Chapter Three
Product and Service Design
3.1. GOODS AND SERVICES SELECTION
Product decision involves the selection, definition, and design of products. Product selection is
choosing the good or service to provide customers or clients. Great products are the keys to
success. Anything less than an excellent product strategy can be devastating to a firm.
The objective of the product decision is to develop and implement a product strategy that meets
the demands of the marketplace with a competitive advantage. As one of the 10 decisions of
OM, product strategy may focus on developing a competitive advantage via differentiation, low
cost, rapid response, or a combination of these.
3.2. QUALITY FUNCTION DEPLOYMENT: Product Definition Tool
Quality function deployment (QFD) refers to both (1) determining what will satisfy the customer
and (2) translating those customer desires into the target design. The idea is to capture a rich
understanding of customer wants and to identify alternative process solutions. This information
is then integrated into the evolving product design. QFD is used early in the design process to
help determine what will satisfy the customer and where to deploy quality efforts.
One of the tools of QFD is the house of quality. The house of quality is a graphic technique for
defining the relationship between customer desires and product (or service). Only by defining
this relationship in a rigorous way can operations managers design products and processes with
features desired by customers. Defining this relationship is the first step in building a world-class
production system. To build the house of quality, we perform seven basic steps:
1. Identify customer wants. (What do prospective customers want in this product?)
2. Identify how the good/service will satisfy customer wants. (Identify specific product
characteristics, features, or attributes and show how they will satisfy customer wants.)
3. Relate customer wants to product hows. (Build a matrix, as in Example 1, that shows this
relationship.)
4. Identify relationships between the firm's hows. (How do our hows tie together? For instance,
in the following example, there is a high relationship between low electricity requirements
and auto focus, auto exposure, and a paint pallet because they all require electricity. This
relationship is shown in the "roof' of the house in Example 1.)
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5. Develop importance ratings. (Using the customer's importance ratings and weights for the
relationships shown in the matrix, compute our importance ratings, as in Example 1.)
6. Evaluate competing products. (How well do competing products meet customer wants? Such
an evaluation, as shown in the two columns on the right of the figure in Example I, would be
based on market research.)
7. Determine the desirable technical attributes, your performance, and the competitor's
performance against these attributes. (This is done at the bottom of the figure in Example 1).
Example
Your team has been charged with designing a new camera for Great Cameras, Inc. The first
action is to construct a House of Quality
Solution
Overlay 1
First, through market research, Great Cameras, Inc., determined what the customer wants. Those
wants are shown on the left of the house of quality. Second, the product development team
determined how the organization is going to translate those customer wants into product design
and process attribute targets. These haws are entered across the top portion of the house of
quality.
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Overlay 2
Third, the team evaluated each of the customer wants against the hows. In the relationship matrix
of the house, the team evaluated how well its design meets customer needs. Fourth, the "roof" of
the house, indicates the relationship between the attributes. Fifth, the team developed importance
ratings for its design attributes on the bottom row of the table. This was done by assigning values
(5 for high, 3 for medium, and 1 for low) to each entry in the relationship matrix, and then
multiplying each of these values by the customer's importance rating. The values in the "Our
importance ratings" row provide a ranking of how to proceed with product and process design,
with the highest values being the most critical to a successful product.
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Overlay 3.
Sixth, the house of quality is also used for the evaluation of competitors. The two columns on the
right indicate how market research thinks competitors, A and B, satisfy customer wants (Good,
Fair, or poor). Products from other firms and even the proposed product can be added next to
company B.
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Overlay 4.
Seventh, the team identifies the technical attributes and evaluates how well Great Cameras, Inc.,
and its competitors address these attributes. Here the team decided on the noted technical
attributes.
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3.3. ISSUES FOR PRODUCT DESIGN
Several techniques are important to the design of a product. We will now review seven of these:
(1) concurrent design, (2) robust design, (3) modular design, (4) computer-aided design (CAD),
(5) computer aided manufacturing (CAM), (6) virtual reality technology, and (7) value analysis.
3.3.1. Concurrent Design
In this section, we discuss the three types of concurrent designs: form, functional, and
production design.
A. FORM DESIGN
Form design refers to the physical appearance of a product-its shape, color, size, and style.
Aesthetics such as image, market appeal, and personal identification are also part of form design.
In many cases, functional design must be adjusted to make the product look or feel right. For
example, the form design of Mazda’s Miata sports car went further than looks—the exhaust had
to have a certain “sound,” the gearshift lever a certain “feel,” and the seat and window
arrangement the proper dimensions to encourage passengers to ride with their elbows out. Apple
products have great form and functional design.
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B. FUNCTIONAL DESIGN
Functional design is concerned with how the product performs. It seeks to meet the
performance specifications of fitness for use by the customer. Three performance characteristics
considered during this phase of design are reliability, maintainability, and usability
1. RELIABILITY
Reliability is the probability that a given part or product will perform its intended function for a
specified length of time under normal conditions of use. You may be familiar with reliability
information from product warranties. A hair dryer might be guaranteed to function (i.e., blow air
with a certain force at a certain temperature) for one year under normal conditions of use
(defined to be 300 hours of operation). A car warranty might extend for three years or 50,000
miles. Normal conditions of use would include regularly scheduled oil changes and other minor
maintenance activities. A missed oil change or mileage in excess of 50,000 miles in a three-year
period would not be considered “normal” and would nullify the warranty. A product or system’s
reliability is a function of the reliabilities of its component parts and how the parts are arranged.
