Products and services. (Chapter 5)

1. Products and Services

Chapter 5
Products and Services
Operations Management - 5th Edition
Roberta Russell & Bernard W. Taylor, III
Copyright 2006 John Wiley & Sons, Inc.

2. Lecture Outline

Design Process
Reducing Time-to-Market
Improving Quality of Design
Special Considerations in
Service Design
Copyright 2006 John Wiley & Sons, Inc.
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3. Design Process

Effective design can provide a competitive
edge
matches product or service characteristics with
customer requirements
ensures that customer requirements are met in the
simplest and least costly manner
reduces time required to design a new product or
service
minimizes revisions necessary to make a design
workable
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4. Design Process (cont.)

Product design
defines appearance of
product
sets standards for
performance
specifies which materials
are to be used
determines dimensions
and tolerances
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Service design
specifies what physical
items, sensual benefits,
and psychological
benefits customer is to
receive from service
defines environment in
which service will take
place
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5. Design Process (cont.)

Idea
generation
Suppliers
Product or
service concept
Feasibility
study
Performance
specifications
Form design
Customers
R&D
Marketing
Competitors
Revising and testing
prototypes
Production
design
Functional
design
New product or
service launch
Final design
& process plans
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Design
specifications
Manufacturing
or delivery
specifications
Pilot run
and final tests
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6. Idea Generation Sources

Company’s own
R&D department
Customer complaints
or suggestions
Marketing research
Suppliers
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Salespersons in the
field
Factory workers
New technological
developments
Competitors
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7. Idea Generation Sources (cont.)

Perceptual Maps
Visual comparison of
customer perceptions
Benchmarking
Comparing product/service
against best-in-class
Reverse engineering
Dismantling competitor’s product to
improve your own product
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8. Perceptual Map of Breakfast Cereals

GOOD
TASTE
Cocoa Puffs
LOW
NUTRITION
HIGH
NUTRITION
Rice
Rice
Krispies
Krispies
Cheerios
Cheerios
Wheaties
Wheaties
Shredded
Shredded
Wheat
Wheat
BAD
TASTE
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9. Feasibility Study

Market analysis
Economic analysis
Technical/strategic analysis
Performance specifications
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10. Rapid Prototyping

Build a prototype
form design
functional design
production design
Test prototype
Revise design
Retest
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11. Form and Functional Design

Form Design
how product will
look?
Functional Design
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reliability
maintainability
usability
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12. Computing Reliability

Components in series
0.90
0.90
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0.90 x 0.90 = 0.81
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13. Computing Reliability

Components in parallel
0.90
R2
0.95 + 0.90(1-0.95) = 0.995
0.95
R1
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14. System Reliability

0.90
0.98
0.98
0.92
0.98
0.92+(1-0.92)(0.90)=0.99
0.98
0.98 x 0.99 x 0.98 = 0.951
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15. System Availability (SA)

SA =
MTBF
MTBF + MTTR
where:
MTBF = mean time between failures
MTTR = mean time to repair
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16.

System Availability
(cont.)
PROVIDER
MTBF (HR)
MTTR (HR)
A
B
C
60
36
24
4.0
2.0
1.0
SAA = 60 / (60 + 4) = .9375 or 94%
SAB = 36 / (36 + 2) = .9473or 95%
SAC = 24 / (24 + 1) = .96 or 96%
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17. Usability

Ease of use of a product or service
ease of learning
ease of use
ease of remembering how to use
frequency and severity of errors
user satisfaction with experience
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18. Production Design

Simplification
reducing number of parts, assemblies, or options in
a product
Standardization
using commonly available and interchangeable
parts
Modularity
combining standardized building blocks, or
modules, to create unique finished products
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19.

Design Simplification
(a) Original design
84 s
43 / hr
Assembly using
common fasteners
(b) Revised design
12 s
300 / hr
One-piece base &
elimination of
fasteners
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(c) Final design
4s
900 / hr
Design for
push-and-snap
assembly
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20. Final Design and Process Plans

Final design
detailed drawings
and specifications
for new product or
service
Process plans
workable instructions
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necessary equipment
and tooling
component sourcing
recommendations
job descriptions and
procedures
computer programs for
automated machines
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21. Reducing Time-to-Market

Reducing Time-toMarket
Establish multifunctional design teams
Make design decisions concurrently
rather than sequentially
Design for manufacture and assembly
Use technology in the design process
Engage in collaborative design
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22. Design Team

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23. Concurrent Design

A new approach to
design that involves
simultaneous design of
products and processes
by design teams
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Improves quality of early
design decisions
Involves suppliers
Incorporates production
process
Uses a price-minus
system
Scheduling and
management can be
complex as tasks are
done in parallel
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24. Design for Manufacture and Assembly (DFMA)

Design for
manufacture
design a product for
easy and economical
production
Design for assembly
a set of procedures for:
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reducing number of parts in
an assembly
evaluating methods of
assembly
determining an assembly
sequence
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25. DFM Guidelines

