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Chapter 4 =
on
PRODUCT DESIGN
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Core
competency: what an organization can do better than its competitors
(relate to competitive priorities—price, quality, dependability,
flexibility, time). What i=
s the
company known for?
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=
Usually the company’s core competency drives, at l=
east
to some extent, the product development process—synergy!
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It is possible to use Contract Manufacturers to manufact=
ure
a product for you—you design it and they make it to your
specifications—you hope! It
is likewise possible to outsource product/service design and let some compa=
ny,
a company that is really good at it, do it for you!
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Product
Development Process:
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Planning <=
/span>à Concept Development à System-Le=
vel
Planning à
Detail Design à Testing a=
nd
Refinement à Production
Ramp-Up
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=
Involves, Marketing, Engineering (product and process), =
and
Operations (they know what is and is not feasible—they do it!)
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Supporting roles by Finance, Leg=
al
Staff, HRM, etc.
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Market pull
vs. Technology Push
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Platform
Technology: Develop products that use existi=
ng
platform, possibly building on existing competitive advantage.
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Process-In=
tensive
Products: Usually product design and process
designed developed simultaneously because cannot really be separated (also =
true
of service/service system design).
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=
Customized=
, High-Risk,
Quick-Build, and Complex System products=
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Economic
Justification: Will it make the company money,
directly (sales revenue – total product cost) or indirectly (increasi=
ng
profitability of other products).
NPV, ROI, IRR, Payback BE Analysis, etc. are techniques/decision mak=
ing
criteria.
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=
Good to have a look at the economics of it at various po=
ints
along the way (milestones=
,
or right before the next MAJOR commitment).
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DESIGNING =
FOR
THE CUSTOMER
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=
Industrial
Design—designing for aesthetics =
and
the user (to meet the users’ needs).
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=
Quality
Function Deployment: incorporating the voice of the
customer into the product design/redesign specifications. Employs
inter-functional teams from marketing, design engineering, and manufacturin=
g to
translate customer needs into a product that meets those needs. The =
House of Quality is a communicati=
on
tool for translating customer needs in to concrete action that can be taken=
to
make/change a product such that it meets customer needs.
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=
![](3D"Chapter4PRODUCTDESIGN_files/image002.gif")
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Value Analysis/Value Engineeringà simplify, simplify, simplify=
!
Value Engineering is us=
ed
to engineer value (emphasis on cost avoidance) into new products whe=
reas
Value Analysis is used to re-engineer products (existing products) to
enhance value (emphasis on cost reduction).
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=
Value =3D quality / price (customer perspective) or cost (business
perspective)
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=
The goal is to achieve as good=
or
better performance in meeting customer needs, while reducing the cost of the
product. Emphasis is on simpl=
ifying
the product design to use fewer parts, cheaper parts, f=
ewer
operations in manufacturing, ease of use by customer. Make it just as good or better,=
but
cheaper!
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=
Designing Products for Manufacture and Assembly <=
/b>design the product/service so =
that
it is simple to make so that it can be made well (fit for customer’s
intended use). Best to adhere to the KISS principle (keep it simple
stupid!). Simple is easy to g=
et
right, first time and every time!
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=
Note: It i=
s a
good idea to consider process design while considering product design
(concurrent engineering), so that you design products that will be easy and
inexpensive to make.
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ASSESSING THE PERFORMANCE OF PRODUCT DEVELOPMENT
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=
Usually assessed relative to:
=
= Time—timely response to customer needs, time to market, frequency of new product introductions, time between new product introductions, started = vs. completed, actual vs. planned, performance, % of sales from new products. <= o:p>
Impact on Competitiveness—responsiveness to customers/competitors,
quality of design (close to market), frequency of projects (product
life-cycle).
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=
Productivity--Engineering hours/project, cost of materials a=
nd
tooling per project, actual vs. planned.
Impact on Competitiveness—number of products (freshness and breadth=
of
line), and Frequency of projects (economics of development).<=
span
style=3D'font-size:16.0pt;font-family:"Tahoma","sans-serif";mso-fareast-fon=
t-family:
"Times New Roman";mso-bidi-font-weight:bold'>
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=
Quality—conformance to specs, reliability in use, design=
quality
(does it meet customer needs to a high degree), yield (factory and
field—maximum revenue for money spent).
—=
;reputation
(customer loyalty, relative attractiveness to customers (market share), and
profitability (cost of ongoing service).
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Relating PRODUCT PLANNING to COMPETITIVE PRIORITIES
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=
PRODUCT PLANNING=
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=
It is an ongoing process. Aff=
ects
operations management because operations managers must produce/provide the
products. Product plan=
ning
should span the entire product life cycle. Plans of marketing, operations, and
finance must be coordinated.
Product planning must be consistent with overall corporate strategy =
and
with a firm’s corporate mission.
=
=
Basically a firms undertakes
product planning with the objective of achieving long term profitability--<=
u>the
key to survival.
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=
Product planning as it relates to the product life cycle=
—entrance
exit strategies.
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ENTRANCE--EXIT STRATEGY A:
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Enter early and exit late.
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Enter->introduction
Exit-->decline
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Implications for Operations:
=
=
transition from low-volume,flexible pr=
oducer
to high-volume, low-cost producer.
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ENTRANCE--EXIT STRATEGY B:
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=
Enter early and exit early.
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Enter->introduction
Exit-->maturity
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Implications for Operations:
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=
low-volume, flexible producer.
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ENTRANCE--EXIT STRATEGY C:
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=
Enter late and exit late.
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Enter->growth
Exit-->decline
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Implications for Operations:
=
=
high-volume, low cost producer.(may use preemptive strategy)=
.
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MANAGING THE PRODUCT LIFE CYCLE INVOLVES MANY COMPLEX
DECISIONS-
=
=
-NOT JUST WHEN TO INTRODUCE NEW PRODUCTS.
=
. when to
modify
=
. new=
uses
for products
=
. When to drop
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POSITIONING STRATEGIES:
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=
PRODUCT VS. PROCESS, OR SOMEWHERE IN BET=
WEEN.
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Process Focus: &nb=
sp;
Ex. Job Shop.
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=
Intermediate: Ex. Batch.
=
=
Product:
Ex. Flow Shop&n=
bsp;
(Process).
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=
Basically, the positioning decision should flow from oth=
er
strategic decisions, like the product development strategy! (depends on
other decisions).
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=
What about services?
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=
Product planning also applies to services, but services
often more directly involve the customer.
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=
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It
is important to consider variation in the service to meet customer needs, a=
nd
that may be very much interactive in nature.
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Service
Experience fit—new services should fit in the context of the total
service experience of the customer.
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Operational
fit—does the service fit with the operational capabilities of the firm
(can you do it?).
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