1

Design of Goods and Services

2

Outline GLOBAL COMPANY PROFILE: REGAL MARINE GOODS AND SERVICES SELECTION

Product Strategy Options Support Competitive Advantage

Product Life Cycles Life Cycle and Strategy Product-by-value Analysis

GENERATING NEW PRODUCTS New Product Opportunities Importance of New Products

3

Outline - continued PRODUCT DEVELOPMENT

Product Development System Quality Function Deployment (QFD) Organizing for Product Development Manufacturability and Value Engineering

ISSUES FOR PRODUCT DESIGN Robust Design Modular Design Computer-Aided Design (CAD) Computer-Aided Manufacturing Virtual Reality Technology Value Analysis Environmentally Friendly Design

4

Outline - continued Time-Based Competition

Purchase of Technology by Acquiring Firm Joint Ventures Alliances

Defining the Product Make-or-buy Decisions Group Technology

DOCUMENTS FOR PRODUCTION SERVICE DESIGN

Documents for Service Application of Decision Trees to Product Design Transition to Production

5

Learning ObjectivesWhen you complete this chapter, you should be able to :Identify or Define:

Product life cycle Product development team Manufacturabililty and value engineering Robust design Time-based competition Modular design Computer aided design Value analysis Group technology Configuration management

6

Learning Objectives - Continued

When you complete this chapter, you should be able to:Explain:

AlliancesConcurrent engineeringProduct-by-value analysisProduct documentation

7

Regal Marine

Global market 3-dimensional CAD

reduced product development time reduced problems with tooling reduced problems in production

Assembly line JIT

8

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.

Humor in Product Design

9

Need-satisfying offering of an organization Example

P&G does not sell laundry detergent P&G sells the benefit of clean clothes

Customers buy satisfaction, not parts May be a good or a service

What is a Product?

10

Product Strategy Options

Product differentiation

Low cost

Rapid response

11

Generation of New Product Opportunities

Economic change

Sociological and demographic changeTechnological change

Political/legal changeChanges inmarket practiceprofessional standardssuppliers and distributors

12

Legislation/ Implementation Date Stated Purpose Industry CriticismElectrical-Waste directive (2006)

Makes electrical equipment easier to recycle in part by banning some hazardous substances

Bans some common flame retardants, raising the likelihood of fires

Telecom-data-protection directive (mid-2003)

Protects privacy on e-mail and the internet

Makes surfing more onerous by restricting use of “cookies” to remember peoples preferences

Biotech-Labeling laws (2003) Strengthens existing food-label laws and introduces labeling for animal feed containing genetically modified content

Encourages food processors and supermarkets to avoid using genetically modified ingredients, and farmers could stop growing them

Pedestrian-protection initiative (2001-2012) (when all new cars sold in Europe must comply)

Reduces injuries and casualties in road accidents

Raises costs of cars and restricts automaker’s design freedom

Chemicals review (staggered through 2012)

Eliminates health hazards due to chemicals

Restricts even minute use of dangerous substances, such as ethanol, in products such as cosmetics and detergents

Warning

13

Product

ProductIdea

Package

PhysicalGood

FeaturesQualityLevel

Service(Warranty)

Brand(Name)

Product Components

14

Product Life Cycle

Introduction Growth Maturity Decline

15

Product Life CycleIntroduction

Fine tuning research product development process modification and enhancement supplier development

16

Product Life CycleGrowth

Product design begins to stabilize Effective forecasting of capacity becomes

necessary Adding or enhancing capacity may be

necessary

17

Product Life CycleMaturity

Competitors now established High volume, innovative production may be

needed Improved cost control, reduction in options,

paring down of product line

18

Product Life CycleDecline

Unless product makes a special contribution, must plan to terminate offering

19

Product Life Cycle, Sales, Cost, and Profit

Sale

s, C

ost &

Pro

fit

.

Introduction Maturity DeclineGrowth

Cost ofDevelopment

& ManufactureSales Revenue

Time

Cash flowLoss

Profit

20

0%5%

10%15%20%25%30%35%40%45%50%

Position of Firm in Its Industry

Indu

stry

Lea

der

Top Third Middle

ThirdBottomThird

Percent of Sales From New Product

21

Products in Various Stages of Life Cycle

GrowthDecline

Time

Sales

Virtual Reality

RollerBlades Jet Ski

Boeing 727

IntroductionMaturity

22

Few Successes

0

500

1000

1500

2000

Development Stage

Number

1000

Market requirement

Design review,Testing, Introduction

25

Ideas

1750

Product specification

100

Functional specifications

One success!

