Product & Process

Design
PowerPoint presentation to accompany
Heizer and Render
Operations Management, 10e, Global Edition
Principles of Operations Management, 8e, Global Edition
PowerPoint slides by Jeff Heyl

2011 Pearson Education

5-1

Product Design
- Is the process of deciding on the
unique characteristics and features of
the companys product.
Process Selection
- is the development of the process
necessary to produce the designed
product.
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Product and Process

Design
Affect the product quality, product
cost, and customer satisfaction.
If the product is not well designed or
if the manufacturing process is not
true to the product design, the
quality of the product may suffer.

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Product Design defines a products

characteristics, such as its
appearance, the materials it is made
of, its dimensions and tolerances,
and its performance standards.
- brings together marketing
analyst, art directors, sales
forecasters, engineers, finance
experts, and other members of the
company to think and plan
strategically.
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The Product Design

Process
Idea
Development

Product
Screening

Product Idea
developed:
Sources can
be customers,
competitors,
or suppliers

Product Idea
evaluated:
need to
consider
operations,
marketing,
and financial
req.

2011 Pearson Education

Preliminary
Design &
Testing
Product
Prototypes
built, tested,
and refined

Final Design
Final Product
specifications
completed

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Factors Impacting Product

Design
Factors that need to be considered
during the product design stage:
1.Design for Manufacture
2.Product Life Cycle
3.Concurrent Engineering
4.Remanufacturing

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1. Design for Manufacture

(DFM)
- is a series of guidelines that we should
follow to produce a product easily and
profitably.
DFM guidelines focus on two issues:
1.Design simplification means reducing
the number of parts and features of the
product whenever possible.
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2. Design Standardization refers to

the use of common and
interchangeable parts.
By using interchangeable parts, we
can make a greater variety of
products with less inventory and
significantly lower cost and provide
greater flexibility.

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Guidelines for Design for

Manufacture (DFM)
1. Minimize parts
2. Design parts for different products
3. Use modular design
4. Avoid tools
5. Simplify operations

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2. Product Life Cycle

A series of stages that products
pass through in their lifetime,
characterized by changing product
demands over time.
May be any length from a few
hours to decades
The operations function must be
able to introduce new products
successfully
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Sales, cost, and cash flow

Product Life Cycles

Cost of development and production
Sales revenue
Net revenue (profit)

Cash
flow
Negative
cash flow

Introduction

Loss

Growth

Maturity

Decline
Figure 5.1

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Product Life Cycle

Introductory Phase
Fine tuning may warrant
unusual expenses for
1. Research
2. Product development
3. Process modification and
enhancement
4. Supplier development
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Product Life Cycle

Growth Phase
Product design begins to
stabilize
Effective forecasting of
capacity becomes necessary
Adding or enhancing capacity
may be necessary
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Product Life Cycle

Maturity Phase
Competitors now established
High volume, innovative
production may be needed
Improved cost control,
reduction in options, paring
down of product line
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Product Life Cycle

Decline Phase
Unless product makes a
special contribution to the
organization, must plan to
terminate offering

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4. Concurrent Engineering
Is an approach that brings many
people together in the early phase of
product design in order to
simultaneously design the product
and the process.
The old approach of product and
process design was called over-thewall
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The Over-the Wall approach was to

have first the designer of idea come
up with the exact product
characteristics. Once the design was
complete they pass on to operations
who would design the production
process needed to produce the
product.

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Problems with Over-the-wall

It is very inefficient and costly
Takes longer amount of time than
when product and process design
are performed concurrently.
It does not create a team
atmosphere, which is important in
todays work environment.

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4. Remanufacturing
The concept of using components of
old products in the production of
new ones.
Is a concept that has been gaining
increasing importance as our society
becomes more environmentally
conscious and focuses on recycling
and eliminating waste.
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Issues for Product Design

1. Robust design
2. Modular design
3. Computer-aided design (CAD)
4. Computer-aided manufacturing (CAM)
5. Virtual reality technology
6. Value analysis
7. Environmentally friendly design
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1. Robust Design
Design that can be produced to
requirements even with
unfavorable conditions in the
production process.
Product is designed so that small
variations in production or
assembly do not adversely affect
the product
Typically results in lower cost
and higher quality
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2. Modular Design
Design in which parts or components of a
product are subdivided into modules that are
easily interchanged or replaced.
Products designed in easily segmented
components
Adds flexibility to both production and marketing
Improved ability to satisfy customer
requirements

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3. Computer Aided Design

(CAD)
Interactive use of
computer to develop
and document a
product.
Shorter development
cycles, improved
accuracy, lower cost
Information and
designs can be
deployed worldwide
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Extensions of CAD
Design for Manufacturing and Assembly
(DFMA)
Solve manufacturing problems during the
design stage

3-D Object Modeling

Small prototype
development

CAD through the

internet
International data
exchange through STEP (standard for exchange of
product data)

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4. Computer-Aided
Manufacturing (CAM)
Refers to the use of information
technology to control machinery.
Utilizing specialized computers
and program to direct and control
manufacturing equipment
Often driven by the CAD system
(CAD/CAM)
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Benefits of CAD/CAM
1. Product quality
- it permits the designer to investigate more
alternatives, potential problems and dangers.

2. Shorter design time

- this lowers cost and allows a more
rapid response to the market

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Benefits of CAD/CAM
3. Production cost reductions

- Reduced inventory, more efficient use of

personnel through improved scheduling, and
faster implementation of design changes
lower costs.

4. Database availability
- Provides information for other manufacturing
software and accurate product data so everyone
is operating from the same information,
resulting in cost reduction.

