UNIT - 2

The design of products and services

Introduction: Products and services are often the first thing that customers see of a company, so they should have an impact. And although operations managers may not have direct responsibility for product and service design,

they always have an indirect responsibility to provide the

information and advice upon which successful product or service development depends. But, increasingly, operations managers are expected to take a more active part in product and service design.

What is designed in a product or service?

All products and services can be considered as having

three aspects:
a concept, which is the understanding of the nature, use and value of the service or product; a package of component products and services that provide those benefits defined in the concept; the process defines the way in which the component products and services will be created and delivered.

 Translate customer wants and needs into product and

What Does Product and Service Design Do?

service requirements. (marketing, operations) Refine existing products and services. (marketing) Develop new products and/or services. (marketing, operations) Formulate quality goals. (marketing, operations) Formulate cost targets. (accounting, finance, operations) Construct and test prototypes. (operations, marketing, engineering) Document specifications.

The design activity is itself a process: Producing designs for products, services is itself a process which conforms to the input transformationoutput model. It therefore has to be designed and managed like any other process. Figure illustrates the design activity as an input transformation output diagram. The transformed resource inputs will consist mainly of information in the form of market forecasts, market preferences, technical data, and so on.

The stages of design: To get to a final design of a product or

service, the design activity must pass through several key stages. These form an approximate sequence, although in practice designers will often recycle or backtrack through the stages. First, comes the concept generation stage that develops the overall concept for the product or service. The concepts are then screened to try to ensure that, in broad terms, they will be a sensible addition to its product/service portfolio and meet the concept as defined. The agreed concept has then to be turned into a preliminary design that then goes through a stage of evaluation and improvement to see if the concept can be served better, more cheaply or more easily. An agreed design may then be subjected to prototyping and final design.

Concept generation: # Ideas from customers.

# Listening to customers.
# Ideas from competitor activity. # Ideas from staff. # Ideas from research and development.

Phases in Product Design and Development

Idea generation: Product development begins with idea generation. Ideas can come from a variety of sources. This topic will be discussed in detail following this section. Feasibility analysis: Feasibility analysis entails market analysis (demand), economic analysis (development cost and production cost, profit potential), and technical analysis (capacity requirements and availability, and the skills needed). Also, it is necessary to answer the question, Does it fit with the mission? It requires collaboration among marketing, finance, accounting, engineering, and operations. Product specifications: This involves detailed descriptions of what is needed to meet (or exceed) customer wants, and requires collaboration between legal, marketing, and operations.

Process specifications: Once product specifications have been set, attention turns to specifications for the process that will be needed to produce the product. Alternatives must be weighed in terms of cost, availability of resources, profit potential, and quality. This involves collaboration between accounting and operations. Prototype development: With product and process specifications complete, one (or a few) units are made to see if there are any problems with the product or process specifications. Design review: Make any necessary changes, or abandon. Involves collaboration among marketing, finance, engineering, design, and operations. Market test: A market test is used to determine the extent of consumer acceptance. If unsuccessful, return to the design review phase. This phase is handled by marketing. Product introduction: Promote the product. This phase is handled by marketing. Follow-up evaluation: Determine if changes are needed, and refine forecasts. This phase is handled by marketing.

Concept screening: Three broad categories of design

criteria: The feasibility of the design option can we do it? Do we have the skills (quality of resources)? Do we have the organizational capacity (quantity of resources)? Do we have the financial resources to cope with this option? The acceptability of the design option do we want to do it? Does the option satisfy the performance criteria which the design is trying to achieve? (These will differ for different designs.) Will our customers want it? Does the option give a satisfactory financial return? The vulnerability of each design option do we want to take the risk? That is, Do we understand the full consequences of adopting the option? Being pessimistic, what could go wrong if we adopt the option?

Specify the components of the package: The first

task in this stage of design is to define exactly what will go into the product or service: that is, specifying the components of the package. This will require the collection of information about such things as the constituent component parts which make up the product or service package and the component (or product) structure, the order in which the component parts of the package have to be put together.

