Lecture 4

Product and Service Design

Reliability
 Strategic Product and Service design
• The essence of an organization is the goods
and services it offers
– Every aspects of the organization is structured
around them
• Product and service design or redesign should
be closely tied to an organization’s strategy
 What does product & service design
do?
• Translate customer wants and needs into
product and service requirements
• Refine existing products and services
• Develop new products and services
• Formulate quality goals
• Formulate cost targets
• Construct and test prototypes
• Document specialisations
• Translate product and service specifications
into process specifications
• Involve inter-functional collaboration
 Key Questions
• Is there a demand for it?
– Market size
– Demand profile
• Can we do it?
– Manufacturability
• The capability of an organisation to produce an item at an acceptable profit
– Serviceability
• The capability of an organization to provide a service at an acceptable cost or profit
• What level of quality is appropriate?
– Customer expectations
– Competitor quality
– Fit with current offering
• Does it make sense from an economic standpoint?
– Liability issues, ethical considerations, sustainability issues, costs and profits
 Reason to Design or Redesign
• The driving forces for product and service
design or redesign are market opportunities or
threats:
– Economic
– Social and demographic
– Political, liability or legal
– Competitive
– Cost or availability
– Technological
 Supply-Chain Based Ideas
• Ideas can come from anywhere in the supply
chain:
– Customers
– Suppliers
– Distributors
– Employees
– Maintenance and repair personnel
 Competitor Based Ideas
• By studying how a competitor operates and
its products and services, many useful ideas
can be generated
• Reverse engineering
– Dismantling and inspecting a competitor’s
product to discover product improvements
 Research Based Ideas
• Research and Development (R&D)
– Organised efforts to increase scientific knowledge or
product innovation
– Basic research
• Has the objective of advancing the state of knowledge
about a subject without any near-term expectation of
commercial applications
– Applied research
• Has the objective of achieving commercial applications
– Development
• Converts the results of applied research into useful
commercial applications
 Legal Consideration
• Legal Considerations
– Product liability
• The responsibility a manufacturer has for any injuries or
damages caused by as faulty product
• Some of the concomitant costs
– Litigation
– Legal and insurance costs
– Settlement costs
– Costly product recalls
– Reputation effects
– Uniform Commercial
• Under the UCC, products carry an implication of
merchantability and fitness
 Ethical Consideration
• Designers are often under pressure to
– Speed up the design process
– Cut costs
• These pressures force trade-off decisions
– What if a product has bugs?
• Release the product and risk damage to your
reputation
• Work out the bugs and forgo revenue
 Sustainability
• Sustainability
– Using resources in ways that do not harm
ecological systems that support human existence
• Key aspects of designing for sustainability
– Cradle-to-grave assessment (Life cycle
assessment)
– End-of-life programs
– The 3-Rs
• Reduction of costs and materials used
• Re-using parts of returned products
• Recycling
Product or service life stages
 Standardization
• Standardization
– Extent to which there is an absence of variety in a
product, service or process
• Products are made in large quantities of identical items
• Every customer or item processes receives essentially
the same service
 Designing of Mass Customization
• Mass customization
– A strategy of producing basically standardized
goods or services, but incorporating some degree
of customization in the final product or service
 Delayed Differentiation
• Delayed Differentiation
– The process of producing, but not quite
completing, a product or service until customer
preference are known
– It is a postponement tactic
• Produce a piece of furniture, but do not stain it; the
customer chooses the stain
 Modular Design
• A form of standardization in which component
parts are grouped into modules that are easily
replaced or interchanged
– Advantages
• Easier diagnosis and remedy of failures
• Easier repair and replacement
• Simplification of manufacturing and assembly
– Disadvantages
• Limited number of possible product configurations
• Limited ability to repair a faulty module; the entire
module must often be scraped
 Robust Design
• A design that results in products or services
that can function over a broad range of
conditions
– The more robust a product or service, the less
likely it will fail due to a change in the
environment in which it is used or in which it is
performed
 Quality Function Deployment (QFD)
• An approach that integrates the “voice of the
customer” into both product and service
development
– The purpose is to ensure that customer
requirements are factored into every aspect of the
process
– Listening to and understanding the customer is
the central feature of QFD
 The House of Quality Sequence

House 1 House 2 House 3 House 4

Customer Design Specific Production
Requirements Characteristics Components Processes

