CHAPTER FOUR

Product and Service Design

Reported by: Sherinne Christie Ann Z. Albao, 12/03/12MBM Class, Production and Operations Management, Monday, Room 109

PRODUCT & SERVICE DESIGN• The essence of an organization.• There is a link between the product & service design and the success of the

organization.• Organizations that have well-designed product or services are more likely

to realized their goals than those with poorly designed products and services.

• This plays a strategic role in the degree to which an organization is able to achieve its goals.

• It is the major factor in customer satisfaction, quality, cost and manufacturability which also becomes the ultimate basis for judging the organization.

Manufacturability – the ease of design features that can be achieved by production.

REASONS FOR PRODUCT & SERVICE DESIGN

• To be competitive by offering new products and/or services

• Business growth and increase profits • Developed products and/or services as an

alternative to downsizing.• Adding jobs and retaining people.• Redesigning• Cost Reductions

TRENDS IN PRODUCT & SERVICE DESIGN

1. Increased Emphasis in customer satisfaction and pressure to be competitive.2. Increased Emphasis on reducing time to introduce.3. Increased Emphasis on reducing time to produce.4. Greater attention on capabilities of the organization to produce or deliver

the item.5. Greater attention to environmental concerns6. User-friendly products and services

Getting new and/or improved products or services to the market ahead of the competitors gives an organization a competitive advantage that can lead to increase in profits and market share and can create an image as a market leader.

Getting new and/or improved products or services to the market as quickly as possible enables organizations to increase their level of customer satisfaction (common on non-profit organizations).

OBJECTIVES OF PRODUCT & SERVICE DESIGN

COMMON OBJECTIVESatisfy the customer while making a reasonable profit

Objectives of product design and service may have similarities but they differ from each other.

DESIGN FOR MANUFACTURING (DFM)Considering organization’s capabilities when designing a

product.DESIGN FOR OPERATIONS

Operations people must be involved early in the design process to ensure compatibility to organization’s

capabilities

To design a product or service that will meet (or exceed) customer expectations within cost (or budget) that takes into account the capabilities of operations and the

fact that alternative design may be more or less difficult to produce or provide.

THE DESIGN PROCESS• Begins with motivation for design• Customer is the driving force for the design• Must have ideas for new designs (e.g. marketing and competitors)• Production capabilities must be basic considerations.• Forecasts of future demand.• Cost, Target Market and Function• Manufacturability

REVERSE ENGINEERINGDismantling and inspecting a

competitor’s produce to discover product improvements.

REGULATIONS & LEGAL CONSIDERATIONS

• Department of Trade and Industry• Security Exchange Commission• Bureau of Food and Drugs• Consumer Act of the Philippines(Act.No. 7394)• Philippines Customs Regulations• Philippine E-commerce Law (Act.No. 8792)• Legal Marketing of Environmental Law

• Product Liability – a manufacturer is liable for any injuries or damages caused by a faulty product.

• Uniform Commercial Code – products carry an implication of merchantability and fitness; that is, a product must be usable for its intended purpose.

RESEARCH & DEVELOPMENT• Organized efforts to increase scientific

knowledge or product innovation.• Some research leads to patents, with

potential licensing and royalties. (R.A. No 8293)

BASIC RESEARCHAdvancing the state of

knowledge about a subject, without any

near term expectation of commercial

applications

APPLIED RESEARCHObjective of achieving

commercial applications.

DEVELOPMENTResults of applied

research into useful commercial applications.

STANDARDIZATION• The extent to which there is absence of variety

in a product, service, or process.• Standardized products are made in large

quantities of identical items

ADVANTAGES1. Fewer parts to deal with in inventory and in manufacturing2. Reduced training costs and time3. More routine purchasing, handling, and inspection procedures4. Orders fillable from inventory5. Opportunities for long production runs and automation6. Need for fewer parts justifies increased expenditures on perfecting design and improving

quality control procedures.

DISADVANTAGES7. Design may be frozen with too many imperfections remaining.8. High cost of design changes increases resistance to improvements9. Decreased variety results in less consumer appeal.

STANDARDIZATION

PRODUCT LIFE CYCLE

Curiosity

Awareness

Demand Levels

Off

Market Becomes Saturated

Defensive Research

ROBUST DESIGN• Design that results in products or services that can

function over a broad range of conditions.• The more robust a product/service the less likely it

will fail due to the change in the environment in which is used or performed.

• The better the design holds up, the higher the level of customer satisfaction.

TAGUCHI’S APPROACH• Japanese engineer Genichi Taguchi• Easier to design a product that is insensitive to environmental factors than

to control the environmental factors.• Parameter Design – determining the specification settings for both the

product and process that will result in robust design in terms of manufacturing variations, product deterioration and conditions used.

• Modifies the conventional statistical methods of experimental design.• Determining which factors are controllable and which are not controllable

(or too expensive to control) and determining the optimal levels of the controllable factors relative to product performance.

