Lecture Outline

• The Operations Function – Slide 7

• The Evolution of Operations and Supply Chain
Introduction to Operations Management Management – Slide 14
• Globalization – Slide 18
• Productivity and Competitiveness – Slide 23
• Strategy and Operations – Slide 27
• Organization of the Text – Slide 42
• Learning Objectives of this Course – Slide 44

Dr. Rohit Sindhwani

MDI Gurgaon

Learning Objectives Operations Management

• Describe what the operations function is and how it relates to other • What is Operations Management?
business functions. o design, operation, and improvement of productive systems
• Discuss the key factors that have contributed to the evolution of • What is Operations?
operations and supply chain management.
o a function or system that transforms inputs into outputs of
• Discuss how and why businesses operate globally and the importance of greater value
globalization in supply chain management.
• What is a Value Chain?
• Calculate and interpret productivity measures used for measuring
o a series of activities from supplier to customer that add value
competitiveness.
to a product or service
• Discuss the importance of operations and supply chain management to
a firm’s strategy and the process of developing, aligning, and deploying
strategy.
Transformation Process Operations as a Transformation Process

• A series of activities along a value chain extending from supplier to

customer
• Activities that do not add value are superfluous and should be
eliminated
• The transformation process can be:
o Physical: as in manufacturing operations
o Locational: as in transportation or warehouse operations
o Exchange: as in retail operations
o Physiological: as in health care
o Psychological: as in entertainment
o Informational: as in communication

The Operations Function Operations Function

• Organizing work Operations as the Technical Core

• Operations
• Selecting processes • Marketing
• Arranging layouts • Finance and Accounting
• Locating facilities
• Human Resources
• Designing jobs
• Suppliers
• Measuring performance
• Controlling quality
• Scheduling work
• Managing inventory
• Planning production
Sample Organizational Structure How is Operations Relevant to my Major?

• Accounting - “As an auditor you must understand the fundamentals of

operations management.”
• Information Technology - “IT is a tool, and there’s no better place to apply it
than in operations.”
• Management - “We use so many things you learn in an operations class—
scheduling, lean production, theory of constraints, and tons of quality tools.”
• Economics - “It’s all about processes. I live by flowcharts and Pareto analysis.”
• Marketing - “How can you do a good job marketing a product if you’re unsure
of its quality or delivery status?”
• Finance - “Most of our capital budgeting requests are from operations, and
most of our cost savings, too.”

The Operations Decisions The Dimensions of Operations Management

 Evolution of Operations and Supply Chain
Management
• Craft production
o process of handcrafting products or services for individual customers
• Division of labor
o dividing a job into a series of small tasks each performed by a different worker
• Interchangeable parts
o standardization of parts that enabled mass production
• Scientific management
o systematic analysis of work methods
• Mass production
high-volume production of a standardized product for a mass market
Figure 1(b) – Competitive Priorities. Weak companies are plagued by
o

• Quality revolution
tradeoff obstacles. World class organizations have gained an upper o an emphasis on quality and the strategic role of operations
hand over the tradeoff obstacles • Lean production
o adaptation of mass production that prizes quality and flexibility

Historical Events in Operations Management Historical Events in Operations Management

