CHAPTER TWO

1. Product and service design CHAPTER TWO

2. The essence of any organization is the product or services it offers. There is an obvious link b/n the design of those product or services and the success of the organization Organization that have well designed product or services are more likely to realize their goals than those with poorly designed product or services introduction

3. Product and service design plays a strategic role in the degree to achieve its goal it is a major factor in 1. Customer satisfaction , The product or service is the main concern of the customer and become the ultimate bases for judging the organization. 2. Product and service quality and The quality connection is twofold. Quality is obviously affected by design but also during production by the degree to which production conforms to the intent of design. a key factor there is Manufacturability which refers to the ease with which design features can be achieved by production. 3. Production costs. Similarly design affects cost both the cost of materials specified by design and the cost, required to achieve the intent of design e.g.. Labor and equipment cost.

4. To bring new or revised product /service to the market as quickly as possible To design product /services that have customer appeal To increase the level of customer satisfaction To increase quality To reduce cost Objective of product and service design

5. In a competitive environment getting new or improved product or service to the market a head of competitors gives an organization a competitive advantage that can lead to increased profit as well as increased market share and create an image of the organization as a leader.

6. The design process began with the motivation for design For new business or new product the motivation is to achieve the goals of the organization For existing firm in addition to that general motivation there are more specific factors to consider The Design Process

7. Factors considered to began design process for existing firm • Government Regulation • The Appearance Of New Technology • Competitive Pressure • Customer Need • The customer is driving force for design. Failure to satisfy customer can result customer complaints, return, warranty claims, loss of market share and so on.

8. In order for the design process to occur there must be ideas for new or improved designs these can come from a variety of sources. Most obviously the customer. • Marketing can tap this source of ideas in a number of ways such as the use of focuses group, surveys and the analyses of buying patterns. • Some organization have research and development department that also generate ideas for new or improved product and services.

9. Competitors are another important source of ideas by studying competitors product or service and how it operates e.g. pricing policy, return policies, warranty and so on. An organization can learn a great deal the can help to achieve design improvement

10. Beyond that some companies buy a competitors newly designed product the moment it appears on the market Using a procedure called reveres engineering. They then carefully dismantle and inspect the product. Then uncover product improvement incorporated in their own product

11. This may deny the competitors some of the rewards that usually result from being the first to introduce a new product or one with new features.

12. Product development system An effective product strategy links product decision with • Cash flows firm must have cash for product development • Market dynamics understand changes constant taking place in the market • Product life cycle • Organization capability necessary talents and resource available Product development

13. Ideas Ability Requirement: what is the customer requirement Functional specification (how the product will work) Product specification:- how the product will made Design review:- are product specification best way to meet customer requirement Test market:- does product meet customer expectation Introduction:- introducing to market Evolution evaluation of success, feed back Stage of product development

14. Idea Generation Ideas based on Competitor based Supply chain based Research based

15. Ideas Idea Generation Supply chain based Competitor based Research based

16. system and organization structure for product design New and traditional system • Traditional :-Every function is given to specialized ,isolated department. they forward the challenge to the next dep’t • New product dev’t team or concurrent engineering team that represent every part of function like marketing , production , engineering. Finance etc. they check product life success from development to marketing and disposal . They doing simultaneously the design • In addition to developing an effective system and organization structure for the product development. • Several techniquesare important We will now review five of these • Robust design • Standardization • Modular design • Computer aided design • Value analysis • Environmentally friendly design Issues for product design

17. Some of product will perform as designed only within a narrow range of condition while other will perform as designed over much broader range of condition. The latter have robust design. • The more robust a product is the less likely that it will fail due to a change in the environment in which it is used • the extent to which design can build robustness in the product the better it should hold up and the higher the level of customer satisfaction. Robust design

18. Standardization :- Extent to which there is an absence of variety in a product, service or process Standardized products are immediately available to customers • Advantages of Standardization • Fewer parts to deal with in inventory & manufacturing • Design costs are generally lower • Reduced training costs and time • More routine purchasing, handling, and inspection procedures • Orders fallible from inventory • Need for fewer parts • Opportunities for long production runs and automation Standardization