Reducing design complexity: Simplicity is usually seen as a virtue amongst designers of products and services. The most elegant design solutions are often the simplest. However, when an operation produces a variety of products or services (as most do) the range of products

and services considered as a whole can become complex,

which, in turn, increases costs. Designers adopt a number of approaches to reducing the inherent complexity in the design of their product or service range.

Standardization: Operations sometimes attempt to overcome the cost penalties of high variety by standardizing their products, services or processes. This allows them to restrict variety to that which has real value for the end-customer. Often it is the operations outputs which are standardized. Commonality: Using common elements within a product or service can also simplify design complexity. Using the same components across a range of automobiles is a common practice.

Modularization: The use of modular design principles involves designing standardized sub-components of a product or service which can be put together in different ways. It is possible to create wide choice through the fully interchangeable assembly of various combinations of a smaller number of standard sub-assemblies.

Define the process to create the package: The product/service structure and bill-of-materials specifies what goes into a product. It is around this stage in the design process where it is necessary to examine how a process could put together the various components to create the final product or service.

Design evaluation and improvement: The purpose of this stage in the design activity is to take the preliminary design and see if it can be improved before the product or service is tested in the market. There are a number of techniques that can be employed at this stage to evaluate and improve the preliminary design. Here we treat three which have proved particularly useful: Quality function deployment (QFD) Value engineering (VE) Taguchi methods.

Quality function deployment: The

key purpose of quality function deployment (QFD) is to try to ensure that the eventual design of a product or service actually meets the needs of its customers. Customers may not have been considered explicitly since the concept generation stage, and therefore it is appropriate to check that what is being proposed for the design of the product or service will meet their needs.

What Does QFD Do?

CONCEPT CUSTOMER

Better Designs in Half the Time!

Plan

Design

Redesign

Manufacture

Traditional Timeline
Plan
Design Redesign Manufacture

Benefits

QFD Is a Productivity Enhancer

Four Phase of QFD (G. Kannan, 2008)

QFD is a tool which integrates three distinct voices, namely, Voice of Business (VoB), Voice of Customer (VoC) and Voice of Engineer (VoE).
VoB deals with organizational requirements and resource limitations. It is satisfied by generating profits through new and improved products. VoC deals with customers needs and requirements within budget constraints. VoE deals with technical requirements and constraints. It is satisfied by designing a product that is compatible with manufacturing facilities and endures operating conditions.

NEED

The Quality Function Deployment (QFD) process

IDENTIFYING & CLASSIFYING CUSTOMER REQUIREMENT

IDENTIFYING IMPORTANCE OF CUSTOMER REQUIREMENT

IDENTIFYING DESIGN DEPENDENT PARAMETER

CORRELATE REQUIREMENTS & PARAMETEETR

CHECK CORRELATION GRID

BENCHMARK CUSTOMER PERCEPTIONS

BENCHMARK DESIGN DEPENDENT PARAMETER

ANALIZE CORRELATION GRID FOR INCONSISTENCIES

DELINEATE DESIGN DEPENDENT PARAMETER TARGET VALUE AND RELATIVE PRIORITIES

The QFD matrix is a formal articulation of how the company sees the relationship between the requirements of the customer (the whats) and the design characteristics of the new product (the hows).

The matrix contains various sections, as explained below: The whats, or customer requirements, is the list of competitive factors which customers find significant. Their relative importance is scored, in this case on a 10-point scale, with accurate scoring the highest. The competitive scores indicate the relative performance of the product, in this case on a 1 to 5 scale. Also indicated are the performances of two competitor products. The hows, or design characteristics of the product, are the various dimensions of the design which will operationalize customer requirements within the product or service. The central matrix (sometimes called the relationship matrix) represents a view of the interrelationship between the whats and the hows. This is often based on value judgments' made by the design team. The symbols indicate the strength of the relationship.

The bottom box of the matrix is a technical assessment of the product. This contains the absolute importance of each design characteristic. [For example, the design characteristic interfaces has a relative importance of (9 5) + (1 9) = 54.] This is also translated into a ranked relative importance. In addition, the degree of technical difficulty to achieve high levels of performance in each design characteristic is indicated on a 1 to 5 scale. The triangular roof of the house captures any information the team has about the correlations (positive or negative) between the various design characteristics.