(1 of 2) (2 of 2)
ERA EVENTS/CONCEPTS DATES ORIGINATOR ERA EVENTS/CONCEPTS DATES ORIGINATOR

Industrial Revolution Steam engine 1769 James Walt Quality Revolution JIT (just-in-time) 1970s Taiichi Ohno (Toyata)
TOM (total quality management) 1980s W. Edwards Deming, Joseph Juran
Division of labor 1776 Adam Smith Strategy and operations Wickham Skinner, Robert Hayes
Interchangeable parts 1790 Eli Whitney Reengineering 1990s Michael Hammer, James Champy
Six Sigma 1990s GE, Motorola
Scientific Management Principles of scientific management 1911 Frederick W. Taylor
Time and motion studies 1911 Frank and Lillian Gilbreth Internet Revolution Interest, WWW ERP, supply chain Management, 1990s ARPANET, Tim Berners-Lee SAP, Oracle, Dell,
Activity scheduling chart 1912 Henry Gantt E-commerce, social networking Apple
Moving assembly line 1913 Henry Ford 2000s Amazon, Yahoo, eBay, Google,
Facebook, YouTube, Twitter, etc.
Human Relations Hawthorne studies 1930 Elton Mayo
Globalization Word Trade Organization 1990s GATT
Motivation theories 1940s Abraham Maslow European Union 2000s Europe
1950s Frederick Herzberg Global supply chains Outsourcing China, India
1960s Douglas McGregor Emerging economics

Operations Research Linear programming 1947 George Dantzig Sustainability Global warming 2010s, Today Numerous companies, scientists, statesmen and
Carbon footprint governments
Digital computer 1951 Remington Rand Green products World Economic Forum,
Simulation, waiting line theory, decision theory, 1950s Operations research groups Corporate social responsibility (CSR) Kyoto Protocol
PERT/CPM UN Global Compact United Nations
MRP 1960s Joseph Orlicky, IBM, and others
EDI, CIM 1970s Auto industry, DARPA Digital Revolution Big data, Internet of Things (IoT), 3D printing, Today Google, Apache, P&G, MIT, NSF, Amazon, and
Smart Cities, Autonomous Vehicles, Drones others
Supply Chain Management Globalization
• Supply chain management
o management of the flow of information, products, and services • Why “go global”?
across a network of customers, enterprises, and supply chain o favorable cost
partners o access to international markets
o response to changes in demand
o reliable sources of supply
o latest trends and technologies
• Increased globalization
o results from the Internet and falling trade barriers

Hourly Compensation Costs for Production Trade in Goods as a Percent of GDP

Workers (in U.S. dollars)
Figure 2 – Trade in Goods as % of GDP

Figure 1 – Hourly Compensation

Manufacturing Output (in $US trillions) Productivity and Competitiveness

Figure 3 – Manufacturing Output (in $US Trillions) • Competitiveness

o degree to which a nation can produce goods and services that meet
the test of international markets
• Productivity
o ratio of output to input
• Output
o sales made, products produced, customers served, meals delivered,
or calls answered
• Input
o labor hours, investment in equipment, material usage, or square
footage

Measures of Productivity Osborne Industries

Productivity per Hour ($US) Strategy and Operations

• How the mission of a company is accomplished

• Provides direction for achieving a mission
• Unites the organization
• Provides consistency in decisions
• Keeps organization moving in the right direction

Strategy Formulation Strategic Planning

1. Defining a primary task

o What the firm is in the business of doing?
2. Assessing core competencies
o What does the firm do better than anyone else?
3. Determining order winners and order qualifiers
o What qualifies an item to be considered for purchase?
o What wins the order?
4. Positioning the firm
o How will the firm compete?
5. Deploying the strategy
Order Winners and Order Qualifiers Positioning the Firm: Cost, Speed, Quality,
Flexibility (1 of 2)
• Cost
o Waste elimination
• relentlessly pursuing the removal of all waste
o Examination of cost structure
• looking at the entire cost structure for reduction potential
o Lean production
• providing low costs through disciplined operations

• Speed
o Fast moves, Fast adaptations, Tight linkages
o Internet
• Customers expect immediate responses
o Service organizations
• always competed on speed (McDonald’s, LensCrafters, and Federal Express)
o Manufacturers
• time-based competition: build-to-order production and efficient supply chains
Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan Betts,
o Fashion industry
Operations and Process Management, Prentice Hall, 2006, p. 47
• Nine-day design-to-rack lead time of Spanish retailer, Zara