• Ability to achieve major advances in product or process design fairly quickly, using a relatively small number of experiments.

CONCURRENT ENGINEERING• Also known as Simultaneous Development• Bringing design and manufacturing engineering people together early in

the design phrase to simultaneously develop the product and processes for producing the product.

• Currently include manufacturing, marketing, purchasing and cross-functional personnel.

Traditionally designers developed a new product without any input from manufacturing and then turn the design to

the manufacturing team for them to developed the product.

OVER-THE-WALLCreated tremendous challenges for manufacturing,

generating numerous conflicts and greatly increasing the time needed to successfully produce a new product. It

contributed to the “us vs. them” mentality.

ADVANTAGES:1. Manufacturing Personnel are able to identify capabilities and capacities.

Knowledge in production capabilities can help in the selection process, cost and quality considerations, design and conflicts during production.

2. Early opportunities for design or procurement of critical tooling, some of which might have long lead times. That can shorten production process.

3. Early consideration of the technical feasibility of a particular design or a portion of the design.

4. More effective resource allocation.5. Emphasis can be on problem resolution instead of conflict resolution.

DISADVANTAGES6. Difficulty in overcoming long standing existing boundaries between design and

manufacturing.7. Difficulty in achieving extra communication and flexibility if the process is to

work.

CONCURRENT ENGINEERING

COMPUTER-AIDED DESIGN (CAD)• The use of computer graphics for product design.• Modify or create products by means of light pen, keyboard,

joystick, mouse and any similar devices.• Design in entered in computer and maneuvered on screen.• Can be rotated into many perspectives, split apart, view in the

inside and closer examinations.• Increase productivity of designers.• Creates database of information of supply.• Engineering and cost analysis• Identify best selections among alternative designs.

EXAMPLES:ImiCAD, 3DCAD,

AutoCad, IntelliCAD,

Strata Foto 3D CX2 and Sketch

Up 8.0

MODULAR DESIGN• A form of standardization in which component

parts are subdivided into modules that are easily replaced or interchanged.

Failures are easier to diagnose and remedy

because there are fewer parts to investigate.

Ease of Repairs and Replacements

Simplifications in manufacturing and

assembly, purchasing & inventory becomes

routine.

Less training cost.

DIFFERENCES OF SERVICE DESIGN OVER PRODUCT DESIGN

• Products are Tangible, Service is intangible.• Service is produces and received at the same time.• Services cannot be inventoried.• Services are highly visible to consumers and must

be designed with that in mind.• Some services have low barriers to entry and exit.• Locations and convenience can be a factor.

OVERVIEW OF SERVICE DESIGN• Service design begins with the choice of a service strategy.• Requires assessment by top management of the potential market and

profitability.• Customer requirements and expectations must be determined.• These information is then used to design the service delivery system.• Two issues in deliver design: degree of variation in service requirements

and degree of customer contact.• Low degree of costumer contact and service requirement variability, the

more standardized.• High degree of costumer contact and service requirement meant service

must be highly customized.

OVERVIEW OF SERVICE DESIGNHigh Highly

Customized

Moderate

Low

None Highly Standardized

None Low Moderate High

Variability In Service

Requirements

Degree of Contact with Customer

DESIGN GUIDELINES

A number of simply but highly effective rules are often used to guide the development of service systems. The key rules are the following:1. Have a single, unifying theme, such as convenience or speed. This will

help personnel to work together rather than at cross-purposes.2. Make sure the system has the capability to handle any expected

variability in service requirements.3. Include design features and checks to ensure that service will be reliable

and will provide consistently high quality.4. Design the system to be user-friendly. This is especially true for self-

service systems.

SERVICE BLUEPRINTINGA method used in service design to describe and analyze a proposed service. A key element of a service blueprint is a flowchart of the service. The major steps in service blueprinting are the following:

1. Establish boundaries for the process and decide on the level of detail that will be needed.

2. Identify the steps involved and described them.3. Prepare a flowchart of major process steps.4. Identify potential failure points and incorporate features that minimize the

chances of failures.5. Establish a timeframe for service execution and an estimate of variability in

processing time requirements.6. Analyze profitability.

SERVICE BLUEPRINTING

QUALITY FUNCTION DEPLOYMENT

• An approach that integrates the “voice of the customer” into the product development process.

• The purpose is to ensure that customer requirements are factored into every aspect of the process from the product planning to the production floor.

• Listening to and understanding the customer is the central feature of QFD.• Once the requirements are known, they must be translated into technical

terms related to production of the product.• The structure of QFD is based on a set of matrices to broaden the scope of

analysis. The main matrix relates customer requirements (what) and their corresponding technical requirements (how).

QUALITY FUNCTION DEPLOYMENT

• Additional features are usually added to the basic matrix to broaden the scope of analysis. Typical additional features include importance weightings and competitive evaluations.

