Design of Goods and Services

Outline
 GLOBAL COMPANY PROFILE: REGAL MARINE  GOODS AND SERVICES SELECTION  Product Strategy Options Support Competitive Advantage  Product Life Cycles  Life Cycle and Strategy  Product-by-value Analysis  GENERATING NEW PRODUCTS  New Product Opportunities  Importance of New Products 2

Outline - continued
 PRODUCT DEVELOPMENT  Product Development System  Quality Function Deployment (QFD)  Organizing for Product Development  Manufacturability and Value Engineering  ISSUES FOR PRODUCT DESIGN  Robust Design  Modular Design  Computer-Aided Design (CAD)  Computer-Aided Manufacturing  Virtual Reality Technology  Value Analysis

Outline - continued
 Time-Based Competition  Purchase of Technology by Acquiring Firm  Joint Ventures  Alliances  Defining the Product  Make-or-buy Decisions  Group Technology
  DOCUMENTS FOR PRODUCTION SERVICE DESIGN
4

 Documents for Service  Application of Decision Trees to Product Design  Transition to Production

Learning Objectives
When you complete this chapter, you should be able to : Identify or Define:  Product life cycle  Product development team  Manufacturabililty and value engineering  Robust design  Time-based competition  Modular design  Computer aided design  Value analysis  Group technology

Learning Objectives Continued

When you complete this chapter, you should be able to: Explain:

Alliances Concurrent engineering Product-by-value analysis Product documentation

6

Regal Marine
 Global market  3-dimensional CAD
 reduced product development time  reduced problems with tooling  reduced problems in production

 Assembly line  JIT

7

Humor in Product Design

As the customer wanted it. As Marketing interpreted it.

1984-1994 T/Maker Co.

1984-1994 T/Maker Co.

As Operations made it.

As Engineering designed it.

1984-1994 T/Maker Co.

1984-1994 T/Maker Co.

What is a Product?
 Need-satisfying offering of an organization
 Example
 P&G does not sell laundry detergent  P&G sells the benefit of clean clothes

 Customers buy satisfaction, not parts  May be a good or a service

9

Product Strategy Options

 Product differentiation Low cost Rapid response

10

Generation of New Product Opportunities

 Economic change Sociological and demographic change Technological change Political/legal change Changes in market practice professional standards suppliers and distributors
11

Legislation/ Implementation Date

Electrical-Waste directive (2006) Telecom-data-protection directive (mid-2003) Biotech-Labeling laws (2003)

Stated Purpose
Makes electrical equipment easier to recycle in part by banning some hazardous substances Protects privacy on e-mail and the internet Strengthens existing foodlabel laws and introduces labeling for animal feed containing genetically modified content Reduces injuries and casualties in road accidents Eliminates health hazards due to chemicals

Industry Criticism
Bans some common flame retardants, raising the likelihood of fires Makes surfing more onerous by restricting use of cookies to remember peoples preferences Encourages food processors and supermarkets to avoid using genetically modified ingredients, and farmers could stop growing them Raises costs of cars and restricts automakers design freedom Restricts even minute use of dangerous substances, such as ethanol, in products such as cosmetics and detergents 12

Warning

Pedestrian-protection initiative (2001-2012) (when all new cars sold in Europe must comply) Chemicals review (staggered through 2012)

Product Components
Product

Brand (Name)

Product Idea

Package

Physical Good

Features

Quality Level

Service (Warranty)

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Product Life Cycle

    Introduction Growth Maturity Decline

14

Product Life Cycle Introduction

 Fine tuning
    research product development process modification and enhancement supplier development

15

Product Life Cycle Growth

 Product design begins to stabilize  Effective forecasting of capacity becomes necessary  Adding or enhancing capacity may be necessary

16

Product Life Cycle Maturity

 Competitors now established  High volume, innovative production may be needed  Improved cost control, reduction in options, paring down of product line

17

Product Life Cycle Decline

 Unless product makes a special contribution, must plan to terminate offering

18

Product Life Cycle, Sales, Cost, and Profit

Cost of Development & Manufacture Sales, Cost & Profit . Sales Revenue

Profit Loss
Growth
Cash flow Time

Introduction

Maturity

Decline
19

Percent of Sales From New Product

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Industry Leader

Top Third

Middle Third Bottom Third

Position of Firm in Its Industry

20

Products in Various Stages of Life Cycle

Sales

Growth
Roller Blades

Maturity
Jet Ski

Introduction

Decline

Virtual Reality Time

Boeing 727

21

Few Successes
Number 2000 1500 1000 500 0 Development Stage
22

Ideas 1750

Market requirement

Design review, Testing, Introduction

1000
Functional specifications

500

Product specification

100

25

One success!

