Lecture # 5:
PRODUCT & SERVICE DESIGN
Humayun Akhtar Awan
OPERATIONS MANAGEMENT
RIPHAH INTERNATIONAL UNIVERSITY

GOODS & SERVICES SELECTION
 It is based on:
Differentiation
Lower Price
Rapid Response

GENERATION OF NEW PRODUCT
OPPORTUNITIES
 Five factors influencing opportunities:
Economic Change
Sociological & Demographic Change
Technological Change
Political / Legal Change
Other Changes

PRODUCT LIFE CYCLES
 Four Phases:
 Incubation
 Growth
 Maturity
 Saturation
 Decline
 Duration of Life Cycles:
 Few Hours (Newspapers)
 Months (Seasonal Fashions)
 Years (VCRs)
 Decades (Volkswagen Beetle)

PRODUCT LIFE CYCLE
Time
Incubation
Growth
Maturity
Saturation
Decline
Deman
d

LIFE CYCLE & STRATEGY
 Strategy Options as products move through
their life cycles:
 Introductory Phase
 Growth Phase
 Maturity Phase
 Saturation phase
 Decline Phase

INTRODUCTORY PHASE
 Still undergoing “fine tuning”
 Expenses like:
Research
Product Development
Process Modification & Enhancement
Supplier Development
Examples: Mobile Phones, Computers

GROWTH PHASE
 Product Design begins to stabilize
 Effective Forecasting for matching
capacity with demand becomes necessary

MATURITY PHASE
 Product is mature
 Competitors established
 High volume, innovative production
required
 Cost Control, Design Freeze important

SATURATION PHASE
 Product is in abundance in the market
 More production, less demand
 Improvement and value addition required
to maintain demand

DECLINE PHASE
 Dying Products may be stopped
 Resources & managerial talent is wasted
in producing them
 Unless dying products make some unique
contribution to the firm’s reputation,
their production should be terminated.

PRODUCT-BY-VALUE ANALYSIS
 Pareto Principle applied to product mix
“Focus on the critical few, not the trivial
many”
 Product-by-Value is a listing of products
in descending order of their individual
monetary contribution to the firm, as
well as annual monetary contribution of
the product

PRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT SYSTEM
 Cash for product development
 Understanding market changes constantly
 Possession of necessary talents and
resources
 PD System not only determines product
success but also the firm’s future

STAGES OF PRODUCT
DEVELOPMENT
IDEAS
ORGs ABILITY
CUSTOMER
REQUIREMENTS
FUNCTIONAL SPECS
PRODUCT
SPECIFICATIONS
DESIGN REVIEW
TEST MARKET
INTRODUCTION
EVALUATION
Scope of product
Dev. team
Scope for Design
& Engg. teams

QUALITY FUNCTION DEPLOYMENT
 Determining what will satisfy the customer
 Translating Customer desires into the target design
 Used early in the design process
 One tool is House of Quality: Relationship between
customer desires and product or service.
 Six Steps for building HOQ:
 Identify Customer wants
 Identify how product will satisfy customer
 Relate customer wants to product hows
 Identify relation between firm’s hows
 Develop Important Ratings
 Evaluate competing products

HOUSE OF QUALITY
Correlation
matrix
Design
requirements
Customer
require-
ments
Competitive
assessment
Relationship
matrix
Specifications
or
target values

HOQ EXAMPLE
Customer
Requirements
Easy to close
Stays open on a hill
Easy to open
Doesn’t leak in rain
No road noise
Importance weighting
Engineering
Characteristics
Energy
needed
to
close
door
Check
force
on
level
ground
Energy
needed
to
open
door
Water
resistance
10 6 6 9 2 3
7
5
3
3
2
X
X
X
X
X
Correlation:
Strong positive
Positive
Negative
Strong negative
X
*
Competitive evaluation
X = Us
A = Comp. A
B = Comp. B
(5 is best)
1 2 3 4 5
X AB
X AB
XAB
A X B
X A B
Relationships:
Strong = 9
Medium = 3
Small = 1
Target values
Reduce
energy
level
to
7.5
ft/lb
Reduce
force
to
9
lb.
Reduce
energy
to
7.5
ft/lb.
Maintain
current
level
Technical evaluation
(5 is best)
5
4
3
2
1
B
A
X
BA
X B
A
X
B
X
A
BXA
BA
X
Door
seal
resistance
Accoust.
Trans.
Window
Maintain
current
level
Maintain
current
level

THE KANO MODEL
Kano Model
Customer Needs
Customer
Satisfaction
Excitement
Expected
Must Have

ORGANIZING FOR PRODUCT
DEVELOPMENT
 Traditional US Approach:
Distinct departments; fixed duties and
responsibilities; but lack of forward thinking
 Second Approach:
Product Manager; Champion the product
through all phases
 Third Approach:
Teams
 Product Development Teams
 Value Engineering Teams

PRODUCT DEVELOPMENT TEAMS
 Charged with the responsibility of moving
from market requirements to achieving a
product success
 Representation from all related /
affected deptts.
 Also called Concurrent Engineering
 Reverse engineering

MANUFACTURABILITY & VALUE
ENGINEERING
 Activities that help improve a product’s
design, production, maintainability and
use
 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

“OVER THE WALL” APPROACH
Design
Manufacturing
New
Product

ISSUES FOR PRODUCT DESIGN
 Robust Design: Product can be produced to specs. even
with unfavourable conditions in the prod. Process.
 Modular Design: Parts or components are divided into
modules that are easily interchanged or replaced.
 Computer Aided Design (CAD): Use of computer to
develop, design and document products.
 Value Analysis: Improvements during production
process that lead to a better product or a product more
economically produced
 Environmentally Friendly Designs: Minimizing waste of
raw materials and resources, products have minimal
effect on environment, re-cyclability, less harmful
ingredients, less energy

TIME BASED COMPETITION
 Competition based on time; rapidly developing
products and moving them to the market
 External Development Strategies
 Alliances
 Joint Ventures
 Purchase of Tech. by acquiring a developer
 Internal Development Strategies
 Newly developed products
 Migrations of existing products
 Enhancements to existing products

DEFINING THE PRODUCT
 Functions of product
 Designing of product
 Design for production
 Engg. Drawing
 BOM (Bill of Materials)
 Make or Buy decisions
 Group technology

DOCUMENTS FOR PRODUCTION
 Assembly Drawing: Exploded View
 Assembly Chart: Schematic assembly
 Route Sheet: List of operations
 Work Order: Instruction for production
 Engg. Change Notices: Changes
 Configuration Management: Tracking /
Identification

THANK YOU