19. Designs may be frozen with too many imperfections remaining. High cost of design changes increases resistance to improvements. Decreased variety results in less consumer appeal. Disadvantages of Standardization

20. Modular design is a form of standardization in which component part are subdivided into modules that are easy replaced or interchanged. • Modular design make it possible to have relatively high product variety and low component variety at the same time and unnecessary. • The basic aid is to develop a series of basic product component or module that can be assembled in to a large number of different product to operation there are only a limited number of a basic component and process. • Instead of designing each product separately the component design product around standard component module. • Common module can serve more than one product line. Modular Design

21. Computer are use for product design computer aided (CAD)uses computer graphics for product design by means of light pen, a key board, a joystick, or similar device. • Ones the design entered into the computer, the designer can maneuver it on the screen it can be rotated to provide the designer with different perspectives • It can be split a part to give the designer a view of the inside and portion it can be enlarged for closer examination • Easy to making it accessible to manufacturing personnel and other in the firm Computer aided design

22. a major benefit is increasing productivity of designer, no longer mechanical drawing of paper work and to correct errors or incorporate revisions Creation of a data base for manufacturing supply information on product geometry and dimension tolerances, material specification and so on

23. Value analysis is a method for improving the use fullness of a product without increasing cost or reducing cost without reducing the use fullness of the product • It is great cost saving or a better product for customer • Value analysis seek improvement that lead to • Either a better product or • Product made more economically Value analysis is like a zero base budgeting Value analysis

24. Working with environmental team with employees from different functional areas to addressed a wider range of environmental issues. • They should view the impact of product design • view the product interims of its impact on the entire economy • The team should consider the life cycle of the product from row material to installation to use to disposal • The goal is to reduce the environmental impact of product throughout it is life. Environmental friendly design

25. Develop safe and more environmentally sound product • Minimizing waste of raw materials and energy • Differentiating from the competition • Increasing cost effectiveness of complying with environmental regulation • Being recognized as a good corporate citizen Green manufacturing :-The concept of GM is making environment sound product through efficient process can be good business The Benefit of Such Strategy

26. Companies can show their sensitivity to green manufacturing in product and process design in several ways • Make product recyclable • Use recycled product • Use less harm full ingredients • Use lighter component • Use less energy • Use less material Green manufacturing is appreciated by the public and it can save money, material and the environment these are the kind of win situation that operations managers seek

27. Service industries include banking, finance, insurance, transportation and communications. • Designing services is challenging because they often have unique characteristics. • One reason productivity improvement in services are so low is because both the design and delivery of service product include customer interaction • When the customer participates in the design process the service supplier may have a menu of services from which the customer select option • Because of the d/f b/n service and product the design of service must take into account different element than the design of products. Service Design

28. Consider these differences: • Product are generally tangible : service are generally intangible. Consequently service design often focuses more on intangible factors than does product design • Service are often produced and received at the some time b/c of this there is less latitude in finding and correcting errors before the customer has chance to discover them. Consequently training, process design, and customer relation are particular important. • Service can not be inventoried this poses restriction on flexibility and makes capacity design very important. • Some service have low barriers to enter and exit this places additional burden on service design to continually be aware of what competitors are offering. • Location is often important In service design with convenience as major factor hence design of service and choice of location are often closely linked

29. Decision trees can be used for new product decision as well as for a wide variety of other management problems. • They are particularly helpful when there are series of decisions and various out comes that lead to subsequent decision followed by other out come to form a decision. Be sure that all alternative and states of nature are included in the tree this include alternative of doing noting Application of decision tress to product design

30. E.g. 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 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 8000 processors selling for $100each the cost of CAD equipment is $ 500,000, but that of hiring and training three new engineers is only $375.000. however manufacturing cost 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 0.4, the probability of unfavorable acceptance is 0.6

31. Emv purchase CAD SYSTEM = .4($1000,000)+.6(-$20,000)= $388,000 • Emv hiring and training additional engineers .4($875,000)+.6(25,000)=365,000 • It is better to choose the first option(purchase CAD, system than other option