Product Design & Development

By:
Dr. Vinay Surendra Yadav
Assistant Professor
Operations and Quantitative Techniques
Indian Institute of Management Shillong, India
 Strategic Product & Design

 The essence of an organization is the goods and services it offers

 Every aspect of the organization is structured around them

 Product and service design – or redesign – should be closely tied to an organization’s

strategy
Remember the activity
 You may need to go for design thinking and innovation. on water bottle design
and discussion in the
class.

https://www.youtube.com/watch?v=IZvAm3xLIWU
 What Does Product & Service Design Do?

1. Translate customer wants and needs into product and service requirements
2. Refine existing products and services
3. Develop new products and services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications
8. Translate product and service specifications into process specifications

Involve Inter-functional Collaboration

 Key Questions
1. Is there a demand for it?
 Market size
 Demand profile

2. Can we do it?
 Manufacturability - the capability of an organization to produce an item at an acceptable
profit
 Serviceability - the capability of an organization to provide a service at an acceptable cost
or profit

3. What level of quality is appropriate?

 Customer expectations
 Competitor quality
 Fit with current offering

4. Does it make sense from an economic standpoint?

 Liability issues, ethical considerations, sustainability issues, costs and profits
 Reasons to Design or Re-Design
 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
 Idea Generation

1. Supply-chain based

2. Competitor based

3. Research based
 Supply-Chain Based

• Ideas can come from anywhere in the supply chain:

• Customers

• Suppliers

• Distributors

• Employees

• Maintenance and repair personnel

 Competitor-Based

• 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
• Research and Development (R&D)
• Organized 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 Considerations
• 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 Code

• Under the UCC, products carry an implication of merchantability and fitness
 Ethical Considerations

• 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 forego 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
 Cradle-to-Grave Assessment

• Cradle-to-Grave Assessment
• aka Life-Cycle Assessment (LCA)
• The assessment of the environmental impact of a product or service throughout its
useful life
• Focuses on such factors as
• Global warming
• Smog formation
• Oxygen depletion
• Solid waste generation
• LCA procedures are part of the ISO 14000 environmental management procedures
 Reduce: Costs and Materials
• Value analysis

• Examination of the function of parts and materials in an effort to reduce the cost and/or improve the
performance of a product

• Common questions used in value analysis

• Is the item necessary; does it have value; could it be eliminated?
• Are there alternative sources for the item?
• Could another material, part, or service be used instead?
• Can two or more parts be combined?
• Can specifications be less stringent to save time or money?
• Do suppliers/providers have suggestions for improvements?
• Can packaging be improved or made less costly?
 Re-Use: Remanufacturing

• Remanufacturing

• Refurbishing used products by replacing worn-out or defective components

• Can be performed by the original manufacturer or another company

• Reasons to remanufacture:
• Remanufactured products can be sold for about 50% of the cost of a new product
• The process requires mostly unskilled and semi-skilled workers
• In the global market, European lawmakers are increasingly requiring manufacturers to take back
used products

• Design for disassembly (DFD)

• Designing a product to that used products can be easily taken apart
 Recycle
• Recycling
• Recovering materials for future use
• Applies to manufactured parts
• Also applies to materials used during production
• Why recycle?
• Cost savings
• Environmental concerns
• Environmental regulations

• Companies doing business in the EU must show that a specified proportion of their products are
recyclable

• Design for recycling (DFR)

• Product design that takes into account the ability to disassemble a used product to recover the
recyclable parts
 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 processed receives essentially the same service
 Designing for 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

• Facilitating Techniques
• Delayed differentiation
• Modular design
 Delayed Differentiation

• Delayed Differentiation

• The process of producing, but not quite completing, a product or service until
customer preferences are known

• It is a postponement tactic
• Produce a piece of furniture, but do not stain it; the customer chooses the stain
 Modular Design
• 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
• training costs are relatively low

• Disadvantages
• Limited number of possible product configurations
• Limited ability to repair a faulty module; the entire module must often be scrapped
 Reliability

• 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
 Robust Design

• 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

• Pertains to product as well as process design

• Consider the following automobiles:
• Ferrari Enzo
• Toyota Avalon
• Which is design is more robust?
 Degree of Newness
• Product or service design changes:
1. Modification of an existing product or service
2. Expansion of an existing product line or service offering
3. Clone of a competitor’s product or service
4. New product or service

• The degree of change affects the newness of the product or service to the market and to the
organization
• Risks and benefits?
Product or service life stages
 Product Life Cycle

Cost of development and production

Sales, cost, and cash flow
Sales revenue
Net revenue (profit)

Cash
flow

Negative
cash flow Loss

Introduction Growth Maturity Decline

 Introductory Phase Maturity Phase
► Fine tuning may warrant unusual ► Competitors now established
expenses for ► High volume, innovative production may be
1. Research needed
2. Product development ► Improved cost control, reduction in options,
paring down of product line
3. Process modification and
enhancement
4. Supplier development

Growth Phase Decline Phase

► Product design begins to stabilize ► Unless product makes a special
contribution to the organization, must plan
► Effective forecasting of capacity to terminate offering
becomes necessary
► Adding or enhancing capacity may
be necessary
 Product Life Cycle Costs

100 –
Costs committed

80 –

Percent of total cost 60 –

Costs incurred

40 –

20 –
Ease of change

0–

Concept Detailed Manufacturing Distribution,

design design service,
prototype and disposal
 Generating New Products
1. Understanding the customer