If all parts must function for the product or system to operate, then the system reliability is the
product of the component part reliabilities.
Rs = (R1)(R2) . . . (Rn), where Rn is the reliability of the nth component
For example, if three component parts are required and has the specified reliability, the reliability
of the system is 0.90 * 0.80*0.99 = 0.0.713 = 71.3%. The system can be visualized as a series of
components as follows:
Note that the system reliability of 0.713 is considerably less than the component reliabilities. As
the number of serial components increases, system reliability will continue to deteriorate. This
makes a good argument for simple designs with fewer components! Failure of some components
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in a system is more critical than others—the brakes on a car, for instance. To increase the
reliability of individual parts (and thus the system as a whole), redundant parts can be built in to
back up a failure. Providing emergency brakes for a car is an example.
Consider the following redundant design with R1 representing the reliability of the original
component and R2 the reliability of the backup component.
Reliability can also be expressed as the length of time a product or service is
in operation before it fails, called the mean time between failures (MTBF). In
this case, we are concerned with the distribution of failures over time, or the
failure rate. The MTBF is the reciprocal of the failure rate (MTBF = 1/failure
rate).
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Reliability can be improved by simplifying product design, improving the
reliability of individual components, or adding redundant components.
Products that are easier to manufacture or assemble, are well maintained,
and have users who are trained in proper use have higher reliability.
2. MAINTAINABILITY
Maintainability (also called serviceability) refers to the ease and/or cost
with which a product or service is maintained or repaired. Products can be
made easier to maintain by assembling them in modules, like computers, so
that entire control panels, cards, or disk drives can be replaced when they
malfunction. The location of critical parts or subject to failure affects the
ease of disassembly and, thus, repair. Instructions that teach consumers how
to anticipate malfunctions and correct them themselves can be included with
the product. Specifying regular maintenance schedules is part of
maintainability, as is proper planning for the availability of critical
replacement parts.
One quantitative measure of maintainability is mean time to repair (MTTR).
Combined with the reliability measure of MTBF, we can calculate the average
availability or “uptime” of a system as
3. USABILITY
Usability is what makes a product or service easy to use and a good fit for
its targeted customer. It is a combination of factors that affect the user’s
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experience with a product, including ease of learning, ease of use, and ease
of remembering how to use, frequency and severity of errors, and user
satisfaction with the experience.
C. PRODUCTION DESIGN
Production design is concerned with how the product will be made. Designs those are difficult
to make often result in poor-quality products. Many times, production personnel find themselves
redesigning products on the factory floor. Late changes in design are both costly and disruptive.
An adjustment in one part may necessitate an adjustment in other parts, “unraveling” the entire
product design. That’s why production design is considered in the preliminary design phase.
Recommended approaches to production design include simplification, standardization,
modularity, and design for manufacture.
Design simplification attempts to reduce the number of parts,
subassemblies, and options in a product. It also means avoiding tools,
separate fasteners, and adjustments.
Standardization makes possible the interchangeability of parts among
products, resulting in higher-volume production and purchasing, lower
investment in inventory, easier purchasing and material handling, fewer
quality inspections, and fewer difficulties in production. Some products, such
as light bulbs, batteries, and DVDs, benefit from being totally standardized.
For others, being different is a competitive advantage. The question
becomes how to gain the cost benefits of standardization without losing the
market advantage of variety and uniqueness.
Design for manufacture (DFM) is the process of designing a product so
that it can be produced easily and economically. The term was coined in an
effort to emphasize the importance of incorporating production design early
in the design process. When successful, DFM not only improves the quality of
product design but also reduces both the time and cost of product design
and manufacture.
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Specific DFM software can recommend materials and processes appropriate
for a design and provide manufacturing cost estimates throughout the
design process. More generally, DFM guidelines promote good design
practice, such as:
Minimize the number of parts and subassemblies.
Avoid tools, separate fasteners, and adjustments.
Use standard parts when possible and repeatable, well-understood
processes.
Design parts for many uses, and modules that can be combined in
different ways
Design for ease of assembly, minimal handling, and proper presentation.
Allow for efficient and adequate testing and replacement of parts.
3.3.2. Robust Design
Robust design means that the product is designed so that small variations in production or
assembly do not adversely affect the product.
3.3.3. Modular Design
Products designed in easily segmented components are known as modular designs.
Modular designs offer
Flexibility to both production and marketing.
product development, production, and subsequent changes easier
Flexibility to the ways customers can be satisfied.
3.3.4. Computer-Aided Design (CAD)
Computer-aided design (CAD) is the use of computers to interactively design
products and prepare engineering documentation.
