Course Name: Production & Operations

Management
Module 2: Product & Service Design

1) Write short notes on CAD and concurrent engineering.

Computer-aided Design (CAD) Computer-aided Design (CAD), also known as

Computer-aided Drafting, is the use of computer software and systems to
design and create 2D and 3D virtual models of goods and products for the
purposes of testing. It is also sometimes referred to as computer assisted
drafting. Advantages of CAD In the field of product development there are
often immense costs associated with the testing of new products. Every new
product must undergo at least a small measure of physical testing – not only to
ensure that it meets minimum safety standards but also to ensure that it will
successfully operate under the range of conditions to which it can expect to be
exposed.

Example: The wing of an airplane must undergo stress tests to ensure that it will
retain its integrity even under the most grueling weather and turbulence
conditions before it is approved for use. Unfortunately, this testing can be
ruinously time-consuming and expensive. If an aeronautical company has to
physically build dozens of wings in the course of testing a new design then the
final cost and time scale of the project can be far higher than projected.
Fortunately, there is no need to physically test all of these designs. Instead,
developers can run virtual stress tests using computer-aided design, substituting
a wind tunnel for a CAD application that can simulate the same conditions. The
benefits of virtual simulations are obvious. In addition to a reduction in the cost
of product development and the time required to run tests there is also the
advantage that conceptual designs can be modified instantly as the tests
progress. Perhaps one of the best examples of this versatility can be seen in the
design of the airplane wing. The science of aerodynamics is complex, and it is
often the case that certain wing shapes can create unexpected turbulence under
certain conditions. When this occurs during physical testing it can be a
challenge to discover the problem and make alterations. When running virtual
tests using CAD, however, alterations to the design can be made quickly and
easily, so new designs can be tested and retested until the problem is resolved.

Business Applications for CAD Idea Generation With the limiting factor of
prototype manufacture removed, CAD allows the process of idea generation to
become much more flexible. Enterprises can afford to be more open to new
ideas and suggestions than in the past – from both employees and potential
customers. Suggestions for new products can be quickly tested at a much lower
cost than in the past. Augmentation CAD opens up the possibility to make
slight improvements on new product designs instantly. While this can be of
great benefit in the design of a new product it can also be extremely useful for
investigating possible improvements to existing products – or even reverse
engineering and augmenting the products of competitors. Market Testing
Through designing new products using CAD it becomes possible to begin the
process of market testing much earlier than in the past. Focus groups can be
presented with virtual mock-ups of new products more quickly than would be
possible with physical prototypes, and alterations can be made based on their
feedback almost instantly. Since modifications can be made simply by entering
new data into the CAD software, updated virtual mock-ups can be presented to
the same audience for further feedback during the same session.

Concurrent Engineering

The basis for concurrent engineering is the significant overlap among the
different phases of

product development.

In high clock-speed industries, this is critical. Many companies, in this

category, use the concurrent

engineering approach to speed up the product development process.

Teams are constituted that integrate the CE program.

There can be three types of teams:

(i) program management team,

(ii) technical team and

(iii) design-build team.

(iv) Concurrency involves the parallel completion of project phases.

2) Why do you think concurrent engineering is more critical in high clock-speed industries?

In high clock-speed industries, this is critical. Many companies, in this

category, use the concurrent engineering approach to speed up the product
development process. Teams are constituted that integrate the CE program.
There can be three types of teams: (i) program management team, (ii) technical
team and (iii) design-build team. Concurrency involves the parallel completion
of project phases. With an integration team ensuring the exchange of
information between the teams working on different aspects, it is possible to
considerably reduce development times and create high quality product designs
that meet customer expectations. Using this technique, some companies boast
that they have reduced, by a third or more, the time needed to develop and
launch new products. They have injected more customer-related information
into the process and to make it flow better. Example: Some instances of time-
savings that have already been achieved are presented below:

1. Chrysler, Ford, and GM have reduced the interval from concept approval to
production from 5 to 3 years.

2. Fourteen engineers at the Tank and Automotive Research and Development

Center designed a lowsilhouette tank prototype in 16 months. By traditional
methods, this would have taken 3 years and 55 engineers.
 3. Northrop Grumman’s CAD systems provided a first-time, error-free physical
mockup of many sections of the B2 aircraft in less than one half of the time
compared to conventional methods.

Numerous examples point that increased and improved communications

between all phases will significantly reduce the time from concept to delivery
of the product or service to the marketplace. By improving the quality, timing,
and synthesis of information throughout the development cycle, companies can
free themselves from prescheduled project time lines and formalized process
steps and manage their resources and work flows more flexibly. They can keep
their product options open longer, act on market information later, and reduce
the delays, bottlenecks, rework, and wasted effort inherent in today’s assembly-
line Product-Development Process. When the product development cycle is
shortened, products can be designed to be more responsive to specific customer
requirements. By transforming a sequential process into a more dynamic and
information-based concurrent process, companies can quicken the pace of
development and improve a product’s odds of success.

