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OPERATIONS MANAGEMENT

PRODUCT DECISION, ANALYSIS AND


DEVELOPMENT
PROF. NITIN KUBDE

What is a Product?

The term PRODUCT is often used as a catch-all word


to identify solutions to its target market. We will
follow this approach and permit the term product to
cover offerings that fall into one of the following
categories

Contd..
Goods
Services
Ideas

PRODUCT DECISION?

THE SIMPLER WAY..

THE LESS SIMPLER WAY..

WHAT IS PRODUCT DESIGN?


It is a systematic formulation which
leads to the selection of material, its
specification
and
its
aesthetic
appearance of the product to be
manufactured. Though product design is
a part of engineering design but its role
in operation management is very crucial.

Contd
Product design is concerned with the form
and function of the product.

FORM DESIGN & FUCTIONAL


DESIGN

IMPORTANCE OF PRODUCT
DESIGN
Production or operations strategy is
directly influenced by product design for
the following reasons.
1. As products are designed, all the detailed
characteristics of each product are established.
2. Each product characteristics directly affects
how the product can be made or produced (i.e.
process technology and process design)

Contd
3. How the product is made determines the
design of the production strategy
(production design) which is the heart of
production and operation strategy.

Contd
Product design directly affects product
quality,
production
and
customer
satisfaction. Hence, the design of product is
crucial to stay in todays global competition.
A good product design can improve the
marketability of a product making it easier
to operate or use, upgrading its quality,
improving appearance, and/or reducing
manufacturing costs.

WHAT DOES PRODUCT DESIGN


DO?
The activities and responsibilities of product design
includes following:
Translating customer needs and wants into product
and requirements (marketing).
Refining existing products (marketing).
Developing new products (marketing & product
design).
Formulating quality goals (quality assurance,
production).
Formulating cost targets (Accounting).
Documentary specifications (product design).

OBJECTIVES OF PRODUCT
DESIGN
The overall objective is profit
generation in the long run.
To achieve the desired product
quality.
To reduce the development time and
cost to the minimum.
To reduce the cost of product.

CHARACTERISTICS OF GOOD
PRODUCT DESIGN

FUNCTION OR PERFORMANCE
APPEARANCE OR AESTHETICS
RELIABILITY
MAINTAINABILITY
AVAILABILITY
PRODUCIBILITY
SIMPLIFICATION
STANDARDISATION
SPECIFICATION
SAFETY

Contd
FUNCTION OR PERFORMANCE:- The function
or performance is what customer expects the
product to do solve his/her problem or for
certain benefits leading to satisfaction.
APPEARANCE
OR
AESTHETICS:This
includes the style, colour, look, feel, etc. which
appeals to the human sense and adds value to
the product.
RELIABILITY:- This refers to the length of
time a product can be used before it fails.

Contd
MAINTAINABILITY:- This refers to the
restoration of a product once it has failed.
AVAILABILITY:- This refers to the continuity
of service to the customer. Availability is a
combination of reliability and maintainability.
High reliability and maintainability ensures high
availability.
PRODUCIBILITY:- This refers to the ease of
manufacture with minimum cost (economic
production).

Contd
SIMPLIFICATION:- It refers to the elimination
of the complex features so that the intended
function is performed with reduced costs, higher
quality or more customer satisfaction.
STANDARDISATION:- It refers to the design
activity that reduces variety among a group of
products or parts.
SPECIFICATION:- A specification is a detailed
description of a material part or product,
including physical measures such a dimensions,
volume, weight, surface finish etc.

Contd
SAFETY:- The product must be safe to the
user and should not cause any accident while
using or should not cause any health hazard to
the user.

