03. product design

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    Product Design 1

    Product Design

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    Product Design 2

    Humorin Product Design

    As the customer

    wanted it.As Marketing

    interpreted it.

    As Engineering

    designed it.

    As Operations

    made it.

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    Product Design 3

    Whats a Product?

    Need-satisfying offering of an

    organization

    Example P&G does not sell laundry detergent

    P&G sells the benefit of clean clothes

    Customers buy satisfaction, not parts May be a good and/or service: a product

    service bundle

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    Product Design 4

    Product Components

    Product

    Product

    Idea Package

    Physical

    Good Features

    Quality

    Level

    Service

    (Warranty)

    Brand

    (Name)

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    Product Design 6

    Product Life Cycle

    Intro-

    ductionGrowth

    Time

    Sales

    1995 Corel Corp.

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    Product Design 7

    Product Life Cycle

    Intro-

    ductionGrowth Maturity

    Time

    Sales

    1995 Corel Corp.

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    Product Design 8

    Product Life Cycle

    Intro-

    ductionGrowth Maturity Decline

    Time

    Sales

    1995 Corel Corp.

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    Product Design 9

    Product Life Cycle

    Intro-

    ductionGrowth Maturity Decline

    Time

    Sales

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    Product Design 11

    LEARNING OBJECTIVES

    Demonstrate your understanding of the cross-functional linkagesinvolved in designing product-service bundles

    Describe the tasks involved in designing product-service bundles Summarize the traditional approach to designing product-service

    bundles

    Describe the modern approach to designing product-service bundles Compare and contrast a variety of tools that are useful in the designprocesses, and use break-even analysis

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    Product Design 13

    Importance of Product Design

    THEREFORE

    THE DESIGN OF GOODS ANDSERVICES ARE CRUCIAL TO SUCCESSIN TODAYSGLOBAL COMPETITION

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    Product Design 14

    INTRODUCTION

    Designing product-service bundles is facilitatedby managing white spaces

    Development of a product-service bundlerequires completion of a defined set of tasks

    Customers are less likely to accept partialsatisfaction of requirements

    Product-service bundle design is an ongoingprocess

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    Product Design 15

    Product Decisions

    Involve selecting products to offer,defining products, & designing products

    Objective

    Meet marketplace demand with a producthaving a competitive advantage

    Affect entire organization

    Example: equipment, layout, skills etc.

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    Product Design 16

    Product Decisions

    ENTAILS EVALUATION OF

    COMPETING PRODUCT CONCEPTS

    AND/OR MAJOR MODIFICATION OF

    CURRENT PRODUCTS

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    Product Design 18

    TASKS IN THE DESIGN OFPRODUCT-SERVICE BUNDLES

    Doing market research

    Performing basic scientific research

    Choosing or developing a technology

    Developing specific applications,systems, and/or products and services

    Testing performance of new systemsand/or products and services

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    Product Design 19

    TASKS IN THE DESIGNOF PRODUCT-SERVICE BUNDLES

    Creating a value-adding system:

    product creation processes

    delivery systems maintenance and support services

    allied service and product deliverysystems

    supplier capabilities

    distribution system

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    Product Design 20

    Ensuring legal and regulatorycompliance of new applications,systems, and/or products and services

    Obtaining patents, trademarks, andcopyrights

    Develop marketing plan:

    place, price, promotion customer education

    TASKS IN THE DESIGNOF PRODUCT-SERVICE BUNDLES

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    Product Design 21

    HE TRADITIONAL APPROACH TO THE DESIGN OF PRODUCTSERVICE BUNDLES

    Over-the-wall approach set of sequentially related tasks

    each task represented by different function

    each function works in isolation from others

    Trends that challenge the traditionalapproach

    globalization of business

    rapid technological change shortening product life cycles

    e-commerce

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    Product Design 23

    THE MODERN APPROACH TO THE DESIGNOF PRODUCT-SERVICE BUNDLES

    Over-the-wall approach spans whitespaces; it doesnt manage them

    Greater emphasis on management of

    all functions throughout the designprocess

    Cross-functional design team typically

    manages the entire design process Concurrent team approach

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    Product Design 24

    DESIGNING PRODUCT-SERVICE BUNDLES:MODERN APPROACH

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    Product Design 25

    TEAM STRUCTUREINSTEAD OF FUNCTIONAL STRUCTURE

    Each function spins in its contribution Customer is seen as part of the design

    team

    Functional excellence remainsimportant, but is subordinate tocustomer satisfaction

