PRODUCT DESIGN

Week 2

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LEARNING OUTCOMES
1. Why product design is needed
2. Product life cycles
3. Product development stages
4. Issues for product designs
5. Product development continuum
6. Service design

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WHY PRODUCT DESIGN IS NEEDED
 The objective of the product decision is to develop
and implement a product strategy that meets the
demands of the marketplace with a competitive
advantage.
 Product strategy may focus on developing a
competitive advantage via differentiation, low cost,
rapid response, or a combination of these
 Hence, products need to be redesign to meet
customers’ need and challenge the competitors.

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WHY PRODUCT DESIGN IS NEEDED
Examples:

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PRODUCT LIFE CYCLES

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PRODUCT LIFE CYCLES
 Introductory Phase Because products in the
introductory phase are still being “finetuned” for the
market, as are their production techniques, they may
warrant unusual expenditures for (1) research, (2)
product development, (3) process modification and
enhancement, and (4) supplier development. For
example, when the iPhone was first introduced, the
features desired by the public were still being
determined. At the same time, operations managers were
still groping for the best manufacturing techniques.
 Growth Phase In the growth phase, product design has
begun to stabilize, and effective forecasting of capacity
requirements is necessary. Adding capacity or enhancing
existing capacity to accommodate the increase in product
demand may be necessary.

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PRODUCT LIFE CYCLES
 Maturity Phase By the time a product is mature,
competitors are established. So high volume,
innovative production may be appropriate.
Improved cost control, reduction in options, and a
paring down of the product line may be effective or
necessary for profitability and market share.
 Decline Phase Management may need to be
ruthless with those products whose life cycle is at an
end. Dying products are typically poor products in
which to invest resources and managerial talent.
Unless dying products make some unique
contribution to the firm’s reputation or its product
line or can be sold with an unusually high
contribution, their production should be terminated.
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PRODUCT DEVELOPMENT STAGES

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QUALITY FUNCTION DEPLOYMENT

 Identify customer wants

 Identify how the good/service will satisfy
customer wants (what we can do)
 Relate customer wants to product hows
 Identify relationships between the firm’s hows
 Develop importance ratings
 Evaluate competing products
 Compare performance to desirable technical
attributes

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QFD HOUSE OF QUALITY

Interrelationships
Customer
importance How to satisfy
ratings customer wants
(exe. 1-5) (What can we do)

Competitive
assessment
What the Relationship
customer matrix
wants

Our importance ratings

Target values/
Technical Weighted
attributes rating
Technical
evaluation
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HOUSE OF QUALITY EXAMPLE

Your team has been charged with

designing a new camera for Great
Cameras, Inc.
The first action is
to construct a
House of Quality

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HOUSE OF QUALITY EXAMPLE

Interrelationships

What the
How to Satisfy
Customer Wants

customer

Competitors
Analysis of
What the
Relationship
Customer

wants Wants
Matrix

Technical
Attributes and
Evaluation

Lightweight 3 Customer
Easy to use 4 importance
rating
Reliable 5 (5 = highest)
Easy to hold steady 2
Color correction 1

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HOUSE OF QUALITY EXAMPLE

Interrelationships

How to Satisfy

Low electricity requirements Customer Wants

Competitors
Analysis of
What the
Relationship
Customer

Aluminum components
Matrix
Wants

Technical
Attributes and

Auto focus Evaluation

Auto exposure How to Satisfy

Paint pallet Customer Wants

Ergonomic design

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HOUSE OF QUALITY EXAMPLE

Interrelationships

High relationship (5) How to Satisfy

Customer Wants

Medium relationship (3)

Competitors
Analysis of
What the
Relationship
Customer
Matrix

Low relationship (1)

Wants

Technical
Attributes and
Evaluation

Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
Color corrections 1
Relationship matrix
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 HOUSE OF QUALITY EXAMPLE
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical

Relationships between Attributes and

Evaluation

Low electricity requirements

the things we can do

Aluminum components

Ergonomic design
Auto exposure

Paint pallet
Auto focus

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HOUSE OF QUALITY EXAMPLE 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
Color corrections 1
Our importance ratings 22 9 27 27 32 25

Weighted
rating
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HOUSE OF QUALITY EXAMPLE
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix

Company A

Company B
Wants

Technical
Attributes and
Evaluation

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
Color corrections 1 P P
Our importance ratings 22 5

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 Interrelationships
HOUSE OF QUALITY EXAMPLE
How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Failure 1 per 10,000

Technical
Attributes and
Evaluation

Panel ranking
Target

2 circuits
values

2’ to ∞
(Technical

0.5 A

75%
attributes)

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
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HOUSE OF QUALITY EXAMPLE

Low electricity requirements

Aluminum components

Ergonomic design
Auto exposure

Paint pallet

Company A

Company B
Auto focus
Completed
House of
Lightweight 3 G P
Easy to use 4 G P

Quality Reliable
Easy to hold steady
5
2
F G
G P
Color correction 1 P P
Our importance ratings 22 9 27 27 32 25

Failure 1 per 10,000

Target values

Panel ranking
(Technical
attributes)

2 circuits
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical Company B 0.6 50% yes 2 ok F
evaluation
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Us 0.5 75% yes 2 ok G
MANUFACTURABILITY AND VALUE
ENGINEERING

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.