2. Economic change

3. Sociological and demographic change

4. Technological change

5. Political and legal change

6. Market practice, professional standards,

suppliers, distributors
 Product Development Stages
Concept

Feasibility

Customer Requirements

Functional Specifications

Product Specifications Scope for

Scope of design and
product Design Review engineering
development teams
team Test Market

Introduction

Evaluation
 Quality Function Deployment
1. Identify customer wants

2. Identify how the good/service will satisfy customer wants

3. Relate customer wants to product hows

4. Identify relationships between the firm’s hows

5. Develop customer importance ratings

6. Evaluate competing products

7. Compare performance to desirable technical attributes

QFD House of Quality

Interrelationships
Customer
importance
How to satisfy
ratings
customer wants

assessment
Competitive
What the Relationship
customer matrix
wants

Target values Weighted

rating
Technical
evaluation
 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
 House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

What the
customer wants
Customer
importance
rating
(5 = highest)
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
 House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Low electricity requirements

Aluminum components

High number of pixels

How to Satisfy

Ergonomic design
Customer Wants

Auto exposure
Auto focus
 House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

High relationship Technical

Attributes and
Evaluation
Medium relationship
Low relationship

Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1

Relationship matrix
House of Quality Example Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Relationships between
the things we can do

Low electricity requirements

Aluminum components

High number of pixels

Ergonomic design
Auto exposure
Auto focus
 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
High resolution 1

Our importance ratings 22 9 27 27 32 25

Weighted rating
 House of Quality Example
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Company B
Company A
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
High resolution 1 P P

Our importance ratings 22 5

 House of Quality Example
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants

Technical
Attributes and
Evaluation

Failure 1 per 10,000

Panel ranking
Target values
(Technical

2 circuits
attributes)

2’ to ∞
0.5 A

75%
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

House of Quality Example

Low electricity requirements

Aluminum components

High number of pixels

Ergonomic design
Auto exposure

Company A

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

Quality Reliable
Easy to hold steady
5
2
F G
G P
High resolution 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
Us 0.5 75% yes 2 ok G
 House of Quality Sequence

Deploying resources through the organization

in response to customer requirements

Quality
plan
Production
process

Production
Specific
House

process
components

components
House 4

Specific
Design
characteristics
characteristics
3
House
Design

2
requirements
Customer

House
1
 Organizing for Product Development
► Traditionally – distinct departments
► Duties and responsibilities are defined
► Difficult to foster forward thinking

► A Champion
► Product manager drives the product through the product development system and related
organizations

► Team approach
► Cross functional – representatives from all disciplines or functions
► Product development teams, design for manufacturability teams, value engineering teams

► Japanese “whole organization” approach

► No organizational divisions
 Kano Model
The Kano model is a theory for product development and customer satisfaction
developed in the 1980s by Noriaki Kano, which classifies customer preferences
into five categories.

Source: Jain and Singh (2020)

 Kano Model

Source: Jain and Singh (2020)

Product Life-Cycle Management (PLM)

► Integrated software that brings together

most, if not all, elements of product design
and manufacture

► Product design
► CAD/CAM, DFMA
► Product routing
► Materials
► Assembly
► Environmental
 Service Design

► Service typically includes direct interaction with the

customer

► Process – chain – network (PCN) analysis focuses on

the ways in which processes can be designed to
optimize interaction between firms and their customers
Process-Chain-Network (PCN) Analysis
 Process-Chain-Network (PCN) Analysis

• Direct interaction region includes process steps that involve interaction

between participants

• The surrogate (substitute) interaction region includes process steps in

which one participant is acting on another participant’s resources

• The independent processing region includes steps in which the

supplier and/or the customer is acting on resources where each has
maximum control
 Process-Chain-Network (PCN) Analysis

• All three regions have similar operating issues but the appropriate way
of handling the issues differs across regions

• Service operations exist only within the area of direct and surrogate
interaction

• PCN analysis provides insight to aid in positioning and designing

processes that can achieve strategic objectives
Application of Decision Trees to Product Design

► Particularly useful when there are a series of

decisions and outcomes which lead to other
decisions and outcomes
Application of Decision Trees to Product Design

Procedure
1. Include all possible alternatives and states of
nature - including “doing nothing”

2. Enter payoffs at end of branch

3. Determine the expected value of each branch

and “prune” the tree to find the alternative with
the best expected value
 Decision Tree Example

(.4)
Purchase CAD
High sales

(.6) Low sales

Hire and train engineers

(.4)
High sales

(.6)
Low sales
Do nothing
 Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
High sales
$1,000,000 Net

$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss

(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(– $20,000)

(.6)
Low sales
Do nothing
 Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net

$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss

(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(– $20,000)
= $388,000
(.6)
Low sales
Do nothing
 Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net

$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
$365,000
$2,500,000 Revenue
(.4) – 1,250,000 Mfg cost ($50 x 25,000)
High sales – 375,000 Hire and train cost
$875,000 Net

$800,000 Revenue
(.6) – 400,000 Mfg cost ($50 x 8,000)
Low sales – 375,000 Hire and train cost
Do nothing $0 $25,000 Net

$0 Net
 Transition to Production
► Know when to move to production
► Product development can be viewed as evolutionary and never complete
► Product must move from design to production in a timely manner

► Most products have a trial production period to insure producibility

► Develop tooling, quality control, training
► Ensures successful production

► Responsibility must also transition as the product moves through its life cycle
► Line management takes over from design

► Three common approaches to managing transition

► Project managers
► Product development teams
► Integrate product development and manufacturing organizations