CHAPTER TWO

Product Design and process selection

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Operations Management, Eighth Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
 Product and Service Design

• Major factors in design strategy

– Cost
– Quality
– Time-to-market
– Customer satisfaction
– Competitive advantage
Product and service design – or redesign – should be
closely tied to an organization’s strategy

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Product or Service Design Activities

• Translate customer wants and needs into

product and service requirements
• Refine existing products and services
• Develop new products and services
• Formulate quality goals
• Formulate cost targets
• Construct and test prototypes
• Document specifications

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Reasons for Product or Service Design

• Economic
• Social and demographic
• Political, liability, or legal
• Competitive
• Technological

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Objectives of Product and Service Design
• Main focus
– Customer satisfaction
• Secondary focus
– Function of product/service
– Cost/profit
– Quality
– Appearance
– Ease of production/assembly
– Ease of maintenance/service

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Designers Adhere to Guidelines
• Produce designs that are consistant with
the goals of the company
• Give customers the value they expect
• Make health and safety a primary
concern
• Consider potential harm to the
environment

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Other Issues in Product and Service Design
• Product/service life cycles
• How much standardization
• Product/service reliability
• Range of operating conditions

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 Life Cycles of Products or Services
Figure 4.1

Saturation

Maturity
Demand

Decline
Growth

Introduction

Time
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 Standardization
• Standardization
– Extent to which there is an absence of
variety in a product, service or process
• Standardized products are immediately
available to customers

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Advantages of Standardization
• Fewer parts to deal with in inventory &
manufacturing
• Design costs are generally lower
• Reduced training costs and time
• More routine purchasing, handling, and
inspection procedures

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Advantages of Standardization (Cont’d)

• Opportunities for long production runs and

automation
• Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures.

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Disadvantages of Standardization

• Designs may be frozen with too many

imperfections remaining.
• High cost of design changes increases
resistance to improvements.
• Decreased variety results in less consumer
appeal.

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 Mass Customization

• Mass customization:
– A strategy of producing standardized
goods or services, but incorporating
some degree of customization
– Delayed differentiation
– Modular design

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 Delayed Differentiation

• Delayed differentiation is a
postponement tactic
– Producing but not quite completing a
product or service until customer
preferences or specifications are known

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 Modular Design

Modular design is a form of

standardization in which component parts
are subdivided into modules that are easily
replaced or interchanged. It allows:
– easier diagnosis and remedy of failures
– easier repair and replacement
– simplification of manufacturing and assembly

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 Reliability

• Reliability: The ability of a product, part, or

system to perform its intended function under
a prescribed set of conditions
• Failure: Situation in which a product, part, or
system does not perform as intended
• Normal operating conditions: The set of
conditions under which an item’s reliability is
specified

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 Robust Design

Robust Design: Design that results

in products or services that can
function over a broad range of
conditions

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 Degree of Newness
1.Modification of an existing
product/service
2.Expansion of an existing product/service
3.Clone of a competitor’s product/service
4.New product/service

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 Degree of Design Change

Type of Design Newness to the Newness to the

Change organization market
Modification Low Low

Expansion Low Low

Clone High Low

New High High

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Phases in Product Development Process
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation
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 Idea Generation

Supply chain based

Ideas Competitor based

Research based

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Reverse Engineering

Reverse engineering is the

dismantling and inspecting
of a competitor’s product to
discover product
improvements.

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 Research & Development (R&D)
• Organized efforts to increase scientific
knowledge or product innovation & may
involve:
– Basic Research advances knowledge about
a 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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 Designing for Manufacturing
Beyond the overall objective to achieve
customer satisfaction while making a
reasonable profit is:
Design for Manufacturing(DFM)
The designers’ consideration of the
organization’s manufacturing capabilities
when designing a product.
The more general term design for operations
encompasses services as well as
manufacturing
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Concurrent Engineering

Concurrent engineering
is the bringing together
of engineering design and
manufacturing personnel
early in the design phase.

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 Recycling

• Recycling: recovering materials for

future use
• Recycling reasons
– Cost savings
– Environment concerns
– Environment regulations

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 Process Selection

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Operations Management, Eighth Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
 Introduction
• Process selection
– Deciding on the way production of goods or
services will be organized
• Major implications
– Capacity planning
– Layout of facilities
– Equipment
– Design of work systems

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 Process Selection
• Variety Batch
– How much
• Flexibility
– What degree
Job Shop Repetitive
• Volume
– Expected output

Continuous

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 Process Types
• Job shop
– Small scale
• Batch
– Moderate volume
• Repetitive/assembly line
– High volumes of standardized goods or services
• Continuous
– Very high volumes of non-discrete goods

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Figure 6.2 Product – Process Matrix
Process Type
Job Shop Appliance Not
repair feasible
Emergency
room
Batch Commercial
bakery
Classroom
Lecture
Repetitive Automotive
assembly
Automatic
carwash
Continuous Not Oil refinery
feasible Water
(flow)
purification
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 Product – Process Matrix
Dimension Job shop Batch Assembly Continuous
Job variety Very High Moderate Low Very low
Process Very High Moderate Low Very low
flexibility

Unit cost Very High Moderate Low Very low

Volume of low Moderate High Very high
output

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