OM I Product Design

Operations Management
Product design and development

Product design
Product design and
and development
development
Importance of product / service design
• Helps in differentiation of product
• Improved sales due to higher customer
satisfaction
• Improved profit margins
• Affects the whole organization in some
way or the other
Product Life Cycle
• What is a Product Life Cycle?
• What is the importance of PLC to

Operations Management?
Product Life Cycle
Cost of development and production

Sales, cost, and cash flow
Sales revenue
Cash
flow
Negative
cash flow
Introduction Growth Maturity Decline

Product Life Cycle
Introduction Phase
 Frequent design changes

(product innovation high)
 Short production runs
 Supplier development
 High production costs
Product Life Cycle
Growth Phase
 Product design begins to
stabilize
 Effective forecasting of
demand becomes necessary
 Capacity growth /utilization
become important
 Price competition starts
 Distribution system to be
enhanced
Product Life Cycle
Maturity Phase
 Competitors now established
 Stable product design and
stable mfg process
 High volumes and optimum
capacity utilization
 Cost cutting very important
Product Life Cycle
Decline
 Little product differentiation

 Over capacity in industry
 Cost minimization is
necessary
 Hardly any product or
process innovation
Model for Product and Process Innovation by
Abernathy-Utterback
Product Development Process
 Idea generation
 Screening
 Initial design
Functional specifications
Product specifications
Process design
 Economic analysis
 Prototype testing
 Final design
 Test market
Manufacturability
Designing for manufacturability (DFM)
 Design must be easy to manufacture

 Simple design
 Reduces production cost
 Reduces production time
Manufacturability
1. Standardization
Conformance to standards
Benefits of standardization:
• Reduces variety
• Fewer items in inventory
• Purchasing, handling and inspection easier
• Helps in mass production
• Reduces costs
• Brings in inter-changeability
2. Simplification
Reduction in number of parts used in the product
Benefits: similar to standardization
Manufacturability
Modular design
Product is made up of
modules or sub-assemblies
 Increased variety of
products
 Adds flexibility to both
production and marketing
 Ease of production
 Lower cost
Manufacturability
Platforms
A collection of assets (a set of parts,
subsystems, interfaces, and manufacturing
processes that are shared among a set of
products) used by a company across a number of
different products. Advantages
1.Reduced development cost
2.Reduced development time
3.Improved reliability
4.Reduced risk
Reliability
What is reliability?
Ability to perform an intended function

Can be expressed as:
• Percentage
• MTBF
Reliability
Reliability depends upon:
• Product design
• Quality of raw material/components
• Production technique
• Testing
• Preventive maintenance
• Redundancy
Reliability
Calculating reliability of a system
• In series
• In parallel
Reliability
FMEA (Failure Mode and Effect Analysis)
•Can help in making products more reliable
by identifying possible modes of failure, their
severity, occurrence and ability to prevent
/detect failure
Kano Model
• The Kano Model is a frameworks designed
to help product teams prioritize initiatives.
• The Kano model is useful in gaining a
thorough understanding of a customer’s
needs.
Kano Model
Kano Model
• Basic features: Cause strong dissatisfaction if absent.
– An example is the telephone function of a smartphone.
• Performance features: They have a linear relationship with
customer satisfaction.
– An example is the resolution of a smartphone's camera.
• Attractive features: Not expected by customers but are well-
received if present..
– An example is a free case delivered with a smartphone.
• Neutral / indifferent features: These do not add value
– An example is the number of ringtones on a smartphone.
• Reversed features : Unwanted features that decrease customer
satisfaction when present.
– An example is the permanent tracking of a smartphone
Product development time
Product development time can be reduced
by using:
• Computer aided design (CAD)

• Concurrent engineering
Computer Aided Design
(CAD)
 Using computers to
design products and
prepare engineering
documentation
 Shorter development
cycles
 improved accuracy
 lower variable costs
 Easy storage
 Easy modifications
Conventional product designing
process
As Marketing
understood As engg.
it. designed it.
© 1984-1994 T/Maker Co.

© 1984-1994 T/Maker Co.
As Operations As the customer

made it. wanted it.
© 1984-1994 T/Maker Co.

5-26
© 1984-1994 T/Maker Co.
Concurrent engineering
• Conventional product design process is
sequential in nature (Over the wall
approach)
• Concurrent engineering uses cross
functional teams
• Reduces product development time
• Better design suited to customer needs
Over the wall approach
Value engineering
What is Value?
Value engineering
Value Engineering is the systematic
application of recognized techniques which
•identify the functions of a product
•assign monetary values to them and
•try to fulfill the functions at reduced cost
without compromising on quality.
Objective is to improve value of the
product
Value engineering
Value can be improved in many ways.
Can be brought about by: using alternate

material, simplifying design, removing poor
value functions
Value engineering
Steps in Value Engineering
1.General Phase
2.Information Phase
3.Function Phase
4.Creativity Phase
5.Evaluation Phase
6.Investigation Phase
7.Recommendation Phase
Innovation
1. What is innovation?
•Putting creative ideas into effective use to improve
products or services or business processes
2. Why do companies need innovation?
Innovation can lead to
• Greater customer satisfaction
• Adapt to changed circumstances
• Allows you to differentiate from competitors
• Fosters growth leading to increased revenues and
increased market share
Types of innovations
Innovation
How can successful implementation of
innovation be brought about ?
•By implementing innovation in
– The culture of the company

