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Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 1
Operations & Production Management
(OPM)Dr. Muhammad Wasif
Visiting Faculty, IBA.
Product and Service Design
2
Resource Person : Dr. Muhammad Wasif Operations & Production Management7
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 2
Introduction to Product & Service Design
Section 2.1
3
Resource Person : Dr. Muhammad Wasif Operations & Production Management7
Major factors in design strategy
Resource Person : Dr. Muhammad Wasif Operations & Production Management10
Cost
Quality
Time-to-market
Customer satisfaction
Competitive advantageProduct and service design or redesign should be
closely tied to an organizations strategy
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 3
Product or Service Design Activities
Resource Person : Dr. Muhammad Wasif Operations & Production Management10
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
Reasons for Product or Service Design
Resource Person : Dr. Muhammad Wasif Operations & Production Management10
Reasons Examples
Economic Low price grocery shop (Imtiaz supermarket) Low maintenance products (disposable items)
Social & demographic
High cost of fuel (Hybrid cars) People believe in charity & religion (Chipa, Edhi, Alamgir welfares)
Political, liability, or legal
Relate politics with charity to win people (KKF, Alkhidmat, SKH) Have ISO certification for export goods (Llyods, SGS, BVQI)
Competitive Women are willing to use cosmetics (different brands of shampoo) People want easy and cheap communication (ufone, telenore etc.)
Cost or availability Islamic Banking
Technological High speed internet (DSL, 4G, LTE)
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 4
Objectives of Product and Service Design
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Main focusCustomer satisfactionUnderstand what the customer wants
Secondary focus Function of product/serviceCost/profitQualityAppearance Ease of production/assembly Ease of maintenance/service
Product Life Cycles
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
May be any length from a few hours to decades The operations function must be able to introduce new products
successfully
Product Life Cycles
Hours Week Months Years
Foods Magazines Fashion apparel Media tapes
Newspapers Stationary items Tech. Services Players
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 5
Product Life Cycles
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Negative cash flow
Introduction Growth Maturity Decline
Sale
s, c
ost,
and
cas
h fl
ow
Cost of development and production
Cash flow
Net revenue (profit)
Sales revenue
Loss
Product Development System
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Scope of product
development team
Scope for design and engineering
teams
Evaluation
Introduction
Test Market
Functional Specifications
Design Review
Product Specifications
Customer Requirements
Ability
Ideas
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 6
Issues for Product Development
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Robust design small change in design do not disturb whole product.
Modular design segmented components (E.g. subway buger)
Computer-aided design (CAD) PC used as tool for faster design.
Computer-aided manufacturing (CAM)
Virtual reality technology simulations and analysis without prototypes, e.g. (Witness software, Plant Simulation).
Value analysis design improvement during production.
Environmentally friendly design
Product Development Continuum
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
External Development StrategiesAlliances
Joint venturesPurchase technology or expertiseby acquiring the developer
Internal Development StrategiesMigrations of existing products
Enhancements to existing productsNew internally developed products
Internal Cost of product development SharedLengthy Speed of product development Rapid and/
or ExistingHigh Risk of product development Shared
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 7
Acquiring Technology
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By Purchasing a Firm
Speeds development
Issues concern the fit between the acquired organization and product and the host
Through Joint Ventures
Both organizations learn
Risks are shared
Through Alliances
Cooperative agreements between independent organizations
Product Documents
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Engineering drawing
Shows dimensions, tolerances, and materials
Shows codes for Group Technology
Bill of Material
Lists components, quantities and where used
Shows product structure
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 8
Documents for Production
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Assembly drawing
Assembly chart
Route sheet
Work order
Engineering change notices (ECNs)
Assembly drawing
Assembly chart
Route sheet Work order
Quality Function DeploymentSection 2.2
16
Resource Person : Dr. Muhammad Wasif Operations & Production Management33
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 9
Quality Function Deployment (QFD)
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
House of Quality is an approach that integrates the voice of the customer into the product and service development process.
Relationshipmatrix
How to satisfycustomer wants
Interrelationships
Co
mpe
titi
ve
asse
ssm
ent
Technicalevaluation
Target values
What the customer
wants
Customer importance
ratings
Weighted rating
1. Identify customer wants
2. Identify how the good/service will satisfy customer wants
3. Relate customer wants to product hows
4. Identify relationships between the firms hows
5. Develop importance ratings
6. Evaluate competing products
7. Compare performance to desirable technical attributes
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Your team has been charged with designing a new camera for Great Cameras, Inc.
