Lecture # 5:Lecture # 5:

PRODUCT & SERVICE DESIGNPRODUCT & SERVICE DESIGN

Humayun Akhtar Humayun Akhtar AwanAwan

OPERATIONS MANAGEMENTOPERATIONS MANAGEMENT

GOODS & SERVICES GOODS & SERVICES SELECTIONSELECTION

It is based on:It is based on:DifferentiationDifferentiationLower PriceLower PriceRapid ResponseRapid Response

GENERATION OF NEW GENERATION OF NEW PRODUCT OPPORTUNITIESPRODUCT OPPORTUNITIES

Five factors influencing Five factors influencing opportunities:opportunities:Economic ChangeEconomic ChangeSociological & Demographic ChangeSociological & Demographic ChangeTechnological ChangeTechnological ChangePolitical / Legal ChangePolitical / Legal ChangeOther ChangesOther Changes

PRODUCT LIFE CYCLESPRODUCT LIFE CYCLES

Four Phases:Four Phases: IncubationIncubation GrowthGrowth MaturityMaturity SaturationSaturation DeclineDecline

Duration of Life Cycles:Duration of Life Cycles: Few Hours (Newspapers)Few Hours (Newspapers) Months (Seasonal Fashions)Months (Seasonal Fashions) Years (VCRs)Years (VCRs) Decades (Volkswagen Beetle)Decades (Volkswagen Beetle)

PRODUCT LIFE CYCLEPRODUCT LIFE CYCLE

Time

Incubation

Growth

Maturity

Saturation

Decline

Dem

and

LIFE CYCLE & STRATEGYLIFE CYCLE & STRATEGY

Strategy Options as products move Strategy Options as products move through their life cycles:through their life cycles:

Introductory PhaseIntroductory Phase

Growth PhaseGrowth Phase

Maturity PhaseMaturity Phase

Saturation phaseSaturation phase

Decline PhaseDecline Phase

INTRODUCTORY PHASEINTRODUCTORY PHASE

Still undergoing “fine tuning”Still undergoing “fine tuning” Expenses like:Expenses like:

ResearchResearchProduct DevelopmentProduct DevelopmentProcess Modification & EnhancementProcess Modification & EnhancementSupplier DevelopmentSupplier DevelopmentExamples: Mobile Phones, ComputersExamples: Mobile Phones, Computers

GROWTH PHASEGROWTH PHASE

Product Design begins to stabilizeProduct Design begins to stabilize

Effective Forecasting for matching Effective Forecasting for matching capacity with demand becomes capacity with demand becomes necessarynecessary

MATURITY PHASEMATURITY PHASE

Product is matureProduct is mature Competitors establishedCompetitors established High volume, innovative production High volume, innovative production

requiredrequired Cost Control, Design Freeze Cost Control, Design Freeze

importantimportant

SATURATION PHASESATURATION PHASE

Product is in abundance in the Product is in abundance in the marketmarket

More production, less demandMore production, less demand Improvement and value addition Improvement and value addition

required to maintain demandrequired to maintain demand

DECLINE PHASEDECLINE PHASE

Dying Products may be stoppedDying Products may be stopped Resources & managerial talent is Resources & managerial talent is

wasted in producing themwasted in producing them Unless dying products make some Unless dying products make some

unique contribution to the firm’s unique contribution to the firm’s reputation, their production should reputation, their production should be terminated.be terminated.

PRODUCT-BY-VALUE PRODUCT-BY-VALUE ANALYSISANALYSIS

Pareto Principle applied to product Pareto Principle applied to product mixmix““Focus on the critical few, not the trivial Focus on the critical few, not the trivial

many”many” Product-by-Value is a listing of Product-by-Value is a listing of

products in descending order of their products in descending order of their individual monetary contribution to individual monetary contribution to the firm, as well as annual monetary the firm, as well as annual monetary contribution of the productcontribution of the product

PRODUCT DEVELOPMENTPRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT PRODUCT DEVELOPMENT SYSTEMSYSTEM

Cash for product developmentCash for product development Understanding market changes Understanding market changes

constantlyconstantly Possession of necessary talents and Possession of necessary talents and

resourcesresources PD System not only determines PD System not only determines

product success but also the firm’s product success but also the firm’s future future

STAGES OF STAGES OF PRODUCT PRODUCT

DEVELOPMENTDEVELOPMENT

IDEASIDEAS

ORGs ABILITYORGs ABILITY

CUSTOMERCUSTOMERREQUIREMENTSREQUIREMENTS

FUNCTIONAL SPECSFUNCTIONAL SPECS

PRODUCT PRODUCT SPECIFICATIONSSPECIFICATIONS

DESIGN REVIEWDESIGN REVIEW

TEST MARKETTEST MARKET

INTRODUCTIONINTRODUCTION

EVALUATIONEVALUATION

Scope of productScope of productDev. teamDev. team

Scope for Design Scope for Design & Engg. teams& Engg. teams

QUALITY FUNCTION QUALITY FUNCTION DEPLOYMENTDEPLOYMENT

Determining what will satisfy the customerDetermining what will satisfy the customer Translating Customer desires into the target Translating Customer desires into the target

designdesign Used early in the design processUsed early in the design process One tool is House of Quality: Relationship One tool is House of Quality: Relationship

between customer desires and product or service.between customer desires and product or service. Six Steps for building HOQ:Six Steps for building HOQ:

Identify Customer wantsIdentify Customer wants Identify how product will satisfy customerIdentify how product will satisfy customer Relate customer wants to product howsRelate customer wants to product hows Identify relation between firm’s howsIdentify relation between firm’s hows Develop Important RatingsDevelop Important Ratings Evaluate competing productsEvaluate competing products

