Product/Service Design

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Product/Service Design

• Henry C. Co
• Technology and Operations Management,
• California Polytechnic and State University

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Service Design

• Specifies what the customer is to experience
• Determines setting and degree of customer
  involvement
• Defines physical items, physiological benefits,
  psychological benefits the customer receives
• Sets standards for delivery.

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Product Design

1. Market Identification
2. Technological Innovation
3. Product Design
4. Process Design
5. Feasibility Study
6. Production
7. Production Improvements.

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Market Identification
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• Which market to serve?
• Matches product/service characteristics with
  customer needs
• Meets customer requirements in the simplest, most
  cost-effective manner
• Time to market (window of opportunity)

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Technological Innovation
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Product v. Process Innovation

• For 4 years, Ford developed, produced, and sold
  five different engines (2-6 cylinders) in a
  factory of trade craftsmen working with GP
  machines.
• Out of this experience came a dominant design,
  the Model T.
• Within 15 years, 2 million engines of this single
  design were produced each year in a
  mass-production facility. During that period,
  there were incremental (no fundamental)
  innovation in product.

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Innovation and Development

• The fluid-pattern stage
• During the early stages of the products life
  cycle, the level of prototype innovation is high.
  This is because firms modify, change, and update
  the product in an effort to establish a dominant
  design.
• The transitional-pattern stage
• Once a dominant design is established, emphasis
  shifts to process innovations in order to provide
  the capability to mass-produce the product. This
  typically requires a shift from GP to specialized
  equipment. During this period, the level of
  product innovation falls dramatically.
• The specific-pattern stage
• At this stage, incremental process innovations
  further specialize the production process to
  reduce cost, enhance quality, and make further
  improvements. This leaves firms with a rigid
  process and an aging product (highly inflexible,
  difficult to adapt to environmental changes).

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Window of Opportunity

• First generations (1950s) of IBM computers had a
  useful market life of more than a decade.
• IBM 360 (mid 1960s), IBM maintained its dominant
  market position until the arrival of
  minicomputers. Then companies like Digital, Data
  General, etc., started challenging IBM from the
  low end of the business.
• Useful market life of computers shrank from 10
  years to 8 years, then only 5 years, then 3, and
  2.
• Desktop PCs and laptops useful market life
  dropped to less than a year.

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The Classic Product Cash Flow

• Window of opportunity the period in which the
  new product faces no or low competition in the
  market place.
• The window of opportunity for market exploitation
  is constantly shrinking as the competition brings
  new products more and more frequently.

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The High-Tech Product Cash Flow

• Project A, which was introduced before the
  competition came up with an equivalent or better
  product, has been able to generate a positive
  cumulative cash flow, with a good return on
  investment during the RD cycle.
• Project B was introduced at a time when some
  competition already existed, results in a
  negative cumulative cash flow.

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The Case of the PowerPC

• Somerset, a joint venture by IBM, Apple, and
  Motorola in 1991 to develop the PowerPC.
• Time May Have Passed the PowerPC (Business
  Week, 4, March 1996), Ira Sager wrote
• As it is, Somerset hasnt even come close to its
  goal of posing a serious challenge to Intel
  Corp.s dominance in microprocessors Somerset
  fell behind schedule on more powerful versions of
  the PowerPC chip Three years ago, they had it
  in their hands, says Jon Rubinstein, president
  of Firepower Systems Inc., one of the few
  companies outside the Somerset trio to use the
  PowerPC But technical difficulties, internal
  bickering, and management upheavals delayed
  successor chips by 18 months. Says Sun CEO Scott
  G. McNealy The PowerPC is on really shaky
  ground.

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Product and Service Design
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Product Design

• Specifies materials
• Determines dimensions tolerances
• Defines appearance
• Sets performance standards.

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Perceptual Map Of Breakfast Cereals
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Process Design
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Process Planning

• Create workable instructions for manufacture
• Select tooling equipment
• Prepare job descriptions
• Determine operation assembly order
• Network all systems

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Feasibility Study
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• Market Feasibility
• Technical Feasibility
• Economic Feasibility
• Strategic Analysis

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Production
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Functional Design(How The Product Performs)

• Reliability
• Probability product performs intended function
  for specified length of time
• Maintainability
• Ease and/or cost or maintaining/repairing product

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Computing Reliability
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Quality Function Deployment (QFD)

• Translates the voice of the customer into
  technical design requirements
• Displays requirements in matrix diagrams
• First matrix called house of quality
• Series of connected houses

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House Of Quality
5. Tradeoff Matrix
3. Product characteristics
Importance
1. Customer requirements
4. Relationship matrix
2. Competitive assessment
6. Technical assessment and target values
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Japanese Professor Yoji Akao devised the system
and coined the phrase quality function
deployment. The QDF matrix combines
benchmarking, customer demand, product
characteristics, and customer satisfaction to
measure and improve product quality.
Business Week, October 25, 1991.
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Benefits Of QFD

• Promotes better understanding of customer demands
  and design interactions
• Increases customer satisfaction
• Breaks down barriers between functions
  departments fosters teamwork
• Improves design/development process documentation
• Reduces the of engineering changes, cost of
  design manufacture, and brings new designs to
  the market faster

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Taguchis Robust Design

• A product or service exhibits robustness if it
  performs consistently regardless of the operating
  conditions
• Designers must consider both controllable factors
  (design features) and uncontrollable factors
  (operating conditions) in design for robustness

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Consistency Is Important

• Consistent errors are easier to correct than
  random errors
• Parts within tolerances may yield assemblies
  which arent within tolerances
• Consumers prefer product characteristics near
  their ideal values

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Taguchis Quality Loss Function
Quality Loss
Target
Lower Tolerance Limit
Upper Tolerance Limit
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Production Improvements
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Kaizen

• Continuous Quality Improvement (CQI)
• Continuously challenge and incrementally upgrade
  performance levels

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The Deming Wheel (PDCA Cycle)
Plan for change Aimed at improvement
Drop it, Formalize it or Repeat it
Plan
Act
Do
Check
Implement the change
Evaluate the results. Did it work?