Minimize 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
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26. Technology in the Design Process

Computer Aided Design (CAD)
assists in creation, modification, and
analysis of a design
includes
computer-aided engineering (CAE)
tests and analyzes designs on computer screen
computer-aided manufacturing (CAM)
ultimate design-to-manufacture connection
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27. Collaborative Design

A software system for collaborative design and
development among trading partners
Follows life cycle of the product
Accelerates product development, helps to resolve
product launch issues, and improves quality of the
design
Designers can
conduct virtual review sessions
test “what if” scenarios
assign and track design issues
communicate with multiple tiers of suppliers
create, store, and manage project documents
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28. Improving Quality of Design

Review designs to prevent failures
and ensure value
Design for environment
Measure design quality
Use quality function deployment
Design for robustness
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29. Design Review

Failure mode and effects analysis (FMEA)
a systematic method of analyzing product failures
Fault tree analysis (FTA)
a visual method for analyzing interrelationships
among failures
Value analysis (VA)
helps eliminate unnecessary features and functions
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30.

FMEA for Potato Chips
Failure
Mode
Cause of
Failure
Effect of
Failure
Corrective
Action
Stale
low moisture content
expired shelf life
poor packaging
tastes bad
won’t crunch
thrown out
lost sales
add moisture
cure longer
better package seal
shorter shelf life
Broken
too thin
too brittle
rough handling
rough use
poor packaging
can’t dip
poor display
injures mouth
chocking
perceived as old
lost sales
change recipe
change process
change packaging
Too Salty
outdated receipt
process not in control
uneven distribution of salt
eat less
drink more
health hazard
lost sales
experiment with recipe
experiment with process
introduce low salt version
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31. Fault tree analysis (FTA)

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32. Value analysis (VA)

Can we do without it?
Does it do more than is required?
Does it cost more than it is worth?
Can something else do a better job?
Can it be made by
a less costly method?
with less costly tooling?
with less costly material?
Can it be made cheaper, better, or faster by
someone else?
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33. Design for Environment

Design for environment
designing a product from material that can be recycled
design from recycled material
design for ease of repair
minimize packaging
minimize material and energy used during manufacture,
consumption and disposal
Extended producer responsibility
holds companies responsible for their product even after its
useful life
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34. Design for Environment (cont.)

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35. Measure Design Quality

% of revenue from new
products or services
% of products capturing
50% or more of market
% of process initiatives
yielding a 50% or more
improvement in
effectiveness
% of suppliers engaged in
collaborative design
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% of parts that can be
recycled
% of parts used in
multiple products
% of parts with no
engineering change
orders
Average number of
components per product
Things gone wrong
(TGW)
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36. Quality Function Deployment (QFD)

Translates voice of customer into technical
design requirements
Displays requirements in matrix diagrams
first matrix called “house of quality”
series of connected houses
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37. House of Quality

Importance
House of Quality
5
Trade-off matrix
3
Design
characteristics
1
4
2
Customer
requirements
Relationship
matrix
Competitive
assessment
6
Target values
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38. Competitive Assessment of Customer Requirements

Competitive Assessment
Easy and
safe to use
Irons
well
Customer Requirements
1
2
3
Presses quickly
9
Removes wrinkles
8
AB
X
Doesn’t stick to fabric
6
X
BA
Provides enough steam
8
AB
Doesn’t spot fabric
6
X AB
Doesn’t scorch fabric
9
A XB
Heats quickly
6
Automatic shut-off
3
Quick cool-down
3
X
Doesn’t break when dropped
5
AB
Doesn’t burn when touched
5
AB X
Not too heavy
8
X
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B A
4
X
5
X
B
X
A
ABX
A B
X
A
B
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39. From Customer Requirements to Design Characteristics

Irons
well
Presses quickly
-
Removes wrinkles
+
Doesn’t stick to fabric
-
Provides enough steam
+
+
+ +
-
-
+ - +
+
-
Automatic shut-off
+
Quick cool-down
Doesn’t break when dropped
-
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- +
+ + +
Doesn’t burn when touched
Not too heavy
Automatic shutoff
+ +
+ + +
+ -
-
Protective cover for soleplate
+ + +
+
Heats quickly
Time to go from 450º to 100º
-
+
Doesn’t scorch fabric
Time required to reach 450º F
Flow of water from holes
Size of holes
Number of holes
- + + +
Doesn’t spot fabric
Easy and
safe to use
Material used in soleplate
Thickness of soleplate
Size of soleplate
Weight of iron
Customer Requirements
Energy needed to press
From Customer
Requirements
to Design
Characteristics
+
+ -
-
- +
+
+
+ + +
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40. Tradeoff Matrix

Copyright 2006 John Wiley & Sons, Inc.
Automatic shutoff
Protective cover for soleplate
Time to go from 450º to 100º
Time required to reach 450º
+
Flow of water from holes
-
Size of holes
-
Number of holes
Material used in soleplate
Thickness of soleplate
Size of soleplate
Weight of iron
Energy needed to press
Tradeoff Matrix
+
+
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41. Targeted Changes in Design