The first action is to construct a House of Quality
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 10
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Customerimportance
rating(5 = highest)
Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color correction 1
(1) What the customer wants
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
Low
ele
ctri
city
req
uire
men
ts
Alum
inum
com
pone
nts
Auto
foc
us
Auto
exp
osur
e
Pain
t pa
llet
Ergo
nom
ic d
esig
n
(2) How to SatisfyCustomer Wants
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 11
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
High relationshipMedium relationshipLow relationship
(3)Relationship matrix
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
Low
ele
ctri
city
req
uire
men
ts
Alum
inum
com
pone
nts
Auto
foc
us
Auto
exp
osur
e
Pain
t pa
llet
Ergo
nom
ic d
esig
n
(4) Relationships between the things we can do
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 12
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
(5) Weighted rating=3x1+4x1+5x3=22
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 9 27 27 32 25
High relationship (5)Medium relationship (3)Low relationship (1)
1
1
3
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Com
pany
A
Com
pany
B
G PG PF GG PP P
Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 5
(6) How well do competing products meet customer wants
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 13
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
What the Customer
Wants
RelationshipMatrix
TechnicalAttributes and
Evaluation
How to SatisfyCustomer Wants
Interrelationships
Anal
ysis
of
Com
peti
tors
Target values(Technical attributes)
Technical evaluation
Company A 0.7 60% yes 1 ok GCompany B 0.6 50% yes 2 ok FUs 0.5 75% yes 2 ok G
0.5
A
75%
2to
2
circ
uits
Failu
re 1
per
10,0
00
Pane
l ran
king
(7) Compare performance to desirable technical attributes
House of Quality Example
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Completed House of Quality Lightweight 3Easy to use 4
Reliable 5
Easy to hold steady 2
Color correction 1
Our importance ratings
Low
ele
ctri
city
req
uire
men
ts
Alum
inum
com
pone
nts
Auto
foc
us
Auto
exp
osur
e
Pain
t pa
llet
Ergo
nom
ic d
esig
n
Com
pany
A
Com
pany
B
G P
G P
F G
G P
P P
Target values(Technical attributes)
Technical evaluation
Company A 0.7 60% yes 1 ok G
Company B 0.6 50% yes 2 ok F
Us 0.5 75% yes 2 ok G
0.5
A
75%
2to
2
circ
uits
Failu
re 1
per
10,0
00
Pane
l ran
king
22 9 27 27 32 25
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 14
House of Quality Sequence
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Deploying resources through the organization in response to customer requirements
Desi
gn
char
acte
rist
ics
Specific components
House 2
Cust
omer
re
quir
emen
ts
Design characteristics
House 1Sp
ecif
ic
com
pone
nts
Production process
House 3
Prod
ucti
on
proc
ess
Quality plan
House 4
Decision TreeSection 2.3
28
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Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 15
Application of Decision Trees
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes
Procedure
Include all possible alternatives and states of nature -including doing nothing
Enter payoffs at end of branch
Determine the expected value of each branch and prune the tree to find the alternative with the best expected value
Application of Decision Trees
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
(.6)
Low sales
(.4)
High sales
(.6) Low sales
(.4)
High salesPurchase CAD
$388,000
Hire and train engineers$365,000
Do nothing $0
$0 Net
$800,000 Revenue- 400,000 Mfg cost ($50 x 8,000)- 375,000 Hire and train cost
$25,000 Net
$2,500,000 Revenue- 1,250,000 Mfg cost ($50 x 25,000)
- 375,000 Hire and train cost$875,000 Net
$2,500,000 Revenue- 1,000,000 Mfg cost ($40 x 25,000)
- 500,000 CAD cost$1,000,000 Net
$800,000 Revenue- 320,000 Mfg cost ($40 x 8,000)- 500,000 CAD cost- $20,000 Net loss
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 16
Service DesignSection 2.4
31
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Service Design
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Service is an act
Service delivery system
Facilities
Processes
Skills
Many services are bundled with products
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 17
Service Design
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Service typically includes direct interaction with the customer
Increased opportunity for customization
Reduced productivity
Cost and quality are still determined at the design stage
Delay customization
Modularization
Reduce customer interaction, often through automation
Service Design
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Service typically includes direct interaction with the customer Increased opportunity for customizationReduced productivity
Cost and quality are still determined at the design stageDelay customizationModularizationReduce customer interaction, often through
automation
(c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating
(a) Customer participation in design such as pre-arranged funeral services or cosmetic surgery
(b) Customer participation in delivery such as stress test for cardiac exam or delivery of a baby
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 18
Service Systems
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Service systems range from those with little or no customer contact to very high degree of customer contact
such as:
Insulated technical core (software development)
Production line (automatic car wash)
Personalized service (hair cut, medical service)
Consumer participation (diet program)
Self service (supermarket)
Characteristics of Well Designed Service Systems
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
1. Consistent with the organization mission
2. User friendly
3. Robust
4. Easy to sustain
5. Cost effective
6. Value to customers
7. Effective linkages between back operations
8. Single unifying theme
9. Ensure reliability and high quality
Operations & Production Management 1/22/2015
Resource Person : Dr. Muhammad Wasif 19
Challenges of Service Design
Resource Person : Dr. Muhammad Wasif Operations & Production Management15
Variable requirements
Difficult to describe
High customer contact
Service customer encounter
Resource Person : Dr. Muhammad Wasif Operations & Production Management59
References
Operations Management, 10th Ed., by J. Heizer & B. Render
Operations Management, William J. Stevenson. Operations Management, 7th Ed., N. Slack, A.B.
Jones, R. Johnston.
Cases in Operations Management, S. Chambers, C. Harland, A. Harison, N. Slack.