Positioning the Firm: Cost, Speed, Quality,

Flexibility (2 of 2)
• Quality
o Minimizing defect rates or conforming to design specifications
o Ritz-Carlton - one customer at a time
• Service system designed to “move heaven and earth” to satisfy customer
• Employees empowered to satisfy a guest’s wish
Competitiveness,
• Teams set objectives and devise quality action plans Strategy, and
• Each hotel has a quality leader Productivity
• Flexibility
o Ability to adjust to changes in product mix, production volume, or design
o Mass customization
• mass production of customized parts
o National Bicycle Industrial Company
• offers 11,231,862 variations
• delivers within two weeks at costs only 10% above standard models
2-1
You should be able to: Better quality, higher productivity, lower costs, and the
LO 2.1 List several ways that business organizations compete ability to respond quickly to customer needs are more
LO 2.2 Name several reasons that business organizations fail important than ever, and…
LO 2.3 Define the terms mission and strategy and explain why they are
important the bar is getting higher
LO 2.4 Discuss and compare organization strategy and operations
strategy and explain why it is important to link the two
LO 2.5 Describe and give examples of time-based strategies
LO 2.6 Define the term productivity and explain why it is important to
organizations and to countries
LO 2.7 Describe several factors that affect productivity

2-2 2-3

 We focus on three separate but related ideas that are  Competitiveness:

vitally important to business organizations  How effectively an organization meets the wants and
1. Competitiveness needs of customers relative to others that offer similar
2. Strategy goods or services
3. Productivity  Organizations compete through some combination of
their marketing and operations functions
• What do customers want?
• How can these customer needs best be satisfied?

LO 2.1
2-4 2-5
 Identifying consumer wants and/or needs 1. Product and service design
 Pricing and quality 2. Cost

 Advertising and promotion 3. Location

4. Quality
5. Quick response
6. Flexibility
7. Inventory management
8. Supply chain management
9. Service
10. Managers and workers

LO 2.1 LO 2.1
2-6 2-7

1. Neglecting operations strategy  Mission

2. Failing to take advantage of strengths and opportunities  Goals
and/or failing to recognize competitive threats
3. Too much emphasis on short-term financial performance  Organizational strategies
at the expense of R&D  Functional strategies
4. Too much emphasis on product and service design and  Tactics
not enough on process design and improvement
5. Neglecting investments in capital and human resources
6. Failing to establish good internal communications and FIGURE 1
cooperation Planning and decision making
are hierarchical in organizations
7. Failing to consider customer wants and needs

LO 2.2 LO 2.3
2-8 2-9
 Company Vision Statement
Microsoft To help people and businesses throughout the world realize their full
 Mission potential.
 The reason for an organization’s existence Apple To advance humankind through technology.

 Mission statement Starbucks To establish Starbucks as the premier purveyor of the finest coffee in the
world while maintaining uncompromising principles while we grow.
 States the purpose of the organization
Google To provide access to the world's information in one click.
 The mission statement should answer the question of
“What business are we in?” Company Mission Statement
Microsoft To empower every person and organization to achieve more.s
Apple Bring the best user experience to customers through innovative
hardware, software, and services.
Starbucks To inspire and nurture the human spirit—one person, one cup, and one
neighborhood at a time.
Google To organize the world's information and make it universally accessible
and useful.
LO 2.3 LO 2.3
2-10 2-11

 The mission statement serves as the basis for  Strategy

 A plan for achieving organizational goals
organizational goals
 Serves as a roadmap for reaching the organizational destinations
 Goals  Organizations have
 Provide detail and the scope of the mission  Organizational strategies
 Overall strategies that relate to the entire organization
 Goals can be viewed as organizational destinations
 Support the achievement of organizational goals and mission
 Goals serve as the basis for organizational strategies  Functional level strategies
 Strategies that relate to each of the functional areas and that support
achievement of the organizational strategy

LO 2.3 LO 2.3
2-12 2-13
 Tactics  Core competencies
 The methods and actions taken to accomplish strategies The special attributes or abilities that give an
 The “how to” part of the process organization a competitive edge
 Operations  To be effective, core competencies and strategies need to be
 The actual “doing” part of the process aligned

