Design Goods Slides
Transcript of Design Goods Slides
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Mini-Presentation
Describe an example of product or service Describe an example of product or service design from your experiencedesign from your experience
3 to 4 minutes presentation3 to 4 minutes presentation
Great opportunity to secure your Great opportunity to secure your participation grade!participation grade!
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Outlines: Design of Goods and Services Trend in New Product/Service Design and Trend in New Product/Service Design and
DevelopmentDevelopment Product Life Cycles, Life Cycle and StrategyProduct Life Cycles, Life Cycle and Strategy Product Design and Development SystemProduct Design and Development System Sequential Design and Concurrent EngineeringSequential Design and Concurrent Engineering Application of Decision Tree to Product DesignApplication of Decision Tree to Product Design Quality Function Deployment (QFD): Quality Function Deployment (QFD):
Translating Customer Attributes into Product Translating Customer Attributes into Product Characteristics:Characteristics:
Organizing for Product DevelopmentOrganizing for Product Development
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Product Life Cycles
Introduction Growth Maturity Decline
Standardization
Less rapid product changes - more minor changes
Optimum capacity
Increasing stability of process
Long production runs
Product improvement and cost cutting
Little product differentiation
Cost minimization
Over capacity in the industry
Prune line to eliminate items not returning good margin
Reduce capacity
Forecasting critical
Product and process reliability
Competitive product improvements and options
Increase capacity
Shift toward product focused
Enhance distribution
Product design and development critical
Frequent product and process design changes
Short production runs
High production costs
Limited models
Attention to quality
Best period to increase market share
R&D product engineering critical
Practical to change price or quality image
Strengthen niche
Cost control critical
Poor time to change image, price, or quality
Competitive costs become critical
Defend market position
OM
Str
ateg
y/Is
sues
Com
pany
Str
ateg
y/Is
sues
HDTV
CD-ROM
Color copiers
Drive-thru restaurants Fax machines
Station wagons
Sales
3 1/2” Floppy disks
Internet
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Product Life Cycle, Sales, Cost, and Profit
Sale
s, C
ost &
Pro
fit
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Introduction Maturity DeclineGrowth
Cost ofDevelopment
& ManufactureSales Revenue
Time
Cash flowLoss
Profit
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Product Life CycleIntroduction
Fine tuningFine tuning researchresearch product developmentproduct development process modification and enhancementprocess modification and enhancement supplier developmentsupplier development
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Product Life CycleGrowth
Product design begins to stabilizeProduct design begins to stabilize Effective forecasting of capacity becomes Effective forecasting of capacity becomes
necessarynecessary Adding or enhancing capacity may be Adding or enhancing capacity may be
necessarynecessary
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Product Life CycleMaturity
Competitors now establishedCompetitors now established High volume, innovative production may be High volume, innovative production may be
neededneeded Improved cost control, reduction in options, Improved cost control, reduction in options,
paring down of product lineparing down of product line
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Product Life CycleDecline
Unless product makes a special contribution, Unless product makes a special contribution, must plan to terminate offeringmust plan to terminate offering
Successful example of reviving product’s Successful example of reviving product’s profitability in the decline stage: profitability in the decline stage: Tamagochi, simple-function cameraTamagochi, simple-function camera
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Design and Development Criteria
PRODUCT/SERVICE QUALITYPRODUCT/SERVICE QUALITYDesign-measured customer satisfactionDesign-measured customer satisfactionConformance--Actual results versus specificationsConformance--Actual results versus specificationsFeaturesFeaturesDurabilityDurabilityServiceability and othersServiceability and others
TIME TO MARKET (DEVELOPMENT SPEED)TIME TO MARKET (DEVELOPMENT SPEED)Elapsed time from conception to launchElapsed time from conception to launchTime required to recover investmentsTime required to recover investments
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Design and Development Criteria
DESIGN AND DEVELOPMENT COSTSDESIGN AND DEVELOPMENT COSTSOne-time development costsOne-time development costsTotal costs to the customer (design, development, Total costs to the customer (design, development, and manufacturing)and manufacturing)
GENERALGENERALPercentage of sale from new productsPercentage of sale from new productsMarket share (new and sustaining)Market share (new and sustaining)
REGULATION AND STANDARDSREGULATION AND STANDARDSISO 9000ISO 9000UL, CCIB, FAC, IEEEUL, CCIB, FAC, IEEE
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Product Development Stages
Idea generationIdea generation Assessment of firm’s ability to carry outAssessment of firm’s ability to carry out(Form Product Development Team)(Form Product Development Team) Customer RequirementsCustomer Requirements Functional SpecificationFunctional Specification Product SpecificationsProduct Specifications Design ReviewDesign Review Test MarketTest Market Introduction to MarketIntroduction to Market EvaluationEvaluation
Scope of design for manufacturability and value engineering
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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.
