifications into delivery specifications
- 45. © McGraw Hill 45 The Well-Designed Service System LO 4.12 Characteristics Consistent with the organization mission User-friendly Robust if variability is a factor Easy to sustain Cost-effective Has value that is obvious to the customer Has effective linkages between back- and front-of-the-house operations Has a single, unifying theme Has design features and checks that will ensure service that is reliable and of high quality
- 46. © McGraw Hill 46 Successful Service Design LO 4.13 1. Define the service package in detail 2. Focus on the operation from the customer’s perspective 3. Consider the image that the service package will present both to customers and to prospective customers 4. Recognize that designers’ familiarity with the system may give them a quite different perspective than that of the customer, and take steps to overcome this 5. Make sure that managers are involved and will support the design once it is implemented 6. Define quality for both tangibles and intangibles 7. Make sure that recruitment, training, and reward policies are consistent with service expectations 8. Establish procedures to handle both predictable and unpredictable events 9. Establish system to monitor, maintain, and improve service
- 47. © McGraw Hill 47 Operations Strategy LO 4.13 Effective product and service design can help the organization achieve competitive advantage: Packaging products and ancillary services to increase sales Using multiple-use platforms Implementing tactics that will achieve the benefits of high volume while satisfying customer needs for variety Continually monitoring products and services for small improvement opportunities Reducing the time it takes to get a new or redesigned product or service to the market
- 48. Because learning changes everything.® www.mheducation.com © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.