Product Design Criteria

In this section, we illustrate how different criteria can impact

the design of a product. The most fundamental criteria are
those that relate directly to what the customer wants.
Matching a product’s design with the desire of the target
customer group is essential from a marketing view.
 DESIGNING SERVICE PRODUCTS
An important issue when developing a new service or
changing an existing one is the question of how different the
new service is compared to the current services offered by the
firm. Here are three general factors to consider when
determining this:

Similarity to current services

Similarity to current processes.
Financial justification.
 Designing Products for Manufacture
and Assembly
The word design has many different meanings. To some, it means the
aesthetic design of a product, such as the external shape of a car or the
color, texture, and shape of the casing of a can opener. In another sense,
design can mean establishing the basic parameters of a system. For
example, before considering any details, the design of a power plant might
mean establishing the characteristics of the various units such as generators,
pumps, boilers, connecting pipes, and so forth.

Yet another interpretation of the word design is the detailing of the

materials, shapes, and tolerance of the individual parts of a product. This is
the concern of this section. It is an activity that starts with sketches of parts
and assemblies and then progresses to the computer-aided design (CAD)
workstation (described in Appendix B on Operations Technology),

QUESTION: How Does Design for Manufacturing and Assembly ( DFMA )

Work?
 DESIGNING SERVICE PRODUCTS
Service products are very different because direct customer
involvement in the process introduces significant variability in the
process in terms of both the time that it takes to serve a
customer and the level of knowledge required of the firm’s
employees.
Questions that should be addressed in the design of a service
include:
How will this variability be addressed?
What are the implications for operational cost and the
customer service experience?
 Cont….
An important issue when developing a new service or changing
an existing one is the question of how different the new service is
compared to the current services offered by the firm. Here are
three general factors to consider when determining this:
Similarity to current services
Similarity to current processes
Financial justification
 READING ASSIGNMENT
ECONOMIC ANALYSIS OF PRODUCT DEVELOPMENT PROJECTS

CASE STUDY
Consider the case of a product development team in the midst of developing a new
photograph printer, the CI-700. The CI-700 would produce large-scale, full-color pictures
from digital images. The primary markets for the product are the graphic arts, insurance,
and real estate industries. During the CI-700’s development, the team faces several
decisions that it knows could have a significant impact on the product’s profitability:

Should the team take more time for development in order to make the product available
on multiple computer “platforms,” or would a delay in bringing the CI-700 to market be
too costly?

Should the product use proprietary print media or commonly available premium quality
print media?

Should the team increase development spending in order to increase the reliability of the
CI-700?
 Cont….
It is important to remember that economic analysis can capture only those factors that
are measurable and that projects often have both positive and negative implications that
are difficult to quantify. Also, it is difficult for an economic analysis to capture the
characteristics of a dynamic and competitive environment. Economic analysis is useful in
at least two different circumstances:

Go/no-go milestones. For example: Should we try to develop a product to address a

new market opportunity? Should we proceed with the implementation of a selected
concept? Should we launch the product we have developed? These decisions typically
arise at the end of each phase of development.

Operational design and development decisions. Operational decisions involve

questions such as: Should we spend $100,000 to hire an outside firm to develop this
component in order to save two months of development time? Should we launch the
product in four months at a unit cost of $450 or wait six months, when we can reduce
the cost to $400?