500

23

Product-by-Value Analysis

Lists products in descending order of their individual dollar contribution to the firm.

Helps management evaluate alternative strategies.

24

Product Development Stages Idea generation Assessment of firm’s ability to carry out Customer Requirements Functional Specification Product Specifications Design Review Test Market Introduction to Market EvaluationSc

ope

of p

rodu

ct d

evel

opm

ent t

eam

Scope of design for manufacturability and value engineering teams

25

Quality Function Deployment

Identify customer wants Identify how the good/service will satisfy

customer wants Relate customer wants to product hows Identify relationships between the firm’s hows Develop importance ratings Evaluate competing products

26

QFD House of Quaoity

27

House of Quality Sequence Indicates How to Deploy

Resources to Achieve Customer Requirements

28

Idea Generation Stage

Provides basis for entry into market Sources of ideas

Market need (60-80%); engineering & operations (20%); technology; competitors; inventions; employees

Follows from marketing strategy Identifies, defines, & selects best market

opportunities

29

Customer Requirements Stage Identifies & positions key

product benefits Stated in core benefits

proposition (CBP) Example: Long lasting

with more power (Sears’ Die Hard Battery)

Identifies detailed list of product attributes desired by customer Focus groups or

1-on-1 interviews

House of Quality

Customer Requirements

Product Characteristics

30

Functional Specification Stage Defines product in terms of how the product would meet

desired attributes Identifies product’s engineering characteristics

Example: printer noise (dB)

Prioritizes engineering characteristics May rate product compared to competitors’

House of Quality

Customer Requirements

Product Characteristics

31

Determines how product will be made Gives product’s physical specifications

Example: Dimensions, material etc.

Defined by engineering drawing

Done often on computer Computer-Aided

Design (CAD)

Product Specification Stage

House of Quality

ProductCharacteristics

Component Specifications

32

Quality Function Deployment

Product design process using cross-functional teams Marketing, engineering, manufacturing

Translates customer preferences into specific product characteristics

Involves creating 4 tabular ‘Matrices’ or ‘Houses’ Breakdown product design into increasing

levels of detail

33

You’ve been assigned temporarily to a QFD team. The goal of the team is to develop a new camera design. Build a House of Quality.

© 1984-1994 T/Maker Co.

House of Quality Example

34

House of Quality Example

High relationship Medium relationship Low Relationship

CustomerRequirements

CustomerImportance

Target Values

35

House of Quality Example

High relationship Medium relationship Low Relationship

Target Values

Light weightEasy to useReliable

What the customer desires (‘wall’)

AluminumParts

AutoFocus

AutoExposure

CustomerRequirements

CustomerImportance

36

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

37

House of Quality Example

High relationship Medium relationship Low Relationship

CustomerRequirements

CustomerImportance

Light weightEasy to useReliable

AluminumParts

AutoFocus

AutoExposure

321

Relationship between customer attributes & engineering characteristics (‘rooms’)

38

House of Quality Example

High relationship Medium relationship Low Relationship

CustomerRequirements

CustomerImportance

Target Values

Light weightEasy to useReliable

AluminumParts

AutoFocus

AutoExposure

321

5 1 1

Target values for engineering characteristics (‘basement’);

key output

39

House of Quality Example

High relationship Medium relationship Low Relationship

CustomerRequirements

CustomerImportance

Target Values

Light weightEasy to useReliable

AluminumParts

AutoFocus

AutoExposure

321

5 1 1

40

Organizing for Product Development

Historically – distinct departments Duties and responsibilities are defined Difficult to foster forward thinking

Today – team approach Representatives from all disciplines or

functions Concurrent engineering – cross functional

team

41

Manufacturability and Value Engineering

Benefits: reduced complexity of products additional standardization of products improved functional aspects of product improved job design and job safety improved maintainability of the product robust design

42

Cost Reduction of a Bracket via Value Engineering

43

Issues for Product Development

Robust design Time-based competition Modular design Computer-aided design Value analysis Environmentally friendly design

44

Robust Design

Product is designed so that small variations in production or assembly do not adversely affect the product

45

Modular Design

Products designed in easily segmented components.