The speed and ease with which sophisticated designs can be manipulated, analyzed,
and modified with CAD makes review of numerous options possible before final
commitments are made.
Faster development, better products, and accurate flow of information to other
departments-all contribute to a tremendous payoff for CAD.
The payoff is particularly significant because most product costs are determined at the
design stage.
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3.3.5. Computer-Aided Manufacturing
Computer-aided manufacturing (CAM) refers to the use of specialized computer
programs to direct and control manufacturing equipment.
When computer-aided design (CAD) information is translated into instructions for
computer-aided manufacturing (CAM), the result of these two technologies is
CAD/CAM. The benefits of CAD and CAM include:
Product quality: CAD permits the designer to investigate more alternatives,
potential problems, and dangers.
Shorter design time: A shorter design phase lowers cost and allows a more rapid
response to the market.
Production cost reductions: Reduced inventory, more efficient use of personnel
through improved scheduling, and faster implementation of design changes
lower costs,
Database availability: Provides information for other manufacturing software
and accurate product data so everyone is operating from the same information,
resulting in dramatic cost reductions.
New range of capabilities: For instance, the abilities to rotate and depict objects
in three dimensional forms, to check clearances, to relate parts and attachments,
and to improve the use of numerically controlled machine tools-all provide new
capability for manufacturing.
3.3.5. Value Analysis
Value analysis (VA) (also known as value engineering) was
developed by General Electric in 1947
To eliminate unnecessary features and functions in product
designs.
It has reemerged as a technique for use by multifunctional design
teams.
The design team defines the essential functions of a component,
assembly, or product using a verb and a noun.
3.3.6. Design for environment (DFE)
It involves many aspects of design
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Designing products from recycled material, reducing
hazardous chemicals,
Using materials or components that can be recycled after
use,
Designing a product so that it is easier to repair than
discard, and
Minimizing unnecessary packaging.
3.4. Organizing for Product Development
1. The traditional U.S. approach to product development is an organization with distinct
departments:
a research and development department to do the necessary research;
an engineering department to design the product;
a manufacturing engineering department to design a product that can be produced;
and
a production department that produces the product.
The distinct advantage of this approach is that fixed duties and responsibilities exist.
The distinct disadvantage is lack of forward thinking: How will downstream
departments in the process deal with the concepts, ideas, and designs presented to
them, and ultimately what will the customer think of the product?
2. A second and popular approach is to assign a product manager to "champion" the product
through the product development system and related organizations.
3. A third, and perhaps the best, product development approach used in the U.S. seems to be the
use of teams. Such teams are known variously as product development teams, design for
manufacturability teams, and value engineering teams.
4. The Japanese use a fourth approach.
They bypass the team issue by not subdividing organizations into research and
development, engineering, production, and so forth.
Consistent with the Japanese style of group effort and teamwork, these activities are
all in one organization.
Japanese culture and management style are more collegial and the organization less
structured than in most Western countries.
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Therefore, the Japanese find it unnecessary to have "teams" provide the necessary
communication and coordination.
Notes
The typical Western style, and the conventional wisdom, is to use teams.
Teams often include representatives from marketing, manufacturing, purchasing,
quality assurance and field service personnel. Many teams also include representatives
from vendors.
Use of such teams is also called concurrent engineering and implies a team
representing all affected areas (known as a cross-functional team).
Concurrent engineering also implies speedier product development through
simultaneous performance of various aspects of product development.
The team approach is the dominant structure for product development by leading
organizations in the U.S.
3.5. SERVICE DESIGN
Designing services is challenging because they often have unique characteristics.
At this point, the customer may even participate in the design of the service.
Design specifications may take the form of a contract or a narrative description with photos
(such as for cosmetic surgery or a hairstyle).
Similarly, the customer may be involved in the delivery of a service or in both design and
delivery, a situation that maximizes the product design challenge.
A number of techniques can both reduce costs and enhance the product.
1. One technique is to design the product so that customer is delayed as late in the process as
possible. This is the way a hair salon operates: Although shampoo and rinse are done in a
standard way with lower cost labor, the tint and styling (customizing) are done last.
2. The second approach is to modularize the product so that customization takes the form of
changing modules. This strategy allows modules to be designed as "fixed," standard entities.
The modular approach to product design has applications in both manufacturing and service.
Similarly, investment portfolios are put together on a modular basis, as are college curricula.
3. A third approach to the design of services is to divide the service into small parts and identify
those parts that lend themselves to automation or reduced customer interaction. For
instance, by isolating check-cashing activity via ATM machines, banks have been very
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effective at designing a product that both increases customer service and reduces costs.
Similarly, airlines are moving to ticketless service.
4. Because of the high customer interaction in many service industries, a fourth technique is to
focus design on the so-called moment of truth. The momentum of truth is the moment that
exemplifies, enhances, or detracts from the customer's expectations. That moment may be as
simple as a smile or having the checkout clerk focus on you rather than talking over his
shoulder to the clerk at the next counter. Moments of truth can occur when you order at
McDonald's, get a haircut, or register for college courses.
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