Chapter 4
Product and
Service Design
1
Trends in Product & Service Design
– Customer satisfaction
• Designing products & services that are “user friendly”
– User friendly software
– Reducing time to introduce/produce new product or
service
– PhD degree in 6 months
– The organization’s capabilities to produce or deliver the
right item on time
– Compaq could not deliver enough laptops in mid 90s
– Environmental concerns
• Designing products that use less material
– Toyota Prius
2
Product and Service Design
• Major factors in design strategy
– Cost
– Quality
– Time-to-market
– Customer satisfaction
– Competitive advantage
Product and service design – or redesign – should be
closely tied to an organization’s strategy
3
Activities of Product or Service Design
• Translate customer wants and needs into product
and service requirements
• Refine existing products and services
• Develop new products and services
• Formulate
– quality goals
– cost targets
• Construct and test prototypes
• Document specifications
4
Reasons for Product or Service Design
• Economic
• Low demand, excessive warranty claims
– SUVs easily topple over and have high warranty claims
• Social and demographic
• Changing tastes, aging population
– SUVs for generation X people who age but want to stay dynamic
• Political, liability, or legal
• Safety issues, new regulations, government changes
– SUVs easily topple over and manufacturers are sued
• Competitive
• New products and services in the market, promotions
– SUV sales are increased with promotions.
– The profit margins on SUVs are huge so a lot of room for promotions
• Cost or availability
• Raw materials, components, labor
• Technological
• Components, production processes
5
Objectives of Product and Service Design
• Main focus
– Customer satisfaction
• Secondary focus
– Function of product/service
– Cost/profit
– Quality
– Appearance
– Ease of production/assembly
– Ease of maintenance/service
6
Design For Operations
• Taking into account the capabilities of the
organization in designing goods and services
•
•
•
•
•
•
Location of facilities
Suppliers
Transportation fleet
Current workforce
Current technology
Standing contracts
– All can all limit the implementation of a new
design
7
Legal, Ethical, and Environmental Issues
• Legal
– IRS, FDA, OSHA
– 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
• Ethical
– Releasing products with defects
• Releasing Software with bugs
• Sending genetically altered food to nations suffering food shortages
• Environmental
– EPA
8
Designers Adhere to Guidelines
• Produce designs that are consistent with the
goals of the company
• Give customers the value they expect
• Make health and safety a primary concern
• Consider potential harm to the environment
9
Forthcoming Aspects of Product Design
• Product Life Cycles
• Standardization
• Mass Customization
• Modular Design
• Robust Design
• Concurrent Engineering
• Computer-Aided Design
10
Other Issues in Product and Service Design
• Product/service life cycles
• How much standardization
• Product/service reliability
• Range of operating conditions
11
Life Cycles of Products or Services
Saturation
Deman
d
Maturity
Design
for low
volume
cassettes
Decline
Growth Compact discs
Introduction
Flash memory
Time
12
Standardization
• Standardization
– Extent to which there is an absence of variety in a
product, service or process
• The degree of Standardization?
• Standardized products are immediately
available to customers
Calculators & car wash
13
Advantages of Standardization
• Fewer parts to deal with in inventory &
manufacturing
– Less costly to fill orders from inventory
• Reduced training costs and time
• More routine purchasing, handling, and inspection
procedures
• Opportunities for long production runs, automation
• Need for fewer parts justifies increased
expenditures on perfecting designs and improving
quality control procedures.
14
Disadvantages of Standardization
• Decreased variety results in less consumer appeal.
• Designs may be frozen with too many imperfections
remaining.
• High cost of design changes increases resistance to
improvements
– Who likes optimal Keyboards?
• Standard systems are more vulnerable to failure
– Epidemics: People with non-standard immune system stop the
plagues.
– Computer security: Computers with non-standard software stop the
dissemination of viruses.
