product design presentation

7/30/2019 Product Design Presentation

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Discussion OutlineProduct and Service Design DefinitionTrends in Product and Service DesignReasons for Product and Service DesignProduct and Service Design ProcessSources of New Product IdeasFactors Impacting DesignProcess Selection


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Product/Service Design DefinedThe process of defining all of the companies product characteristics

appearance,materials,dimensions,tolerances, andperformance standards

Service industries must define both the service and concept- Physical elements, aesthetic & psychological benefits

e.g. promptness, friendliness, ambiance

Product and service design must match the needs and preferences of thetargeted customer group and must support product manufacturability (theease with which a product can be made)


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Product and Service Design

Product design and process selectionaffects Product quality Product cost Customer satisfaction

Overall manufacturability the ease withwhich the product can be made (DFM)


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Trends in Product and ServiceDesign

Increased emphasis on or attention to: Customer satisfaction

Reducing time to introduce new productor service

Reducing time to produce product


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Trends in Product and ServiceDesign contd.

Increased emphasis on or attention to: The organizations capabilities to produce

or deliver the item Environmental concerns Designing products & services that are

user friendly Designing products that use less material


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Reasons for Product and ServiceDesign

Be competitive

Increase business growth & profits

Avoid downsizing with development of new products

Improve product quality

Achieve cost reductions in labor or materials


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Major Factors to Consider in

Product and Service DesignStrategy Cost Quality Time-to-market Customer satisfaction Competitive advantage


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Product or Service DesignActivities-William Stevenson

Translate customer wants and needs intoproduct and service requirementsRefine existing products and services

Develop new products and servicesFormulate quality goalsFormulate cost targets

Construct and test prototypesDocument specifications


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The Product Design Process-JohnWiley

Step 1 - Idea Development- Someone thinks of a need and a product/service design to satisfy it

e.g. customers, marketing, engineering, competitors,

benchmarking, reverse engineering

Step 2 - Product Screening- Every business needs a formal/structured evaluation process

e.g. fit with facility and labor skills, size of market, contribution margin,

break-even analysis, return on sales

Step 3 Preliminary Design and Testing- Technical specifications are developed, prototypes built, testing starts

Step 4 Final Design- Final design based on test results, facility, equipment, material, & labor

skills defined, suppliers identified


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Design and Testing: The Case of Honda Accord

Video


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Developing New Products andServicesNewness can be defined in two senses:

New to the company, in the sense thatthe firm has never made or sold this typeof product before, but other firms mayhaveNew to the market or innovative; the

product is the first of its kind in themarket


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Developing New Products andServices

New products account for a staggering40% of company sales on averageFor every 7 new product ideas, about 4enter development, 1.5 are launched, andonly 1 succeeds


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Brainstorming Activity

Think of at least 10 new product ideas(anything under the sun)Write them in a piece of paper


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Lets see some new product ideasfrom the net

www.businesspundit.com/25-most-promising-new-products-for-2010/www.strangenewproducts.com/
http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.strangenewproducts.com/http://www.strangenewproducts.com/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/http://www.businesspundit.com/25-most-promising-new-products-for-2010/


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Sources of New Product Ideas

Internal Employees Marketing department

R&D departmentExternal Customers (QFD) Competitors Suppliers Internet


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Quality Function Development(QFD)

An approach that integrates the voiceof the customer into the product andservice development process


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QFD Methodology


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Product Planning Using QFD


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Success Stories on New ProductDevelopment using QFD

Nokia studies consumer needs ,emerging technologies and changingbusiness environment within the mobility

and communications spaceGE Health Care encourages activeinvolvement of their lead users

mostly doctors and research scientists.GE brings them together for regularmedical advisory board sessions


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Success Stories contd.

HP defines 10 factors that made themsuccessful in their new product projects:understanding user needs , strategicalignment, competitive analysis andproduct superiority, regulationcompliance, priority decision criteria list,risk assessment, product positioning,

product channel and support, projectendorsement by upper management, andtotal organization support


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Use of QFD

Hyundai Video


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Reverse Engineering

The dismantling and inspecting of competitors product to discover productimprovements

TED Video


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Research & Development (R&D)

Organized efforts to increase scientificknowledge or product innovation & mayinvolve:

Basic Research advances knowledge abouta subject without near-term expectations of commercial applications.