QFD can be used to

Reduce product development time by 50% Cut start-up & engineering costs by 30% Reduce time to market Reduce of design changes

Value engineering: The purpose of value engineering is to try to

reduce costs, and prevent any unnecessary costs, before producing the product or service. Simply put, it tries to eliminate any costs that do not contribute to the value and performance of the product or service. (Value analysis is the name given to the same process when it is concerned with cost reduction after the product or service has been introduced.) Taguchi methods: The main purpose of Taguchi methods, as advocated by Genichi Taguchi, is to test the robustness of a design. The basis of the idea is that the product or service should still perform in extreme conditions. Example: A telephone should still work even when it has been knocked onto the floor. Although one does not expect customers to knock a telephone to the floor, this does happen, and so the need to build strength into the casing should be considered in its design.

The benefits of interactive design: A number of factors have been suggested which can significantly reduce time to market for a product or service, including the following: simultaneous development of the various stages in the overall process; an early resolution of design conflict and uncertainty; an organizational structure which reflects the development project. If the development process takes longer than expected (or even worse, longer than competitors) two effects are likely to show. The first is that the costs of development will increase. Having to use development resources, such as designers, technicians, subcontractors, and so on, for a longer development period usually increases the costs of development. Perhaps more seriously, the late introduction of the product or service will delay the revenue from its sale (and possibly reduce the total revenue substantially if competitors have already got to the market with their own products or services). This is illustrated in Figure 5.9.

Simultaneous development: When each stage is separate, with a clearly defined set of tasks, any difficulties encountered during the design at one stage might necessitate the design being halted while responsibility moves back to the previous stage. The main problem of the sequential approach is that it is both time consuming and costly. This sequential approach is shown in Figure 5.10(a). This principle can be taken right through all the stages, one stage commencing before the previous one has finished, so there is simultaneous or concurrent work on the stages (see Fig. 5.10(b)). (Note that simultaneous development is often called simultaneous (or concurrent) engineering in manufacturing operations.)

Early conflict resolution: Characterizing the design activity as a whole

series of decisions is a useful way of thinking about design. However, a decision, once made, need not totally and utterly commit the organization. If the design team manages to resolve conflict early in the design activity, this will reduce the degree of uncertainty within the project and reduce the extra cost and, most significantly, time associated with either managing this uncertainty or changing decisions already made. Figure 5.11 illustrates two patterns of design changes through the life of the total design, which imply different time-tomarket performances.

 Why is good product and service design important? Good design makes good business sense because it translates customer needs into the shape and form of the product or service and so enhances profitability. Design includes formalizing three particularly important issues: the concept, package and process implied by the design. Design is a process that itself must be designed according to the process design principles described in the previous chapter. What are the stages in product and service design? Concept generation transforms an idea for a product or service into a concept which captures the nature of the product or service and provides an overall specification for its design.

 Screening the concept involves examining its feasibility, acceptability and vulnerability in broad terms to ensure that it is a sensible addition to the companys product or service portfolio. Preliminary design involves the identification of all the component parts of the product or service and the way they fit together. Typical tools used during this phase include component structures and flow charts. Design evaluation and improvement involve re-examining the design to see if it can be done in a better way, more cheaply or more easily. Typical techniques used here include quality function deployment, value engineering and Taguchi methods. Prototyping and final design involve providing the final details which allow the product or service to be produced. The outcome of this stage is a fully developed specification for the package of products and services, as well as a specification for the processes that will make and deliver them to customers.

 Why should product and service design and process design be considered interactively? Looking at them together can improve the quality of both product and service design and process design. It helps a design break even on its investment earlier than would otherwise have been the case. Employ simultaneous development where design decisions are taken as early as they can be, without necessarily waiting for a whole design phase to be completed. Ensure early conflict resolution which allows contentious decisions to be resolved early in the design process, thereby not allowing them to cause far more delay and confusion if they emerge later in the process. Use a project-based organizational structure which can ensure that a focused and coherent team of designers is dedicated to a single design or group of design projects.