Product-by-Value Analysis
 Lists products in descending order of their individual dollar contribution to the firm.  Helps management evaluate alternative strategies.

23

Product Development Stages

Scope of product development team

  j j j j j j j

Idea generation Assessment of firms ability to carry out Customer Requirements Functional Specification Scope of design for Product Specifications manufacturability and Design Review value engineering teams Test Market Introduction to Market Evaluation
24

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 firms hows  Develop importance ratings  Evaluate competing products
25

QFD House of Quaoity

26

House of Quality Sequence Indicates How to Deploy Resources to Achieve Customer Requirements

27

Idea Generation Stage

 Provides basis for entry into market  Sources of ideas
 Market need (60-80%); engineering & operations (20%); technology; competitors; inventions; employees

 Follows from marketing strategy

 Identifies, defines, & selects best market opportunities
28

Customer Requirements Stage

 Identifies & positions key product benefits
  Stated in core benefits proposition (CBP) Example: Long lasting with more power (Sears Die Hard Battery)

j Identifies detailed list of product attributes desired by customer

j

Focus groups or 1-on-1 interviews

House of Quality
Product Characteristics

Customer Requirements
29

Functional Specification Stage

 Defines product in terms of how the product would meet desired attributes  Identifies products engineering characteristics
 Example: printer noise (dB)

 Prioritizes engineering characteristics House of Quality  May rate product compared to competitors Product
Characteristics

Customer Requirements
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Product Specification Stage

 Determines how product will be made  Gives products physical specifications  Example: Dimensions, material etc.  Defined by engineering drawing House of Quality  Done often on computer
 Computer-Aided Design (CAD)
Product Characteristics Component Specifications

31

Quality Function Deployment

 Product design process using cross-functional teams
 Marketing, engineering, manufacturing

 Translates customer preferences into specific product characteristics  Involves creating 4 tabular Matrices or Houses
 Breakdown product design into increasing levels of detail
32

House of Quality Example

Youve been assigned temporarily to a QFD team. The goal of the team is to develop a new camera design. Build a House of Quality.

1984-1994 T/Maker Co.

33

House of Quality Example

Customer Requirements

Customer Importance

Target Values

High relationship

Medium relationship

Low Relationship
34

House of Quality Example

What the customer desires (wall)

Customer Requirements

Customer Importance

Aluminum Parts

Auto Focus

Auto Exposure

Light weight Easy to use Reliable

Target Values

High relationship

Medium relationship

Low Relationship
35

House of Quality Example

Average customer importance rating
Customer Requirements

Customer Importance

Aluminum Parts

Auto Focus

Auto Exposure

Light weight Easy to use Reliable

Target Values

3 2 1
Medium relationship Low Relationship
36

High relationship

House of Quality Example

Relationship between customer attributes & engineering characteristics (rooms)

Customer Requirements

Customer Importance

Aluminum Parts

Auto Focus

Auto Exposure

Light weight Easy to use Reliable High relationship

3 2 1
Medium relationship Low Relationship
37

House of Quality Example

Target values for engineering characteristics (basement); key output

Customer Requirements

Customer Importance

Aluminum Parts

Auto Focus

Auto Exposure

Light weight Easy to use Reliable

Target Values

3 2 1 5
Medium relationship

1
Low Relationship

1
38

High relationship

House of Quality Example

Customer Requirements

Customer Importance

Aluminum Parts

Auto Focus

Auto Exposure

Light weight Easy to use Reliable

Target Values

3 2 1 5
Medium relationship

High relationship

Low Relationship
39

Organizing for Product Development

 Historically distinct departments
 Duties and responsibilities are defined  Difficult to foster forward thinking