Product Development without Coordination
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Managing Design and Development Process Planning, organizing, staffing, leading, and
controlling the limited resources SEQUENTIAL DESIGN AND DEVELOPMENT
Before 1985, most American firms have organized their product design and development process sequentially. The sequence typically emerges as each functional area completes its part of the project before passing on the results to the next operation.
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Managing Design and Development Process SHORTCOMINGS:SHORTCOMINGS:
Frequent engineering changes Frequent engineering changes (before and after product launch)(before and after product launch)
Ineffective communication Ineffective communication Lack of prospective thinking.Lack of prospective thinking. Longer design and development lead timeLonger design and development lead time
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Managing Design and Development Process CONCURRENT DESIGN AND CONCURRENT DESIGN AND
DEVELOPMENT (CONCURRENT DEVELOPMENT (CONCURRENT ENGINEERING)ENGINEERING)
This method sets up a comprehensive This method sets up a comprehensive process for completing the steps in design process for completing the steps in design and development through a continuing and development through a continuing involvement of cross-functional teams of involvement of cross-functional teams of organization members. organization members.
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Managing Design and Development Process MAIN BENEFITS:MAIN BENEFITS:
Shorter development cycleShorter development cycle
Better cross-functional communicationBetter cross-functional communication
TeamworkTeamwork
Clear perspective.Clear perspective. In practice, concurrent engineering and In practice, concurrent engineering and
sequential process are both important sequential process are both important
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72-Seat Regional Propeller Aircraft: Q400 Project
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Snapshot of Aircraft DevelopmentBeginning in spring 1996, about 380 engineers and professionals from Bombardier and its major suppliers work together in a football-size design department for the Joint Definition Phase of Q400. In this phase, all major disciplines involved in aircraft design are represented. They included engineering, design, tooling, manufacturing, marketing, sales, procurement, customer/field support, spare parts, training, publications and many more. This phase also involved refining project objectives and further negotiations. Such a co-location of company engineers and suppliers benefits both parties. It facilitates superior communication among all functions and leverages suppliers' knowledge so that new process technology can be incorporated into product development.
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Snapshot of Aircraft Development
Milestones in this 6-month JDP, including different Deign Reviews, were to determine specific targets for delivering the commitments. These iterative and interactive loops are to drive and check the detailed timing and specs from all areas. When this process was completed, it was subject to a series of Participant Exit Reviews to freeze every interface design of different structures and systems. When the Project Director accepted that review, the representatives and suppliers involved could then exit the JDP process to complete their detailed design of items under their responsibility and prepare for production.
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Quality Function Deployment
Suitable for product design process using Suitable for product design process using cross-functional teamscross-functional teams e.g. marketing, engineering, manufacturinge.g. marketing, engineering, manufacturing
Translates customer preferences into specific Translates customer preferences into specific product characteristicsproduct characteristics
Involves creating 4 tabular ‘Matrices’ or ‘Houses’Involves creating 4 tabular ‘Matrices’ or ‘Houses’ Breakdown product design into increasing levels Breakdown product design into increasing levels
of detailof detail
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In each House of Quality
Identify customer Identify customer wantswants Identify Identify howhow the good/service will satisfy the good/service will satisfy
customer wantscustomer wants.. Relate the customer’s Relate the customer’s wantswants to the product’s to the product’s
howhowss.. Identify relationships between the firm’s Identify relationships between the firm’s howhowss.. Develop importance ratingsDevelop importance ratings Evaluate competing productsEvaluate competing products
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The goal of the QFD The goal of the QFD team is to design and team is to design and develop a new camera. develop a new camera. Start from building a Start from building a House of Quality.House of Quality.
© 1984-1994 T/Maker Co.
House of Quality Example
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High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Target Values
House of Quality Example
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House of Quality Example
High relationship Medium relationship Low Relationship
CustomerRequirements
CustomerImportance
Target Values
Light weightEasy to useReliable
What the customer desires (‘wall’)
AluminumParts
AutoFocus
AutoExposure
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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
Target Values
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
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5 1 1
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Figure 5.5
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Quality Function Deployment
The Quality Function Deployment (QFD) tool is used to meet customers’ requirements throughout the design process and also in the design of production systems. It is a customer-driven quality planning process to guide design, manufacturing, and marketing of goods.
QFD was developed in 1972 at Mitsubishi’s Kobe shipyard site.
Xerox and Ford initiated the use of QFD in the United States in 1986.
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Quality Function Deployment
Chrysler also employed the QFD methodology in 1986 in the design and development of its LH-platform cars (Chrysler Concord, Eagle Vision, Dodge Intrepid). It used QFD along with concurrent engineering and utilization of design-for-manufacturing principles and design-of-experiments methods. The overall results were quite impressive: the design cycle took 36 months versus 54 to 62 months before; prototype cars were ready 95 days before the production lunch. Customer approval rating and sales have been very good.