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ISSUES FOR PRODUCT DESIGN
(1) robust design,
(2) modular design,
(3) computer-aided design/computer aided
manufacturing (CAD/CAM),
(4) virtual reality technology,
(5) value analysis, and
(6) sustainability/life cycle assessment (LCA).

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PRODUCT DEVELOPMENT CONTINUUM

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SERVICE DESIGN:
PROCESS-CHAIN-NETWORK ANALYSIS

A process chain is a sequence of steps that accomplishes an activity, such

as building a home, completing a tax return, or preparing a sandwich.
A process participant can be a manufacturer, a service provider, or a
customer.
A network is a set of participants.
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EXERCISES
 Using the house of quality, pick a real product (a
good or service) and analyze how an existing
organization satisfies customer requirements.
 Prepare a house of quality for a mousetrap.

 Draw a two-participant PCN diagram for one of

the following processes:
a) The process of having your computer repaired.
b) The process of pizza preparation.
c) The process of procuring tickets for a concert.

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CASE STUDIES:
DE MAR’S PRODUCT STRATEGY
De Mar, a plumbing, heating, and air-conditioning
company located in Fresno, California, has a simple but
powerful product strategy: Solve the customer’s problem
no matter what, solve the problem when the customer
needs it solved, and make sure the customer feels good
when you leave . De Mar offers guaranteed, same-day
service for customers requiring it. The company provides
24-hour-a-day, 7-day-a-week service at no extra charge
for customers whose air conditioning dies on a hot
summer Sunday or whose toilet overflows at 2:30 A.M. As
assistant service coordinator Janie Walter puts it: “We
will be there to fix your A/C on the fourth of July, and it’s
not a penny extra. When our competitors won’t get out of
bed, we’ll be there!”

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CASE STUDIES
De Mar guarantees the price of a job to the penny
before the work begins. Whereas most competitors
guarantee their work for 30 days, De Mar
guarantees all parts and labor for one year. The
company assesses no travel charge because “it’s not
fair to charge customers for driving out.” Owner
Larry Harmon says: “We are in an industry that
doesn’t have the best reputation. If we start making
money our main goal, we are in trouble. So I stress
customer satisfaction; money is the by-product.”

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CASE STUDIES
De Mar uses selective hiring, ongoing training and
education, performance measures, and compensation
that incorporate customer satisfaction, strong
teamwork, peer pressure, empowerment, and
aggressive promotion to implement its strategy. Says
credit manager Anne Semrick: “The person who
wants a nine-to five job needs to go somewhere else.”
De Mar is a premium pricer. Yet customers respond
because De Mar delivers value—that is, benefits for
costs. In 8 years, annual sales increased from about
$200,000 to more than $3.3 million.

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CASE STUDIES
Discussion Questions
1. What is De Mar’s product? Identify the tangible
parts of this product and its service components.
2. How should other areas of De Mar (marketing,
finance, personnel) support its product strategy?

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CASE STUDIES:
PRODUCT DESIGN AT REGAL MARINE

With hundreds of competitors in the boat business,

Regal Marine must work to differentiate itself from
the flock. As we saw in the Global Company Profile
that opened this chapter, Regal continuously
introduces innovative, high-quality new boats. Its
differentiation strategy is reflected in a product line
consisting of 22 models.

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CASE STUDIES:
PRODUCT DESIGN AT REGAL MARINE

To maintain this stream of innovation, and with so

many boats at varying stages of their life cycles,
Regal constantly seeks design input from customers,
dealers, and consultants. Design ideas rapidly find
themselves in the styling studio, where they are
placed onto CAD machines in order to speed the
development process. Existing boat designs are
always evolving as the company tries to stay stylish
and competitive. Moreover, with life cycles as short
as 3 years, a steady stream of new products is
required.

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CASE STUDIES:
PRODUCT DESIGN AT REGAL MARINE

A few years ago, the new product was the three-

passenger $11,000 Rush, a small but powerful boat
capable of pulling a water-skier. This was followed
with a 20-foot inboard–outboard performance boat
with so many innovations that it won prize after
prize in the industry. Another new boat is a
redesigned 52-foot sports yacht that sleeps six in
luxury staterooms. With all these models and
innovations, Regal designers and production
personnel are under pressure to respond quickly.

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CASE STUDIES:
PRODUCT DESIGN AT REGAL MARINE
By getting key suppliers on board early and urging them
to participate at the design stage, Regal improves both
innovations and quality while speeding product
development. Regal finds that the sooner it brings
suppliers on board, the faster it can bring new boats to
the market. After a development stage that constitutes
concept and styling, CAD designs yield product
specifications. The first stage in actual production is the
creation of the “plug,” a foam-based carving used to make
the molds for fiberglass hulls and decks. Specifications
from the CAD system drive the carving process. Once the
plug is carved, the permanent molds for each new hull
and deck design are formed. Molds take about 4 to 8
weeks to make and are all handmade.

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CASE STUDIES:
PRODUCT DESIGN AT REGAL MARINE
Similar molds are made for many of the other
features in Regal boats—from galley and stateroom
components to lavatories and steps. Finished molds
can be joined and used to make thousands of boats.
Discussion Questions *
1. How does the concept of product life cycle apply to
Regal Marine products?
2. What strategy does Regal use to stay competitive?
3. What kind of engineering savings is Regal
achieving by using CAD technology rather than
traditional drafting techniques?
4. What are the likely benefits of the CAD design
technology?
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