Design Specific Production Quality Plan

Characteristics Components Processes
 Concurrent Engineering
• Bringing engineering design and
manufacturing personnel together early in the
design phase
– Also may involve manufacturing, marketing and
purchasing personnel in loosely integrated
cross-functional teams
– Views of suppliers and customers may also be
sought
• The purpose is to achieve product designs that
reflect customer wants as well as
manufacturing capabilities
 Computer Aided Design (CAD)
• Product design using computer graphics
• Advantages
– Increases productivity of designers 3 to 10 times
– Creates a database of manufacturing information and
product specifications
– Provides possibility of engineering of cost analysis on
proposed designs
• CAD that includes finite element analysis (FEA)
can significantly reduce time to market
– Enables developers to perform simultaneous that aid in
the design analysis and commercialization of new products
 Production Requirements
• Designers must take into account production
capabilities
– Equipment
– Skills
– Types of materials
– Schedules
– Technologies
– Special abilities
 Manufacturability
• Ease of fabrication and /or assembly
• It has important implications for
– Cost
– Productivity
– Quality
 Component Communality
• When products have a high degree of
similarity in features and components, a part
can be used in multiple products
• Benefits:
– Savings in design time
– Standard training for assembly and installation
– Opportunities to buy in bulk from suppliers
– Communality of parts for repair
– Fewer inventory items must be handled
 Service Design
• Begins with choice of service strategy, which
determines the nature and focus of the
service and he target market
– Key issues in service design
• Degree of variation in service requirements
• Degree of customer contact and involvement
 Differences between Product and
Service Design
• Products are generally tangible, services intangible
• Services are created and delivered at the same time
• Services cannot be inventoried
• Services are highly visible to customers
• Some services have low barriers to entry and exit
• Location often important to service design, with
convenience as a major factor
• Service systems range from those with little or no customer
contact to those that have a very high degree of customer
contact
• Demand variability alternately creates waiting lines or idle
service resources
 Operations Strategy
• Effective product and service design can help
the organisation achieve competitive
advantage:
– Packing products and ancillary services to increase sales
– Using multiple-use platforms
– Implementing tactics that will achieve the benefits of high
volume while satisfying customer needs for variety
– Continually monitoring products and services for small
improvement opportunities
– Reducing the time it takes to get a new or redesigned
product or service to the market
 Reliability
• The ability of a product, part or system to perform its
intended function under a prescribed set of conditions
• Failure
– Situation in which a product, part or system does not
perform as intended
• Reliabilities are always specified with respect to
certain conditions
– Normal operating conditions
• The set of conditions under which an item’s reliability is specified
• Reliability is expressed as a probability
– The probability that the product or system will function
when activated
– The probability that the product or system will function for
a given length of time
 Reliability - Series: Rule 1
• Finding the probability under the assumption that
the system consists of a number of independent
components
– Requires the use of probabilities for independent
events
• Independent event
– Events whose occurrence or non-occurance do not influence one
another
• Rule 1
– If two or more events are independent and success is
defined as the probability that all of the events occur,
then the probability of success is equal to the product
of the probabilities of the events
 Example - Rule 1
• A machine has two buttons. Inorder for the
machine to function, both buttons must work.
One button has a probability of working of
0.95, and the second button has a probability
of working of 0.88.
P(Machine works) = P(Button 1 works) x P(Button 2 works) = 0.95x0.88 = 0.836

Button 1 Button 2
(Prob.=0.95) (Prob.=0.88)
 Reliability - Redundancy: Rule 2
• One way to enhance reliability is to utilize
redundancy
– Redundancy
• The use of backup components to increase reliability
• Rule 2
– If two events are independent and success is
defined as the probability that at least one of the
events will occur, the probability of success is
equal to the probability of either one plus 1 minus
that probability multiplied by the other probability
 Example - Rule 2
• A restaurant located in area that has frequent power
outages has a generator to run its refrigeration
equipment incase of a power failure. The local power
company has a reliability of 0.97, and the generator
has a reliability of 0.9. The probability that the
restaurant will have power is
P(Power) = P(Power Co.)+ (1-P(Power Co.))x P(Generator) = 0.97+(1-0.97)x0.9 = 0.997

Generator
(Prob.=0.9)

Power Co.
(Prob.=0.97)
Reliability - Multiple Redundancy: Rule 3

• Rule 3
– If two or more events are involved and success is
defined as the probability that at least one of
them occurs, the probability of success is equal to
1 minus probability of all fail
 Example - Rule 3
• A student takes three calculators (with reliabilities of 0.85, 0.8 and
0.75) to her exam. Only one of them needs to function for her to
be able to finish the exam. What is the probability that she will
have a functioning calculator to use wen taking her exam?
P(Any Calc.) = 1- (1-P(Calc. 1))x(1-P(Calc. 2))x(1-P(Calc. 3)) = 1- (1-0.85)x(1-0.8)x(1-0.75) = 0.9925

Calc. 3
(Prob.=0.75)

Calc. 2
(Prob.=0.8)

Calc. 1
(Prob.=0.85)
What is this system’s reliability?
B3
(Prob.=0.75)

A2 B2 C2
(Prob.=0.8) (Prob.=0.8) (Prob.=0.7)

A1 B1 C1
(Prob.=0.95) (Prob.=0.85) (Prob.=0.9)

A B C
(Prob.=0.99) (Prob.=0.9925) (Prob.=0.97)

System
(Prob.=0.9531)
 Reliability Over Time
• In this case, reliabilities are determined relative to a specified
length of time.
• This is a common approach to viewing reliability when
establishing warranty periods
 Infant Mortality
• To properly identify the distribution and
length of each phase requires collecting and
analysing historical data
• The mean time between failures (MTBF) in
the infant mortality phase can often be
modeled using the negative exponential
distribution
 Exponential Distribution
P(No failure before T) = e-T/MTBF
where,
e= 2.7183…
T = Length of service before failure
MTBF= Mean time before failure
 Reliability = e-T/MTBF

1-e -T/MTBF
 Availability
• The fraction of time a piece of equipment is
expected to available for operation

Availability= MTBF/(MTBF + MTR)

where,
MTBF= Mean Time Between Failures
MTR= Mean Time to Repair
 Example - Availability
• John Q. Student uses a laptop at school.his
laptop operates 30 weeks on average
between failures. It takes 1.5 weeks, on
average to put his laptop back into service.
What is the laptop’s availability?

Laptop’s Availability= MTBF/(MTBF + MTR) = 30/(30+1.5)= 0.9524

 Summary
• Product or Service Design
– Sources of Idea
– Legal and Ethical Consideration
– Sustainability
– Product or Service Life Stages
– Design Approaches and Tools
– Differences between Service and Product Design
• Reliability
– Reliability Rules
– Bathtub Curve
– Availability