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Product and Service Design
Customer Satisfaction
Product Life Cycle
Research and Development
Operations Manager Role
Process Design
Reliability
Operations Strategy
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What do we know and not know
What do we know?
• Industry Analysis
• Competition Review
• Defined our product characteristics
• Approximated industry demand
• Defined a location
• Established our supply chain
What do we not know?
• How do we plan to create our product or service.
• The capital and human resources we need.
• How to organize our facility.
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What factors should we consider?
Market conditions
• Demand
• Timing of demand
• Customer Satisfaction
Capital requirements
• Expense
• ROI
Labor
• Skills needed
• Skills available
Technology
• Technology Maturity
• Flexibility
• Equipment
• Communication
Process Design and Order Fulfillment Strategy
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Process Selection Decision
Product – Based Factors
• Uniqueness
•
Volume
•
Number of Products
•
Level of Standardization
Strategic Factors
1. Market conditions
2. Capital Requirements
Does the Process
change?
3. Labor
4. Technology
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Process Design Characteristics
Uniqueness
Volume
Product
Types
Labor
skills
Flexibility
Project
High
Very low
(1-2)
Multiple
Specialized
Very high
Job shop
High
Low
(1-10)
Multiple
Specialized
High
Moderate
Moderate
(10-100)
Several
products
Some
specializati
on
Moderate
Assembly
Low
High
(Thousands)
1 product
some
changes
Low
(OJT)
Low
Continuous
Low
High
(thousands
– millions)
1 Product
Low
(OJT)
Low
Batch
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Process Design Options
Flow
Layout
Process
Job Shop
Intermittent
Process
Customized
Project
Intermittent
Site Layout
Customized
Batch
Intermittent
Process
Modular
Assembly
Continuous
Product
Modular
Flow Shop
Continuous
Product
Modular
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Layout
Modular vs Customized
Intermittent vs Continuous
Product Layout
WS
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WS
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WS
3
WS
4
WS
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Finished
Product A
WS
1
WS
2
WS
3
WS
4
WS
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Finished
Product B
Process Layout
Frame
Foundation
Electrical
Walls
House Model A
House Model B
Trusses
Plumbing
Trim
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Green Factories
Many factories today are striving to be “Green”; pressured by
government and citizens.
When developing processes we must understand the impact on:
• Water pollution
• Air Pollution
• Impact on global warming
Operations are striving for
• Lowering energy consumption or even being self-contained
• Limiting or eliminating waste to landfills
Frito-Lay
Why Green Manufacturing
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Product Life Cycle
Different Stages of the Life Cycle will Place Different Demands upon the Plant.
Demand
• Costs begin to drop
• Product better known
• Additional uses defined
• Demand increases rapidly
• Low Demand,
High Costs
Growth
• Market Share has peak
• Demand begins to level off
• Costs Stabilized
Maturity
• Replaced by new products
• Lifestyle changes
Decline
Incubation
Time
• Demand is a function:
• Marketing & advertising effort
• Success in identifying and meeting market demands
• Number and position of competitors in the market
• High cost because of small quantities and large initial capital purchases
• Initial startup flaws will hamper delivery and quality
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Order Fulfillment - MTS
Made – To - Stock
• Standard product(s);
• fill orders from inventory;
Order penetration after assembly
Metrics:
• service level;
• inventory turnover;
• capacity utilization;
• replenishment time.
How the company plans to position itself in the market
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Order Fulfillment - MTO
1. Made – To –Order
• Higher flexibility;
• tracks specific orders;
• limited inventory;
• Order penetration prior to fabrication
Metrics:
• percent of orders on time;
•
time it takes to design,
• build and deliver order.
How the company plans to position itself in the market
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Order Fulfillment - ATS
1. Assemble – to – Order
• Combines MTO & MTS;
• Some components are made to stock or
purchased ahead of customer order.
• Components combined based on customer order
•
Order penetration after Fabrication of components
•
Differs from MTS as the end product is not
completed and placed in inventory prior to customer
order.
How the company plans to position itself in the market
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Order Fulfillment – Why know?
Depending on your function within the company the type
of Order Fulfillment will impact how you complete your
job.
Marketing - MTS, you need to know how much of the
finished product is in Inventory. MTO, you need to
know the lead time of each product type.
Finance/Accounting – the impact on capacity planning and
appropriate inventory levels
HR – Skill levels will differ; MTO has higher skill rqmts
IS – systems necessary to track orders in the system,
inventory levels, metrics, forecasting
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Service Process
Do the Process Options apply to Service companies?
Production companies focus on the appropriate layout of
equipment to satisfy the needs of the customer.