LO 2.3 LO 2.3
2-14 2-15

Organizational
Strategy Operations Strategy Examples of Companies or Services
 Effective strategy formulation requires taking into
Low Price Low cost U.S. first-class postage account:
Wal-Mart
 Core competencies
Responsiveness Short processing times McDonald’s restaurants
On-time delivery FedEx  Environmental scanning
Differentiation: High performance design Sony TV  SWOT: Strengths, Weaknesses, Opportunities, and Threats
High Quality and/or high quality processing
Consistent quality Coca-Cola
Differentiation: Innovation 3M, Apple  Successful strategy formulation also requires taking
Newness
into account:
Differentiation: Flexibility Burger King (Have it your way”)
Variety Volume McDonald’s (“Buses Welcome”)
 Order qualifiers
Differentiation: Superior customer service Disneyland  Order winners
Service IBM
Differentiation: Convenience Supermarkets; mall stores
Location

LO 2.4 LO 2.4
2-16 2-17
  Order qualifiers
 Environmental scanning is necessary to identify
 Characteristics that customers perceive as minimum
 Internal factors
standards of acceptability for a product or service to be
 Strengths and weaknesses
considered as a potential for purchase
 External factors
 Order winners
 Opportunities and threats
 Characteristics of an organization’s goods or services that
cause it to be perceived as better than the competition

LO 2.4
LO 2.4
Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan Betts, Operations and Process Management, Prentice Hall, 2006, p. 2-18 2-19
47

1. Economic conditions 1. Human resources

2. Political conditions 2. Facilities and equipment
3. Legal environment 3. Financial resources
4. Technology 4. Customers
5. Competition 5. Products and services
6. Customers 6. Technology
7. Suppliers 7. Other
8. Markets

LO 2.4 LO 2.4
2-20 2-21
 Supply Chain Strategy  Operations strategy
 How the organization should work with suppliers and  The approach, consistent with organization strategy,
policies relating to customer relationships and that is used to guide the operations function
sustainability
 Sustainability Strategy
 Work with governmental regulations and interest
groups to achieve sustainability goals
 Global Strategy
 Work with international suppliers/producers and also
with countries where the products and services are sold

LO 2.4 LO 2.4 An Integrated Operations Strategy

2-22 2-23

Decision Area What the Decisions Affect  Quality-based strategy

Product and service design Costs, quality, liability, and environmental issues  Strategy that focuses on quality in all phases of an
Capacity Cost, structure, flexibility organization
Process selection and layout Costs, flexibility, skill level needed, capacity
 Pursuit of such a strategy is rooted in a number of factors:
 Trying to overcome a poor quality reputation
Work design Quality of work life, employee safety, productivity
 Desire to maintain a quality image
Location Costs, visibility
 A desire to catch up with the competition
Quality Ability to meet or exceed customer expectations
 A part of a cost reduction strategy
Inventory Costs, shortages
Maintenance Costs, equipment reliability, productivity
Scheduling Flexibility, efficiency
Supply chains Costs, quality, agility, shortages, vendor relations
Projects Costs, new products, services, or operating systems

LO 2.4 LO 2.4
2-24 2-25
 Time-based strategies  Areas where organizations have achieved time
 Strategies that focus on the reduction of time needed to reductions:
accomplish tasks  Planning time
 It is believed that by reducing time, costs are lower, quality is  Product/service design time
higher, productivity is higher, time-to-market is faster, and
 Processing time
customer service is improved
 Changeover time
 Delivery time
 Response time for complaints

LO 2.5 LO 2.5
2-26 2-27

 Agile operations  A top-down management system that organizations can use to

clarify their vision and strategy and transform them into action
 A strategic approach for competitive advantage that
 Develop objectives
emphasizes the use of flexibility to adapt and prosper in
 Develop metrics and targets for each objective
an environment of change
 Develop initiatives to achieve objectives
 Involves the blending of several core competencies:
 Identify links among the various perspectives
 Cost
 Finance
 Quality
 Customer
 Reliability
 Internal business processes
 Flexibility
 Learning and growth
 Monitor results

