Product Development

Summer 2013

Increasing Importance of

Product Development Increasing Importance of

Product Development 1. Customers demand greater product variety.

2. Customers are causing shorter product life cycles.

3. Improving technology is causing new products to be introduced

4. The impact of increasing product variety and shortening product life cycles is having a multiplicative effect on the need for product development.

5. Today, in order to be competitive, the firm may have to produce many different products with a life cycle of only five years or less. End of Life issues

Product Design

Specifies materialsDetermines dimensions &

tolerancesDefines appearanceSets performance standards

Service DesignSpecifies what the customer is to

experience Physical items Sensual benefits Psychological benefits

An Effective Design Process

Matches product/service characteristics with customer needs

Meets customer requirements in simplest, most cost-effective manner

Reduces time to market - haste vs. speed to market

Minimizes revisions - quality designed into the product

Stages in the Design Process Idea Generation — Product Concept - can you

create your own market? What role does the voice of the customer play in idea generation?

Feasibility Study — Performance Specifications Preliminary Design — Prototype - testing and

redesign Final Design — Final Design Specifications Process Planning — Manufacturing

Specifications - make to order/stock – assembly line?

Idea Generation

Suppliers, distributors, salespersons Trade journals and other published material Warranty claims, customer complaints,

failures Customer surveys, focus groups, interviews Field testing, trial users Research and development

More Idea Generators Perceptual Maps

Visual comparison of customer perceptions

BenchmarkingComparing product/service

against best-in-class Reverse engineering

Dismantling competitor’s product to improve your own product

Perceptual Map of Breakfast Cereals

HIGH HIGH NUTRITIONNUTRITION

LOW LOW NUTRITIONNUTRITION

GOOD GOOD TASTETASTE

BAD BAD TASTETASTE

© Russell and Taylor, Prentice Hall, 2004

Perceptual Map of Breakfast Cereals

HIGH HIGH NUTRITIONNUTRITION

LOW LOW NUTRITIONNUTRITION

GOOD GOOD TASTETASTE

Cocoa PuffsCocoa Puffs

BAD BAD TASTETASTE

Rice Rice KrispiesKrispies

WheatiesWheaties

CheeriosCheerios

Shredded Shredded WheatWheat

© Russell and Taylor, Prentice Hall, 2004

Perceptual Map of Breakfast Cereals

HIGH HIGH NUTRITIONNUTRITION

LOW LOW NUTRITIONNUTRITION

GOOD GOOD TASTETASTE

Cocoa PuffsCocoa Puffs

BAD BAD TASTETASTE

Rice Rice KrispiesKrispies

WheatiesWheaties

CheeriosCheerios

Shredded Shredded WheatWheat

How do I get here?

Feasibility Study

Market Analysis - Market Segmentation

Economic Analysis Technical / Strategic Analysis Performance Specifications Risk Analysis

Economic Analysis

• Can we produce it at a volume to make a profit?

• If not, why produce?• How many do we have to make to break

even?

Break Even AnalysisTotal Costs = Total Revenues

(Volume x Price) = (Fixed Costs + Variable Costs)

Profit = (Total Revenue – Total Costs)

Fixed Costs

Sales Price – Variable CostsB/E Point =

Example

Fixed Costs = $2000

Variable Costs = $5/item

Sales Price = $10/item

Fixed Costs ($2000)

Sales Price ($10) – Variable Costs ($5)

B/E PT =

B/E point = ($2000/$5) 400 items

Risk Analysis

1. Identify the Hazards2.Assess hazards to determine risks.3.Develop controls and make risk decisions.4.Implement controls.5.Supervise and evaluate.

Preliminary Design

Create form & functional designBuild prototypeTest prototypeRevise prototypeRetest

How will it look?

Functional Design(How the Product Performs)

Reliability Probability product performs intended

function for specified length of time

Maintainability Ease and/or cost or maintaining/repairing

product

System Availability

System Availability, SA = MTBFMTBFMTBF + MTTRMTBF + MTTR

PROVIDERPROVIDER MTBF (HR)MTBF (HR) MTTR (HR)MTTR (HR)

AA 6060 4.04.0BB 3636 2.02.0CC 2424 1.01.0

System AvailabilityPROVIDER MTBF (HR) MTTR (HR)

A 60 4.0B 36 2.0C 24 1.0

SASAAA = 60 / (60 + 4) = .9375 or 93.75% = 60 / (60 + 4) = .9375 or 93.75%

SASABB = 36 / (36 + 2) = .9473 or 94.73% = 36 / (36 + 2) = .9473 or 94.73%

SASACC = 24 / (24 + 1) = .96 or 96% = 24 / (24 + 1) = .96 or 96%

Production Design

Part of the preliminary design phase

Simplification Standardization Modularity

Final Design & Process Plans

Produce detailed drawings & specificationsCreate workable instructions for

manufactureSelect tooling & equipmentPrepare job descriptionsDetermine operation & assembly orderProgram automated machines

Improving the Design Process Design teams Concurrent design Design for manufacture & assembly Design to prevent failures and ensure value Design for environment Measure design quality Utilize quality function deployment Design for robustness Engage in collaborative design

Design Teams

Marketing, manufacturing, engineeringSuppliers, dealers, customersLawyers, accountants, insurance

companies

Preferred solution = cross functional teams

Concurrent Design

Improves quality of early design decisionsDecentralized - suppliers complete

detailed design Incorporates production processScheduling and management can be

complex as tasks are done in parallel include the customer in the process!!

