OPM Topic 2 Design

Operations & Production Management 1/22/2015

Resource Person : Dr. Muhammad Wasif 1

Operations & Production Management

(OPM)Dr. Muhammad Wasif

Visiting Faculty, IBA.

Product and Service Design

2

Resource Person : Dr. Muhammad Wasif Operations & Production Management7



Introduction to Product & Service Design

Section 2.1

3


Major factors in design strategy


Cost

Quality

Time-to-market

Customer satisfaction

Competitive advantageProduct and service design or redesign should be

closely tied to an organizations strategy



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

Reasons for Product or Service Design


Reasons Examples

Economic Low price grocery shop (Imtiaz supermarket) Low maintenance products (disposable items)

Social & demographic

High cost of fuel (Hybrid cars) People believe in charity & religion (Chipa, Edhi, Alamgir welfares)

Political, liability, or legal

Relate politics with charity to win people (KKF, Alkhidmat, SKH) Have ISO certification for export goods (Llyods, SGS, BVQI)

Competitive Women are willing to use cosmetics (different brands of shampoo) People want easy and cheap communication (ufone, telenore etc.)

Cost or availability Islamic Banking

Technological High speed internet (DSL, 4G, LTE)



Objectives of Product and Service Design


Main focusCustomer satisfactionUnderstand what the customer wants

Secondary focus Function of product/serviceCost/profitQualityAppearance Ease of production/assembly Ease of maintenance/service

Product Life Cycles


May be any length from a few hours to decades The operations function must be able to introduce new products

successfully

Product Life Cycles

Hours Week Months Years

Foods Magazines Fashion apparel Media tapes

Newspapers Stationary items Tech. Services Players



Product Life Cycles


Negative cash flow

Introduction Growth Maturity Decline

Sale

s, c

ost,

and

cas

h fl

ow

Cost of development and production

Cash flow

Net revenue (profit)

Sales revenue

Loss

Product Development System


Scope of product

development team

Scope for design and engineering

teams

Evaluation

Introduction

Test Market

Functional Specifications

Design Review

Product Specifications

Customer Requirements

Ability

Ideas



Issues for Product Development


Robust design small change in design do not disturb whole product.

Modular design segmented components (E.g. subway buger)

Computer-aided design (CAD) PC used as tool for faster design.

Computer-aided manufacturing (CAM)

Virtual reality technology simulations and analysis without prototypes, e.g. (Witness software, Plant Simulation).

Value analysis design improvement during production.

Environmentally friendly design

Product Development Continuum


External Development StrategiesAlliances

Joint venturesPurchase technology or expertiseby acquiring the developer

Internal Development StrategiesMigrations of existing products

Enhancements to existing productsNew internally developed products

Internal Cost of product development SharedLengthy Speed of product development Rapid and/

or ExistingHigh Risk of product development Shared



Acquiring Technology


By Purchasing a Firm

Speeds development

Issues concern the fit between the acquired organization and product and the host

Through Joint Ventures

Both organizations learn

Risks are shared

Through Alliances

Cooperative agreements between independent organizations

Product Documents


Engineering drawing

Shows dimensions, tolerances, and materials

Shows codes for Group Technology

Bill of Material

Lists components, quantities and where used

Shows product structure



Documents for Production


Assembly drawing

Assembly chart

Route sheet

Work order

Engineering change notices (ECNs)

Assembly drawing

Assembly chart

Route sheet Work order

Quality Function DeploymentSection 2.2

16




Quality Function Deployment (QFD)


House of Quality is an approach that integrates the voice of the customer into the product and service development process.

Relationshipmatrix

How to satisfycustomer wants

Interrelationships

Co

mpe

titi

ve

asse

ssm

ent

Technicalevaluation

Target values

What the customer

wants

Customer importance

ratings

Weighted rating

1. Identify customer wants

2. Identify how the good/service will satisfy customer wants

3. Relate customer wants to product hows

4. Identify relationships between the firms hows

5. Develop importance ratings

6. Evaluate competing products

7. Compare performance to desirable technical attributes

House of Quality Example


Your team has been charged with designing a new camera for Great Cameras, Inc.

The first action is to construct a House of Quality





Customerimportance

rating(5 = highest)

Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color correction 1

(1) What the customer wants

What the Customer

Wants

RelationshipMatrix

TechnicalAttributes and

Evaluation

How to SatisfyCustomer Wants

Interrelationships

Anal

ysis

of

Com

peti

tors



What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Anal

ysis

of

Com

peti

tors

Low

ele

ctri

city

req

uire

men

ts

Alum

inum

com

pone

nts

Auto

foc

us

Auto

exp

osur

e

Pain

t pa

llet

Ergo

nom

ic d

esig

n

(2) How to SatisfyCustomer Wants





Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1

What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Anal

ysis

of

Com

peti

tors

High relationshipMedium relationshipLow relationship

(3)Relationship matrix



What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Anal

ysis

of

Com

peti

tors

Low

ele

ctri

city

req

uire

men

ts

Alum

inum

com

pone

nts

Auto

foc

us

Auto

exp

osur

e

Pain

t pa

llet

Ergo

nom

ic d

esig

n

(4) Relationships between the things we can do





(5) Weighted rating=3x1+4x1+5x3=22

What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Anal

ysis

of

Com

peti

tors

Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 9 27 27 32 25

High relationship (5)Medium relationship (3)Low relationship (1)

