Operations Management: Product and Service Design

• Operations Management and Total Quality Management are key topics

Product & Service Design

• Encompasses determining what a product or service should do
• Considers customer needs and production
• Addresses design or redesign, idea generation, legal and ethical considerations, and sustainability
• Incorporates the "3Rs" (reduce, reuse, recycle)
• Considers standardization, mass customization, reliability, robust design, degree of newness, and QFD
• Steps involve product design and development, designing for production, and service design
• Steps in service design involve concept to service system

What Product and Service Design Does:

• Translates customer needs into product/service requirements
• Refines existing offerings
• Develops new products/services
• Formulates quality/cost goals
• Constructs prototypes
• Documents specifications
• Integrates product/service specs into process specs and involves various departments

Key Questions in Product/Service Design:

• Is there a demand? (market size, demand profile)
• Can we do it? (manufacturability, serviceability)
• What is the appropriate quality level? (customer expectations, competitor quality, fit with current offerings)
• Does it make economic sense? (liability, sustainability, ethical considerations, costs vs. budget)

Product and Service Design Principles:

• Should align closely with organizational strategy
• Proper design is crucial

Reasons to Design or Redesign:

• Market opportunities or threats are economic, low demand/reduce costs, integrating cost analysis, social/demographic shifts, political/legal factors
• Competitive pressures, costs, availability, and technology also influence

Idea Generation

• Considers legal, ethical factors, and uses supply-chain and competitor insights
• Ideas originate throughout the supply chain
• Competitor analysis involves reverse engineering to discover improvements

Research and Development (R&D):

• Basic research advances knowledge, achieving commercial applications
• Applied research converts findings into practical uses

Legal Considerations (Product Liability):

• Manufacturers are responsible for injuries/damages from faulty design
• Addresses potential harm to environment/humanity, pollution, and safety
• Costs include litigation, legal/insurance, settlements, recalls, and reputation
• Under the Uniform Commercial Code, products must be fit for their intended purpose

Ethical Considerations:

• Designers face pressure to expedite and cut costs

Balancing Sustainability & Cost:

• Pressure to trade off decisions

Sustainability:

• Using resources without harming ecological systems
• Measured by Cradle-to-Grave Assessment (Life-Cycle Assessment, LCA)

The 3Rs (Reduce, Reuse, Recycle):

• Reduction of costs/materials is achieved through value analysis
• Reuse involves parts from returned products and remanufacturing of worn/defective items
• Recycling recovers materials through design for disassembly (DFD) and recycling (DFR)

Design Considerations:

• Standardization reduces variety
• Mass customization offers standardized goods with some customization capabilities
• Reliability ensures products perform as intended
• Robust design functions over a range of conditions

Degree of Newness:

• Product or service innovation ranges from modifications/expansions to new creations and clones
• Affects the organization and market novelty

Quality Function Deployment (QFD):

• Integrates customer feedback into design/development

Kano Model:

• Basic quality has limited influence
• Performance quality is proportional to satisfaction/dissatisfaction
• Excitement quality exceeds expectations

Phases in Product Design and Development:

• Introduction sees a product as a curiosity
• Growth has design improvements with increasing demand
• Maturity sees flat demand
• Decline involves decisions to replace/abandon products

Concurrent Engineering:

• Involves engineering/manufacturing during design to improve
• Achieves designs that satisfy customer/manufacturing

Computer-Aided Design (CAD):

• Utilizes computer graphics to improve designer productivity
• Includes finite element analysis (FEA)

Service Design:

• Strategies starts with service strategy choice
• Services are simultaneously created/delivered
• Most are a mix of goods/services
• Begins with service strategy choice, market assessment, and identifying customer expectations

Strategic Capacity Planning for Products and Services involves matching long-term capabilities with demand

Capacity Definition:

• Capacity denotes output limits, measured in units produced or services performed
• Factors include equipment, space, and employee skills

Capacity Planning Goals:

• Capacity aims to match supply with demand
• Gaps result in over/under capacity

Key Planning Questions:

• Needed the type & quantity of capacity in the future?

Strategic Implications:

• Decision regarding capacity affects ability to meet demands, operating costs, initial costs, long-term resource commitments, competitiveness, and management

External Factors:

• Globalization complicates planning
• Advance planning is crucial due to the commitment of financial/other resources

Measuring Capacity:

• Design capacity represents the maximum output
• Effective capacity accounts for personal time and maintenance

System Effectiveness Measures:

• Efficiency (actual output/effective capacity)
• Utilization (actual output/design capacity)
• Actual output cannot exceed effective capacity

Determinants of Effective Capacity:

• Design factors (layout, size, location)
• Product/service (uniformity)
• Process factors (capability, output quality/quantity)
• Human, policy, operational and supply chain factors
• External factors like product standards and safety regulations

Strategy Formulation:

• Requires assumptions about future scenarios regarding demand, technology, and competition

Capacity Strategies:

• Leading builds capacity in anticipation of demand
• Following builds when demand exceeds capacity
• Tracking adds capacity in smaller increments

Explore product and service design in operations management. This covers translating customer needs, refining existing offerings, and developing new products and services. Key aspects include quality/cost goals, prototyping, specifications, and integrating product/service specs into process specs.