Copyright 2006 John Wiley & Sons, Inc.
Protective cover for soleplate
in.
cm
ty
ea
3
1.4
8x4
2
SS
27
15
0.5
45
500
N
Y
4
1.2
8x4
1
MG
27
15
0.3
35
350
N
Y
2
1.7
9x5
4
T
35
15
0.7
50
600
N
Y
3
4
4
4
5
4
3
2
5
5
3
0
3
3
3
3
4
3
3
3
4
4
5
2
1.2
8x5
3
SS
30
30
500
*
*
*
*
*
*
*
Automatic shutoff
Number of holes
Time to go from 450º to 100º
Material used in soleplate
Time required to reach 450º
Thickness of soleplate
lb
Flow of water from holes
Size of soleplate
ft-lb
Size of holes
Weight of iron
Objective
measures
Units of measure
Iron A
Iron B
Our Iron (X)
Estimated impact
Estimated cost
Targets
Design changes
Energy needed to press
Targeted Changes in
Design
mm oz/s sec sec Y/N Y/N
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42. Completed House of Quality

SS = Silverstone
MG = Mirorrglide
T = Titanium
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43. A Series of Connected QFD Houses

Part
characteristics
Process
characteristics
A-2
Parts
deployment
Operations
A-3
Process
planning
Process
characteristics
House
of
quality
Part
characteristics
A-1
Product
characteristics
Customer
requirements
Product
characteristics
A-4
Operating
requirements
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44. Benefits of QFD

Promotes better understanding of customer
demands
Promotes better understanding of design
interactions
Involves manufacturing in design process
Breaks down barriers between functions and
departments
Provides documentation of design process
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45. Design for Robustness

Robust product
designed to withstand variations in environmental
and operating conditions
Robust design
yields a product or service designed to withstand
variations
Controllable factors
design parameters such as material used,
dimensions, and form of processing
Uncontrollable factors
user’s control (length of use, maintenance, settings
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46. Tolerance and Consistency

Tolerance
allowable ranges of variation in the dimension of a
part
Consistency
consistent errors are easier to correct than random
errors
parts within tolerances may yield assemblies that
are not within limits
consumers prefer product characteristics near their
ideal values
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47. Taguchi’s Quality Loss Function

Quantifies customer
preferences toward
quality
Emphasizes that
customer preferences
are strongly oriented
toward consistently
Design for Six Sigma
(DFSS)
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Quality Loss
Taguchi’s Quality Loss
Function
Lower
tolerance
limit
Target
Upper
tolerance
limit
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48. Special Considerations in Service Design

Services are
intangible
Service output is
variable
Service have higher
customer contact
Services are
perishable
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Service inseparable
from delivery
Services tend to be
decentralized and
dispersed
Services are
consumed more often
than products
Services can be easily
emulated
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49. Service Design Process

Desired service
experience
Service Concept
Service Package
Targeted
customer
Physical
items
Sensual
benefits
Psychological
benefits
Performance Specifications
Customer
requirements
Activities
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Service
Provider
Design Specifications
Customer
Service
Design
Process
Customer
expectations
Facility
Provider
skills
Cost and time
estimates
Delivery Specifications
Schedule
Deliverables
Location
Service
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50. Service Design Process (cont.)

Service concept
purpose of a service; it defines target
market and customer experience
Service package
mixture of physical items, sensual
benefits, and psychological benefits
Service specifications
performance specifications
design specifications
delivery specifications
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5-50

51. High v. Low Contact Services

Design
Decision
High-Contact Service
Facility Convenient to
location
customer
Facility
layout
Low-Contact Service
Near labor or
transportation source
Must look presentable, Designed for
accommodate
efficiency
customer needs, and
facilitate interaction
with customer
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
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5-51

52. High v. Low Contact Services (cont.)

Design
Decision
High-Contact Service
Low-Contact
Service
Quality
control
More variable since
Measured against
customer is involved in
established
process; customer
standards; testing
expectations and
perceptions of quality
and rework possible
may differ; customer
to correct defects
present when defects
occur
Capacity
Excess capacity
required to handle
peaks in demand
Planned for average
demand
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
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5-52

53. High v. Low Contact Services (cont.)

Design
Decision
High-Contact Service
Low-Contact
Service
Worker skills
Must be able to
interact well with
customers and use
judgment in decision
making
Technical skills
Scheduling
Must accommodate
customer schedule
Customer
concerned only
with completion
date
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
Copyright 2006 John Wiley & Sons, Inc.
5-53

54. High v. Low Contact Services (cont.)

Design
Decision
High-Contact Service
Low-Contact
Service
Service
process
Mostly front-room
Mostly backactivities; service may
room activities;
change during delivery
planned and
in response to
customer
executed with
minimal
interference
Service
package
Varies with customer;
includes environment
as well as actual
service
Fixed, less
extensive
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
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5-54

55.

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