4-1 Product and Service Design

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-2 Product and Service Design

PART THREE
SYSTEMS DESIGN
•Chapter Four Product and Service Design
•Chapter Four Supplement Reliability
•Chapter Five Capacity Planning
•Chapter Five Supplement Decision Theory
•Chapter Six Process Design and Facility Layout
•Chapter Six Supplement Linear Programming
•Chapter Seven Design of Work Systems
•Chapter Seven Supplement Learning Curves
•Chapter Eight Location Planning and Analysis
•Chapter Eight Supplement The Transportation Model

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-3 Product and Service Design

Chapter 4

Product and
Service Design

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-4 Product and Service Design

Product and Service Design

• Major factors in strategy

– Cost
– Quality
– Time-to-market
– Customer satisfaction
– Competitive advantage

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-5 Product and Service Design

Trends in Product & Service Design

• Increased emphasis on or attention to:

– Customer satisfaction

– Reducing time to introduce new product

or service

– Reducing time to produce product

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-6 Product and Service Design

Trends in Product & Service Design (Cont’d)

• Increased emphasis on or attention to:

– The organization’s capabilities to produce or
deliver the item
– Environmental concerns
– Designing products & services that are “user
friendly”
– Designing products that use less material

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4-7 Product and Service Design

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

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-8 Product and Service Design

Reasons for Product or Service Design

• Be competitive
• Increase business growth & profits
• Avoid downsizing with development of
new products
• Improve product quality
• Achieve cost reductions in labour or
materials

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-9 Product and Service Design

Objectives of Product and Service Design

• Development time and cost

• Product or service cost
• Resulting product or service quality
• Capability to produce or deliver a given
product or service

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-10 Product and Service Design

Design For Operations

• Taking into account the capabilities of

the organization in designing goods and
services

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-11 Product and Service Design

The Kano Model

Kano Model
Customer Satisfaction

Excitement
Expected
Must Have

Customer Needs

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4-12 Product and Service Design

Sources of Ideas for Products and Services

• Internal
– Employees
– Marketing department
– R&D department
• External
– Customers (QFD)
– Competitors
– Suppliers

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-13 Product and Service Design

Quality Function Deployment

• Quality Function Deployment

– Voice of the customer
– House of quality

QFD: An approach that integrates the “voice of the

customer” into the product and service development
process.

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-14 Product and Service Design

Reverse Engineering

Reverse engineering is the

dismantling and inspecting
of a competitor’s product to
discover product improvements.

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4-15 Product and Service Design

Research & Development (R&D)

• Organized efforts to increase scientific

knowledge or product innovation & may
involve:
– Basic Research advances knowledge about a
subject without near-term expectations of
commercial applications.
– Applied Research achieves commercial
applications.
– Development converts results of applied
research into commercial applications.

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4-16 Product and Service Design

Legal, Ethical, and Environmental Issues

• Legal
– FDA, OSHA, IRS
– Product liability
– Uniform commercial code
• Ethical
– Releasing products with defects
• Environmental
– EPA

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4-17 Product and Service Design

Regulations & Legal Considerations

• Product Liability - A manufacturer is

liable for any injuries or damages
caused by a faulty product.
• Uniform Commercial Code - Products
carry an implication of merchantability
and fitness.

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4-18 Product and Service Design

Product Design

• Product Life Cycles

• Robust Design
• Concurrent Engineering
• Computer-Aided Design
• Modular Design

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4-19 Product and Service Design

Life Cycles of Products or Services

Figure 4-2

Saturation

Maturity
Deman

Decline
Growth
d

Incubation

Time
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4-20 Product and Service Design

Advantages of Standardization

• Fewer parts to deal with in inventory &

manufacturing
• Reduced training costs and time
• More routine purchasing, handling,
and inspection procedures

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4-21 Product and Service Design

Advantages of Standardization (Cont’d)

• Orders fillable from inventory

• Opportunities for long production runs
and automation
• Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures.

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-22 Product and Service Design

Disadvantages of Standardization

• Designs may be frozen with too many

imperfections remaining.
• High cost of design changes increases
resistance to improvements.
• Decreased variety results in less
consumer appeal.

