OM FInal
### 1. Manufacturability
Definition: How easily a product can be made.
### 2. Product Design
Definition: The process of determining all the product’s characteristics and features.
### 3. Service Design
Definition: The process of setting all the characteristics of a service, including physical, sensual, and psychological
benefits.
### 4. Design of Services versus Goods
Refers to: Planning and creating products in two different industries.
- Goods: Tangible products (like manufactured items or retail goods).
- Services: Intangible products, focusing on the overall experience and concept.
### Key Comparisons:
- Goods:
- Preference is based on physical design elements.
- Services:
- Preference is based on both physical elements and additional service aspects (like ambiance and psychological
benefits).
- Service operations include factors such as promptness and friendliness.
### Steps in Product Design Process
1. Idea Development:
- Definition: The foundation of a new product begins with an idea.
- Importance: It is the first and most crucial step in product development.
- Sources of Ideas:
- Product managers understand customer needs and market trends.
- Engineers and inventors develop new and innovative products.
- Creativity can come from any employee.
- Importance of Idea Development:
- Helps companies stay competitive by introducing new products.
- Regularly launching new products maintains success and attracts customers.
- Factors Affecting New Product Releases:
- Market Demand: If customers want something new.
- Sales Performance: If sales are declining, a new product may be introduced.
- Examples:
- Automobile Industry: New car models every year.
- Fashion Brands: New clothing collections for each season.
2. Ideas from Customers, Competitors, and Suppliers:
- Customers as a Source of Ideas:
- Customers drive the design of goods and services.
- Marketing links customers with product design.
- Market researchers collect customer information through surveys and focus groups.
- Customer preferences change over time, so continuous analysis is needed.
- Forecasting Customer Preferences:
- Important for long-term success.
- Predicting future customer demands helps businesses stay ahead in the market.
- Competitors as a Source of Ideas:
- Observing competitors' products and their success rates.
- Analyzing competitors' product designs, pricing strategies, and operations.
- Benchmarking: Learning from top-performing companies to improve one's own business.
- Example: American Express as a model for excellent complaint resolution.
3. Reverse Engineering & Suppliers as a Source of Ideas:
- Reverse Engineering:
- Analyzing competitors' products by disassembling and studying their design features.
- Helps improve own designs by learning from competitor products.
- Example: Ford Motor Company used reverse engineering to develop the Taurus model.
- Research and Development (R&D) teams generate new product ideas and focus on innovation.
- Suppliers as a Source of Ideas:
- Suppliers share knowledge and expertise.
- Early Supplier Involvement (ESI): Suppliers participate in early stages of product design.
- Collaboration with suppliers improves product quality, reduces costs, and better satisfies customer needs.
5. Product Screening
- Definition: After developing a product idea, companies evaluate its chances of success through product screening.
- Process: A product screening team assesses the idea based on key business functions, with executives from different
departments analyzing various factors before approving the product.
- Key Evaluation Areas:
- Operations:
- Determines if the company has the necessary resources to produce the product.
- Ensures raw materials for production are available.
- Marketing:
- Estimates the potential market size for the new product.
- Evaluates the effort needed to promote and sell the product.
- Finance:
- Assesses the financial investment required for production.
- Calculates the cost and expected return on investment (ROI).
- Break-even Analysis:
- Technique to compute the amount of goods needed to sell to cover costs.
- Formulas:
- Total Cost = F + VC(Q)
- Revenue = SP(Q)
- Total Cost = Total Revenue
- Q(be) = F / (SP - VC)
6. Preliminary Design and Testing
- Definition: After passing the screening stage, the product moves to preliminary design and testing.
- Process:
- Design engineers convert general performance specifications into technical specifications.
- Prototypes are created and tested to evaluate functionality.
- Test results help identify issues, leading to revisions and further prototype testing.
- Service businesses test offerings on a small scale before a full launch.
- Customer feedback is used to refine and improve the service.
- Example: Fast-food restaurants test new menu items in specific locations before launching them nationwide.
### 7. Final Design
- Definition: After extensive testing, the product moves to the final design stage.
- Process:
- Final product specifications are created based on test results and refinements.
- Materials needed for production are identified.
- Suppliers for raw materials are chosen.
- The entire production process is organized for efficient manufacturing.
### Factors Impacting Product Design
1. Design for Manufacture (DFM):
- Definition: Ensures a product is easy and cost-effective to produce.
- Importance: A good design should satisfy customers and be practical to manufacture. Ignoring manufacturing
feasibility can make a product idea too costly or difficult to produce.
- Key DFM Guidelines:
- Design Simplification: Reduces the number of parts and features in the product, making it easier to manufacture,
less costly, and of better quality.
- Design Standardization: Uses common and interchangeable parts instead of unique ones, reducing inventory
costs, allowing greater product variety with fewer components, and increasing manufacturing flexibility. (Example:
Toolbox)
2. Product Life Cycle (PLC):
- Definition: A series of stages that products pass through in their lifetime, characterized by changing product
demands over time.