    Ability of members to make significantcontributions at each stage of the design

    process Concurrent team approach is not alwayseasy

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    Product Design 26

    CONCURRENT ENGINEERINGINSTEAD OF SEQUENTIAL/HIERARCHICAL ENGINEERING

    Concerns of more than one functionare considered simultaneously

    Concurrent EngineeringStrategies/Methods: Design for manufacturing (DFM)

    Taguchi methods

    Design for disassembly Design for procurement

    Design for environment

    Life cycle analysis

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    Product Design 27

    GROUP TECHNOLOGY ANDADDITIONAL DESIGN STRATEGIES

    Group technologybased on commonalities

    Modular designconsiders an itemscomponents or subsystems independently

    Product simplification improvesmanufacturability, serviceability or reliabilityby reducing the complexity

    E-commerce plays a role in the designprocess

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    Product Design 28

    QUALITY FUNCTION DEPLOYMENT (QFD)

    Used to integrate customer expectations withproduct design decisions

    Competitive analysis gathers information on

    customer satisfaction Technical analysis gathers information on

    production technologies, reliability, andperformance

    Design targets are used to position the product-service bundle to best advantage

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    Product Design 29

    GENERIC HOUSE OF QUALITY

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    Product Design 30

    Product Development Stages

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    Product Design 31

    Product Development Stages Idea Generation

    Market Requirements

    Functional Specification

    Product Specification

    Design Review

    Test Market

    Introduction Life Cycle Management

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    Product Design 32

    0

    500

    1000

    1500

    2000

    Few Successes

    Market

    req.Functionalspec.

    Product

    spec.

    Successful

    product

    Design review,Testing, Intro.

    1750

    1000

    500

    10025 1

    Development Stage

    Number

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    Product Design 33

    Idea Generation Stage

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    Product Design 34

    Idea Generation Stage

    Provides ideas that provide basis forentry into market

    Sources of ideas

    Market need (60-80%); engineering &operations (20%); technology;competitors; inventions; employees

    Follows from marketing strategy Identifies, defines, & selects best market

    opportunities

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    Product Design 35

    Factors Creating MarketOpportunities

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    Product Design 37

    Market Requirements Stage

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    Product Design 39

    Functional Specification Stage

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    Product Design 40

    Functional Specification Stage

    Defines product in terms of how the product would meetdesired attributes

    Identifies products engineering characteristics

    Example: printer noise (dB) Prioritizes engineering characteristics

    May rate product to competitorsProduct

    Char.

    Customer

    Req.

    House of Quality

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    Product Design 41

    Product Specification Stage

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    Product Design 42

    Product Specification Stage

    Determines how product will be made

    Gives products physical specifications

    Example: Dimensions, material etc.

    Defined by engineeringdrawing

    Done often on computer

    Called Computer-Aided Design (CAD)

    Component

    Spec.Product

    Char.

    House of Quality

    C t Aid d

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    Product Design 43

    Computer AidedDesign (CAD)

    Designing products ata computer terminal orwork station

    Design engineerdevelops roughsketch of product

    Uses computer todraw product

    Often used with CAM 1995 Corel Corp.

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    Product Design 44

    Benefits of CAD/CAM

    Shorter design time

    Database availability

    New capabilities Example: Focus more on product ideas

    Improved product quality

    Reduced production costs

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    Product Design 45

    Designing for

    Product ReliabilityDesign Issue

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    Product Design 46

    Reliability

    Often a desired attribute of customers Probability that a component or

    system will function for a given time

    Ways to increase Improve individual components

    Responsibility of design engineering& purchasing

    Provide redundancy

    Design includes backup components

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    Product Design 47

    System Reliability

    System: a group of interacting parts

    Reliability depends on two factors

    Number of components

    Component reliability

    Equation

    Rs= R1x R2x R3x ... x Rn 0 Ri 1

    Components are independent

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    Product Design 48

    System Reliability

    System: a group of interacting parts

    Reliability depends on two factors

    Number of components

    Component reliability

    Equation

    Rs= R1x R2x R3x ... x Rn 0 Ri 1

    Components are independent

    Ri= Reliability of

    component i

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    Product Design 49

    Failure

    Change in product or system fromsatisfactory to below standard

    )N(FRMTBF

    operatedhoursunitNo.