1

1

3



Com

pany

A

Com

pany

B

G PG PF GG PP P

Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 5

(6) How well do competing products meet customer wants

What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Anal

ysis

of

Com

peti

tors





What the Customer

Wants

RelationshipMatrix


Evaluation


Interrelationships

Anal

ysis

of

Com

peti

tors

Target values(Technical attributes)

Technical evaluation

Company A 0.7 60% yes 1 ok GCompany B 0.6 50% yes 2 ok FUs 0.5 75% yes 2 ok G

0.5

A

75%

2to

2

circ

uits

Failu

re 1

per

10,0

00

Pane

l ran

king

(7) Compare performance to desirable technical attributes



Completed House of Quality Lightweight 3Easy to use 4

Reliable 5

Easy to hold steady 2

Color correction 1

Our importance ratings

Low

ele

ctri

city

req

uire

men

ts

Alum

inum

com

pone

nts

Auto

foc

us

Auto

exp

osur

e

Pain

t pa

llet

Ergo

nom

ic d

esig

n

Com

pany

A

Com

pany

B

G P

G P

F G

G P

P P

Target values(Technical attributes)

Technical evaluation

Company A 0.7 60% yes 1 ok G

Company B 0.6 50% yes 2 ok F

Us 0.5 75% yes 2 ok G

0.5

A

75%

2to

2

circ

uits

Failu

re 1

per

10,0

00

Pane

l ran

king

22 9 27 27 32 25



House of Quality Sequence


Deploying resources through the organization in response to customer requirements

Desi

gn

char

acte

rist

ics

Specific components

House 2

Cust

omer

re

quir

emen

ts

Design characteristics

House 1Sp

ecif

ic

com

pone

nts

Production process

House 3

Prod

ucti

on

proc

ess

Quality plan

House 4

Decision TreeSection 2.3

28




Application of Decision Trees


Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes

Procedure

Include all possible alternatives and states of nature -including doing nothing

Enter payoffs at end of branch

Determine the expected value of each branch and prune the tree to find the alternative with the best expected value

Application of Decision Trees


(.6)

Low sales

(.4)

High sales

(.6) Low sales

(.4)

High salesPurchase CAD

$388,000

Hire and train engineers$365,000

Do nothing $0

$0 Net

$800,000 Revenue- 400,000 Mfg cost ($50 x 8,000)- 375,000 Hire and train cost

$25,000 Net

$2,500,000 Revenue- 1,250,000 Mfg cost ($50 x 25,000)

- 375,000 Hire and train cost$875,000 Net

$2,500,000 Revenue- 1,000,000 Mfg cost ($40 x 25,000)

- 500,000 CAD cost$1,000,000 Net

$800,000 Revenue- 320,000 Mfg cost ($40 x 8,000)- 500,000 CAD cost- $20,000 Net loss



Service DesignSection 2.4

31


Service Design


Service is an act

Service delivery system

Facilities

Processes

Skills

Many services are bundled with products



Service Design


Service typically includes direct interaction with the customer

Increased opportunity for customization

Reduced productivity

Cost and quality are still determined at the design stage

Delay customization

Modularization

Reduce customer interaction, often through automation

Service Design


Service typically includes direct interaction with the customer Increased opportunity for customizationReduced productivity

Cost and quality are still determined at the design stageDelay customizationModularizationReduce customer interaction, often through

automation

(c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating

(a) Customer participation in design such as pre-arranged funeral services or cosmetic surgery

(b) Customer participation in delivery such as stress test for cardiac exam or delivery of a baby



Service Systems


Service systems range from those with little or no customer contact to very high degree of customer contact

such as:

Insulated technical core (software development)

Production line (automatic car wash)

Personalized service (hair cut, medical service)

Consumer participation (diet program)

Self service (supermarket)

Characteristics of Well Designed Service Systems


1. Consistent with the organization mission

2. User friendly

3. Robust

4. Easy to sustain

5. Cost effective

6. Value to customers

7. Effective linkages between back operations

8. Single unifying theme

9. Ensure reliability and high quality



Challenges of Service Design


Variable requirements

Difficult to describe

High customer contact

Service customer encounter


References

Operations Management, 10th Ed., by J. Heizer & B. Render

Operations Management, William J. Stevenson. Operations Management, 7th Ed., N. Slack, A.B.

Jones, R. Johnston.

Cases in Operations Management, S. Chambers, C. Harland, A. Harison, N. Slack.

OPM Topic 2 Design

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