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Benefits of CAD/CAM
5. New range of capabilities
- for instance, the abilities to rotate and
depict objects in three-dimensional
form, to check clearances, to relate
parts and attachments, and to improve
the use of numerically controlled
machine tools all provide new
capability for manufacturing.

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5.Virtual Reality Technology

A visual form of communication in which
images substitute for reality and typically
allow the user to respond interactively
Computer technology used to develop an
interactive, 3-D model of a product from the
basic CAD data
Allows people to see the finished design
before a physical model is built
Very effective in large-scale designs such as
plant layout

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6. Value Analysis
A review of successful products that
takes place during the production
process.
Focuses on design improvement during
production
Seeks improvements leading either to a
better product or a product which can
be produced more economically with
less environmental impact

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7.Ethics, Environmentally
Friendly Designs, and
Sustainability
It is possible to enhance productivity
and deliver goods and services in an
environmentally and ethically
responsible manner
In OM, sustainability means ecological
stability
Conservation and renewal of resources
through the entire product life cycle
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Ethics, Environmentally
Friendly Designs, and
Sustainability

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The Ethical Approach

View product design from a
systems perspective
Inputs, processes, outputs
Costs to the firm/costs to society

Consider the entire life cycle of

the product

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The Ethical Approach

Goals
1. Developing safe end environmentally
sound practices
2. Minimizing waste of resources
3. Reducing environmental liabilities
4. Increasing cost-effectiveness of
complying with environmental
regulations
5. Begin recognized as a good
corporate citizen
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Guidelines for Environmentally

Friendly Designs
1. Make products recyclable
2. Use recycled materials
3. Use less harmful ingredients
4. Use lighter components
5. Use less energy
6. Use less material
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Acquiring Technology
By Purchasing a Firm
Speeds development
Issues concern the fit between the acquired
organization and product and the host

Through Joint Ventures

Both organizations learn
Risks are shared

Through Alliances
Cooperative agreements between
independent organizations
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Service Design
Service typically includes direct
interaction with the customer
Increased opportunity for customization
Reduced productivity

Cost and quality are still determined at

the design stage
Delay customization
Modularization
Reduce customer interaction, often
through automation
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Service Design

Figure 5.12
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Service Design

Figure 5.12
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Documents for Services

High levels of customer
interaction necessitates
different documentation
Often explicit job instructions
for moments-of-truth
Scripts and storyboards are
other techniques

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First Bank Corp. Drive-up

Teller Service Guidelines
Be especially discreet when talking to the customer
through the microphone.
Provide written instructions for customers who must fill
out forms you provide.
Mark lines to be completed or attach a note with
instructions.
Always say please and thank you when speaking
through the microphone.
Establish eye contact with the customer if the distance
allows it.
If a transaction requires that the customer park the car and
come into the lobby, apologize for the inconvenience.
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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

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Application of Decision
Trees to Product Design
Procedures
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
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Decision Tree Example

Silicon, Inc., a semiconductor manufacturer, is
investing the possibility of producing and
marketing a microprocessor. Undertaking this
project will require either purchasing of
sophisticated CAD system or hiring and training
several additional engineers. The market for the
product could be either favorable or unfavorable.
Silicon inc of course has the option of not
developing the new product at all.
With favorable acceptance by the market, sales
would be 25,000 processors selling for $100 each.
With unfavorable acceptance, sales would only be
8,000 processors selling for $100 each. The cost of
CAD equipment if $500,000, but that of
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Hiring and training three new engineers is only

$375,000. However, manufacturing costs should
drop from $50 each when manufacturing without
CAD, to $40 each when manufacturing with CAD.
The probability of favorable acceptance of the neew
microprocessor is .40; the probability of
unfavorable acceptance is .60

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Decision Tree Example

(.4)

Purchase CAD

High sales

(.6) Low sales

Hire and train engineers

(.4)
High sales

(.6)
Low sales

Do nothing
Figure 5.14
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Decision Tree Example

(.4)

Purchase CAD

High sales

(.6) Low sales

Hire and train engineers

$2,500,000
- 1,000,000
- 500,000
$1,000,000
$800,000
- 320,000
- 500,000
- $20,000

Revenue
Mfg cost ($40 x 25,000)
CAD cost
Net
Revenue
Mfg cost ($40 x 8,000)
CAD cost
Net loss

(.4)
High sales

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

(.6)
Low sales

Do nothing
Figure 5.14
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Decision Tree Example

(.4)

Purchase CAD
$388,000

High sales

(.6) Low sales

Hire and train engineers

$2,500,000
- 1,000,000
- 500,000
$1,000,000
$800,000
- 320,000
- 500,000
- $20,000

Revenue
Mfg cost ($40 x 25,000)
CAD cost
Net
Revenue
Mfg cost ($40 x 8,000)
CAD cost
Net loss

(.4)
High sales

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

= $388,000
(.6)
Low sales

Do nothing
Figure 5.14
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Decision Tree Example

(.4)

Purchase CAD
$388,000

High sales

(.6) Low sales

Hire and train engineers

$365,000
(.4)

High sales

(.6)
Low sales

Do nothing $0

$2,500,000
- 1,000,000
- 500,000
$1,000,000
$800,000
- 320,000
- 500,000
- $20,000
$2,500,000
- 1,250,000
- 375,000
$875,000
$800,000
- 400,000
- 375,000
$25,000
$0 Net

2011 Pearson Education

Revenue
Mfg cost ($40 x 25,000)
CAD cost
Net
Revenue
Mfg cost ($40 x 8,000)
CAD cost
Net loss
Revenue
Mfg cost ($50 x 25,000)
Hire and train cost
Net
Revenue
Mfg cost ($50 x 8,000)
Hire and train cost
Net

Figure 5.14
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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

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Transition to 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

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