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Product: A product is anything that is capable of satisfying
A felt need. A new product is the one which is truly innovative
and is significantly different from other existing products.
The development of a new product passess through SEVEN
stages.
NEW PRODUCT DESIGN/ PRODUCT
DEVELOPMENT PRCESS
Needsidentification
AdvanceProduct planning
Advancedesign
Detailed engineeringdesign
Prodn. ProcessDesign and
development
Product evaluation
& improvement
Product use
& support
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1. Needs Identification:Needs identification must be preceded by idea generation. New
product
Development starts with an idea. Idea emanates from
CustomersTop Management Staff of the marketing department Production deptt.
Engineering section2. Advance Product Planning or feasibility study:At this stage conceptual design of the product shall emerge. For
Example the Conceptual design for a pen would articulate its
length, Weight, strength, shape, colour, retail price and so on.in the market.
Concept design is finalised by the production and operation
Personnel, joining together.
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It includes:
preliminary market analysis ( sales projections)Crating alternative concepts for the product
Clarifying operational requirementsEstablishing design criteria and their prioritiesEstimating logisticsDistributing and maintaining the product
3. Advance Design
It involves detailed investigation by basic and applied researchers
Into technical feasibility and also identifying the trade-offs in
Product design.
4. Detailed Engineering Design
It involves a seroes pf emgomeeromg actovotoes tp develop a
Detailed definition of the product including its subsystems and
Components, materials, sizes and so on.
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The engineering process involves analysis, experimentation and
Data collection to find design that meet several design objectives:
design for function
design for reliability design for maintained (economically maintained) design for safety design for producibility (produced at the intended cost & volu
9. Production Process Design and DevelopmentIn this stage it is not only plans for material acquisition, production
Warehousing,transportation and distribution but also it involves
Planning for other supporting systems such as controls, informatio
And human resources.
6. Production Evaluation & ImprovementAfter the product has been launched, it needs constant evaluation
And improvement.
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7. Product use and SupportIn this stage it considers support for consumers who use the
Product. Support system might
Educate users on specific application of the product Provide warranty and repair services Distribute replacement parts or Upgrade the product with design improvements
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Since every product passes through a life cycle and the life cycle
Can have a direct bearing on a companys survival.
Product Life Cycle:Product life cycle is the pattern of demand throughout the
Products life ( over time).
(similar patterns and stages can identified for the useful life
of a process)
The life cycle of a product consists of four stages:
Introduction Growth
Maturity and Decline
The life cycle curve shows all the above stages are shown below:
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Demand/Sales volume(Rs.)
O lossTime in Year
Profit
Introduction
Growth
Maturity
Decline
Fig. Characteristic of the Product Life Cycle
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Low/noneDecliningannually
Strong,then
At a peak
NoneProfits
DeclineSlow, noannualgrowth
Raidgrowth
Low levels,
Then rising
Sales
DecreasingIntenseIncreasingLitter, if anyCompetition
Loyalcustomers
Massmarket
Massmarket
InnovatorsCharacteristicsof Customers
DeclineMaturityGrowthIntroduction
Table: Characteristics of Stage in Product Life Cycle
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PROCESS DESIGN
Process design means the complete delineation and description
of specific steps in the production process and the linkages among
the steps that will enable the production system to produce
products of the desired quality, in the required quantity, at the
time, customers want them and at the budgeted cost.
Process design is necessary to manufacture new products.
Process planning is intense because-
Business or market conditions change Technologically superior machines become available or As other changes occur
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Interrelationship of Product Design and Process
Design
Product Ideas
Feasibility Studies
Product Design Process Design
Advanced Product PlanningAdvance DesignProduction Process Design
& DevelopmentProduct Evaluation &
ImprovementProduct Use and Support
Organising the process flowsRelation of process design
to process flowEvaluating the process
design
Continuous interaction
Produce and market new products
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PRODUCT RELIABILITY
Product reliability as the probability that the product will
perform as intended for a prescribed lifetime under specifiedoperating conditions.
Reliability is the first, ahead of comfort, price, style and many
other product features.
Unreliability is reflected in the products failure rate. This is
shown in the following curve.
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Reliability Engineering determines the least height (failure rate)
and greatest length (useful performance life) for each new product
based on
Financial Technical and Consumer considerations
What reliability is required of each subcomponent to achieve theoverall product reliability ?
Which subcomponents should be used to most economically
meet this required reliability ?
The above two questions are quite relevant because often a final
product does not perform properly unless all of its subcomponents
function correctly.
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Therefore, the reliabilities of individual subcomponents mustbe greater than the reliability desired for the final product.
Product reliability is usually expressed in terms of a probability.Once reliability has been achieved subcomponents can be selectedon the basis of economic considerations.
