Product and Service Design PDF

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Professor: Eyran Gisches...

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Chapter 4

MIS 373

Lecture Notes

Product and Service Design o Product and Service Design  The essence of an organization is the goods and services it offers  Every aspect of the organization is structured around them  Product (Goods and Service) design (or redesign) should be closely tied to an organization’s strategy o Reasons for Design or Re-Design  Market Opportunities or Threats drive product (goods & services) design (or redesign)  Economic  Low demand, need to reduce costs, quality problems  Social and Demographic  Aging populations, population changes  Political, Liability, or Legal  Regulations, safety issues  Competitive  New or changed products and services  Cost of Availability  Raw materials, components, labor, energy  Technological  Product components, processes o Key Questions for the Organization  Is there a demand for it?  Market size  Demand profile (short/long-term, slow/fast growth  Can we do it?  Manufacturability – the capability of an organization to produce an item at an acceptable profit  Serviceability – the capability of an organization to provide a service at an acceptable cost or profit  What level of quality is appropriate?  Customer expectations  Competitor quality  Fit with current offering  Does it make sense from an economic standpoint?  Costs and profits  Liability issues, ethical considerations, sustainability issues o Phases in Products: Design & Development  1. Feasibility Analysis  Demand, development and production cost, potential profit, technical analysis, capacity requirements, skills needed, fit with mission

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2. Product Specifications  What’s needed to meet customer wants  3. Process Specifications  Weigh alternative processes in terms of cost, resources, profit, quality  4. Prototype Development  Few units are made to find problems with the product or process  5. Design Review  Changes are made or project is abandoned  6. Market Test  Determine customer acceptance. If unsuccessful return to Design-review  7. Product Introduction  Promotion  8. Follow-Up Evaluation  Based on feedback, changes may be made Idea Generation: Supply-Chain Based  Ideas can come from anywhere in the supply-chain:  Suppliers  Employees  Distributors  Customers Idea Generation: Competitor-Based  Studying a competitor’s products and services  Reverse engineering  Dismantling and inspecting a competitor’s product to study its construction and composition Idea Generation: Research Based  Research and Development (R&D)  Organized efforts to increase (scientific) knowledge or product innovation  Basic research  Objective: advancing the state of knowledge about a subject without nearterm expectation of commercial applications  Applied research  Objective: commercial applications  Development  Objective: Converting the results of applied research into commercial applications Quality Function Development (QFD)  Integrate the “voice of the customer” into product and service development  The “house of quality” (see below)

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Lecture Notes

o Standardization  Absence of variety in a product, service, or process  Products are made in large quantities of identical items  Every unit [customer] processed goes through the same process [receives essentially the same service]  Advantages:  Fewer parts to deal with in inventory and in manufacturing  Reduced training costs and time  More routine purchasing, handling, and inspection procedures

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Lecture Notes

 Orders fillable from inventory  Opportunities for long production runs and automation  Disadvantages:  High cost of design changes increase resistance to improvements: design may be frozen with too many imperfections  Decreased variety results in less consumer appeal o Product/Service Life-Stages

o Designing for Mass Customization  Mass Customization  A strategy of producing standardized goods or services, while incorporating some degree of customization in the final product or service  Techniques:  Delayed differentiation  Modular design o Delayed Differentiation  The process of producing, but not quite completing, a product into customer preferences are known o Modular Design  Components are grouped into modules that are easily replaced or interchanged  Advantages:  Simplification of manufacturing and assembly  Relatively low training costs  Easier diagnosis and remedy of failures  Easier repair and replacement  Disadvantages:

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 Limited number of possible product configuration  E.g., a PC computer Designing (products) for Production  1. Concurrent engineering  2. Computer-Assisted Design (CAD)  3. Production requirements  4. Component commonality Concurrent Engineering  Bringing design, marketing, purchasing and manufacturing personnel together early in the design phase  Integrated cross-functional teams  Views of suppliers and customers may also be sought  The purpose:  Achieve product designs that reflect customer wants as well as manufacturing capabilities Computer Aided Design (CAD)  Increased designers’ productivity  Directly provides information to manufacturing (dimensions, material – BOM)  Perform analysis: engineering, cost  Shortens time-to-market  E.g., SolidWorks, AutoCad DFM and DFA  Design for Manufacturing (DFM)  Designing products that are compatible with an organization’s capabilities  Equipment  Skills  Types of materials  Schedules  Technologies  Special abilities  When Opportunities and Capabilities do not match management must consider expanding or changing capabilities  Manufacturability  Ease of fabrication and/or assembly  Has important implications for:  Cost  Productivity  Quality  Design for Assembly (DFA)  Reducing the number of parts in a product and on assembly methods and sequence Component Commonality

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Lecture Notes

Using (standardized) parts in multiple products Benefits:  Reduced design time  Standard training for assembly and installation  Opportunities to buy in bulk from suppliers  Commonality of parts for repair  Fewer inventory items must be handled o Service Design  Begins with a choice of service strategy, which determines the nature and focus of the service, and the target market  Key issues in service design:  Degree of variation in service requirements  Degree of customer contact and involvement o Differences Between Service and Product Design  Services are created and delivered at the same time.  Less opportunity to correct errors  Training, process design more important  Services cannot be inventoried  capacity issues  Services are highly visible to consumers  Importance of process design  Service systems range from those with little or no customer contact (similar to product design) to those that have a very high degree of customer contact  Location is often important to service design  Convenience is a major factor  Demand variability – time & quantity & requirements – alternately creates waiting lines or idle service resources  Cost and efficiency perspective vs. customer perspective  Standardizing  Risk of eliminating features that customers value  Reduce customer choices (e.g., cable channels bundle)  Increase flexibility (e.g., temporary workers) o Challenges to Service Design  Variability  Timing  Services cannot be stored  Quantity  Balancing supply and demand: o Possible (e.g., doctor’s appointments) o Impossible (e.g., emergency room)  Requirements  Difficult to predict customer  Especially when there is direct contact with the customer

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Lecture Notes

o Service Blueprint  A method to design and analyze a service  STEPS:  1. Establish boundaries and decide the level of detail needed  2. Identify and determine the sequence of customer and service actions and interactions. Picture the service from the customer’s perspective  3. Develop time estimates for each phase of the process, as well as time variability.  4. Identify potential failure points and develop a plan to prevent or minimize them, as well as a response plan

o Value Stream Mapping  1. Specify value from the standpoint of the customer  2. Identify all the steps in the process – from incoming goods from suppliers to shipment of products [delivery of service] to customers – and create a visual map  3. Collect data: processing time, waiting times, distance, errors, inefficient work methods, etc.  4. Objective: Increase value – time, cost, quality, variety – to customer. Eliminate steps that do not create value  5. Repeat as long as waste exists o Value Stream Mapping: Ask Yourself  Where are the bottlenecks?  Where do errors occur?  Which process has to deal with the most variation?  Where does waste occur?  Excess inventory  Over-processing – paperwork, redundancy  Waiting lines  Unnecessary transportation  Processing waste – using more resources than required  Inefficient work methods  Mistakes

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 Underused people o Value Stream Mapping: Symbols

o Service Value Stream Mapping: Symbols

o Value Stream Mapping Example: Urgent-Care Visit  Value to customer: accurate and quick exam

CLICKER QUESTIONS

Lecture Notes

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Lecture Notes

1. Which concept help designers take into account Production Capabilities? a. Design for Manufacturing (DFM) 2. Service design often differs from product design because services: a. Cannot be inventoried, involve high customer contact, tend to experience demand variability, location is important [ALL OF THE ABOVE]...