OPERATIONS

MANAGEMENT
Lecture # 5:
PRODUCT & SERVICE DESIGN
Humayun Akhtar Awan

GOODS & SERVICES SELECTION

It is based on:
Differentiation
Lower

Price
Rapid Response

GENERATION OF NEW PRODUCT

OPPORTUNITIES

Five factors influencing opportunities:

Economic

Change
Sociological & Demographic Change
Technological Change
Political / Legal Change
Other Changes

PRODUCT LIFE CYCLES

Four Phases:
Incubation
Growth
Maturity
Saturation
Decline

Duration of Life Cycles:

Few

Hours (Newspapers)
Months (Seasonal Fashions)
Years (VCRs)
Decades (Volkswagen Beetle)

PRODUCT LIFE CYCLE

Saturation

Demand

Maturity
Decline
Growth

Incubation

Time

LIFE CYCLE & STRATEGY

Strategy Options as products move through

their life cycles:
Introductory
Growth

Phase

Maturity

Phase

Saturation
Decline

Phase

phase

Phase

INTRODUCTORY PHASE
Still undergoing fine tuning
Expenses like:

Research
Product

Development
Process Modification & Enhancement
Supplier Development
Examples: Mobile Phones, Computers

GROWTH PHASE

Product Design begins to stabilize

Effective Forecasting for matching

capacity with demand becomes necessary

MATURITY PHASE
Product is mature
Competitors established
High
volume, innovative production
required
Cost Control, Design Freeze important

SATURATION PHASE
Product is in abundance in the market
More production, less demand
Improvement and value addition required
to maintain demand

DECLINE PHASE
Dying Products may be stopped
Resources & managerial talent is wasted
in producing them
Unless dying products make some unique
contribution to the firms reputation,
their production should be terminated.

PRODUCT-BY-VALUE ANALYSIS

Pareto Principle applied to product mix

Focus

many

on the critical few, not the trivial

Product-by-Value is a listing of products

in descending order of their individual
monetary contribution to the firm, as
well as annual monetary contribution of
the product

PRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT SYSTEM

Cash for product development
Understanding market changes constantly
Possession of necessary talents and
resources
PD System not only determines product
success but also the firms future

IDEAS

ORGs ABILITY

STAGES OF PRODUCT
DEVELOPMENT

CUSTOMER
REQUIREMENTS

Scope for Design

& Engg. teams

FUNCTIONAL SPECS

Scope of product
Dev. team

PRODUCT
SPECIFICATIONS
DESIGN REVIEW
TEST MARKET
INTRODUCTION

EVALUATION

QUALITY FUNCTION DEPLOYMENT

Determining what will satisfy the customer

Translating Customer desires into the target design
Used early in the design process
One tool is House of Quality: Relationship between
customer desires and product or service.
Six Steps for building HOQ:

Identify Customer wants

Identify how product will satisfy customer
Relate customer wants to product hows
Identify relation between firms hows
Develop Important Ratings
Evaluate competing products

HOUSE OF QUALITY
Correlation
matrix
Design
requirements

Customer
requirements

Relationship
matrix

Specifications
or
target values

Competitive
assessment

HOQ EXAMPLE
Correlation:
X
X

No road noise
Importance weighting

AB

Water resistance

Accoust. Trans.
Window

Check force
on level
ground
Energy needed
to open door

Door seal
resistance

X A

10

Target values

Technical evaluation
(5 is best)

A XB

5
4
3
2
1

B
A
X

BA
X

B
A
X

B
X
A

BXA

3
Maintain
current level

Maintain
current level

Doesnt leak in rain

X = Us
A = Comp. A
B = Comp. B
(5 is best)
1 2 3 4

XAB

Reduce energy
to 7.5 ft/lb.

Reduce force
to 9 lb.

Easy to open

Competitive evaluation

X AB

Maintain
current level

Reduce energy
level to 7.5 ft/lb

Stays open on a hill

Energy needed
to close door

Im
Engineering
po
rta Characteristics
nc
et
oC
Customer
us
Requirements
t.
Easy to close
7

X
X

Strong positive
Positive
Negative
Strong negative

BA
X

Relationships:
Strong = 9
Medium = 3
Small = 1

THE KANO MODEL

Customer Satisfaction

Kano Model

Excitement
Expected
Must Have

Customer Needs

ORGANIZING FOR PRODUCT

DEVELOPMENT

Traditional US Approach:
Distinct departments; fixed duties and
responsibilities; but lack of forward thinking
Second Approach:
Product Manager; Champion the product
through all phases
Third Approach:
Teams
Product

Development Teams
Value Engineering Teams

PRODUCT DEVELOPMENT TEAMS

Charged with the responsibility of moving
from market requirements to achieving a
product success
Representation
from all related /
affected deptts.
Also called Concurrent Engineering
Reverse engineering

MANUFACTURABILITY & VALUE

ENGINEERING
Activities that help improve a products
design, production, maintainability and
use
The designers consideration of the
organizations manufacturing capabilities
when designing a product.
The more general term design for
operations encompasses services as well
as manufacturing

OVER THE WALL APPROACH

New
Product

Manufacturing

Desig
n

ISSUES FOR PRODUCT DESIGN

Robust Design: Product can be produced to specs. even

with unfavourable conditions in the prod. Process.
Modular Design: Parts or components are divided into
modules that are easily interchanged or replaced.
Computer Aided Design (CAD): Use of computer to
develop, design and document products.
Value Analysis: Improvements during production process
that lead to a better product or a product more
economically produced
Environmentally Friendly Designs: Minimizing waste of
raw materials and resources, products have minimal
effect on environment, re-cyclability, less harmful
ingredients, less energy

TIME BASED COMPETITION

Competition based on time; rapidly developing

products and moving them to the market
External Development Strategies
Alliances
Joint

Ventures
Purchase of Tech. by acquiring a developer

Internal Development Strategies

Newly

developed products
Migrations of existing products
Enhancements to existing products

DEFINING THE PRODUCT

Functions of product
Designing of product
Design for production
Engg. Drawing
BOM (Bill of Materials)
Make or Buy decisions
Group technology

DOCUMENTS FOR PRODUCTION

Assembly Drawing: Exploded View
Assembly Chart: Schematic assembly
Route Sheet: List of operations
Work Order: Instruction for production
Engg. Change Notices: Changes
Configuration Management: Tracking /
Identification

THANK YOU