LOB - Product Design
LOB - Product Design
LOB - Product Design
MANAGEMENT
#4 Product D es ign
OUTLINE
• Goods and Services Selection
• Generating New Products
• Product Development
• Issues for Product Design
• Product Development Continuum
• Defining a Product
• Documents for Production
• Service Design
• Application of Decision Trees to Product Design
• Transition to Production
GOODS AND SERVICES SELECTION
• 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
• Limited and predicable 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
50% –
GOODS AND
SERVICES 40% –
products
The higher the percentage of
sales from the last 5 years, the
more likely the firm is to be a
leader. 20% –
10% –
0% –
Industry Top Middle third Bottom
leader third third
Loss Profit
Loss
Introduction Growth Maturity Decline
PRODUCT LIFE CYCLE
1. Introductory phase 3. Maturity phase
• Fine tuning may warrant unusual • Competitors now established
expenses for • High volume, innovative production
• Research may be needed
• Product development
• Improved cost control, reduction in
• Process modification and enhancement options, paring down of product line
• Supplier development
4. Decline phase
2. Growth phase
• Unless product makes a special
• Product design begins to stabilize contribution to the organization, must
• Effective forecasting of capacity plan to terminate offering
becomes necessary
• Adding or enhancing capacity may be
necessary
Costs committed
100 –
PRODUCT LIFE 80 –
CYCLE COSTS
40 –
20 – Ease of change
0–
Concept Detailed Manufacturing Distribution,
design design service,
prototype and disposal
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
Concept
Feasibility
Customer Requirements
Functional Specifications
Introduction
Evaluation
QUALITY FUNCTION DEPLOYMENT
• Quality function deployment (QFD)
• Determine what will satisfy the customer
• Translate those customer desires into the target design
• House of quality
• Utilize a planning matrix to relate customer wants to how the firm is going to
meet those wants
QUALITY FUNCTION DEPLOYMENT
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 firm’s hows
5. Develop our importance ratings
6. Evaluate competing products
7. Compare performance to desirable technical attributes
Interrelationships
Customer
importance
QFD HOUSE OF ratings
How to satisfy
customer wants
QUALITY
Competitive
assessment
What the Relationship
customer matrix
wants
How to Satisfy
Customer Wants
Competitor
Analysis of
What the
Relationship
Customer
s
Matrix
Wants
Technical
Attributes and
Evaluation
What the
customer wants
Customer
importance
rating
(5 = highest)
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
Interrelationships
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Aluminum components
Ergonomic design
Customer Wants
Auto exposure
Auto focus
Interrelationships
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Medium relationship
Low relationship
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
Relationship matrix
Interrelationships
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Relationships between
the things we can do
Aluminum components
Ergonomic design
Auto exposure
Auto focus
Interrelationships
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
Weighted
rating
Interrelationships
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Company A
Company B
How well do competing
products meet customer
wants
Lightweight 3 G P
Easy to use 4 G P
Reliable 5 F G
Easy to hold steady 2 G P
High resolution 1 P P
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Panel ranking
Target values
(Technical
2 circuits
attributes)
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F
Aluminum components
Ergonomic design
Auto exposure
Company A
Company B
Auto focus
Completed
House of Lightweight
Easy to use
3
4
G
G
P
P
Panel ranking
(Technical
attributes)
2 circuits
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F
Us 0.5 75% yes 2 ok G
HOUSE OF QUALITY SEQUENCE
Deploying resources through the organization in response to customer requirements
Quality
plan
Production
process
Production
Specific
House
process
components
4
components
House
Specific
Design
characteristics
characteristics 3
House
Design
2
requirements
House
Customer
1
ORGANIZING FOR PRODUCT
DEVELOPMENT
• 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
• 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
• Product development teams
• Market requirements to product success
• Cross functional teams often involving vendors
• Open, highly participative environment
• Concurrent engineering
• Simultaneous performance of product development stages
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
• Robust design • Virtual reality technology
• Product is designed so that small variations in production • Computer technology used to develop an
or assembly do not adversely affect the product interactive, 3-D model of a product from the basic
• Typically results in lower cost and higher quality CAD data
• Allows people to ‘see’ the finished design before a
• Modular design physical model is built
• Products designed in easily segmented components • Very effective in large-scale designs such as plant
layout
• Adds flexibility to both production and marketing
• Improved ability to satisfy customer requirements • Value analysis
• Focuses on design improvement during production
• Computer-aided design (CAD)
• Seeks improvements leading either to a better
• Using computers to design products and prepare
product or a product which can be produced more
engineering documentation
economically with less environmental impact
• Shorter development cycles, improved accuracy, lower
cost • Sustainability and Life Cycle Assessment (LCA)
• Information and designs can be deployed worldwide • Sustainability means meeting the needs of the
present without compromising the ability of future
• Computer-aided manufacturing (CAM) generations to meet their needs
• Utilizing specialized computers and program to control • LCA is a formal evaluation of the environmental
manufacturing equipment impact of a product
• Often driven by the CAD system (CAD/CAM)
CAD/CAM
EXTENSION OF CAD BENEFITS OF CAD/CAM
• Joint Ventures
• Both organizations learn
• Risks are shared
• Alliances
• Cooperative agreements between independent organizations
• Useful when technology is developing
• Reduces risks
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 (BOM) lists the components of a product
• Monterey Jack Cheese example
PRODUCT DOCUMENTS
• Engineering drawing NUMBER DESCRIPTION QTY
A 60-71 PANEL WELDM’T 1
• Shows dimensions, tolerances, and materials
A 60-7 LOWER ROLLER ASSM. 1
• Shows codes for Group Technology R 60-17 ROLLER 1
R 60-428 PIN 1
P 60-2 LOCKNUT 1
• Bill of Material A 60-72 GUIDE ASSM. REAR 1
• Lists components, quantities and where used R 60-57-1 SUPPORT ANGLE 1
A 60-4 ROLLER ASSM. 1
• Shows product structure 02-50-1150 BOLT 1
A 60-73 GUIDE ASSM. FRONT 1
A 60-74 SUPPORT WELDM’T 1
R 60-99 WEAR PLATE 1
02-50-1150 BOLT 1
MAKE-OR-BUY DECISIONS
• Produce components themselves or buy from an outside source
• Variations in
• Quality
• Cost
• Delivery schedules
• Assembly chart
• Identifies the point of production where components flow into subassemblies and ultimately into the
final product
• Route sheet
• Lists the operations and times required to produce a component
• Work order
• Instructions to produce a given quantity of a particular item, usually to a schedule
(.4)
High sales
(.6)
Low sales
Do nothing
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD
High sales – 500,000 CAD cost
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(– $20,000)
(.6)
Low sales
Do nothing
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD
High sales – 500,000 CAD cost
$388,000
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(– $20,000)
= $388,000
(.6)
Low sales
Do nothing
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD
High sales – 500,000 CAD cost
$388,000
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
$365,000
$2,500,000 Revenue
(.4) – 1,250,000 Mfg cost ($50 x 25,000)
High sales – 375,000 Hire and train cost
$875,000 Net
$800,000 Revenue
(.6) – 400,000 Mfg cost ($50 x 8,000)
Low sales – 375,000 Hire and train cost
Do nothing $0 $25,000 Net
$0 Net
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
• Responsibility must also transition as the product moves through its life cycle
• Line management takes over from design