Useful performance life Wear-out failuresInitialUsefailures
Failurerate
Fig. Product Failure curve
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Process Technology/Manufacturing Process TechnologyNew Products are not physical realities until they are
manufactured.
Process Technology(PT):
PT refers to the equipment, people, and systems used to produce
a firms products and services
Process technology decisions relate to
Organizing the process flows, Appropriate product-process mix,
To meet strategic requirements, and Evaluating automation and high technology process.
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Types of Process Technology
ProcessTechnology
Project
Technology
Job shop
Batch
Assembly line
Continuous
Manufacturing
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Project Technology:A process technology suitable for producing one-of-a-kind (unique
products.
e.g. General construction company (Flat for the consumers),
Construction of bridges, roads, dams etc.
Since the products cannot be standardized the conversion processmust be flexible in its equipment capabilities, human skills, and
procedures.
Conversion Process features
Problem solving Teamwork and co-ordinated design and Production of unique products
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Job shop Technology:A process technology suitable for a variety of custom designed
products in small volumes.
(It is appropriate for manufacturers of small batches of manydifferent products)
e.g. Jobs done by a Printing Shop, Hospital, Machine shop,
furniture company etc.
Batch Technology:
A process technology suitable for a variety of products in varying
volumes.
For the batch facilities the system must be flexible for the
low-volume/high variety products but the higher volume productscan be process differently.
e.g. Producing some batches for stocking rather than for
customer order.
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Assembly Line:A process technology suitable for a narrow range of standardized
products in high volumes.
e.g. Laundry Appliances
Continuous Flow Technology:
A process technology suitable for producing a continuous flow of
products.
Material and products are produced in continuous, endless flow,rather than in batches or discrete units.
Products is highly standardised It affords high-volume, around the clock operation with
capital-intensive
Specialised automation.e.g. Postal Services, Telephone company, Oil Refinery etc.
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So there are 36 (3x2x2x3) different computer systems from whichto choose.The modular design concept gives consumers a range of product
options and and advantages in manufacturing and product design.Now, rather than storing inventories of all 36 fininshed computersystems, only some of which will be needed we insteasd store just
the subsystems or modules.Thus, when a particular computer system is demanded the producercan focus on quickly retrieving and assembling the appropriatemodules into the desired configuratios and avoid the high costsof idle finished goods inventories.
Material planning and inventory control can be simplified
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PROCESS TECHNOLOGY LIFE CYCLE
Process technology life cycle are related product life cycles.
Over a period of time, manufacturing cost per unit diminishes in
mature products.
Product life cycle starts from the stage of start up and ends in the
stage of decline.
The through-put volume, rates of process innovation and degree
of automation will change from the stage of start-up to the stage
of decline.
Through-put volumes and automation are low at start-up and
high during the maturity stage.
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Assembly line
Continuousflow
Batch
JobshopManufacturing
Cost/unit
Time
Fig. Process Life Cycle
P d P Mi
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Product Process Mix
With changes in products, market requirements and competitions,the equipments, processes and human resources also will change.
If the process changes are not carried out to accommodate process life
cycles, products and processes become incompatible, resulting incompetitive disadvantages.
P d t P Mi
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4. Commodity,
high volume, highstandardisation ofproducts
3.Maturity, fewmajor products,high volume
2. Rapid growth,
low volume,multiple products
1.low volume
& lowstandardisation
Process life
Cycle stages
4. Continuousflow prodn.
3. Assemblyline prodn.
2. Batchprodn.
1.Job shopprodn.
Product Process Mix
Product Life Cycle stages
A
B
C
D
Feasible zone
Void
Void
A Commercial printer, B Heavy machineryC Automobile assembly, D Sugar Mill
h l d
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Process Technology Trends
Flexible Manufacturing Systems (FMS)
FMS is a computer controlled process technology suitable forProducing a moderate variety of products in moderate volumesWith high quality.
e.g. once the machine has finished one batch, th computer signalsThe next quantity or component and the machine automaticallyRepositions and retools accordingly. Meanwhile the just-finishedBatch is automatically transferred to the next work station in itsRouting.
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Characteristics of an FMS Produce a moderate variety of products in modest volumes with
high quality Reduces operating costs Lower direct labor costs Lower manufacturing costs
The benefits are not free. An FMS requires very large capital
Investments in equipment, planning and control systems and humanResources.
An FMS is appropriate when:
13. All products are variation of a stable basic design14. All products utilize the same family of components15. The number of components is only moderate (10 to 50)16. The volume of each component is moderate (1,000 to 30,000 units
but in lot sizes as small as one unit
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Goal of an FMS
The goal is to produce a moderate variety of products in moderate,
Flexible quantities.