Adds flexibility to both production and marketing

46

Designing products at a computer terminal or work station Design engineer

develops rough sketch of product

Uses computer to draw product

Often used with CAM© 1995 Corel Corp.

Computer Aided Design (CAD)

47

Shorter design time Database availability New capabilities

Example: Focus more on product ideas

Improved product quality Reduced production costs

Benefits of CAD/CAM

48

Design for Manufacturing and Assembly (DFMA) 3-D Object Modeling CAD/CAM – CAD info is translated into machine

control instructions (CAM)

© 1995 Corel Corp.

Extensions of CAD

49

Virtual Reality

Computer technology used to develop an interactive, 3-D model of a product.

Especially helpful in design of layouts (factory, store, home, office)

50

Value Analysis

Focuses on design improvement during production

Seeks improvements leading either to a better product or a product which can be more economically produced.

51

Environmentally Friendly Designs

Benefits Safe and environmentally sound products Minimum raw material and energy waste Product differentiation Environmental liability reduction Cost-effective compliance with

environmental regulations Recognition as good corporate citizen

52

“Green” Manufacturing

Make products recyclable Use recycled materials Use less harmful ingredients Use lighter components Use less energy Use less material

53

Time-based Competition

Product life cycles are becoming shorter.

Faster developers of new products gain on slower developers and obtain a competitive advantage

54

Product Development ContinuumExternal Development Strategies

Alliances Joint Ventures

Purchase Technology or Expertise by Acquiring the Developer

Internal Development StrategiesMigrations of Existing Products

Enhancement to Existing ProductsNew Internally Developed Products

Internal ----------------------Cost of Product Development --------------------- Shared

Lengthy --------------------Speed of Product Development---------------Rapid and/or Existing

High ------------------------- Risk of Product Development ----------------------- Shared

55

Engineering drawing Shows dimensions, tolerances, & materials Shows codes for Group Technology

Bill of Material Lists components, quantities & where used Shows product structure

© 1984-1994 T/Maker Co.

Product Documents

56

Monterey Jack(a) U.S. grade AA. Monterey cheese shall conform to the following requirements:

(1)Flavor. Is fine and highly pleasing, free from undesirable flavors and odors. May possess a very slight acid or feed flavor.

(2)Body and texture. A plug drawn from the cheese shall be reasonably firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not possess sweet holes, yeast holes, or other gas holes

(3)Color. Shall have a natural, uniform, bright and attractive appearance.

(4)Finish and appearance - bandaged and paraffin-dipped. The rind shall be sound, firm, and smooth providing a good protection to the cheese

Code of Federal Regulation, Parts 53 to 109,. Revised as of Jan. 1, 1985, General Service Administration

57

1-5/8

13/163/8

13/16

13/16diameter

13/32diameter

1/4 R

12-1/2

5/16

2-1/4

45°

BracketScale: FULL

Drawn: J. Thomas A- 435-038

1-5/8

13/163/8

13/16

13/16diameter

13/32diameter

1/4 R

12-1/2

5/16

2-1/4

45°

BracketScale: FULL

Drawn: J. Thomas A- 435-038

Engineering Drawing Example

58

Engineering Drawings - Show Dimensions, Tolerances, etc.

59

Bill of MaterialP/N: 1000 Name: Bicycle

P/N Desc Qty Units Level1001 Handle Bars 1 Each 11002 Frame Assy 1 Each 1

1003 Wheels 2 Each 2 1004 Frame 1 Each 2

Bill of MaterialP/N: 1000 Name: Bicycle

P/N Desc Qty Units Level1001 Handle Bars 1 Each 11002 Frame Assy 1 Each 1

1003 Wheels 2 Each 2 1004 Frame 1 Each 2

© 1995 Corel Corp.