    failuresNo.)N(FR

    %testedunitsNo.

    failuresNo.(%)FR

    1

    100

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    Product Design 50

    Redundancy

    Increases system reliability

    Means at least 1 component has a backup

    (duplicate) Reliability of component with backup

    = P(1stworking) + [P(2ndworking x P(1stfailing)]

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    Product Design 51

    Redundancy Example

    What is the reliability of this system?

    .95

    .92

    .98

    .89

    .90

    Backup

    components

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    Product Design 52

    Redundancy Example

    What is the reliability of this system?

    .95

    .92

    .98

    .89

    .90

    R = [.95+ .92(1-.95)] [.98] [.90+ .89(1-.90)]

    = (.996) (.98) (.989) = .965 = 96.5%

    Backup

    components

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    Product Design 53

    Design Review Stage

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    Product Design 54

    Design Review Stage

    Determines how product will be madeeconomically & quality robust

    Shows steps in process

    Example: Drill hole to 1/4diameter

    Often uses value

    engineering toreduce costs

    House of Quality

    Production

    Process

    Component

    Spec.

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    Product Design 55

    Life Cycle Management Stage

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    Product Design 56

    Life Cycle Management Stage

    Involves adjusting strategies to deal withopportunities & threats

    Uses product-by-value analysis

    Lists products in descending order of unit & totalcontribution ($)

    Reasons for product failure Competitive response

    Changes in market environment Insufficient return on investment (ROI)

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    Product Design 58

    COST VOLUME BREAK-EVEN ANALYSIS

    Y= 55X

    Y= 5000 + 45X

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    Product Design 59

    Organization for New Product

    Development

    INTEGRATING OPERATIONS MANAGEMENT

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    Product Design 60

    INTEGRATING OPERATIONS MANAGEMENTWITH OTHER FUNCTIONS

    Historical functions most involved indesigning products and services:

    marketing involved in identifying customer

    requirements engineering involved in actually producing

    Modern design processes draw on

    cross-functional teams separating design from other operationaldecisions can hinder efforts to satisfycustomers

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    Organizing for New

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    Product Design 62

    Organizing for NewProduct Development

    Team approach works best

    Composed of marketing, engineering etc.

    Product development teams Responsible for product during all stages of

    life cycle

    Design for manufacturability &value engineering teams

    Responsible for improving product design toreduce costs

    Required Factors

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    Product Design 63

    Required Factorsfor Team Success

    Support of top management

    Qualified, experienced leadership

    Formal team organization

    Training in product development

    Diverse, yet cooperative members

    Adequate staffing, funding, & vendorassistance

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    Product Design 64

    Strategic Importanceof Product Development

    Importance

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    Product Design 65

    Importanceof New Products

    48%

    34%

    11%

    26%

    0%

    10%

    20%

    30%40%

    50%

    60%

    Industry

    Leader

    Top 1/3 Middle

    1/3

    Bottom

    1/3

    Percent of Sales from New Products

    Position of Firm in Industry

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    Product Design 66

    Time-Based Competition

    Competing on the basis of the speed inbringing products to market

    May be new or existing products

    Faster developers have competitiveadvantage

    Companies differentiate themselves byintroducing newer products faster

    Example: Intel 386, 486, & Pentium chips

    Time-Based Competition

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    Product Design 67

    Time-Based CompetitionExample

    0 10 20 30 40 50

    GM

    Ford

    Honda

    Toyota From

    conceptapproval to

    production

    Months

    Company

    46

    37

    36

    27

    Mean Passenger Car Development

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    End of Chapter

    Any blank slides that follow areblank intentionally.