15
Mass Customization
Mass customization:
– A strategy of producing standardized goods or
services, but incorporating some degree of
customization
– Modular design
– Delayed differentiation
16
Mass Customization I: Customize Services
Around Standardized Products
Warranty for contact lenses:
DEVELOPMENT
Source: B. Joseph Pine
PRODUCTION
MARKETING
DELIVERY
Deliver customized services as
well as standardized products
and services
Market customized services with standardized
products or services
Continue producing standardized products or services
Continue developing standardized products or services
17
Mass Customization II: Create Customizable
Products and Services
Gillette sensor adjusting to the contours of the face:
DEVELOPMENT
PRODUCTION
MARKETING
DELIVERY
Deliver standard (but
customizable) products
or services
Market customizable products or services
Produce standard (but customizable) products or services
Develop customizable products or services
18
Mass Customization III: Provide Quick
Response Throughout Supply Chain
Skiing parkas manufactured abroad vs in USA
DEVELOPMENT
PRODUCTION
MARKETING
DELIVERY
Reduce Delivery Cycle Times
Reduce selection and order processing cycle
times
Reduce Production cycle time
Reduce development cycle time
19
Mass Customization IV: Provide Point of
Delivery Customization
Paint mixing:
DEVELOPMENT
PRODUCTION
MARKETING
DELIVERY
Point of delivery
customization
Deliver standardize portion
Market customized products or services
Produce standardized portion centrally
Develop products where point of delivery customization is feasible
20
Delayed Differentiation
• Delayed differentiation is a postponement tactic
– Producing but not quite completing a product or service until customer
preferences or specifications are known
• Postponing the completion until customer specification are
known
• Examples: Wheeled loaders
21
Postponement Case Study: Hewlett & Packard
• H&P produces printers for Europe market. Product manuals (different
languages), labels and power supplies (plugs are different for UK, Continental
EU and US) were used to be packaged along with printers in US.
• HP postpones commitment of a printer to a certain geographic market by
producing universal printers and then applying power supplies and labels (the
parts that differentiate printers for local markets) at the last stage once demand
is more certain
• Packaging was postponed to local distribution centers in each European
country. Packaging is closer to demand (in location and time) so H&P can
respond faster and redistribute the supply:
– Ireland has 1600 with demand 1100
– Portugal has 800 with demand 1000
– Send 200 from Ireland to Portugal
•
For more read: H.L. Lee and C. Billington, "Evolution of Supply Chain Management
Models and Practice at Hewlett-Packard Company," Interfaces, 25, 5, 1995: 42-63.
22
Delayed Differentiation=Postponement
• Postponement is delaying customization step as much as
possible. Producing but not quite completing a product
or service until customer preferences or specifications
are known.
• (Salad) + (Dressings ={1000 Islands, Vinaigrette, …})
• Need:
– Indistinguishable products before customization
– Customization step is high value added
– Unpredictable, negatively correlated demand for finished
products
– Flexible processes to allow for postponement
23
Modular Design
Modular design is a form of standardization in
which component parts are subdivided into
modules that are easily replaced or
interchanged. It allows:
–
easier diagnosis and remedy of failures
–
easier repair and replacement
–
simplification of manufacturing and assembly
Disadvantage: variety decreases
24
Modular Design
Modular design is a form of standardization in which
component parts are subdivided into modules that
are easily replaced or interchanged.
– A bad example: Earlier Ford SUVs shared the lower
body with Ford cars
Due to standardization, it allows:
– easier diagnosis and remedy of failures
– easier repair and replacement
– simplification of manufacturing and assembly
25
Types of Modularity for Mass Customization
Component Sharing Modularity, Dell
Cut-to-Fit Modularity,
Gutters that do not require
seams
Bus Modularity, E-books
+
=
Mix Modularity, Paints
Sectional Modularity, LEGO
26
Mass Customization V: Modularize
Components to Customize End Products
Computer industry, Dell computers:
DEVELOPMENT
PRODUCTION
MARKETING
DELIVERY
Deliver customized product
Market customized products or services
Produce modularized components
Develop modularized products
27
Reliability
• Reliability: The ability of a product, part, or
system to perform its intended function under a
prescribed set of conditions
• Failure: Situation in which a product, part, or
system does not perform as intended
• Normal operating conditions: The set of
conditions under which an item’s reliability is
specified
– A regular car is not to be driven at 200 mph
– A bed is not to be used as a trampoline
28
Improving Reliability
• Good component design improve system reliability
• Production/assembly techniques
• Testing
•To figure out defectives / weak units
•Dell tests each computer’s electric circuitry after the assembly
• Redundancy/backup
•Exactly why your car has a spare tire
• Preventive maintenance procedures
•Medical check-ups to discover potential diseases
• User education
• System design
29
Robust Design
Design that can function over a broad range of conditions
Taguchi’s Approach:
• Design a robust product
– Insensitive to environmental factors either in manufacturing or in use.