Bill of Material Example

60

Bill of Material for a Panel Weldment Hard Rock Café’s Hickory BBQ Bacon Cheeseburger

Number Description Qty Description Qty

A60-71 Panel Weldm’t 1 BunHamburger PattyCheddar CheeseBaconBBQ OnionsHickory BBQ SauceBurger Set Lettuce Tomato Red Onion PickleFrench FriesSeasoned Salt11-inch PlateHRC Flag

18 oz.2 slices2 strips½ cup1 oz. 1 leaf1 slice4 rings1 slice5 oz.1 tsp11

A 60-7R 60-17R 60-428P 60-2

Lower Roller Assembly Roller Pin Locknet

1111

60-72R 60-57-1A 60-402-50-1150

Guide Assem. Rear Support Angle Roller Assem. Bolt

1111

A 60-73A 60-74R 60-9902-50-1150

Guide Assm, Front Support Weldm’t Wear Plate Bolt

1111

Bill of Materials – Manufacturing Plant and Fast-Food Restaurant

61

Make-or-Buy Decisions

Decide whether or not you want (or need) to produce an item

May be able to purchase the item as a “standard item” from another manufacturer

62

Parts grouped into families Similar, more standardized parts

Uses coding system Describes processing & physical

characteristics

Part families produced in manufacturing cells Mini-assembly lines

© 1984-1994 T/Maker Co.

Group Technology Characteristics

63

112mm112mm

60mm60mm

4mm x 45° chamfer4mm x 45° chamfer

80mm80mm Product Code: 1 5 3 1

Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe)

Round Rod

Group Technology Code Example

64

Group Technology Schemes Enable Grouping of Parts

65

Improved product design Reduced purchases Reduced work-in-process inventory Improved routing & machine loading Reduced setup & production times Simplified production planning & control Simplified maintenance

Group Technology Benefits

66

Production Documents

Assembly Drawing Assembly chart Route sheet Work order

67

Shows exploded view of product

Head Neck

Handle

End Cap

Assembly Drawing

68

1

2

3

SA1 A1

A2

Tuna Fish

Mayonnaise

Bread

TunaAssy

FG

Sandwich

Assembly Chart for A Tuna Sandwich

69

Assembly Drawing and Assembly Chart

70

Route Sheet

Lists all operationsRoute Sheet for Bracket

Sequence Machine Operation SetupTime

OperationTime/Unit

1 Shear # 3 Shear tolength

5 .030

2 Shear # 3 Shear 45°corners

8 .050

3 Drillpress

Drill bothholes

15 3.000

4 Brakepress

Bend 90° 10 .025

Route Sheet for BracketSequence Machine Operation Setup

TimeOperationTime/Unit

1 Shear # 3 Shear tolength

5 .030

2 Shear # 3 Shear 45°corners

8 .050

3 Drillpress

Drill bothholes

15 3.000

4 Brakepress

Bend 90° 10 .025

71

Work Order

Dept Oper DateWork Order

Approved: JM

Manufacturing

Authorizes producing a given item, usually to a schedule

72

Engineering Change Notice (ECN)

A correction or modification of an engineering drawing or bill of material

73

Configuration Management

A system by which a product’s planned and changing components are accurately identified and for which control and accountability of change are maintained

74

Service Design - Nature of Customer Participation

75

Improving Customer Relations at a Drive-up Window

Be especially discreet when talking with customer through the

microphone

Provide written instructions for customers who must fill out forms you

provide

Mark lines to be completed or attach a note with instructions

Always say ”please” and “thank you”

Establish eye contact with the customer if the distance allows it

If the transaction requires that the customer park the car and come into

the lobby, apologize for the inconvenience.

76

Moment-of-Truth at a Computer Company

Experience Detractors

I had to call more than once to get through.

A recording spoke to me rather than a person

While on hold, I get silence,and wonder if I am disconnected.

The operator sounded like he was reading a form of routine questions.

The operator sounded uninterested

I felt the operator rushed me.

Standard Expectations

Only one local number needs to be dialed

I never get a busy signal

I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem

A timely resolution to my problem is offered

The operator is able to explain to me what I can expect to take place

Experience Enhancers

The operator was sincerely concerned and apologetic about my problem

He asked intelligent questions that allowed me to feel confident in his abilities

The operator offered various times to have work done, to suit my schedule

Ways to avoid future problems were suggested

77

Application of Decision Trees to Product Design

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

Considerations: Include all possible alternatives and states of nature -

including “doing nothing” Enter payoffs at end of branch Approach determining expected values by “pruning”

tree

78

Transition to Production First issue: knowing when to move to production! Second: must view product development as evolutionary,

not responsibility of single individual/department Third: expect to need a trial production period to work the

bugs out Fourth: recognize that responsibility must also transition