Product Design and Process Selection

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Chapter 3

• Product Design and Process Selection

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What and How to Produce

• Product design is to determine what to produce or
  to offer.
• Process selection is to determine how the product
  is produced or offered.

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Product Design

• Product design defines all aspect of the product
  to be offered to customers, such as material,
  measurement, dimension, specification,
  appearance, performance, components,
• Product must be consistent with the Business
  strategy
• Product design is a joint work of marketing,
  operation and engineering.

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Where the Idea Comes from?

• The driving force of the idea of a new product is
  customer.
• Competitors are also a source of idea.
• Reverse engineering on competitors product
• Suppliers are the third source of idea in product
  design.

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Product Screening

• Evaluating the alternatives of a new product in
  terms of operation, marketing, and finance, and
  select one.

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Break-Even Analysis

• A technique to compute the amount of goods a
  company needs to sell to cover the cost.
• At break-even point, QBE, total revenue is equal
  to total cost.

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Example (p.61)

• Data about a new line of footwear
• Initial investment 52,000.
• Cost of making each pair 9.
• If it is sold at 25/pair, how many pairs must be
  sold to break even?
• If 4,000 pairs were sold, what would be the
  profit?

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B-E Analysis in Product Screening

• For each product in each assumed situation,
  selling price and fixed cost for example, a
  break-even amount is calculated.
• By comparing the break-even amounts, the
  alternative products with low performance can be
  screened out.

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Procedure of Product Design

• Step 1 - Idea Development
• Step 2 - Product Screening
• Step 3 Preliminary Design and Testing
• Step 4 Final Design

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Product Life Cycle

• Four stages of a product life
• Introduction
• Growth
• Maturity
• Decline

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Concurrent Engineering
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Process Selection

• Process selection is to determine how to organize
  the production or delivery of the product.

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Types of Process

• Intermittent Operation
• Is used to produce a variety of products with
  different processing requirements in lower
  volumes.
• Repetitive Operation
• Is used to produce one or a few standardized
  products in higher volumes.

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Facility Layout in Intermittent and Repetitive
Operations
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Layout of an animal clinic
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Alternatives of Process

• Based on product standardization (variety) and
  product volume
• Project process (unit production)
• Batch process
• Line process
• Continuous process.

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Production / Customer Interface

• Three alternative strategies for
  production/customer interface
• Make-to-stock
• Assemble-to-order
• Make-to-order

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Considerations in Product and Process design
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Process Performance Metrics
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Example (p.73)

• Data about Frantz Title Company
• It takes 4 hours to get a title ready on average,
  in which the value-added time is about 30
  minutes
• During 8 hours working time of an officer, only 6
  hours are committed to work, taking lunch and
  break times out
• The company processes 8 titles per day on
  average, with an industry standard of 10 titles
  for a comparable facility.
• Determine process velocity, labor utilization and
  efficiency for the company.

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Classification of Services
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Some Terminologies

• Vertical integration (p.78)
• Outsourcing
• Automation (p.80)
• Flexible manufacturing system (FMS) (p.81)
• Numerically controlled machine (p.82)
• Computer-aided design (CAD) (p.83)
• Computer-integrated manufacturing (CIM) (p.83)