• Columbia parkas with fleece inside
–
–
–
–
–
For skiing and rainy weather: Take out the fleece use the outer shell
For dry cold air: Wear the fleece without the outer shell
For a snow storm: Wear the fleece with the shell
When you put on weight: Ease the belts for a relaxed fit
When you are sweating: Open air ducts for breathing your body
• Central feature is Parameter Design. How to set design parameters?
– Design of experiments – a Statistics concept
• Determines:
– factors that are controllable and those not controllable
– their optimal levels relative for good product performance
30
Phases in Product Development Process
1.
2.
3.
4.
5.
6.
7.
8.
9.
Idea generation
Feasibility analysis (Demand, cost/profit, capacity)
Product specifications (customer requirement)
Process specifications (produce in economic way)
Prototype development
Design review
Market test
Product introduction (promotion)
Follow-up evaluation
31
Idea Generation
Supply chain based
Ideas
Competitor based
Research based
32
Sources of Ideas for Products and Services
• Internal
– Employees
– Marketing department
– R&D department
• External
– Customers, sometimes misleading
– Competitors
• Reverse engineering is the dismantling and inspecting
of a competitor’s product to discover product improvements.
• Benchmarking is comparing and contrasting product and process
characteristics against those of competitors
• Both can be classified as environmental scanning activity
– Suppliers & Customers,
• Ford helps its suppliers in designing components
33
Research & Development (R&D)
• Organized efforts to increase scientific knowledge or
product innovation & may involve:
– Basic Research advances
• Universities, IBM research centers
– Applied Research
• Motorola, Alcatel
– Development
• All companies
34
Manufacturability
• Manufacturability is the ease of
fabrication and/or assembly which is
important for the following aspects:
–
Cost
–
Productivity
–
Quality
35
Design for Manufacturing
Beyond the overall objective to achieve customer
satisfaction while making a reasonable profit is:
Design for Manufacturing (DFM) : The designers’
consideration of the organization’s manufacturing
capabilities when designing a product.
The more general term design for operations
encompasses transportation, services as well as
manufacturing
36
“Over the Wall” Approach vs
Concurrent Engineering
New
Product
Mfg
Design
37
Concurrent Engineering
Concurrent engineering: Bringing
engineering design and manufacturing
personnel together early in the design
phase.
• Manufacturing personnel helps to identify production capabilities,
selecting suitable materials and process, the conflicts during
production can be reduced.
• Early consideration of technical feasibility.
• Shortening the product development process.
38
Product design
• Design for manufacturing (DFM)
• Design for assembly (DFA)
number of parts, methods, sequence.
• Design for recycling (DFR)
• Remanufacturing
• Design for disassembly (DFD)
39
Computer-Aided Design
• Computer-Aided Design (CAD) is product design using
computer graphics.
• increases productivity of designers, 3 to 10 times
• creates a database for manufacturing information on product
specifications
• Simplifies communication of a design. Design teams at various
locations can work together.
• provides possibility of engineering and cost analysis on proposed
designs
• Transonic Systems Inc. manufactures customized medical devices;
pomps, blood vessel, blood pressure measurement equipment.
– Design to manufacturing was long, problematic, designers and manufacturing
engineers could not work on designs simultaneously, some of the previous
designs were lost (talking of knowledge management).
– Savior: CAD
40
Recycling-Remanufacturing
– Recycling: recovering materials for future use
– Recycling reasons
• Cost savings
• Environment concerns
• Environment regulations
– Remanufacturing: replacing worn out parts in
used products
• Kodak cameras
– Design for disassembly is considering ease of
disassembly while designing a product
– Reverse supply chains
41
Quality Function Deployment
• Quality Function Deployment
– Voice of the customer
– House of quality
QFD: An approach that integrates the “voice of the
customer” into the product and service development
process.