3) Critically analyse the concept of delayed differentiation.

Delayed Differentiation The concept of delayed differentiation, also known as

postponement, was first suggested by Alderson in 1950. He suggested that
producers should add options or make differentiating changes to the product
close to the time of purchase by the end use customer. There are many visible
advantages of this concept. Consider the entire supply chain of a product and
try to locate the point at which the product has been manufactured or has
assumed the final form. How remote is it from the consumer in physical terms
or in terms of time? If we give the final form or configure the product close to
the consumer, will it really give us any advantage? The answer to the question
is intrinsically related with the product type; and, following Fisher's cue, there
are reasons to believe that some benefit can be achieved by postponement. This
can be achieved by better control of demand information as the final
configuration of the product can be manipulated based on more up to date
demand information. The manufacturing postponement should allow better
management of forecasts and demand information by shortening the
manufacturing lead time. This of course seems a very suitable approach for
innovative products with short product life cycle and high risk of obsolescence.
The classic example of postponement is provided by Benetton, the trade mark
Italian apparel manufacturer. Benetton used an innovative manufacturing and
supply chain strategy based on postponement to carve out a niche market for
itself. Postponement will not eliminate inventory or surplus material from the
system but will shift it up stream. The advantage of postponement is based on
two fundamental understandings that aggregate demand of similar products (or
same product group) is more predictable compared to demand for individual
types, and that it is the finished product which has the short life cycle and high
risk of obsolescence. Postponement enables a firm to react more efficiently to
demand and is an effective strategy for innovative products. Postponement or
delayed differentiation, when taken to the extreme, has resulted in firms
adopting a type of 'customization' or 'mass customization'. Manufacturing is
postponed until definite demand information is obtained in the way of firm
customer orders with specific requirements. In economic sense, the value of
delayed differentiation (also known as postponement) for a monopolist has been
extensively studied in the operations literature. It becomes near necessary to
analyze the case of (imperfectly) competitive markets with demand uncertainty,
wherein the choice of supply chain configuration (i.e., early or delayed
differentiation) is endogenous to the competing firms. It requires characterizing
firms' choices in equilibrium and analyzing the effects of these choices on
quantities sold, profits, consumer surplus, and welfare. We demonstrate that
purely strategic considerations not previously identified in the literature play a
pivotal role in determining the value of delayed differentiation. In the face of
either entry threats or competition, these strategic effects can significantly
diminish the value of delayed differentiation.

In fact, under plausible conditions, these effects dominate the traditional risk-
pooling benefits associated with delayed differentiation, in which case early
differentiation is the dominant strategy for firms, even under cost parity with
delayed differentiation. We extend the main model to study the effects of
alternate market structures, asymmetric markets, and inventory holdback. The
strategy of achieving competitive superiority through postponement and
customization requires, in order to reduce cost and increase manufacturing
efficiency, certain design attributes. These are commonality, modularity and
standardisation.

4) "Mass customization is a challenge but very useful if implemented successfully".

Validate the statement.

Mass Customization :-

The concept of mass customisation is built on the concept of postponement.

This is the extreme form of postponement as the product is subject to the final
configuration as and when the customers’ specific order is known. The aim is to
provide the customer with custom solutions or, in other words, exactly what he
or she wants, but to provide this with the same efficiency achieved in mass
production. This is a considerable challenge when we consider how individual
choices can vary and what it means to configure products, especially complex
products, to each customer desired configuration given that firms are always
under pressure of reducing system wide costs through reduction in inventory
and the achievement of shorter lead times. In spite of this challenge, if mass
customisation can be successfully implemented, it is possible to see intuitively
that it is the key to increasing value through the provision of unique personal
satisfaction; and, of course, this has the potential to generate additional
marginal revenue. A second consideration, a more profound and fundamental
one, is that the overall effect on inventory related costs can be very positive as
production is based on real demand. This is essentially the transformation of the
supply chain to a pull system at the customer end. This means that the
manufacturing process is completed when definite information regarding
customers’ preferred configuration or design is available. And, you may have
guessed correctly, this information, along with the customers’ willingness to
 wait for the product, are crucial elements, along with the specific characteristics
of the product, which would make mass customisation successful. Example: An
example of mass customisation is what is done by Dell computers. Dell’s direct
supply chain model based on Internet orders and direct shipment to customers
in their preferred configuration has made Dell the favoured subject matter of
many case studies.

5) Name all the objectives of designing.

Objectives of Designing

The objectives of product and service design can be divided into two broad categories:

1. Main Focus:

(a) Customer Satisfaction

(b) Understanding what customer needs

2. Secondary Focus:

(a) Function of product/service

(b) Cost

(c) Profit

(d) Quality

(e) Appearance

(f) Ease of production/Assembly

(g) Ease of maintenance/servicing