An FMS is more flexible than conventional high-volume productionSystem but less flexible than a job shop that specialises in
one-of-a-kind products.
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Computer-integrated manufacturing functions
Manufacturingdatabase
InformationMgmt.
ManufacturingEngg.
Engg. design
Factory
Prodn.
Computer-AidedManufacturing
Group
Technology
ProcessPlanning
Robotics
Physical Drafting Computer-aidedsystems design
designDatabaseMgmt.
Prodn.Planning& control
Mgmt.InformationSystem
Decision
Supportsystem
Automated Quality Robotics Distributed RoutineMaterial Assurance & machines numerical Manufacturing
Handling tools control
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Computer Integrated Manufacturing (CIM)
CIM is a computer information systems utilizing a shared
manufacturing database for engineering design, manufacturing,engineering, factory production, and information management.
CIM centers around a shared database for four primarymanufacturing functions: Engineering design Manufacturing design Factory production and Information Management
The database stores all product and process related informationrequired to produce a component or product. It containsinformation about machine, tools, materials, manufacturing
stepsquantities demanded, due dates and vendors.
C Aid d D i (CAD)
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Computer-Aided Design (CAD)
CAD is a computer software programs that allow a designer to carry outGeometric transformations rapidly.
CAD uses computational and graphics software and has substantiallyenhanced design productivity.
Alternative designs can be posed and evaluated more quickly.
Once a design is satisfactory it is stored in the database and can betransmitted electronically to manufacturing engineering, production
and purchasing.
What does CAD accomplish ?Drafting productivity improves by a factor of three or more andEngineering lead time shrinks.
C t id d M f t i (CAM)
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Computer-aided Manufacturing (CAM)
CAM is a manufacturing systems utilising computer software progr
That control of the actual machine on the shop floor.
The computer programs can be stored in the manufacturing databas
Retrieved, updated, and revised as components are added or redesig
And transmitted electronically in-house or externally by satellite to
other divisions and facilities.
Benefits of CAM
More reliable than the skilled operator
product quality is more consistent closer tolerance low labor cost less time is required
Too much CAM can be costly as suggested by Aerospace manufactuDue to error in com uter ro ram.
Gro p Technolog
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Group Technology
GT is way of organising and using data for components that haveSimilar properties and manufacturing requirements.
Characteristics such as Length, Diameter, type of material andDensity are recorded for each component in the manufacturing system.The computer then sort for all similar components.
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Design of Services and Service Processes
Today the idea is that everything sold falls somewhere on the
continuum or service/product dominance.
To be competitive organisation have to organise differences
in the product/service elements of their market offerings and
develop process technologies accordingly.
Design of Services
Design of services involves the same stages as the design of
Products.
Differences between Product and Service DesignServices that do not include a physical component do not require
the Engg., Testing, components analyses, the process technology
involves different issues and considerations than those of
products
N i
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Salt
Dog food
HouseAutomobiles
Fast food shop
Television
Air-travel
TheaterNursing
ProductDominantentities
Service dominant
entities
Balanced entityEqually weightedBetween productAnd services
Fig. Scale of service Vs. product dominance
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Services Process Technologies
Process technologies for services are at least as diverse, and perhaps
More so, than product process technologies. Services vary in theamount of customer contact and in the intensiveness of labor Vs.Capital. Service process technologies vary accordingly.
Trends in Service AutomationOffice automation (OA) is a computer based system for managinginformation resources.Word processing, generating reports, and handling data may all be
part of OA.e.g. automated banking, electronic grocery scanners, and the like.
Val e Engineering/ Val e Anal sis
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Value Engineering/ Value Analysis
It is one of the techniques of cost reduction and cost prevention.It ensures the necessary function at minimum cost withoutcompromising on quality, reliability, performance and appearance.
The system which developed as a result of a project led by L.D.Milesof the GEC of the U.S.in the year 1947, after five years of work and
an expenditure of $3 millions and which aimed at finding the mosteffective method of improving the value of the product is known asValue Analysis (VA).
e.g. use of asbestos required for flooring
In 1954, the US Navy Bureau of ships applied VA to cost improve-ment during the design stage and termed it as Value Engineering (VE).
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In India, the Indian Value Engineering Society (INVEST) was formedin 1977. Now it is applied in both public and private sectors industriesin India.
When to apply Value Analysis ?
Companys product show decline in sales Companys prices are higher than those of its competitors
Raw materials cost has gone up suddenly New designs are being introduced the cost of manufacturing is rising disproportionate to the volume
of production
Rate of return on investment has a falling trend unable to meet its delivery commitments
V l A l i V V l E i i
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Value Analyis Vs. Value Engineering
VA VA is the application of a set of techniques to an existing productWith a view to improving its value. It is a remedial process.