LO 2.5 LO 2.5
2-28 2-29
 FIGURE 2
The Balanced Scorecard

Radar Chart Dashboard

Source: Adapted from Robert S. Kaplan
and David P. Norton, “Using the Balanced
LO 2.5 Scorecard as a Strategic Management
System,” Harvard Business Review
(January-Febrary 1996): 76.
2-30

 Productivity  High productivity is linked to higher standards of living

 A measure of the effective use of resources, usually  As an economy replaces manufacturing jobs with lower productivity
service jobs, it is more difficult to maintain high standards of living
expressed as the ratio of output to input
 Higher productivity relative to the competition leads to
 Productivity measures are useful for
competitive advantage in the marketplace
 Tracking an operating unit’s performance over time
 Pricing and profit effects
 Judging the performance of an entire industry or
 For an industry, high relative productivity makes it less
country
likely it will be supplanted by foreign industry

LO 2.6 LO 2.6
2-32 2-33
 Output
Productivi ty =
Input

Output Ouput Output

Partial Measures ; ;
Single Input Labor Capital

Output Ouput Output

Multifactor Measures ; ;
Multiple Inputs Labor +Machine Labor +Capital +Energy
฀
Goods or services produced
Total Measure
All inputs used to produce them
฀

LO 2.6 LO 2.6
2-34 2-35

Units produced: 5,000 Multifactor Productivity =

Output
Standard price: $30/unit Labor + Material + Overhead
Labor input: 500 hours 5,000 units  $30/unit
=
Cost of labor: $25/hour (500 hours  $25/hour) + $5,000 + (2(500 hours  $25/hour))
฀
Cost of materials: $5,000 $150,000
=
Cost of overhead: 2× labor cost $42,500
= 3.5294

What is the What is the implication of an unitless measure of productivity?

multifactor
productivity?

LO 2.4 LO 2.6
2-36 2-37
  Service sector productivity is difficult to measure and
manage because
Current productivity - Previous productivity
Productivity Growth = 100%  It involves intellectual activities
Previous productivity  It has a high degree of variability
 A useful measure related to productivity is process yield
Example: Labor productivity on the ABC assembly line was 25 units per hour in  Where products are involved
฀ 2014. In 2015, labor productivity was 23 units per hour. What was the  Ratio of output of good product to the quantity of raw material
productivity growth from 2014 to 2015? input
 Where services are involved, process yield measurement is
23 - 25 often dependent on the particular process:
Productivity Growth = 100% = −8%
25  Ratio of cars rented to cars available for a given day
 Ratio of student acceptances to the total number of students
approved for admission

฀
LO 2.6 LO 2.6
2-38 2-39

Methods • Drones
• GPS devices
• Smartphones
• 3D printers
• Radio frequency ID tags (RFID)
Capital Quality • Medical imaging
• Artificial intelligence

Technology Management

LO 2.4 LO 2.7
2-40 2-41
1. Develop productivity measures for all operations
2. Determine critical (bottleneck) operations
3. Develop methods for productivity improvements
4. Establish reasonable goals
5. Make it clear that management supports and encourages productivity
improvement
6. Measure and publicize improvements
7. Don’t confuse productivity with efficiency

LO 2.7
2-42
 Decision Analysis

Dr. Rohit Sindhwani

MDI Gurgaon

Lecture Outline Decision Analysis

• Decision Analysis – Slide 3 • Quantitative methods

• Decision-Making without Probabilities – Slide 4 o a set of tools for operations manager
• Decision Analysis with Excel – Slide 13 • Decision analysis
• Decision Analysis with OM Tools – Slide 14 o a set of quantitative decision-making techniques for decision
situations in which uncertainty exists
• Decision-Making with Probabilities – Slide 15
o Example of an uncertain situation
• Expected Value of Perfect Information – Slide 19 • demand for a product may vary between 0 and 200 units, depending
• Sequential Decision Tree – Slide 20 on the state of market
Decision-Making Without Probabilities Payoff Table
• Payoff table
• States of nature
o method for organizing and illustrating payoffs from different
o Events that may occur in the future decisions given various states of nature
Examples of states of nature:
•
o
Payoff
• high or low demand for a product
• good or bad economic conditions
o outcome of a decision
• Decision making under risk
o probabilities can be assigned to the occurrence of states of nature in the
future
• Decision making under uncertainty
o probabilities cannot be assigned to the occurrence of states of nature in
the future