Applied Research achieves commercial

applications. Development converts results of applied

research into commercial applications


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FACTORS IMPACTINGDESIGN


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D esign f or Manufacturing DFM

The process of proactively designingproducts to:

1. Optimize all manufacturing functions:fabrication, assembly, test, procurement,shipping, delivery, service and repair

2. Assure the best cost, quality, reliability,

regulatory compliance, safety, time-to-market, and customer satisfaction


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Product Life Cycle (PLC)

According to Kotler and Keller, the PLC indicatesthat products have four things in common:

1. they have a limited lifespan;2. their sales pass through a number of distinct stages,

each of which has different characteristics, challenges,and opportunities;

3. their profits are not static but increase and decreasethrough these stages; and

4. the financial, human resource, manufacturing,marketing and purchasing strategies that productsrequire at each stage in the life cycle varies


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Stages in the PLC1. Introductory characterized by low

sales/profits, high production/marketingcosts, few competitors

2. Growth increase in sales/profit due tomarket awareness, low costs due toeconomies of scale and experience,

growth in competition


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Stages in the PLC cont.

3. Maturity slow growth, rising costs,competition most intense during thisstage

4. Decline sales continue to deteriorate,profits erode, increase in promotionalactivities to induce sales


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Product Life Cycle

Time

Incubation

Growth

Maturity

Saturation

Decline

D e m a n d


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Product Life Cycle

Facility and process investment dependson product life cycleConsider product life cycle stages Introduction Growth Maturity Decline


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Product Life Cycle Management(PLM)

Product Lifecycle Management is the process bywhich manufacturing companies develop,describe, manage and communicate informationabout their products from their conception totheir disposal, both internally and among theirsupply chain partners.


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Concurrent Engineering

The proactive practice of designingproducts to be built on standardprocesses while developing new products


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Concurrent Engineering

Old over -the wall sequential designprocess should not be used

Each function did its work and passed it to the

next function

Replace with a Concurrent Engineeringprocess

All functions form a design team working

together to develop specifications, involvecustomers early, solve potential problems,

reduce costs, & shorten time to market


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Remanufacturing

The concept of using components of oldproducts in the production of new ones


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2007 Wiley

E-manufacturing

Web-based environment creates numerousbusiness opportunities to include; Product design collaboration Process design collaboration

Computer-aided design uses computergraphics to design new productsComputer-integrated manufacturing integration of product design, process planning,and manufacturing using an integratedcomputer system


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Product Screening Tool Break-Even Analysis

Break-even analysis also includes calculating Total cost sum of fixed and variable cost

Total cost = F + (VC)*Q

Revenue amount of money brought in from salesRevenue = (SP) * Q

Q = number of units sold


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Product Screening Tool Break-Even Analysis

Computes the quantity of goods companyneeds to sell to cover its costs

Q BE = F/ (SP - VC) Q BE Break even quantity F Fixed costs SP selling price/unit

VC Variable cost


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Problem-SolvingBreak-even calculation : A company is planning to establish a chain of movie theaters. Itestimates that each new theater will cost approximately $1 Million. The theaters will hold500 people and will have 4 showings each day with average ticket prices at $8. Theyestimate that concession sales will average $2 per patron. The variable costs in labor andmaterial are estimated to be $6 per patron. They will be open 300 days each year. Whatmust average occupancy be to break-even?Break-Even PointTotal revenues = Total costs @ break-even point QSelling price*Q = Fixed cost + variable cost*Q

($8+$2)Q= $1,000,000 + $6*QQ = 250,000 patrons (42% occupancy)

What is the gross profit if they sell 300,000 ticketsProfit = Total Revenue Total Costs

P = $10*300,000 (1,000,000 + $6*300,000)P = $200,000

If concessions only average $.50/patron , what is break-even Q now? (sensitivityanalysis)

($8.50)Q = 1,000,000 - $6*QQ = 400,000 patrons (67% occupancy)


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PROCESS SELECTION


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Process Selection

Product design considerations must include the processProcess selection is based on five considerations

Type of process; range from intermittent to repetitive Degree of vertical integration Flexibility of resources Mix between capital & human resources Degree of customer contact

Two broad process classifications include: Intermittent operations Repetitive operations


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Intermittent Operations

Produce a variety of products withdifferent processing requirements inlower volumes (e.g. auto body shop, tool

and die shop, health care facility)Labor-intensive rather than capital-intensive


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Intermittent Operations contd.

