4-1 Product and Service Design

Chapter 4

Product and
Service Design

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-2 Product and Service Design

Product and Service Design

• Major factors in strategy
– Cost
– Quality
– Time-to-market
– Customer satisfaction
– Competitive advantage

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-3 Product and Service Design

Trends in Product & Service Design

• Increased emphasis on or attention to:

– Customer satisfaction

– Reducing time to introduce new product

or service

– Reducing time to produce product

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-4 Product and Service Design

Trends in Product & Service Design (Cont’d)

• Increased emphasis on or attention to:

– The organization’s capabilities to produce or
deliver the item
– Environmental concerns
– Designing products & services that are “user
friendly”
– Designing products that use less material

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-5 Product and Service Design

Product or Service Design Activities

• Translate customer wants and needs into
product and service requirements
• Refine existing products and services
• Develop new products and services
• Formulate quality goals
• Formulate cost targets
• Construct and test prototypes
• Document specifications

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-6 Product and Service Design

Reasons for Product or Service Design

• Be competitive
• Increase business growth & profits
• Avoid downsizing with development of
new products
• Improve product quality
• Achieve cost reductions in labor or
materials

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-7 Product and Service Design

Objectives of Product and Service Design

• Development time and cost

• Product or service cost
• Resulting product or service quality
• Capability to produce or deliver a given
product or service

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-8 Product and Service Design

Design For Operations

• Taking into account the capabilities of

the organization in designing goods and
services

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-9 Product and Service Design

The Kano Model

Kano Model
Custom er Satisfaction

Excitement
Expected
Must Have

Customer Needs

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-10 Product and Service Design

Concurrent Engineering
Defined
• Concurrent engineering can be defined as
the simultaneous development of project
design functions, with open and interactive
communication existing among all team
members for the purposes of reducing time
to market, decreasing cost, and improving
quality and reliability.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-11 Product and Service Design

Designing for the Customer

House of Quality

Ideal
Quality Function Customer Value Analysis/
Deployment Product Value Engineering

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-12 Product and Service Design

Sources of Ideas for Products and Services

• Internal
– Employees
– Marketing department
– R&D department
• External
– Customers (QFD)
– Competitors
– Suppliers

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-13 Product and Service Design

Quality Function Deployment

• Quality Function Deployment

– Voice of the customer
– House of quality

QFD: An approach that integrates the “voice of the customer”

into the product and service development process.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-14 Product and Service Design

Reverse Engineering

Reverse engineering is the

dismantling and inspecting
of a competitor’s product to
discover product improvements.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-15 Product and Service Design

Research & Development (R&D)

• Organized efforts to increase scientific
knowledge or product innovation & may involve:
– Basic Research advances knowledge about a
subject without near-term expectations of
commercial applications.
– Applied Research achieves commercial applications.
– Development converts results of applied research
into commercial applications.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-16 Product and Service Design

Product Design

• Product Life Cycles

• Robust Design
• Concurrent Engineering
• Computer-Aided Design
• Modular Design

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-17 Product and Service Design

Life Cycles of Products or Services

Figure 4-2

Saturation

Maturity
Demand

Decline
Growth

Incubation

Time
Operations Management, Seventh Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-18 Product and Service Design

Advantages of Standardization

• Fewer parts to deal with in inventory &

manufacturing
• Reduced training costs and time
• More routine purchasing, handling, and
inspection procedures

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-19 Product and Service Design

Advantages of Standardization (Cont’d)

• Orders fillable from inventory

• Opportunities for long production runs
and automation
• Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-20 Product and Service Design

Disadvantages of Standardization

• Designs may be frozen with too many

imperfections remaining.
• High cost of design changes increases
resistance to improvements.
• Decreased variety results in less consumer
appeal.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-21 Product and Service Design

Improving Reliability

• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
Operations Management, Seventh Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-22 Product and Service Design

Concurrent Engineering

Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-23 Product and Service Design

“Over the Wall” Approach

New
Product

Mfg Design

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-24 Product and Service Design

Computer-Aided Design

• Computer-Aided Design (CAD) is product

design using computer graphics.
– increases productivity of designers, 3 to 10
times
– creates a database for manufacturing
information on product specifications
– provides possibility of engineering and cost
analysis on proposed designs

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-25 Product and Service Design

Manufacturability

• Manufacturability is the ease of

fabrication and/or assembly
which is important for:
– Cost
– Productivity
– Quality

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-26 Product and Service Design

Product design

• Design for manufacturing (DFM)

• Design for assembly (DFA)
• Design for recycling (DFR)
• Remanufacturing
• Design for disassembly (DFD)
• Robust design

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-27 Product and Service Design

Recycling

• Recycling: recovering materials for

future use
• Recycling reasons
– Cost savings
– Environment concerns
– Environment regulations

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-28 Product and Service Design

Differences Between Product

and Service Design
• Tangible – intangible
• Services created and delivered at the
same time
• Services cannot be inventoried
• Services highly visible to customers
• Services have low barrier to entry
• Location important to service

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-29 Product and Service Design

Service Variability & Customer

Figure 4-3 Influence Service Design

High Customized
Clothing
Variability
in Moderate Dept. Store
Service
Purchase
Require-
ments Low Telephone
Purchase
None Internet
Purchase
None Low Moderate High

Degree of Contact with Customer

Operations Management, Seventh Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-30 Product and Service Design

Quality Function Deployment

• Quality Function Deployment

– Voice of the customer
– House of quality

QFD: An approach that integrates the “voice of the customer” into

the product and service development process.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-31 Product and Service Design

The House of Quality

Figure 4-5

Correlation
matrix

Design
requirements

Customer
Relationship Competitive
require-
matrix assessment
ments

Specifications
or
target values

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-32 Product and Service Design

House of Quality Example

Correlation:
X Strong positive
Positive
X X
X Negative
* Strong negative

Water resistance
Accoust. Trans.
Energy needed

Energy needed
Im Engineering

to close door

to open door
Check force
p Competitive evaluation

resistance
Door seal
or
tan Characteristics

Window
X = Us

on level
ce

ground
A = Comp. A
Customer to B = Comp. B
Cu (5 is best)
Requirements st . 1 2 3 4 5

X AB
Easy to close 7
Stays open on a hill X AB
5
Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Importance weighting 10 6 6 9 2 3 Relationships:

level to 7.5 ft/lb

Strong = 9
Reduce energy

Reduce energy
Reduce force
current level

current level
current level
to 7.5 ft/lb.
Medium = 3
Target values

Maintain
Maintain

Maintain
to 9 lb. Small = 1

5 B
BA BA
B BXA X
Technical evaluation 4
A
X B
A X
3
(5 is best) 2 X
X A
1

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-33 Product and Service Design

Operations Strategy

• Shorten time-to-market
• Package products and services
• Increase emphasis on component
commonality
• Use multiple-use platforms
• Consider tactics for mass customization
• Look for continual improvement

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-34 Product and Service Design

Engineering Parts
Characteristics characteristics

characteristics
Engineering
requirements
House of
Customer I II
Parts
Quality Deployment

Key process Production

operations requirements
characteristics

Key process
operations
III IV
Parts

Process
Planning Production
Planning

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.