Design for Manufacture and Assembly

Design a product for easy& economical production

Incorporate production design early in the design phase

Improves quality and reduces costs Shortens time to design and manufacturealso known as Design for Six Sigma

Design for Six Sigma• Define – the goals of the design activity• Measure – customer input to determine what is

critical to quality from the customers’ perspective – what are customer delighters? What aspects are critical to quality?

• Analyze – innovative concepts for products and services to create value for the customer

• Design – new processes, products, and services to deliver customer value

• Verify – new systems perform as expected

DFM Guidelines

1. Minimize the number of parts, tools, fasteners, and assemblies

2. Use standard parts and repeatable processes

3. Modular design4. Design for ease of assembly, minimal

handling5. Allow for efficient testing and parts

replacement

Design for Assembly (DFA)Procedure for reducing number of partsEvaluate methods for assemblyDetermine assembly sequence

Design Review

Failure Mode and Effects Analysis (FMEA)A systematic approach for analyzing causes

& effects of failuresPrioritizes failuresAttempts to eliminate causes

Value Analysis (Value Engineering)

Ratio of value / cost Assessment of value :

1. Can we do without it?2. Does it do more than is required?3. Does it cost more than it is worth?4. Can something else do a better job5. Can it be made by less costly method, tools,

material?6. Can it be made cheaper, better or faster by

someone else? Should we contract it out?

Is there value added?

Design for EnvironmentDesign from recycled materialUse materials which can be recycledDesign for ease of repairMinimize packagingMinimize material & energy

used during manufacture, consumption & disposal

green laws in Europe -

Design for Robustness

Product can fail due to poor design quality Products subjected to many conditions Robust design studies

Controllable factors - under designer’s control

Uncontrollable factors - from user or environment

Designs products for consistent performance

A Well-Designed Service System is

Consistent with firm’s strategic focusCustomer friendlyEasy to sustainEffectively linked between front & back

officeCost effectiveVisible to customer

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Process Design Process Design

Process Selection affects the outcome – in production or sports:

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What is Process Selection?

• Series of decisions that includes technical/engineering issues and volume/scale issues

• Technical/engineering: basic methods that produce a good or service

• Scale: how many or how much to produce; how many to serve at a time

• Trade off analysis between capacity and costs

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Why process selection is critical

• Dell – from make/assemble to order in Texas to make/assemble to stock off shore

• Does this work?• Break even analysis may depend on process

costs• Which process gives the lowest costs –

assumption?

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Trade off analysis

• Customer demanded quantity drives the trade off analysis and decision process

• Example:→ retail stocks at Christmas 2008 and 2009 season - goal save money by stocking less→ At what point do you lose sales due to lower stockage levels?

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Process Design/Selection/Capacity

• Have to be simultaneous operations – some texts suggest sequential steps

• Decision process has to be customer based → what should it be? → how many should be produced/how many

are we capable of producing? → how should it be produced?

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Process Strategy - Defines

• Capital intensity• Process flexibility• Vertical integration• Customer involvement

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Goal of Process Design

• Reduce lead time for product to the customer• Is it best to be the first to market and establish

the market?• Or, be the follower and let someone else do

the R&D/design/risk?

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Process Planning

Make-or-buy decisions Process selection Specific equipment selection Process plans Process analysis

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Make-or-Buy Decisions

1. Cost2. Capacity3. Quality4. Speed5. Reliability6. Expertise

What about

Proprietary Information?

Barrier to Make-or-Buy?

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Process Plans Blueprints Bill of material Flat or multiple layers -

part or assembly Assembly chart /

product structure diagram Operations process chart - list of

operations involved in assembly Routing sheet - sequence of events

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Process Analysis

The systematic examination of all aspects The systematic examination of all aspects of a process to improve its operationof a process to improve its operation FasterFaster More efficientMore efficient Less costlyLess costly More responsiveMore responsive

Basic toolsBasic tools Process flowchartProcess flowchart Process diagramsProcess diagrams Process mapsProcess maps

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Operations Process Chart

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Process Analysis – What processes feed other processes?

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Process Flowchart

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Principles for Redesigning Processes

• Walk the Process!• Remove waste, simplify, consolidate• Link processes to create value• Let the swiftest and most capable

execute• Capture information digitally, data mine,

and use information to improve operations

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Principles for Redesigning Processes

• Provide visibility through information about process status

• Fit the process with sensors and feedback loops

• Add analytic capabilities• Connect, collect and create knowledge

around the process• Personalize the process

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Techniques for Generating Innovative Ideas

Vary entry point to a problem Draw analogies Change your perspective Use attribute brainstorming

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RFID

• Active Tags• Always on • Battery powered• Can be read from up to

300 ft• US Army • Savi Tags

• Passive Tags• Small• Must be activated• May be turned off• England• California• Rolex

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Robotics Programmable manipulators Follow specified path Better than humans with respect to

Hostile environments Long hoursConsistency

Adoption has been slowed by ineffective integration and adaptation of systems

Welding at Harley Davidson Plant

Questions?