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Design of Goods and Services
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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
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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 Environmentally Friendly Design
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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
Documents for Service Application of Decision Trees to Product Design Transition to Production
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Learning ObjectivesWhen 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 Configuration management
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Learning Objectives - Continued
When you complete this chapter, you should be able to:Explain:
AlliancesConcurrent engineeringProduct-by-value analysisProduct documentation
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Regal Marine
Global market 3-dimensional CAD
reduced product development time reduced problems with tooling reduced problems in production
Assembly line JIT
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As Engineering designed it.
© 1984-1994 T/Maker Co.
As Operations made it.
© 1984-1994 T/Maker Co.
As Marketing interpreted it.
© 1984-1994 T/Maker Co.
As the customer wanted it.
© 1984-1994 T/Maker Co.
Humor in Product Design
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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
What is a Product?
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Product Strategy Options
Product differentiation
Low cost
Rapid response
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Generation of New Product Opportunities
Economic change
Sociological and demographic changeTechnological change
Political/legal changeChanges inmarket practiceprofessional standardssuppliers and distributors
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Legislation/ Implementation Date Stated Purpose Industry CriticismElectrical-Waste directive (2006)
Makes electrical equipment easier to recycle in part by banning some hazardous substances
Bans some common flame retardants, raising the likelihood of fires
Telecom-data-protection directive (mid-2003)
Protects privacy on e-mail and the internet
Makes surfing more onerous by restricting use of “cookies” to remember peoples preferences
Biotech-Labeling laws (2003) Strengthens existing food-label laws and introduces labeling for animal feed containing genetically modified content
Encourages food processors and supermarkets to avoid using genetically modified ingredients, and farmers could stop growing them
Pedestrian-protection initiative (2001-2012) (when all new cars sold in Europe must comply)
Reduces injuries and casualties in road accidents
Raises costs of cars and restricts automaker’s design freedom
Chemicals review (staggered through 2012)
Eliminates health hazards due to chemicals
Restricts even minute use of dangerous substances, such as ethanol, in products such as cosmetics and detergents
Warning
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Product
ProductIdea
Package
PhysicalGood
FeaturesQualityLevel
Service(Warranty)
Brand(Name)
Product Components
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Product Life Cycle
Introduction Growth Maturity Decline
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Product Life CycleIntroduction
Fine tuning research product development process modification and enhancement supplier development
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Product Life CycleGrowth
Product design begins to stabilize Effective forecasting of capacity becomes
necessary Adding or enhancing capacity may be
necessary
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Product Life CycleMaturity
Competitors now established High volume, innovative production may be
needed Improved cost control, reduction in options,
paring down of product line
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Product Life CycleDecline
Unless product makes a special contribution, must plan to terminate offering
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Product Life Cycle, Sales, Cost, and Profit
Sale
s, C
ost &
Pro
fit
.
Introduction Maturity DeclineGrowth
Cost ofDevelopment
& ManufactureSales Revenue
Time
Cash flowLoss
Profit
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0%5%
10%15%20%25%30%35%40%45%50%
Position of Firm in Its Industry
Indu
stry
Lea
der
Top Third Middle
ThirdBottomThird
Percent of Sales From New Product
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Products in Various Stages of Life Cycle
GrowthDecline
Time
Sales
Virtual Reality
RollerBlades Jet Ski
Boeing 727
IntroductionMaturity
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Few Successes
0
500
1000
1500
2000
Development Stage
Number
1000
Market requirement
Design review,Testing, Introduction
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Ideas
1750
Product specification
100
Functional specifications
One success!
500
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Product-by-Value Analysis
Lists products in descending order of their individual dollar contribution to the firm.
Helps management evaluate alternative strategies.
