CHAPTER 3: DESIGN OF GOODS INTRODUCTION

AND SERVICES
Quick design and launch of a new product to the
market is challenging.
Regal Marine – the world's third yacht manufacturer
has a very fast new product design speed (6 models
per year)  create a competitive advantage.
Which departments of the company are involved in the
product design process? The role of each department?

 Marketing
 Research & development (R&D)
 Production
2

INTRODUCTION
Discussion
Marketing & Product Manufacturing
sales development
Ideas
of
New
Demand products Pre-
Marketing
research
What are the requirements of
Engineering
product design that are
Products

Promotion concepts
Product Product
Customers characteristics
design
Response
Process
planning Production Customers considered effective?
Orders Sales
Orders

Activities of product design & process selection 4

INTRODUCTION INTRODUCTION

What is product/service design?

Effective product design helps
Product design identifies:
• Satisfy customer requirements
What types of materials will be used,
• Achieve cost-effectiveness
Product size and lifespan
• Create quality products as well as meet
the requirements in delivery Shape of product

• Sold to the market Standards of product specification

• Make profits for the company

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INTRODUCTION DESIGN PROCESS

Ideas generation
Service design identifies:
Physical process in the service
Feasibility study
Visual benefits
Psychological benefits that customers
Development and testing of
receive when using the service initial design

Outline the final design of the

product/service
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 DESIGN PROCESS IDEAS GENERATION
R&D
Customer Competitors Where do ideas of the product originate?
 R&D department of the company
Marketing Ideas Suppliers
 Customer recommendations
Product concepts
End  Market Research
 Suppliers
Feasibility
research Production  Wholesalers in the industry
requirements  Factory workers
NO
Engineering
Feasible? requirements  Competitors
Product  Technology development
characteristics
Final Process
Initial design design planning
Sample design
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IDEAS GENERATION DISCUSSION

Methods:
Visual graph: compare different perceptions of Use visual graph for
different products/services from customers.
1. Motorcycle
Good taste
2. Laptop
Cocoa Puffs

Low High
nutrition Cheerios nutrition
Rice krispies Wheaties
Shredded wheat

Bad taste
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IDEAS GENERATION IDEAS GENERATION

Methods: Methods:
Benchmarking: compare the product or production
process with the highest quality product of the same type. Cluster graph: help identify customer segments and
The company compared may not be in the same industry. interests
High
Cluster 2: ages 25 - 45

Importance of nutrition
Cluster 1: ages 6 - 16

Low Importance of taste High

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FEASIBILITY STUDY FEASIBILITY STUDY

Market analysis  Assess the demand for Market analysis  Estimate the cost of
designed products. product development and
Economic analysis  Should we support the Economic analysis production and compare it
development of new with estimated revenue.
products? - Benefit/cost analysis
Engineering/strategies  Will the decision to invest Engineering/strategies
- Decision-making theory
analysis in new products continue? analysis - Net Present Value (NPV)
- Internal rate of return (IRR)
- Risk estimating

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FEASIBILITY STUDY DEVELOPMENT AND TESTING OF
INITIAL DESIGN

Market analysis  Does the new product require Initial design

the use of new technology?
Economic analysis  Is there enough investment
capital, is the new product Sample design
project too risky?
Engineering/strategies
 Is the company capable of
Test sample Feasible initial
analysis manpower and management design design
ability for the use of new
technology?
Modify the design

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FINAL DESIGN FINAL DESIGN

Product Product
functions functions
design design
Determine product
characteristics  product
must meet the requirements Determine the shape, color,
Product from the marketing Product
shape design shape design size, style, aesthetics ...
department.
Longevity?
Durability?

Production Production
design design

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FINAL DESIGN FINAL DESIGN

Product Standardization Product

functions to make parts of the same type interchangeable functions Simplification
design between products, leading to: design To minimize the number of parts and details of the
purchase or manufacture in greater quantities design while ensuring features

lower inventory costs

Module design
Product easy to buy and manage materials Product Combine standardized production areas, in
shape design reduce quality inspection costs and shape design many ways to create a final finished
reduce the difficulties for the production. product.