• Typical additional features include importance weightings and competitive evaluations. A correlational matrix is usually constructed for technical requirements; this can reveal conflicting technical requirements.

• With this additional features, the set of matrices has the form that has a house like appearance referred to as “House of quality”.

QUALITY FUNCTION DEPLOYMENT

QUALITY FUNCTION DEPLOYMENT

Important Relationships and

degree of importance.

Denotes the most important technical requirements for

satisfying customer requirements

Take into account the important values and the strength of correlation in determining

where to focus the greatest effort

Comparing suppliers performance on the customer requirements with each of the

two key competitors.

OPERATIONS STRATEGY

There are 4 major recommendations on operation strategy in the area of product and service design that can improve competitiveness:1. Invest more in R&D2. Shift emphasis away from short-term performance to long-

term performance.3. Work toward continual (albeit gradual) improvements

instead of using a “big bang” approach.4. Work to shorten the product development cycle.

RELIABILITY

SUPPLEMENT TO CHAPTER FOUR

RELIABILITY

• Is a measure of the ability of a product, part, or system to perform its intended function under a prescribed set of conditions.

• It is used by buyers in comparing alternatives and by suppliers in determining the price.

• Also have an impact on repeat sales, reflection on product image and also create legal implications.

(3) IMPORTANT ASPECTS OF RELIABILITY

1. Reliability as Probability2. Definition of Failure3. Prescribed Operating Conditions

FAILURESituation in which a product, part,

or system does not perform as intended.

NORMAL OPERATING CONDITIONS

Set of conditions under which an item’s reliability is specified

QUANTIFYING RELIABILITY

Let us turn into the issue of quantifying overall product or system reliability. It is used in two ways:1. The probability that the product or system

will function on any given trial.2. The probability that the product or system

will function for a given length of time.

QUANTIFYING RELIABILITY

The probability that a system or a product will operate as planned is an important concept in system and product design. Determining that probability when the product or system consists of a number of independent components requires the use of rules of independent probabilities.

INDEPENDENT EVENTSEvents whose occurrence or non-occurrence do

not influence each other.

PROBABILITY RULE 1If two or more events are independent and “success” is defined as the probability that all the events occur, then the probability of success is equal to the product of the probabilities of the events.

Probability A x Probability B

Some products/systems have a large number of component parts that must all operate and to increase overall reliability is needed.

REDUNDANCYThe use of back-up components to increase

reliability

PROBABILITY RULE 2

If two events are independent and “success” is defined as the probability that at least one of the events will occur, the success is equal to the probability of either one plus 1.00 minus that probability multiplied by the other probability.

Probability A + (1-Probability A) x Probability B*assuming that Probability A is the one that occur

PROBABILITY RULE 3

If three events are involved and “success” is defined as the probability that at least one of them occurs, the probability of success is equal to the probability that the first one (any of the events), plus the product of 1.00 minus that probability and the probability of the second event (any of the remaining events), plus the product of 1.00 minus each of first two probabilities and the probability and the probability the third event, and so on.

Probability A + (1-Probability A) x Probability B + (1-Probability A) x (1-Probability B) x Probability C

*Assuming that Probability A is the successful event

The second way of looking at reliability considers the incorporation of time dimensions. Probabilities are determined relative to a specified length of time. This approach is commonly used in product warranties, which pertain to a given period of time after purchase of a product.

Bathtub Curve

MEAN TIME BETWEEN FAILURES• The average length of time between failures of a product or component.• Can be modeled by negative exponential distribution.• Equipment failures and product failures may occur in this pattern.• Can be used to determine various probabilities of interest.

e = Natural logarithm, 2.7183…T = Length of service before failureMTBF = Mean time between failures

The probability that failure will

occur before time, T, is 1.00

minus that amount

Product life can sometimes be modeled by a normal distribution. The table provides areas under a normal curve from the left end of the curve to a specified point z, where z is the standardized value.

MEAN TIME BETWEEN FAILURES

AVAILABILITY• The fraction of time a piece of equipment is expected is to be available for

operation.• A related measure of importance to customers and designers.• Availability can range from zero (never available) to 1.00 (always

available).• Companies that can offer equipment with a high availability factor have a

competitive advantage over companies that offer equipment with lower availability values.

Availability = MTBF / MTBF + MTRMTBF = mean time between failuresMTR = mean time to repair

IMPROVING RELIABILITY

1. Improve component design.2. Improve production and/or assembly

techniques3. Improve testing4. Use redundancy5. Improve preventive maintenance procedures6. Improve user education.7. Improve system design.

How much reliability is needed? The answer depends on the potential benefits of improvements and on the cost of those improvements. Reliability improvements become increasingly costly but the benefits increase faster than the costs.

Reliability of a product or service is often a key dimension in the eyes of the customer. Measuring and improving reliability are important aspects of product and service design although other areas of the organization also have an influence on reliability.

THANKYOU