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Product Development Stages Idea generation Assessment of firm’s ability to carry out Customer Requirements Functional Specification Product Specifications Design Review Test Market Introduction to Market EvaluationSc
ope
of p
rodu
ct d
evel
opm
ent t
eam
Scope of design for manufacturability and value engineering teams
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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
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QFD House of Quaoity
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House of Quality Sequence Indicates How to Deploy
Resources to Achieve Customer Requirements
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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
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Customer Requirements Stage Identifies & positions key
product benefits Stated in core benefits
proposition (CBP) Example: Long lasting
with more power (Sears’ Die Hard Battery)
Identifies detailed list of product attributes desired by customer Focus groups or
1-on-1 interviews
House of Quality
Customer Requirements
Product Characteristics
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Functional Specification Stage Defines product in terms of how the product would meet
desired attributes Identifies product’s engineering characteristics
Example: printer noise (dB)
Prioritizes engineering characteristics May rate product compared to competitors’
House of Quality
Customer Requirements
Product Characteristics
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Determines how product will be made Gives product’s physical specifications
Example: Dimensions, material etc.
Defined by engineering drawing
Done often on computer Computer-Aided
Design (CAD)
Product Specification Stage
House of Quality
ProductCharacteristics
Component Specifications
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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
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You’ve 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.
House of Quality Example
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House of Quality Example
High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Target Values
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House of Quality Example
High relationship Medium relationship Low Relationship
Target Values
Light weightEasy to useReliable
What the customer desires (‘wall’)
AluminumParts
AutoFocus
AutoExposure
CustomerRequirements
CustomerImportance
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House of Quality Example
High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Target Values
Light weightEasy to useReliable
AluminumParts
AutoFocus
AutoExposure
3
12
Average customer importance rating
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House of Quality Example
High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Light weightEasy to useReliable
AluminumParts
AutoFocus
AutoExposure
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Relationship between customer attributes & engineering characteristics (‘rooms’)
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House of Quality Example
High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Target Values
Light weightEasy to useReliable
AluminumParts
AutoFocus
AutoExposure
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5 1 1
Target values for engineering characteristics (‘basement’);
key output
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House of Quality Example
High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Target Values
Light weightEasy to useReliable
AluminumParts
AutoFocus
AutoExposure
321
5 1 1
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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
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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
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Cost Reduction of a Bracket via Value Engineering
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Issues for Product Development
Robust design Time-based competition Modular design Computer-aided design Value analysis Environmentally friendly design
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Robust Design
Product is designed so that small variations in production or assembly do not adversely affect the product
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Modular Design
Products designed in easily segmented components.
Adds flexibility to both production and marketing
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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.
Computer Aided Design (CAD)
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Shorter design time Database availability New capabilities
Example: Focus more on product ideas
Improved product quality Reduced production costs
Benefits of CAD/CAM
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Design for Manufacturing and Assembly (DFMA) 3-D Object Modeling CAD/CAM – CAD info is translated into machine
control instructions (CAM)
© 1995 Corel Corp.
Extensions of CAD
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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)
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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.
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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
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“Green” Manufacturing
Make products recyclable Use recycled materials Use less harmful ingredients Use lighter components Use less energy Use less material
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Time-based Competition
Product life cycles are becoming shorter.
Faster developers of new products gain on slower developers and obtain a competitive advantage
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Product Development ContinuumExternal Development Strategies
Alliances Joint Ventures
Purchase Technology or Expertise by Acquiring the Developer
Internal Development StrategiesMigrations of Existing Products
Enhancement to Existing ProductsNew Internally Developed Products
Internal ----------------------Cost of Product Development --------------------- Shared
Lengthy --------------------Speed of Product Development---------------Rapid and/or Existing
High ------------------------- Risk of Product Development ----------------------- Shared
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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 Co.
Product Documents
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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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1-5/8
13/163/8
13/16
13/16diameter
13/32diameter
1/4 R
12-1/2
5/16
2-1/4
45°
BracketScale: FULL
Drawn: J. Thomas A- 435-038
1-5/8
13/163/8
13/16
13/16diameter
13/32diameter
1/4 R
12-1/2
5/16
2-1/4
45°
BracketScale: FULL
Drawn: J. Thomas A- 435-038
Engineering Drawing Example
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Engineering Drawings - Show Dimensions, Tolerances, etc.