 Today team approach

 Representatives from all disciplines or functions  Concurrent engineering cross functional team
40

Manufacturability and Value Engineering

 Benefits:
      reduced complexity of products additional standardization of products improved functional aspects of product improved job design and job safety improved maintainability of the product robust design
41

Cost Reduction of a Bracket via Value Engineering

42

Issues for Product Development

      Robust design Time-based competition Modular design Computer-aided design Value analysis Environmentally friendly design
43

Robust Design
 Product is designed so that small variations in production or assembly do not adversely affect the product

44

Modular Design
 Products designed in easily segmented components.  Adds flexibility to both production and marketing

45

Computer Aided Design (CAD)

 Designing products at a computer terminal or work station
 Design engineer develops rough sketch of product  Uses computer to draw product

 Often used with CAM

1995 Corel Corp.

46

Benefits of CAD/CAM
 Shorter design time  Database availability  New capabilities
 Example: Focus more on product ideas

 Improved product quality  Reduced production costs

47

Extensions of CAD
 Design for Manufacturing and Assembly (DFMA)  3-D Object Modeling  CAD/CAM CAD info is translated into machine control instructions (CAM)

1995 Corel Corp.

48

Virtual Reality
 Computer technology used to develop an interactive, 3-D model of a product.  Especially helpful in design of layouts (factory, store, home, office)

49

Value Analysis
 Focuses on design improvement during production  Seeks improvements leading either to a better product or a product which can be more economically produced.

50

Environmentally Friendly Designs

 Benefits
     Safe and environmentally sound products Minimum raw material and energy waste Product differentiation Environmental liability reduction Cost-effective compliance with environmental regulations  Recognition as good corporate citizen
51

Green Manufacturing
      Make products recyclable Use recycled materials Use less harmful ingredients Use lighter components Use less energy Use less material
52

Time-based Competition
 Product life cycles are becoming shorter. @Faster developers of new products gain on slower developers and obtain a competitive advantage

53

Product Development ContinuumStrategies External Development

Internal Development Strategies Migrations of Existing Products Enhancement to Existing Products New Internally Developed Products

Joint Ventures Purchase Technology or Expertise by Acquiring the Developer

Alliances

Internal n----------------------Cost of Product Development ---------------------p Shared Lengthy n--------------------Speed of Product Development---------------pRapid and/or Existing High n------------------------- Risk of Product Development -----------------------p Shared
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Product Documents
 Engineering drawing
 Shows dimensions, tolerances, & materials  Shows codes for Group Technology

 Bill of Material
 Lists components, quantities & where used  Shows product structure

1984-1994 T/Maker

55

Monterey Jack
(a) U.S. grade AA. Monterey cheese shall conform to the following requirements: (1)Flavor. Is fine and highly pleasing, free from undesirable flavors and odors. May possess a very slight acid or feed flavor. (2)Body and texture. A plug drawn from the cheese shall be reasonably firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not possess sweet holes, yeast holes, or other gas holes (3)Color. Shall have a natural, uniform, bright and attractive appearance. (4)Finish and appearance - bandaged and paraffin-dipped. The rind shall be sound, firm, and smooth providing a good protection to the cheese Code of Federal Regulation, Parts
53 to 109,. Revised as of Jan. 1, 1985, General Service Administration
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Engineering Drawing Example

13/16 diameter 2-1/2 1

13/32 diameter

1/4 R 2-1/4

45 3/8 1-5/8 13/16

13/16 5/16

Bracket

Scale: FULL Drawn: J. Thomas

A- 435-038
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Engineering Drawings - Show Dimensions, Tolerances, etc.