Think about a health-care facility. Eachpatient, the product, is routed todifferent departments as needed. One

patient may need to get an X ray, go tothe lab for blood work, and then go tothe examining room. Another patient mayneed to go to the examining room andthen to physical therapy.


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Repetitive Operations

Used to produce one or morestandardized products in high volume (e.g.cafeteria, automatic carwash)

Capital intensive rather than labor-intensive


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Other Examples of Intermittent andRepetitive Operations

An assembly line isan example of arepetitive operation.

Designing a custom-made cake isan example of anintermittentoperation.


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Process Types

Process types can be:1. Project process make a one-at-a-time productexactly to customer specifications (e.g. construction,shipbuilding, medical procedure, interior design)

2. Batch process small quantities of product ingroups or batches based on customer orders orspecifications (e.g. Bakeries, education, printingshops)

3. Line process large quantities of a standardproduct (e.g. cars, computers, TVs, food items such

as candies,)4. Continuous process very high volumes of a fullystandard product (e.g. oil refineries, watertreatment plants, paint facilities)


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Underlying Process Relationship BetweenVolume and Standardization


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DESIGNING PROCESS


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Process Design ToolsProcess flow analysis is a tool used to analyzeand document the sequence of steps within atotal process.Process flowchart is used for viewing thesequence of steps involved in producing theproduct and the flow of the product throughthe processProcess Re-engineering is a structuredapproach used when major business changes arerequired as a result of major new products,quality improvement needed, bettercompetitors, inadequate performance

P Fl Ch E l f


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Process Flow Chart Example for aPizza Company


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Tasks or operations

Examples: Giving anadmission ticket to acustomer, installing aengine in a car, etc.

Decision PointsExamples: How muchchange should begiven to a customer,

which wrench shouldbe used, etc.

Purpose and Examples

Source: Chase, Jacobs & Aquilano, Operations Management for Competitive Advantage , 11/e

Flowchart Symbols


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Process Strategy

Make-to-stock - produces standard productsand services for immediate sale or delivery (e.g.most popular pizza that are always availableupon demand)Assemble-to-order produces standardcomponents that can be combined to customerspecifications (e.g. pizza standard crust prepared

ahead of time but are assembled based onspecific customer requests)


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Process Strategy contd.

Make-to-order produces products tocustomer specifications after an order hasbeen received (e.g. pizza order based on

specific customer requirements, allowingchoices of different crusts and toppings)


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Facility Layout and Process Choice


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M t i E l At Z ll D Cl i it t k


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Metrics Example : At Zelles Dry Cleaning, it takes anaverage of 3 hours to dry clean & press a shirt, withvalue-added time estimated at 110 min. Workers are paid

for a 7-hour workday but work 5 hr/day, accounting forbreaks and lunch. Zelles completes 25 shirts per day, whilethe industry standard is 28 for a comparable facility.

Process Velocity = (Throughput Time)/(Value-added time)= (210 minutes/shirt)/(110 minutes/shirt) = 1.90

Labor Utilization = (Time in Use)/(Time Available)= (5 hr)/(7 hr) = .786 or 78.6%

Efficiency = (Actual Output)/(Standard Output)

= (25 shirts/day)/(28 shirts/day) = .89 or 89%


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Referenceshttp://www.innosupport.net/uploads/media/6_4_Product_Lifecycle_Management.pdf http://books.google.com.ph/books?id=9st-HiYJhwcC&printsec=frontcover&dq=design+manufacturability+concurrent+engineering&source=bl&ots=a0YuNalTPZ&sig=YlXJvo9xW1QKZKuaHbZ7yLoLpDs&hl=en&ei=PPtATPGiAYPcvQPW7JToDA&sa=X&oi=book_result&ct=result&resnum=5&ved=0CDIQ6AEwBA#v=onepage&q&f=falsehttp://media.wiley.com/product_data/excerpt/48/04713472/0471347248-4.pdf www.businesspundit.com/25-most-promising-new-products-for-2010/www.strangenewproducts.com/http://www.npd-solutions.com/qfd.htmlFinch, Byron J. (2007) Operations Now. McGraw Hill PublicationsVideos courtesy of Marketing Department : Honda & Hyundai shared byReyes, E. & Technology by Awayan, A.
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