Decision-Making Criteria Under Uncertainty The Southern Textile Company

• Maximax
o choose decision with the maximum of the maximum payoffs
• Maximin
o choose decision with the maximum of the minimum payoffs
• Minimax regret
o choose decision with the minimum of the maximum regrets for each alternative
• Hurwicz
o choose decision in which decision payoffs are weighted by a coefficient of optimism, alpha
o coefficient of optimism is a measure of a decision maker’s optimism, from 0 (completely
pessimistic) to 1 (completely optimistic)
• Equal likelihood (La Place)
o choose decision in which each state of nature is weighted equally
Maximax Solution Maximin Solution

Minimax Regret Solution Hurwicz Criteria

Equal Likelihood Criteria Decision Analysis with Excel

Decision Analysis with OM Tools Decision-Making with Probabilities

• Risk involves assigning probabilities to states of nature

• Expected value
o a weighted average of decision outcomes in which each future state
of nature is assigned a probability of occurrence
Expected Value Decision Making with Probabilities: Excel

n
EV(x)= p(x i )x i
i-1

Where
xi = outcome i
p(xi) = probability of outcome i

Decision Making with Probabilities Expected Value of Perfect Information

• EVPI
o maximum value of perfect information to the decision maker
o maximum amount that would be paid to gain information that would result in a decision better than
the one made without perfect information
• Good conditions will exist 70% of the time
o choose maintain status quo with payoff of $1,300,000
• Poor conditions will exist 30% of the time
o choose expand with payoff of $500,000
• Expected value given perfect information
= $1,300,000 (0.70) + 500,000 (0.30)
= $1,060,000
• Recall that expected value without perfect information was $865,000 (maintain status quo)
• EVPI= $1,060,000 - 865,000 = $195,000
Sequential Decision Trees Decision Tree Analysis
• A graphical method for analyzing decision situations that require a sequence of decisions over
time
• Decision tree consists of
o Square nodes - indicating decision points
o Circles nodes - indicating states of nature
o Arcs - connecting nodes
• Compute EV at nodes 6 & 7
o EV(node 6)= 0.80($3,000,000) + 0.20($700,000) = $2,540,000
o EV(node 7)= 0.30($2,300,000) + 0.70($1,000,000)= $1,390,000
• Decision at node 4 is between
$2,540,000 for Expand and $450,000 for Sell land
• Choose Expand
• Repeat expected value calculations and decisions at remaining nodes

Lecture Outline

Product Design •
•
Design Process – Slide 4
Rapid Prototyping and Concurrent Design – Slide 11
• Technology in Design – Slide 27
• Design Quality Review – Slide 29
• Design for Environment and Extended Producer Responsibility
– Slide 33
• Quality Function Deployment – Slide 36
Dr. Rohit Sindhwani • Design for Robustness – Slide 45
MDI Gurgaon
Learning Objectives The Design Process (1 of 3)

• Explain the importance of the product design process and provide an • Effective design can provide a competitive edge
overview of each step of the process o matches product or service characteristics with customer
• Calculate the reliability and availability of a product or service requirements
• Understand the technologies involved in designing new products and o ensures that customer requirements are met in the simplest
their related production processes and least costly manner
• Utilize techniques for analyzing design failures and eliminating o reduces time required to design a new product or service
unnecessary design features o minimizes revisions necessary to make a design workable
• Explain why and how each step of the product lifecycle can be changed
for improved environmental stewardship, and provide examples of
programs that support green efforts
• Use quality function deployment as a design tool

The Design Process (2 of 3) The Design Process (3 of 3)