- 4 Stages of PLC:
- Introduction: The product is launched, sales are low, and marketing costs are high. (Example: A new smartphone
released with advertisements)
- Growth: Sales increase, profits rise, and competitors enter the market. (Example: More people buy the
smartphone, and competitors launch similar models)
- Maturity: Sales reach the highest level, competition is strong, and prices may drop. (Example: The smartphone is
widely used, and discounts are offered)
- Decline: Sales decrease as new products replace the old one. (Example: A newer smartphone is released, and the
old model is discontinued)
3. Concurrent Engineering:
- Definition: A modern approach where multiple teams work together simultaneously in the early phase of product
design.
- Benefits: Ensures a smooth transition from design to production, reducing development time and improving
quality.
- Old Approach: "Over-the-Wall" Method, where designers created the product first and then passed it to operations
for production without input, leading to inefficiencies and costly modifications.
- Advantages of Concurrent Engineering:
- Teams collaborate from the start, preventing costly design mistakes.
- Reduces product development time and speeds up market launch.
- Improves product quality by considering both design and manufacturing needs early.
4. Remanufacturing:
- Definition: The process of using components from old products to create new ones.
- Importance: Gaining importance due to increasing environmental awareness and the focus on recycling and waste
reduction.
- Benefits:
- Environmental Benefits: Reduces waste and promotes sustainable production.
- Cost Benefits: Remanufactured products can be 50% cheaper than new ones.
### Process Selection
#### Types of Processes:
1. Intermittent Operations:
- Definition: Processes used to produce a variety of products with different processing requirements in lower
volumes.
- Key Features:
- Different products: Each needs a unique process.
- Small batches: Not mass production.
- Flexible routing: No fixed path, moves as needed.
- Example: Healthcare Facility – Patients receive different treatments based on their needs.
2. Repetitive Operations:
- Definition: Processes used to produce one or a few standardized products in high volume. Often involves
significant investment in equipment and machinery.
- Key Features:
- Standardized Products: Same design, no customization.
- High Volume: Large-scale production.
- Line Flow: Resources arranged in a sequence.
- Efficient Process: Fast and smooth workflow.
- Fixed Path: Products follow the same route.
- Example: Assembly lines, Cafeterias, Automatic Car Washes.
3. The Continuum of Process Type:
- Intermittent Operations can be divided into:
- Project Process:
- High customization, low volume, customer involvement.
- Examples: Construction, shipbuilding, custom tailoring, artwork, wedding cake design.
- Batch Process:
- Some customization, small production runs.
- Examples: Bakeries, education, printing shops, university classes.
- Repetitive Operations can be divided into:
- Line Process:
- Mass production, little or no customization.
- Examples: Assembly lines for cars, computers, food, shoes, candy bars.
- Continuous Process:
- Fully automated, high capital investment, non-stop production.
- Examples: Oil refineries, water treatment plants, paint manufacturing.
### Designing Process
1. Process Flow Analysis:
- Definition: A technique for evaluating a process in terms of the sequence of steps from inputs to outputs with the
goal of improving its design.
- Purpose: Helps in identifying inefficiencies and improving process design.
2. Process Flow Chart:
- Definition: A chart showing the sequence of steps in producing the product or service.
- Features:
- Arrows → Show process flow.
- Triangles 🔺 Represent decision points.
- Inverted Triangles 🔻 Indicate storage of goods.
- Rectangles ▭ Represent tasks.
3. Bottleneck:
- Definition: The longest task in the process. Often stages in the production process can be performed in parallel.
4. Strategies:
- Make-to-Stock: Produces standard products and services for immediate sale or delivery.
- Assemble-to-Order: Produces standard components that can be combined to customer specifications.
- Make-to-Order: Produces products to customer specifications after an order has been received.
### Process Performance Metrics
Definition:
Measurements of different process characteristics that tell us how a process is performing.
1. Throughput Time:
- Definition: The average amount of time it takes a product to move through the system.
- Importance: Measures process efficiency – Faster production with lower throughput time.
- Inclusions: Covers both active work and waiting periods.
- Goal: Reducing throughput time increases output.
- Example: Doctor’s visit – Time from arrival to departure, including waiting, consultation, and tests.
2. Process Velocity:
- Definition: The ratio of throughput time to value-added time.
- Formula: Process Velocity = Throughput time / Value-added time
3. Productivity:
- Definition: The ratio of outputs to inputs, measuring how efficiently resources are used.
- Focus: Often uses financial measures (e.g., dollars of output).
4. Utilization:
- Definition: The ratio of the time a resource is actually used to the time it is available.
- Focus: Measures how well resources (e.g., equipment, labor) are being used.
5. Efficiency:
- Definition: The ratio of actual output to standard output.
- Focus: Indicates whether performance is at, above, or below the expected level.