42
The House of Quality
Correlation
matrix
Design
requirements
Customer
requirements
Relationship
matrix
Competitive
assessment
Specifications
or
target values
43
Quality Function Deployment
A structured and disciplined process that provides a means to
identify and carry the voice of the customer through each stage
of product or service development and implementation
QFD is for:
•Communication
•Documentation
•Analysis
•Prioritization
breakthroughs
44
House of Quality Example for a Car Door
Correlation:
X
X
X
3
Doesn’t leak in rain
3
No road noise
2
Water resistance
Accoust. Trans.
Window
Check force
on level
ground
Energy needed
to open door
5
AB
A XB
X A
63
Reduce energy
level to 7.5 ft/lb
Importance weighting
Target values
Technical evaluation
(5 is best)
X = Us
A = Comp. A
B = Comp. B
(5 is best)
1 2 3 4
XAB
5
4
3
2
1
B
A
X
63
BA
X
45
B
A
X
27
B
X
A
6
BXA
27
Maintain
current level
Easy to open
Competitive evaluation
X AB
Maintain
current level
5
Reduce energy
to 7.5 ft/lb.
Stays open on a hill
*
X
Reduce force
to 9 lb.
7
Maintain
current level
Easy to close
Door seal
resistance
Customer
Requirements
Energy needed
to close door
Engineering
Characteristics
X
X
X
Strong positive
Positive
Negative
Strong negative
B
Relationships:
Strong = 9
Medium = 3
Small = 1
BA
X
45
The QFD and Kano Model
Japanese QFD Results
–
–
–
–
Design time reduced by ¼ to ½
Problems with initial quality decreased
Comparison and analysis of competitive products became possible
Communication between divisions improved
The Kano Model
• Product Characteristics:
– Must have = Order qualifiers
– Expected = Order qualifiers, winners
– Excitement = Order winners
1. Make sure that you have the order qualifiers
2. Determine the level of order winners with a cost/benefit analysis
46
Service Design
• Service is an act
• Service delivery system
– Facilities
– Processes
– Skills
• Explicit services
– Core of the service: Hair styling
• Implicit services
– Excitement characteristics: Courtesy
• Many services are bundled with products
– Maintenance services
– Conecpt of selling solutions: Products and Services
• E.g. IBM
47
Phases in Service Design
1.Conceptualize
2.Identify service components
3.Determine performance specifications
4.Translate performance specifications into
design specifications
5.Translate design specifications into delivery
specifications
48
Service Blueprinting
•
Service blueprinting: A method used in service
design to describe and analyze a proposed service
A useful tool for conceptualizing a service delivery
system
Major Steps in Service Blueprinting
•
•
1.
2.
3.
4.
5.
6.
Establish boundaries
Identify steps involved
Prepare a flowchart, see the next page, source in justice-flowchart.pdf
Identify potential failure points
Establish a time frame
Analyze profitability
49
50
Characteristics of Well Designed
Service Systems
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Consistent with the organization mission
User friendly: Do we understand it?
Robust: Can it function under various conditions?
Easy to sustain: Requires to much effort?
Cost effective: Does it cost too much?
Value to customers: Who are the customers?
Effective linkages between back-office operations
Single unifying theme: What does the justice system do?
Ensure reliability and high quality
Consistency.
Up-to-date: Does it evolve?
You be the judge for
the justice system
How do you rate the
system in terms of
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
51
Challenges of Service Design
• Variable requirements
– Criminals and the cases are different
• Difficult to describe
– How do you describe a criminal action?
– We need the court system.
• Descriptions are not exact because they are based on words.
• This is exactly why lawyers make a living; or perhaps more.
• High customer contact
– Service cannot be inventoried
• Service – customer encounter
52
Differences Between Product
and Service Design
Most often product and services are provided together.
