Design of Goods and Services PDF

3. Design of goods and services Outline (continued) Defining a Product Documents for Production Service Design Application of Decision Trees to Product Design Transition to Production Goods and Services Selection (1 of 3) Organizations exist to provide goods or service...

3. Design of goods and services Outline (continued) Defining a Product Documents for Production Service Design Application of Decision Trees to Product Design Transition to Production Goods and Services Selection (1 of 3) Organizations exist to provide goods or services to society Great products are the key to success Top organizations typically focus on core products Customers buy satisfaction, not just a physical good or particular service Fundamental to an organization's strategy with implications throughout the operations function Goods and Services Selection (2 of 3) Limited and predictable life cycles requires constantly looking for, designing, and developing new products Utilize strong communication among customer, product, processes, and suppliers New products generate substantial revenue Goods and Services Selection (3 of 3) Figure 5.1 Product Decision The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage. Product Strategy Options Differentiation El Celler de Can Roca Low cost Your neighborhood's kebab Rapid response Toyota, DHL Product decisions have major implications throughout the operations function Seat’s steering columns Tesla Model 3 vs. Tesla Model Y Product Life Cycles May be any length from a few days to decades The operations function must be able to introduce new products successfully  Product Life Cycle € Figure 5.2 Introductory Phase Product Life Cycle (1 of 4) Fine tuning may warrant unusual expenses for 1. Research 2. Product development 3. Process modification and enhancement 4. Supplier development Product Life Cycle (2 of 4) Growth Phase Product design begins to stabilize Effective forecasting of capacity becomes necessary Adding or enhancing capacity may be necessary Product Life Cycle (3 of 4) Maturity Phase Competitors now established High volume, innovative production may be needed Improved cost control, reduction in options, paring down of product line Product Life Cycle (4 of 4) Decline Phase Unless product makes a special contribution to the organization, management must plan to terminate offering Product Life Cycle Costs Product-by-Value Analysis Lists products in descending order of their individual dollar contribution to the firm Lists the total annual dollar contribution of the product Helps management evaluate alternative strategies Generating New Products 1. Understanding the customer 2. Economic change 3. Sociological and demographic change 4. Technological change 5. Political and legal change 6. Market practice, professional standards, suppliers, distributors Product Development Stages Figure 5.3 Organizing for Product Development (1 of 4) Traditionally – distinct departments Duties and responsibilities are defined Difficult to foster forward thinking A champion Product manager drives the product through the product development system and related organizations Organizing for Product Development (2 of 4) Team approach Cross functional – representatives from all disciplines or functions Product development teams, design for manufacturability teams, value engineering teams Japanese “whole organization” approach No organizational divisions Organizing for Product Development (3 of 4) Product development teams Market requirements to product success Cross-functional teams often involving vendors Open, highly participative environment Organizing for Product Development (4 of 4) Concurrent engineering Simultaneous performance of product development stages Speedier product development Facilitated by cross-functional teams Manufacturability and Value Engineering Benefits: 1. Reduced complexity of the product 2. Reduction of environmental impact 3. Additional standardization of components 4. Improvement of functional aspects of the product 5. Improved job design and job safety 6. Improved maintainability (serviceability) of the product 7. Robust design Cost Reduction of a Bracket via Value Engineering Issues for Product Design 1. Robust design 2. Modular design 3. Computer-aided design (CAD)/Computer-aided manufacturing (CA M) 4. Virtual reality technology 5. Value analysis 6. Sustainability and Life Cycle Assessment (LCA) Robust Design Product is designed so that small variations in production or assembly do not adversely affect the product Typically results in lower cost and higher quality Modular Design Products designed in easily segmented components Adds flexibility to both production and marketing Improved ability to satisfy customer requirements Computer Aided Design (CAD) Using computers to design products and prepare engineering documentation Shorter development cycles, improved accuracy, lower cost Information and designs can be deployed worldwide Extensions of CAD 3D Object Modeling Small prototype development Design for Manufacturing and Assembly (DFMA) Solve manufacturing problems during the design stage CAD through the Internet International data exchange through STEP 3D printing Computer-Aided Manufacturing (CAM) Utilizing specialized computers and program to control manufacturing equipment Often driven by the CAD system (CAD/CAM) Additive manufacturing Extension of CAD that builds products by adding material layer upon layer Additive Manufacturing Figure 5.5 Benefits of CAD/CAM 1. Product quality 2. Shorter design time 3. Production cost reductions 4. Database availability 5. New range of capabilities Virtual Reality Technology A visual form of communication in which images substitute for reality and typically allow the user to respond interactively Allows people to ‘see’ the finished design before a physical model is built Very effective in large-scale designs such as plant layout Augmented Reality The integration of digital information with the user's environment in real time Digital information or images superimposed on an existing image Useful in product design, assembly and maintenance operations, tool or specification information Value Analysis Focuses on design improvement during production Seeks improvements leading either to a better product or a product that can be produced more economically with less environmental impact Sustainability and Life Cycle Assessment (LCA) Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their needs LCA is a formal evaluation of the environmental impact of a product Defining a Product First definition is in terms of functions Rigorous specifications are developed during the design phase Manufactured products will have an engineering drawing Bill of material (B O M) lists the components of a product Application of Decision Trees to Product Design Particularly useful when there are a series of decisions and outcomes that lead to subsequent decisions followed by other outcomes Application of Decision Trees to Product Design (continued) Procedure 1. Include all possible alternatives and states of nature – including “doing nothing” 2. Enter payoffs at end of branch 3. Determine the expected value of each branch and “prune” the tree to find the alternative with the best expected value Decision Tree Example Silicon, Inc., a semiconductor manufacturer, is investigating the possibility of producing and marketing a microprocessor. Undertaking this project will require either purchasing a sophisticated CAD system or hiring and training several additional engineers. The market for the product could be either favorable or unfavorable. Silicon, Inc., of course, has the option of not developing the new product at all. With favorable acceptance by the market, sales would be 25,000 processors selling for 100€ each. With unfavorable acceptance, sales would be only 8,000 processors selling for 100€ each. The cost of CAD equipment is 500,000€, but that of hiring and training three new engineers is only 375,000€. However, manufacturing costs should drop from 50€ each when manufacturing without CAD to 40€ each when manufacturing with CAD. The probability of favorable acceptance of the new microprocessor is 0.40; the probability of unfavorable acceptance is 0.60. Transition to Production Know when to move to production Product development can be viewed as evolutionary and never complete Product must move from design to production in a timely manner Most products have a trial production period to insure producibility Develop tooling, quality control, training Ensures successful production Transition to Production (continued) Responsibility must also transition as the product moves through its life cycle Line management takes over from design Three common approaches to managing transition Project managers Product development teams Integrate product development and manufacturing organizations