58

Bill of Material Example

1995 Corel Corp.

Bill of Material P/N: 1000 Name: Bicycle P/N Desc Qty 1001 Handle Bars 1 1002 Frame Assy 1 1003 Wheels 2 1004 Frame 1

Units Level Each 1 Each 1 Each 2 Each 2

59

Bill of Materials Manufacturing Plant and Fast-Food Restaurant

Bill of Material for a Panel Weldment Number
A60-71

Hard Rock Cafs Hickory BBQ Bacon Cheeseburger Qty Description Qty

Description
Panel Weldmt

1 1 1 1 1 1 1 1 1 1 1 1 1

A 60-7 R 60-17 R 60-428 P 60-2 60-72 R 60-57-1 A 60-4 02-50-1150 A 60-73 A 60-74 R 60-99 02-50-1150

Lower Roller Assembly Roller Pin Locknet Guide Assem. Rear Support Angle Roller Assem. Bolt Guide Assm, Front Support Weldmt Wear Plate Bolt

Bun Hamburger Patty Cheddar Cheese Bacon BBQ Onions Hickory BBQ Sauce Burger Set Lettuce Tomato Red Onion Pickle French Fries Seasoned Salt 11-inch Plate HRC Flag

1 8 oz. 2 slices 2 strips cup 1 oz. 1 leaf 1 slice 4 rings 1 slice 5 oz. 1 tsp 1 1 60

Make-or-Buy Decisions
 Decide whether or not you want (or need) to produce an item  May be able to purchase the item as a standard item from another manufacturer

61

Group Technology Characteristics

 Parts grouped into families
 Similar, more standardized parts

 Uses coding system

 Describes processing & physical characteristics

 Part families produced in manufacturing cells

 Mini-assembly lines
62
1984-1994 T/Maker Co.

Group Technology Code Example

4mm x 45 chamfer 80mm 112mm Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe)
63

Round Rod

60mm

Product Code: 1 5 3 1

Group Technology Schemes Enable Grouping of Parts

64

Group Technology Benefits

       Improved product design Reduced purchases Reduced work-in-process inventory Improved routing & machine loading Reduced setup & production times Simplified production planning & control Simplified maintenance
65

Production Documents
    Assembly Drawing Assembly chart Route sheet Work order

66

Assembly Drawing
 Shows exploded view of product Head Neck End Cap

Handle

67

Assembly Chart for A Tuna Sandwich

1
Tuna Fish SA1 Tuna Assy

A1
Sandwich

2
Mayonnaise

FG

Bread

A2

68

Assembly Drawing and Assembly Chart

69

Route Sheet
 Lists all operations
Sequence 1 2 3 4 Machine Shear # 3 Shear # 3 Drill press Brake press

Route Sheet for Bracket

Operation Shear to length Shear 45 corners Drill both holes Bend 90 Setup Time 5 8 15 10 Operation Time/Unit .030 .050 3.000 .025

70

Work Order
Authorizes producing a given item, usually to a schedule

71

Engineering Change Notice (ECN)

 A correction or modification of an engineering drawing or bill of material

72

Configuration Management
 A system by which a products planned and changing components are accurately identified and for which control and accountability of change are maintained

73

Service Design Nature of Customer Participation

74

Improving Customer Relations at a Drive-up Window

 Be especially discreet when talking with customer through the microphone  Provide written instructions for customers who must fill out forms you provide     Mark lines to be completed or attach a note with instructions Always say please and thank you Establish eye contact with the customer if the distance allows it If the transaction requires that the customer park the car and come into the lobby, apologize for the inconvenience.
75

Moment-of-Truth at a Computer Company

Experience Detractors 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 operator sounded like he was reading a form of routine questions. The operator sounded uninterested I felt the operator rushed me. Standard Expectations 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 operator is able to explain to me what I can expect to take place Experience Enhancers The operator was sincerely concerned and apologetic about my problem He asked intelligent questions that allowed me to feel confident in his abilities The operator offered various times to have work done, to suit my schedule Ways to avoid future problems were suggested
76

Application of Decision Trees to Product Design

 Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes.  Considerations:
   Include all possible alternatives and states of nature including doing nothing Enter payoffs at end of branch Approach determining expected values by pruning tree
77

Transition to Production
  First issue: knowing when to move to production! Second: must view product development as evolutionary, not responsibility of single individual/department Third: expect to need a trial production period to work the bugs out Fourth: recognize that responsibility must also transition

 

78