Production To ensure easy production Production To ensure easy production

design and cost-effectiveness design and cost-effectiveness

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Designed by
Required by engineering Finished product
Required by Sales department
Marketing

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 QFD & QUALITY HOUSE

Customer demand!!!! QFD (Quality Function Deployment)

Information planning and communication tools help structure
product development.
Create better products at reasonable prices.

House of Quality
Is the matrix for linking the input and output elements of
different stages of development.

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QUALITY HOUSE QUALITY HOUSE EXAMPLE

6- Correlation
matrix

3 – Voice of the Organization

(Design Characteristics)

2 – Competitive Analysis
1–Customer voice (customer 5 – Relation matrix (effect of (Benchmarking & Strategy
requirements are sorted by
decreasing importance) design characteristics on Analysis)
customer requirements)

4 - Design objectives
(quality parameters,
competitive standards,
target value, cost ...)

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TECHONOLGY IN DESIGN TECHONOLGY IN DESIGN

Why apply new technology?

Technological efforts to
Product
From competitive strategies: develop new
technology
products/services
 Cost: reduce the amount of input materials, reduce the
Technology
amount of workers needed for production, or reduce Including production
distribution costs Process equipment and
technology processes used to
 Delivery speed: measured by the time from delivery to the
create products/services
time the customer receives the goods. Technology helps
manufacturers reduce this time.
Another way to categorize technology:
 Quality: many technologies improve the quality of products /
services, help increase sales and reduce costs  Hardware: equipment, machinery or tools
 Software: a set of rules, procedures or instructions necessary
 Flexibility in the production process: according to customer for using hardware
requirements
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SOME TECHNOLOGIES IN DESIN AND CASE STUDY – PRODUCT DESIGN OF

PRODUCTION REGAL MARINE
With hundreds of competitors in the yacht manufacturing industry, Regal Marine
CNC (computer numerical control) must find ways to create its identity. Regal is constantly introducing high-quality,
breakthrough yacht models in terms of design and technology. The strategy is
shown by the company with a product portfolio of 22 different models.
In order to maintain the improvement, with a lot of types in different stages of
CAD (Computer aided design) the product lifecycle, Regal seeks innovative ideas from customers, distributors,
consultants. Soon after, ideas were implemented on the CAD system to speed up
design development. The current designs are always improved because the
company always wants to keep the fashion and competitiveness. In addition, since
the life cycle of the yacht is very short, only 3 years, it requires the development of
Module design new products to be fast. Over the past few years, Regal's new product has been a
three-person yacht called Rush ($11,000), a small but powerful boat capable of
towing surfboards. This was followed by a 20-foot yacht with a very innovative
design that won many industry awards. Another new yacht, the Commodore, is a
Robot 42-foot-long, six-bed one with an incredibly magnificent cabin bedroom. With all of
the above innovative designs, Regal's designers and production engineers are
always under pressure to quickly meet the needs of the market.

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CASE STUDY – PRODUCT DESIGN OF
REGAL MARINE
By having key suppliers to participate early in the design process, Regal
improves both design and quality while speeding up the design of new products.
Regal realized that the earlier the supplier is involved in the design process, the
higher the speed of bringing new products to market. After the process of
developing ideas, concepts of features, designs are formed, CAD systems help
to form the specifications of the product. The first step in actual production is the
creation of workpieces, which are a porous foam block used to make molds for
boat casings and fiberglass boat floors. The specifications from the CAD system
will control the process of creating that foam workpiece. After the workpiece is
created, molds for the hull and boat floor are formed. Most often, a mold is made
entirely by hand, and takes from 4-8 weeks. Similar molds are made for the
making of other details, from kitchen shelves to parts of the bedroom cabin as
well as toilets and steps. These complete mold sets can be used to build
thousands of such yachts.

Discussion questions:
1. What competitive strategy was used by Regal Marine?
2. How can Regal Marine achieve the fastest growth rate of new products in the
industry?
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