VE It is the application of exactly the same set of techniques to a newProduct at the design stage, project concept when no hardware existsTo ensure that bad features are not added. It is a preventive process.
Aims/Objectives:
Simplify the product
Use cheaper and netter materials Modify and improve product design use efficient processes. Reduce the product cost. Increase the utility of the product by economical means
Save money or increase the profits
V l E i i P d
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Value Engineering Procedure
The steps of VE are :
5. Blast (I) identify the product(ii) collect relevant information(iii) define different functions
8. Create (iv) Different alternatives
(v) critically evaluate the alternative10. Refine (vi) develop the best alternative
(vii) Implement the best alternative
VE should be done with brain stormingsessionsPrinciples of Brain Storming
1. A quality idea comes from quantity of ideas
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1. Creative ideas emerge from unconventional thinking2. Spontaneous evaluation of ideas affects imaginative thinking and
retards the flow of creative ideas.
4. Hitch-hiking on the ideas often lead to better ideas5. Creeativity is a regenerative process and the recording of ideas asthey emerge help to generate more ideas
7. When ideas cease to flow, short diversions enable the mind torebound with new ideas
Advantages: It is a much faster cost reduction technique It is a less expensive technique
It reduces prodn. Costs and adds value to sales income of theproductApplications-Machine tool industries, Auto industries, import substitutes etc.
Standardisation
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Standardisation
Standardisation is the process of establishing standards or units ofMeasure by which quality, quantity, value, performance etc. may beCompared and measured.
Standardisation Procedure:Steps-
9. With the help of market research, sales statistics etc. determinewhat is tobe sold in future
11. Define a range of products12. From the range of products, select the minimum variety of
components matching the range for manufacturingAn approach to standardisation necessitates the classification ofMaterials and componentsA system ofclassification and codification is necessary for the designOf new products within the defined range.
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Advantages of Standardisation:
Fewer specifications
Better quality products Increased margin of profit Easy availability of spares Minimum inventory cost Quantity discount are possible due to purchase of large volume of
materials
Applications-
Finished products, e.g. cars and T.Vs. Sub assemblies and components e.g. automobile gearboxes Material e.g direct materials (plain carbon and alloy steels etc.) Production equipments e.g. machine tools, press, welding equipment
etc.
Make or Buy Decisions
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Make or Buy Decisions
A company can satisfy the customers wither by making the requiredProducts using the facilities which are available within the company
Or buying them from a subcontractor.Criteria for Make or Buy Criteria for Make:
1. Finished product can be made cheaper by the firm than
outside suppliers2. Finished product is being manufactured by the firm becauseother firms are unable so meet the demand3. For maintaining quality control etc.
Criteria for Buy:1. High investment is required2. The company does not have facilities to make3. Non-availability of skilled personnel4. Patent or other legal barriers
5. Demand for the product is either temporary or seasonal
Approaches for Make or Buy Decisions
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Approaches for Make or Buy Decisions
3. Cost analysis4. Economic analysis5. Break-even analyis
7. Cost AnalysisIn this case cost of making a product and that of buying a product
Are calculated. Then, the alternative which involves the minimum costIs suggested for implementation.
12. Economic Analysis
Inventory models are considered for economic analysis of make orBuy of a product. The inventory models are: Purchase Model Manufacturing Model
Th f l f l l i E i O d Q i (EOQ) d
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The formula for calculating Economic Order Quantity(EOQ) andTotal cost (TC) of each model are as follows:
Purchase Model Manufacturing Model
Q1 = (2C0D/Cc ) Q2 = [2SD/Cc(1-D/R)]
TC = DP + (DC0/ Q1) + (Q1x Cc)/2 TC = DP + (DS/ Q2 ) + Cc (R-D) Q2/2R
Where,D demand/year, P Purchase price/unit
Cc carrying cost/unit/year, C0 - Ordering cost/order
S Setup cost/setup, R Production rate (units/year)Q1Economic Order Quantity, Q2 Economic Production size
Break even Analysis
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Break-even AnalysisFor any organisation, for manufacturing a product it has to incur totalCost. Total cost is comprise of fixed cost (FC) and variable cost (VC).Fixed cost is independent of production volume(output) whereas,The variable cost is a function of the production volume of the product.Break-even Point The point at which TC is equal to the TR or salesRevenue. At this point there is no loss or gain to the organisation.This is analysis is known as Break-even analysis.
BEP = FC / (Selling price per unit Variable cost per unit)
Sales
TC
VC
FC
C
BA
Costs
Unit of sales per periodO
Profit
Loss
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