HOUSE OF QUALITYHOUSE OF QUALITY

Correlation matrix

Designrequirements

Customerrequire-ments

Competitiveassessment

Relationshipmatrix

Specificationsor

target values

HOQ EXAMPLEHOQ EXAMPLE

Customer Requirements

Importance to Cust.Easy to close

Stays open on a hill

Easy to open

Doesn’t leak in rain

No road noise

Importance weighting

Engineering Characteristics

Ene

rgy

need

ed

to c

lose

doo

r

Che

ck f

orce

on

leve

l gr

ound

Ene

rgy

need

ed

to o

pen

door

Wat

er r

esis

tanc

e

10 6 6 9 2 3

7

5

3

3

2

X

X

X

X

X

Correlation:Strong positivePositiveNegativeStrong negative

X*Competitive evaluation

X = UsA = Comp. AB = Comp. B(5 is best)

1 2 3 4 5

X AB

X AB

XAB

A X B

X A B

Relationships:Strong = 9Medium = 3Small = 1Target values

Red

uce

ener

gy

leve

l to

7.5

ft/lb

Red

uce

forc

eto

9 lb

.

Red

uce

ener

gy to

7.5

ft/l

b.

Mai

ntai

ncu

rren

t lev

el

Technical evaluation(5 is best)

54321

B

A

X

BAX B

AX

BXA

BXABA

X

Doo

r se

al

resi

stan

ce

Acc

oust

. Tra

ns.

Win

dow

Mai

ntai

ncu

rren

t lev

el

Mai

ntai

ncu

rren

t lev

el

THE KANO MODELTHE KANO MODELKano Model

Customer Needs

Cu

sto

mer

Sat

isfa

ctio

n

Excitement

Expected

Must Have

ORGANIZING FOR PRODUCT ORGANIZING FOR PRODUCT DEVELOPMENTDEVELOPMENT

Traditional US Approach:Traditional US Approach:Distinct departments; fixed duties and Distinct departments; fixed duties and responsibilities; but lack of forward responsibilities; but lack of forward thinkingthinking

Second Approach:Second Approach:Product Manager; Champion the product Product Manager; Champion the product through all phasesthrough all phases

Third Approach: Third Approach: TeamsTeams Product Development TeamsProduct Development Teams Value Engineering TeamsValue Engineering Teams

PRODUCT DEVELOPMENT PRODUCT DEVELOPMENT TEAMSTEAMS

Charged with the responsibility of Charged with the responsibility of moving from market requirements to moving from market requirements to achieving a product successachieving a product success

Representation from all related / Representation from all related / affected deptts.affected deptts.

Also called Concurrent EngineeringAlso called Concurrent Engineering Reverse engineeringReverse engineering

MANUFACTURABILITY & MANUFACTURABILITY & VALUE ENGINEERINGVALUE ENGINEERING

Activities that help improve a Activities that help improve a product’s design, production, product’s design, production, maintainability and usemaintainability and use

The designers’ consideration of the The designers’ consideration of the organization’s manufacturing organization’s manufacturing capabilities when designing a capabilities when designing a product.product.

The more general term The more general term design for design for operationsoperations encompasses services as encompasses services as well as manufacturingwell as manufacturing

““OVER THE WALL” OVER THE WALL” APPROACHAPPROACH

DesignManufacturing

New Product

ISSUES FOR PRODUCT ISSUES FOR PRODUCT DESIGNDESIGN

Robust Design:Robust Design: Product can be produced to specs. Product can be produced to specs. even with unfavourable conditions in the prod. even with unfavourable conditions in the prod. Process.Process.

Modular Design:Modular Design: Parts or components are divided into Parts or components are divided into modules that are easily interchanged or replaced.modules that are easily interchanged or replaced.

Computer Aided Design (CAD):Computer Aided Design (CAD): Use of computer to Use of computer to develop, design and document products.develop, design and document products.

Value Analysis:Value Analysis: Improvements during production Improvements during production process that lead to a better product or a product process that lead to a better product or a product more economically producedmore economically produced

Environmentally Friendly Designs:Environmentally Friendly Designs: Minimizing waste Minimizing waste of raw materials and resources, products have of raw materials and resources, products have minimal effect on environment, re-cyclability, less minimal effect on environment, re-cyclability, less harmful ingredients, less energyharmful ingredients, less energy

TIME BASED TIME BASED COMPETITIONCOMPETITION

Competition based on time; rapidly Competition based on time; rapidly developing products and moving them to developing products and moving them to the marketthe market

External Development StrategiesExternal Development Strategies AlliancesAlliances Joint VenturesJoint Ventures Purchase of Tech. by acquiring a developerPurchase of Tech. by acquiring a developer

Internal Development StrategiesInternal Development Strategies Newly developed productsNewly developed products Migrations of existing productsMigrations of existing products Enhancements to existing productsEnhancements to existing products

DEFINING THE PRODUCTDEFINING THE PRODUCT

Functions of productFunctions of product Designing of productDesigning of product Design for productionDesign for production Engg. DrawingEngg. Drawing BOM (Bill of Materials)BOM (Bill of Materials) Make or Buy decisionsMake or Buy decisions Group technologyGroup technology

DOCUMENTS FOR DOCUMENTS FOR PRODUCTIONPRODUCTION

Assembly Drawing:Assembly Drawing: Exploded View Exploded View Assembly Chart:Assembly Chart: Schematic assembly Schematic assembly Route Sheet:Route Sheet: List of operations List of operations Work Order:Work Order: Instruction for Instruction for

productionproduction Engg. Change Notices:Engg. Change Notices: Changes Changes Configuration Management:Configuration Management: Tracking Tracking

/ Identification/ Identification

THANK THANK YOUYOU