– Its management processes
– Motivating and inspiring employees for
innovation
Innovation Strategy
Innovation strategy
Plan that an organization develops and
implements to encourage and facilitate
the creation, development, and
introduction of new products, services.
Innovation Strategy
An innovation strategy requires the
following.
•Identifying potential areas for
innovation.
•Establishing processes for generating
and evaluating new ideas.
•Allocating resources to support research
and development.
•Creating a culture that encourages
experimentation and risk-taking.
Innovation Strategy
• Strategy is a commitment to a set of coherent, mutually
reinforcing policies or behaviours to achieve a
specific competitive goal.
• Innovation strategy must be aligned with the business
strategy
• Adopting a specific practice often requires changes in
other polices of organization too.
Innovation Strategy
Why are companies often not successful
in being innovative?
•Not ready to take risks

•Creating strict rules and boundaries to
protect themselves and the company
•Not having an innovation strategy
Innovation Strategy
Companies frequently fail to innovate
and sustain performance?
•Polaroid
•Nokia
•Yahoo
Innovation Strategy
• Innovation strategy has to be custom
tailored
• Without an innovation strategy different
functions end up pursuing conflicting
priorities.
Sales (pressing needs of customers)
Marketing (expanding market share)
Business unit heads (P & L pressures)
R & D (new technologies)
Operations (cost saving)
Innovation Strategy
• Tight connection between business
strategy and innovation
• Example: Corning
 Centralized R & D
 Invest in basic research
 Invest in manufacturing technology
Innovation Strategy
An innovation strategy must answer the
following.
How will innovation create value for customers?

More convenient to use
More durable
More reliable
Cheaper
Better performance
Innovation Strategy
 How will a company capture a share of the

value its innovations generate?
Complimentary assets, capabilities, products
or services which prevent customers from
defecting to rivals
Keep innovating!
Innovation Strategy
 What types of innovations will allow the
company to create and capture value
and what resources should they
receive?
Innovation Strategy
Outsourcing innovation
Benefits
 Faster
 Less risky
 More efficient
 Availability of skills
Disadvantages
 Building know how
 Imitability
 Control
 Data security
Design
Design Thinking
Thinking
• Design thinking is a human-centered
approach to innovation. It involves the
following
– understanding customer's needs
– rapid prototyping
– Iterating
– generating creative ideas to satisfy customer
needs
Design Thinking
Design Thinking
• Empathise
 Have a deep understanding of the underlying issues
involved. Engage with customer, observe and
understand.
 “If you want to build a product that’s relevant

to people, you need to put yourself in their
shoes.”
— Jack Dorsey, Programmer, entrepreneur, co-

founder of Twitter & founder of Square
Design Thinking
•Define
 Put together the information gathered and define the
core problem in a human centred manner.
 The problem statement (PoV) should be about the
people the team is trying to help, rather than focusing
on technology, monetary returns or product
specifications.
 Should not only record what the customer said and
did but also what he thought and felt.
Design Thinking
•Ideate
 Generate ideas to solve the problem. Get as many
ideas as possible.
•Prototype
Produce a number of inexpensive, scaled down
version of the product and test these within the team.
•Test
 Rigorously test the complete product using best
solutions identified during the prototyping phase.
Design of services
Following things need to be considered
1.Supporting facility
2.Facilitating goods
3.Explicit services
4.Implicit services
Design of services
Following needs to be decided
1.The process for delivering the service
2.The level of customization
3.The level of automation
4.The level of interaction with customer
Design of services
Customer may be involved in the following
ways.
Design of service: cosmetic surgery
Delivery of service: cardiac examination
Design and delivery of service: college
education

OM I Product Design

Uploaded by

Copyright:

Available Formats

OM I Product Design

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

OM I Product Design

Uploaded by

Copyright:

Available Formats

Operations Management

Product design and development

• What is the importance of PLC to

Cost of development and production

Introduction Growth Maturity Decline

 Frequent design changes

 Little product differentiation

Designing for manufacturability (DFM)

 Design must be easy to manufacture

Ability to perform an intended function

• Computer aided design (CAD)

© 1984-1994 T/Maker Co.

As Operations As the customer

© 1984-1994 T/Maker Co.

Can be brought about by: using alternate

– The culture of the company

•Not ready to take risks

How will innovation create value for customers?

 How will a company capture a share of the

 “If you want to build a product that’s relevant

— Jack Dorsey, Programmer, entrepreneur, co-

You might also like