STAGES IN PRODUCT DESIGN

CONCEPTION
ACCEPTANCE
EXECUTION
EVALUATION
TRANSLATION
PRE-PRODUCTION

FACTORS INFLUENCING PRODUCT DESIGN

CUSTOMER REQUIREMENTS
CONVENIENCE OF THE OPERATOR OR
USER
TRADE-OFF BETWEEN FUNCTION AND
FORM
TYPES OF MATERIALS USED

WORK METHODS AND EQUIPMENTS

COST/PRICE RATIO

PRODUCT QUALITY

BREAK - EVEN CHARTS


Total revenues
line

Breakeven
Point
25 units

$10,000
$8,000

Total costs
line
Operating
income

$6,000
$4,000
Operating
loss
0

10

20

30

40

50

Units Sold
Page 72

COST

Contd..

COST

BREAK - EVEN CHARTS


Contd..

CAPACITY

Contd..
PROCESS CAPABILITY
EFFECT ON EXISTING PRODUCTS
PACKAGING

Design Influences Manufacturing


Cost
Design is the single most important area
where the efforts to minimise manufacturing
cost are really rewarding.
Costs can be curtailed more easily at design
stage and once product has been designed
or developed, very little can be done except
to cut corners here and there. some of the
areas where significant savings can be made
at the design stage are discussed here
under:

a: MATERIALS
Only those materials which make the product perform
satisfactorily are selected. If cheaper material can
work satisfactorily, there are no us to go for costly.
Materials which are easily available in the market are
used.

b:Machinability- Some materials are easy to machine, allow higher


cutting speeds and cause less tool wear and
breakage. Even if such materials are costly, they
should be preferred if there is greater savings due to
lower machining cost.

c: Make-or-buy decisions- Manufacture a part for which best technical know


how is available.
Manufacture a part if its procurement is expected to
require large amount of money every year.
Buy parts which are available at quite reasonable
rates in market
Buy parts which require the use of special
manufacturing process/equipment which utilisation is
expected to be very poor

d: Tolerances:
Absolute uniformity to produce each piece
to an exact dimension is not only
impossible to obtain in production but also
is costly to approach. tolerances are
stipulated to
Provide a necessary fit or clearance
between the mating parts.
Ensure interchange ability between the
parts.
Enable manufacturing of products/parts at
the lowest cost

e: Use of standard parts- Standard parts cost less to buy since they
are produced by their manufacturers large
quantities on special purpose machines
with special purpose tooling to cater to
needs of a large numbers of customers.
Standard parts are easy to procure from
multiple sources with smaller lead time
thereby reducing procurement cost and
inventory carrying cost.

f: Variety reduction or use of fewer


parts)
Variety reduction is the voluntary elimination of
unnecessary variety in the products ,materials,
components, tools etc.
Benefits of variety reduction include reduced
manufacturing cost, lower inventory investment,
lesser labour cost, fewer defectives, better quality and
economy in buying cost

g: Tool design:
Product design should be such that companys
existing manufacturing facilities-machines, tools,
fixtures etc.-are utilized to extent possible

PRODUCT DEVELOPMENT

Product development is the creation of new


product or some changes done in the
existing product to meet the new demands
of the market.

PRODUCT
DEVELOPMENT

Introduction of new product

Improvement of existing product

Short term objectives

Long term objectives

Introduction of new product


Give practical shape to the ideas.
Utilize the ideal resources.
Meet new requirements of the market.
Project cooperate image of the company.

Improvement of existing product


Short term objectives.
to provide new look.
to satisfy immediate need of
customer.
to stimulate sales by providing new
advantage.
to utilize the existing machine and
manpower.

Long term objectives.


to monopolies market.
to make product on quality basis
to reduce the cost of manufacturing.
to ensure long term growth by tying
the customer to the brand.

Product life cycle

NEW PRODUCT DESIGN & DEVELOPMENT

Customers

Generation of idea

R&D activities

Advance product planning


Advance design
Detailed engineering design
Final design
Production process design and development

Relationship between Research,


Development and Design.
Product Research generates basic information
which gets converted into practical ends
during development and into final physical
form on completion of design.
Product development involves improvement
of existing product.
product design involves the development of
specification of a product.