• Product design
o defines appearance of product
o sets standards for performance
o specifies which materials are to be used
o determines dimensions and tolerances
Idea Generation (1 of 2) Idea Generation (2 of 2)

• Company’s own R&D • Salespersons in the field • Perceptual Maps

department • Factory workers o visual method of comparing customer perceptions of different
• Customer complaints or • New technological
products or services
suggestions developments • Benchmarking
• Marketing research • Competitors o comparing product or process against best-in-class
• Suppliers • Reverse engineering
o carefully dismantling a competitor’s product to improve your
own product

A Perceptual Map of Breakfast Cereals Feasibility Study

• Market analysis
• Economic analysis
• Technical/strategic analyses
• Performance specifications
Rapid Prototyping and Concurrent Design Concurrent Design, Breaking Down Barriers

• Testing and revising a preliminary design model

• Build a prototype
o form design
o functional design
o production design
• Test prototype
• Revise design
• Retest

Form and Functional Design Computing Reliability (1 of 4)

• Form Design
o how the product will look?
• Functional Design
o how the product will perform?
• reliability
• maintainability
• usability
Computing Reliability (2 of 4) Computing Reliability (3 of 4)

Computing Reliability (4 of 4) System Reliability (1 of 2)

System Reliability (2 of 2) System Availability (SA)

where:
MTBF = mean time between failures
MTTR = mean time to repair

System Availability (1 of 2) System Availability (2 of 2)

Usability Production Design

• Ease of use of a product or service • How the product will be made

o ease of learning o Simplification
o ease of use • reducing number of parts, assemblies, or options in a product

o ease of remembering how to use o Standardization

• using commonly available and interchangeable parts
o frequency and severity of errors
o Modular Design
o user satisfaction with experience
• combining standardized building blocks, or modules, to create unique
finished products
o Design for Manufacture (DFM)
• Designing a product so that it can be produced easily and economically

Design Simplification Final Design and Process Plans

• Final design
o detailed drawings and specifications for new product or service
• Process plans
o workable instructions for manufacturing
• necessary equipment and tooling
• component sourcing recommendations
• job descriptions and procedures
• computer programs for automated machines
Technology in Design From Rube Goldberg to Charlie Chaplin

• Computer Aided Design (CAD)

o assists in creation, modification, and analysis of a design
o computer-aided engineering (CAE)
• tests and analyzes designs on computer screen
o computer-aided manufacturing (CAD/CAM)
• ultimate design-to-manufacture connection
o product life cycle management (PLM)
• managing entire lifecycle of a product
o collaborative product design (CPD)

Collaborative Product Design Systems (CPD) Design Quality Reviews

• A software system for collaborative design and development among trading • Review designs to prevent failures and ensure value
partners
o Failure mode and effects analysis (FMEA)
• With PML, manages product data, sets up project workspaces, and follows life
cycle of the product • a systematic method of analyzing product failures
• Accelerates product development, helps to resolve product launch issues, and o Fault tree analysis (FTA)
improves quality of design • a visual method for analyzing interrelationships among failures
• Designers can o Value analysis (VA)
o conduct virtual review sessions • helps eliminate unnecessary features and functions
o test “what if” scenarios
o assign and track design issues
o communicate with multiple tiers of suppliers
o create, store, and manage project documents
FMEA for Potato Chips Value Analysis (VA)
Failure Mode Cause of Failure Effect of Failure Corrective Action
Stale •
•
low moisture content
expired shelf life
•
•
tastes bad
won’t crunch
•
•
add moisture
cure longer
• Eliminate unnecessary features and functions
• poor packaging • thrown out • better package seal • Used by multifunctional design teams
• lost sales • shorter shelf life
Broken • too thin • can’t dip • change recipe • Define essential functions of an item
•
•
too brittle
rough handling
•
•
poor display
injures mouth
•
•
change process
change packaging
• Determine the value of the functions
• rough use • choking • Determine the cost of providing the functions
• poor packaging • perceived as old
• lost sales • Compute Value/Cost ratio
Too Salty •
•
outdated receipt
process not in control
•
•
eat less
drink more
•
•
experiment with recipe
experiment with process
• Design team works to increase the ratio
• uneven distribution of salt • health hazard • introduce low-salt version
• lost sales