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4-23 Product and Service Design

Mass Customization

Mass customization:
– A strategy of producing standardized
goods or services, but incorporating some
degree degree of customization
– Delayed differentiation
– Modular design

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4-24 Product and Service Design

Delayed Differentiation

Delayed differentiation is a
postponement tactic
– Producing but not quite completing a
product or service until customer
preferences or specifications are known

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-25 Product and Service Design

Modular Design

Modular design is a form of standardization in

which component parts are subdivided into
modules that are easily replaced or
interchanged. It allows:
– easier diagnosis and remedy of failures
– easier repair and replacement
– simplification of manufacturing and assembly

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-26 Product and Service Design

Reliability

• Reliability: The ability of a product, part, or

system to perform its intended function under
a prescribed set of conditions

• Failure: Situation in which a product, part, or

system does not perform as intended

• Normal operating conditions: The set of

conditions under which an item’s reliability is
specified

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-27 Product and Service Design

Improving Reliability

• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
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4-28 Product and Service Design

Robust Design

Robust Design: Design that results in

products or services that can function
over a broad range of conditions

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4-29 Product and Service Design

Taguchi Approach Robust Design

• Design a robust product

– Insensitive to environmental factors either
in manufacturing or in use.
• Central feature is Parameter Design.
• Determines:
– factors that are controllable and those not
controllable
– their optimal levels relative to major
product advances

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4-30 Product and Service Design

Designing for Manufacturing

Beyond the overall objective to achieve customer

satisfaction while making a reasonable profit is:
Design for Manufacturing(DFM)
The designers’ consideration of the
organization’s manufacturing capabilities when
designing a product.
The more general term design for operations
encompasses services as well as manufacturing

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4-31 Product and Service Design

Concurrent Engineering

Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.

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4-32 Product and Service Design

“Over the Wall” Approach

New
Product

Mfg Design

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4-33 Product and Service Design

Computer-Aided Design

• Computer-Aided Design (CAD) is

product design using computer graphics.
– increases productivity of designers, 3 to 10
times
– creates a database for manufacturing
information on product specifications
– provides possibility of engineering and cost
analysis on proposed designs

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4-34 Product and Service Design

Manufacturability

• Manufacturability is the ease of

fabrication and/or assembly
which is important for:
– Cost
– Productivity
– Quality

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4-35 Product and Service Design

Product design

• Design for manufacturing (DFM)

• Design for assembly (DFA)
• Design for recycling (DFR)
• Remanufacturing
• Design for disassembly (DFD)
• Robust design

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4-36 Product and Service Design

Recycling

• Recycling: recovering materials for

future use
• Recycling reasons
– Cost savings
– Environment concerns
– Environment regulations

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4-37 Product and Service Design

Differences Between Product

and Service Design
• Tangible – intangible
• Services created and delivered at the
same time
• Services cannot be inventoried
• Services highly visible to customers
• Services have low barrier to entry
• Location important to service

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4-38 Product and Service Design

Service Variability & Customer

Figure 4-3 Influence Service Design

High Customized
Clothing
Degree of
Contact Moderate Dept. Store
with
Purchase
Customer
Low Telephone
Purchase
Minimal Internet
Purchase
High Moderate Low Minimal

Variability in Service Requirements

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati
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4-39 Product and Service Design

Quality Function Deployment

• Quality Function Deployment

– Voice of the customer
– House of quality

QFD: An approach that integrates the “voice of the

customer” into the product and service development
process.

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

McGraw-Hill Ryerson Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
4-40 Product and Service Design

The House of Quality

Figure 4-5

Correlation
matrix

Design
requirements

Customer
Relationship Competitive
require-
matrix assessment
ments

Specifications
or
target values

Operations Management, 2nd Canadian Edition, by Stevenson & Hojati

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4-41 Product and Service Design

House of Quality Example

Correlation:
X Strong positive
Positive
X X
X X X Negative

Water resistance
Strong negative

Accoust. Trans.
*

Energy needed

Energy needed
to close door

to open door
Engineering

Check force
resistance
Door seal
Competitive evaluation
Characteristics

Window
on level
X = Us

ground
A = Comp. A
B = Comp. B
Customer (5 is best)
Requirements 1 2 3 4 5
X AB
Easy to close 7
Stays open on a hill 5 X AB

Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Importance weighting 10 6 6 9 2 3 Relationships:

level to 7.5 ft/lb
Reduce energy

Reduce energy
Strong = 9
Reduce force
current level

current level
current level
to 7.5 ft/lb.
Medium = 3
Maintain

Maintain
Target values

Maintain
to 9 lb. Small = 1

5 B
BA BA
X B B BXA X
Technical evaluation 4
A A X
3
(5 is best) 2 X
X A
1

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4-42 Product and Service Design

Operations Strategy

• Shorten time-to-market
• Package products and services
• Increase emphasis on component
commonality
• Use multiple-use platforms
• Consider tactics for mass customization
• Look for continual improvement

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