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Manufacturability and Value Engineering
Main goals:Main goals: reduce complexity of productsreduce complexity of products Increase level of standardization among Increase level of standardization among
productsproducts improve key functions of each productimprove key functions of each product improved job design and job safetyimproved job design and job safety improved maintainability of the productimproved maintainability of the product Green and ethical products Green and ethical products
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Uncertainty in Product Design
Cost for develop a new product is highCost for develop a new product is high The associated results, such as demand, The associated results, such as demand,
competition, performance remain uncertain competition, performance remain uncertain at the time decisions have to be madeat the time decisions have to be made
Require OM tools to facilitate decision Require OM tools to facilitate decision making in the early stage of product making in the early stage of product developmentdevelopment
Decision Tree is one of the most popular Decision Tree is one of the most popular tool tool
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Few SuccessesFew Successes
0
500
1000
1500
2000
Development Stage
Number
1000
Market requirement
Design review,Testing, Introduction
25
Ideas1750
Product specification
100
Functional specifications
One success!
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Decision Tree Analysis Decision tree analysis may be effectively used for Decision tree analysis may be effectively used for
strategic product decisions.strategic product decisions. A decision tree contains:A decision tree contains:
Decision NodesDecision Nodes: from which one or several : from which one or several decisions alternatives can be chosendecisions alternatives can be chosenChance NodesChance Nodes (state of nature): out of which one (state of nature): out of which one or several states of nature (events, outcomes) will or several states of nature (events, outcomes) will occuroccurEnd NodesEnd Nodes: at the end of the decision tree, where : at the end of the decision tree, where payoffs are being developedpayoffs are being developedArrowsArrows: that connect nodes and identify the : that connect nodes and identify the sequence of decisions on the tree. sequence of decisions on the tree.
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Group Exercise: Introducing New Product Construct the decision tree in detailConstruct the decision tree in detail
Identify the value of each nodeIdentify the value of each node
Explain your decision making processExplain your decision making process
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Decision Tree Analysis
Analyzing new product introduction with Analyzing new product introduction with decision trees involves following steps:decision trees involves following steps:
Define the problem.Define the problem. Structure or draw the decision tree.Structure or draw the decision tree. Assign probabilities to the Chance Nodes Assign probabilities to the Chance Nodes
(states of nature).(states of nature). Payoffs are calculated at the End NodesPayoffs are calculated at the End Nodes
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Decision Tree Analysis
Estimate payoffs for each Chance Node by Estimate payoffs for each Chance Node by calculating the expected value over all calculating the expected value over all alternatives and associated probability.alternatives and associated probability.
Solve the problem by working backwards, Solve the problem by working backwards, that is, starting at the right of the tree and that is, starting at the right of the tree and working back to decision nodes on the left.working back to decision nodes on the left.
Identify the best alternative (decision) with Identify the best alternative (decision) with the highest expected value.the highest expected value.
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AgeTree IncAgeTree, Inc. has developed a promising new product. The company’s management faces three choices: It can sell the idea of the new product to a company for $40,000, it can hire a consultant to study the market and then make a decision, or it can arrange financing for directly manufacturing the product.
The study will cost AgeTree $25,000, and its management believes that there is about 2/3 of chances that a favorable market will be found. If the study is favorable, the company can sell the idea for $40,000, or it can manufacture the product. But even if a favorable market is found and the company manufactures the product, the chance of an ultimately successful production is about 60%. In this case, the company plans to sell 10,000 units of the product with a price of $50 each. The estimated fixed cost will be $190,000 and the variable cost will be $10 per unit. In case of unsuccessful results, the company will be able to sell approximately a half of its original number of units with the same price and costs.
If the study is unfavorable, the management figures that it can still sell the idea for $40,000. Even with an unfavorable study, the company can still manufacture the product, but a successful product can be expected about once in every ten new-product introductions with the same results as those in case of the favorable study.
If the AgeTree’s management decides to manufacture the product without the study, there is only a 1-in-4 chances of its being successful. The results will be exactly the same as previously mentioned.
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Agetree Inc
Sell idea
Study
Manufacture directly
(0.67) favorable
(0.33) unfavorable
Sell idea
Sell idea
Manufacture
Manufacture
(0.6) success
(0.4) fail
(0.1) success
(0.9) fail
(50-10)*10,000-190,000=210,000
(50-10)*5,000-190,000=10,000
(0.25) success
(0.75) fail
40,000
40,000-25,000=15,000
40,000-25,000=15,000
(50-10)*10,000-190,000 -25,000=185,000
(50-10)*5,000-190,000 -25,000=-15,000
(50-10)*10,000-190,000 -25,000=185,000
(50-10)*5,000-190,000 -25,000=-15,000
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