Fault Tree Analysis (FTA) Design for Environment and Extended Producer
Responsibility
• Design for environment
o designing a product from material that
can be recycled
o design from recycled material
o design for ease of repair
o minimize packaging
o minimize material and energy used
during manufacture, consumption and
disposal
• Extended producer responsibility
o holds companies responsible for their
product even after its useful life
Design for Environment Lifecycle Green Areas

• Green Sourcing
o use less material
o use recycled if possible
• Green Manufacture
o is energy from renewable sources
o amount of waste produced
• Green Consumption
o product’s use of energy
o is product recyclable and maintainable
• Recycling and Re-Use
o design products to be recycled or re-used
o save energy and money
https://www.carbonfootprint.com/calculator.aspx

Quality Function Deployment (QFD) Outline of the House of Quality

• Translates voice of customer into technical design

requirements
• Displays requirements in matrix diagrams
o first matrix called “house of quality”
o series of connected houses
A Competitive Assessment of Customer Converting Customer Requirements to Design
Requirements Characteristics

The Tradeoff Matrix Targeted Changes in Design

The Completed House of Quality A Series of Connected QFD Houses

Benefits of QFD Design for Robustness (1 of 2)

• Promotes better understanding of customer demands • Robust product

• Produces better understanding of design interactions o designed to withstand variations in environmental and
operating conditions
• Involves manufacturing in design process
• Robust design
• Provides documentation of design process
o yields a product or service designed to withstand variations
• Controllable factors
o design parameters such as material used, dimensions, and
form of processing
• Uncontrollable factors
o user’s control (length of use, maintenance, settings, etc.)
Design for Robustness (2 of 2) Taguchi’s Quality Loss Function

• Tolerance • Quantifies customer

preferences toward quality
o allowable ranges of variation in the dimension of a part
• Emphasizes that customer
• Consistency preferences are strongly
o consistent errors are easier to correct than random errors oriented toward consistently
o parts within tolerances may yield assemblies that are not meeting quality expectations
within limits • Design for Six Sigma (DFSS)
o consumers prefer product characteristics near their ideal
values

Taguchi Design of Experiments (DOE) for Product Cost of Quality according to Taguchi
Design
There are five basic phases in Taguchi’s experimental design
technique for product development
• Planning
• Designing
• Conducting
• Analyzing
• Confirming
DOE application phases Design Thinking for Product Design
1. Identifying the requirements
2. Development of the concept
3. Defining the scope
4. Engineering and risk analysis
5. Realizing the prototype
6. Testing, verification, validation, and quality control
7. Making the consumers realize the product’s value
8. Installation and commissioning
9. After-sales-service
10. Obtaining feedback for modification and retrofitment.

Sequential Model Design The design-centered model

• A high level of design analysis is carried out by considering various

This includes the development of complete design, stakeholders’ requirements in the detailed design phase to reduce
prototyping, testing, and iteration until a satisfactory result is the subsequent changes in design.
achieved sequentially. • Design for X (DFX) can be Design for Manufacture, Design for
Typical examples are the automotive and aerospace industries. Assembly, Design for Quality, Design for End of Life, etc.
Concurrent Design Model The Dynamic Design Model

• Use of design-centered model results in cost reduction by reducing the development

cycle time, constant pressure to reduce development times and need for more
complex products, makes it increasingly difficult to model all stakeholders’ Changes initiated during the review at the end of each phase force iterations in
requirements in subsequent phases accurately. This led to the development of the design process within the preceding stages. To reduce this impact, in the
concurrent design, where design overlaps with the planning of the process dynamic design model, intense and informal information exchange is
development. introduced across phases to allow all the processes to start simultaneously.

Summary of Design Models