• Includes having the right skills and information flow
Service companies focus on the distribution of labor and or
information to satisfy the customer’s needs.
• Equipment is in support of the layout
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Operations Manager Role
Define a process that satisfies the customer’s needs for
quality and availability.
Define a process that meets company’s strategic goals.
Cross-Discipline
Work with engineers in the early design phases to identify a
design to minimize the time to build the product.
(Manufacturability)
Participate in an interdisciplinary design team to
identify the most cost effective means to
manufacture the product and still meet the
customer’s needs. (Concurrent Engineering)
Identify labor needs and work with HR to train or
hire needs resources.
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Role of Business Functions
Marketing:
• Defining market demand
• Defining customer expectations
• price; options; service level
• Stimulate demand
Finance
• Define ROI
• Raise Capital
Human Resources
• Find employees with right skills
• Train and develop employees
Information systems
• Deliver information to
match process needs.
Accounting
• Establish cost and
performance measures
that are appropriate for
the process being used.
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Operations Strategy
Four Major Recommendations
• Identify process which has the appropriate level of flexibility
• Work Towards Continual Improvements that satisfies the current product
strategy.
• Recognize that process decisions are cross-functional and need input from all
business functions.
• Align Operations strategic goals with company strategic goals
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Batch
Boeing 747
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Assembly Line
Corvette
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Flexible Manufacturing System
(Cellular Manufacturing)
Boeing Mfg
Features
• High Flexibility
• Moderate production
rate
• Runs Autonomously
• Rapid Tool
Changeover
• Offline Setup
• Expensive
($1-$5 Million)
T-30 Consists of
Cincinnati Milicron T-30-5
• Serves as an intermediate approach for parts
that do not have all the characteristics for a
Job Shop or a Flow Shop
• 5 NC Machines with
tool changers
• Automated Guided
Vehicle
• Machine Controllers
• Cell Controllers
• “Next-in-line” queue
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Continuous
Beer
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Continuous
Bridge
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Research and Development
How does a Company Benefit from R&D ?
• Lengthen the Product Life Cycle.
• Gain Advantage Over Competition by introducing New Products.
R&D is Categorized into 3 Levels.
• Basic Research:
Intended to advance scientific knowledge without a specific purpose (NASA)
• Applied Research:
Designed to produce Commercial benefits (Space Drink)
• Development:
Converting applied research results into useful commercial application (TANG)
Companies tend to reduce R&D in times of financial troubles.
• R&D is expensive
• Does not provide short term results
• Companies hope that current products are not in decline stage of Life Cycle.
• Hope that competitors follow in reducing R&D
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House of Quality
Technical
Importance Rqmts
to
Customer
Customer
Rqmts
Competitive
Eval
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2
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Importance Weighting
Target Values
Technical
Evaluation
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3
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Customer Satisfaction
What are the Measures of Customer Satisfaction ?
• The product has the features that are important to the customer.
• The product is provided when the timeframe that the customer wants the product/service.
• The product is defect free.
• The product is within the price range of the customer.
How do you Determine what will Satisfy a Customer?
• Customer Surveys (Ask)
• Focus Groups
• Observation
How do you Translate these Customer Responses into a Product ?
• Quality Function Deployment
Step 1: Consider Voice of the Customer
Step 2: Perform a Competitive Analysis
Step 3: Consider Voice of Engineer
Step 4: Look for Correlation
Step 5: Perform Technical Comparison with Competitors
Step 6: Evaluate Design Trade-offs
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Environmental Factors
What Environmental Factors influence the Product and Service Design decision ?
• Market Demands
- Customer Dissatisfaction
- Gov’t Regulations
- Customer Preference
- Increased Competition for Market Share
• Cost or Shortage of Raw Materials
• Technology
• Product Liability
- Damage or injury due to faulty or misused product
- Uniform Commercial Code : Implied warranty that product is useable for its
intended purpose.
Influences on Product and Service design are more than
End User demands.
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Reliability
Def : A measure of the ability of a product, part or system to perform its intended
function under a prescribed set of conditions.
Why are we concerned about Reliability?
- Can be used as a selling point
- Impact on other company products
- Impact on repeat sales
- Legal Implications
There are Three Important Dimensions of Reliability
- Reliability is a probability
- Definition of a failure
- Prescribed working conditions of the product
What is meant by Reliability as a Probability
- The likelihood that a product will work beyond a certain point in time.
- The likelihood that a product will work after so many repetitions.
Definition of a Failure
- Likelihood that a product will fail before a certain point in time.
- Does not work when it is suppose to or works when it is not suppose to.
Operating Conditions
- The products normal operating environment.
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