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Bill of MaterialP/N: 1000 Name: Bicycle
P/N Desc Qty Units Level1001 Handle Bars 1 Each 11002 Frame Assy 1 Each 1
1003 Wheels 2 Each 2 1004 Frame 1 Each 2
Bill of MaterialP/N: 1000 Name: Bicycle
P/N Desc Qty Units Level1001 Handle Bars 1 Each 11002 Frame Assy 1 Each 1
1003 Wheels 2 Each 2 1004 Frame 1 Each 2
© 1995 Corel Corp.
Bill of Material Example
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Bill of Material for a Panel Weldment Hard Rock Café’s Hickory BBQ Bacon Cheeseburger
Number Description Qty Description Qty
A60-71 Panel Weldm’t 1 BunHamburger PattyCheddar CheeseBaconBBQ OnionsHickory BBQ SauceBurger Set Lettuce Tomato Red Onion PickleFrench FriesSeasoned Salt11-inch PlateHRC Flag
18 oz.2 slices2 strips½ cup1 oz. 1 leaf1 slice4 rings1 slice5 oz.1 tsp11
A 60-7R 60-17R 60-428P 60-2
Lower Roller Assembly Roller Pin Locknet
1111
60-72R 60-57-1A 60-402-50-1150
Guide Assem. Rear Support Angle Roller Assem. Bolt
1111
A 60-73A 60-74R 60-9902-50-1150
Guide Assm, Front Support Weldm’t Wear Plate Bolt
1111
Bill of Materials – Manufacturing Plant and Fast-Food Restaurant
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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
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Parts grouped into families Similar, more standardized parts
Uses coding system Describes processing & physical
characteristics
Part families produced in manufacturing cells Mini-assembly lines
© 1984-1994 T/Maker Co.
Group Technology Characteristics
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112mm112mm
60mm60mm
4mm x 45° chamfer4mm x 45° chamfer
80mm80mm Product Code: 1 5 3 1
Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe)
Round Rod
Group Technology Code Example
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Group Technology Schemes Enable Grouping of Parts
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Improved product design Reduced purchases Reduced work-in-process inventory Improved routing & machine loading Reduced setup & production times Simplified production planning & control Simplified maintenance
Group Technology Benefits
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Production Documents
Assembly Drawing Assembly chart Route sheet Work order
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Shows exploded view of product
Head Neck
Handle
End Cap
Assembly Drawing
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1
2
3
SA1 A1
A2
Tuna Fish
Mayonnaise
Bread
TunaAssy
FG
Sandwich
Assembly Chart for A Tuna Sandwich
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Assembly Drawing and Assembly Chart
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Route Sheet
Lists all operationsRoute Sheet for Bracket
Sequence Machine Operation SetupTime
OperationTime/Unit
1 Shear # 3 Shear tolength
5 .030
2 Shear # 3 Shear 45°corners
8 .050
3 Drillpress
Drill bothholes
15 3.000
4 Brakepress
Bend 90° 10 .025
Route Sheet for BracketSequence Machine Operation Setup
TimeOperationTime/Unit
1 Shear # 3 Shear tolength
5 .030
2 Shear # 3 Shear 45°corners
8 .050
3 Drillpress
Drill bothholes
15 3.000
4 Brakepress
Bend 90° 10 .025
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Work Order
Dept Oper DateWork Order
Approved: JM
Manufacturing
Authorizes producing a given item, usually to a schedule
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Engineering Change Notice (ECN)
A correction or modification of an engineering drawing or bill of material
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Configuration Management
A system by which a product’s planned and changing components are accurately identified and for which control and accountability of change are maintained
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Service Design - Nature of Customer Participation
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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.
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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
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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
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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