Products vs. Services are
• Tangible – intangible
• Services created and delivered at the same time
• Services cannot be inventoried
• Services highly visible to customers
• Services have low barrier to entry
• Location important to service
– Ambiance
– Convenience
53
Service Variability & Customer
Influence Service Design
Figure 4-3
Variability
in
Service
Requirements
High
Customized
Clothing
Moderate
Dept. Store
Purchase
Low
None
Telephone
Purchase
Internet
Purchase
None
Low
Moderate
High
Degree of Contact with
Customer
Where are medical services, internet law consultants?
54
Operations Strategy
• Shorten time-to-market
• Package products and services
– Sell “solutions” not products
•
•
•
•
Increase emphasis on component commonality
Use multiple-use platforms
Consider tactics for mass customization
Look for continual improvement
55
Summary: Product design
•
•
•
•
•
•
•
Remanufacturing-recycling
Robust design
Design for manufacturing (DFM)
Design for assembly (DFA)
Design for disassembly (DFD)
Design for recycling (DFR)
Reliability
56
Practice Questions
• True/ False:
• 1.One of the main advantages of standardization is
that it increases the potential variety of products.
• 2. Product failures can be easier to remedy with
modular design.
• 3. Quality function deployment (QFD) is based on
a set of standards which relate customer
requirements to company capabilities.
1.Answer: False Page: 127
2.Answer: True Page: 129
3.Answer: False Page: 143
57
Practice Question
• Multiple-Choice:
• 4. The term standardization is closely associated
with:
•
A) customization
•
B) high cost
•
C) longer lead times
•
D) variety
•
E) interchangeability
Answer:
E Page: 127
58
Practice Question
• 4. A formal way to document customer
requirements is:
•
A) consumer surveys
•
B) quality function deployment (QFD)
•
C) focus groups
•
D) Delphi technique
•
E) sales/marketing matrix
Answer: B Page: 142
59
Practice Question
• 6. The stage in a product or service life cycle
where some firms adopt a defensive research
posture is:
•
A) incubation
•
B) growth
•
C) maturity
•
D) saturation
•
E) decline
Answer: E Page: 126
60
Reliability
• Reliability: The ability of a product, part, or system to perform its intended
function under a prescribed set of conditions
• Failure: Situation in which a product, part, or system does not perform as
intended
• Normal operating conditions: The set of conditions under which an item’s
reliability is specified
• Reliability is a Probability, that the product or system will:
– Function when activated
– Function for a given length of time
• Independent events
• Redundancy; Why to have spare tires on the car?
61
Parallel vs Serial Components
A product is composed of several components. Suppose components fail/work
independently.
If all components must function for the product to function, components are
serial. Example: Laptop and projector.
A
B
Water flowing from left to right analogy. P(System works)=P(A works) P(B works)
If at least one component must function for the
product to function, components are parallel.
Example: Two batteries of a laptop.
P(System fails)=P(A fails) P(B fails)
A
B
62
Example: Reliability Diagram
Determine the reliability of the system shown
.90
.92
.90
.95
.98
Compare this diagram to that of Example S-1
63
Example
The system can be reduced to a series of three components
By collapsing parallel components
0.98
1-(0.10)(0.10)
1-(0.05)(0.08)
0.98 x 0.99 x 0.996
64
Failure Rate:
Personal life expectancy – Strike life expectancy
Figure 4S-1
Infant
mortality
Few (random) failures
Failures due
to wear-out
Time, T
65
Exponential Distribution for Life X
X ~ Expo( ), f ( x)  e x , E ( X )  1 /   MTBF , P( X  T )  eT
pdf f(x)
Reliability=P(x>T)=1-F(T)
cdf F(T)=P(X<T)
T
Time
66
Use Exponential Distribution
to Model Lifetime
• Exponential distribution is a simple density
used to model lifetimes
• Its failure rate is constant
– So does not apply to human life. Insurers use more
complicated densities.
• The reliability of each part in a system
Reliability=P(Part works at T)=1-F(T)
• Once reliabilities are computed for all parts,
combine parts according to whether serial or
parallel
67
Improving Reliability
• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
How much of reliability is good? Cost-benefit analysis.
68