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4-1
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
SYSTEMS DESIGNPART THREE
•Chapter Four Product and Service Design•Chapter Four Supplement Reliability
•Chapter Five Capacity Planning•Chapter Five Supplement Decision Theory
•Chapter Six Process Design and Facility Layout•Chapter Six Supplement Linear Programming
•Chapter Seven Design of Work Systems•Chapter Seven Supplement Learning Curves
•Chapter Eight Location Planning and Analysis•Chapter Eight Supplement The Transportation Model
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Chapter 4
Product and Service Design
4-3
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Major factors in strategy– Cost– Quality– Time-to-market– Customer satisfaction– Competitive advantage
Product and Service Design
4-4
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Trends in Product & Service Design
• Increased emphasis on or attention to:– Customer satisfaction
– Reducing time to introduce new product or service
– Reducing time to produce product
4-5
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Trends in Product & Service Design (Cont’d)
• Increased emphasis on or attention to:– The organization’s capabilities to produce or
deliver the item
– Environmental concerns
– Designing products & services that are “user friendly”
– Designing products that use less material
4-6
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Translate customer wants and needs into product and service requirements
• Refine existing products and services• Develop new products and services• Formulate quality goals• Formulate cost targets• Construct and test prototypes• Document specifications
Product or Service Design Activities
4-7
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Reasons for Product or Service Design
• Be competitive
• Increase business growth & profits
• Avoid downsizing with development of new products
• Improve product quality
• Achieve cost reductions in labor or materials
4-8
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Development time and cost
• Product or service cost
• Resulting product or service quality
• Capability to produce or deliver a given product or service
Objectives of Product and Service Design
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Taking into account the capabilities of the organization in designing goods and services
Design For Operations
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Kano Model
Customer Needs
Cu
sto
mer
Sati
sfa
cti
on
Excitement
Expected
Must Have
Kano Model
Customer Needs
Cu
sto
mer
Sati
sfa
cti
on
Excitement
Expected
Must Have
The Kano Model
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Internal– Employees– Marketing department– R&D department
• External– Customers (QFD)– Competitors– Suppliers
Sources of Ideas for Products and Services
4-12
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Quality Function Deployment– Voice of the customer– House of quality
Quality Function Deployment
QFD: An approach that integrates the “voice of the customer” into the product and service development process.
4-13
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Reverse Engineering
Reverse engineering is the
dismantling and inspecting of a competitor’s product to discover product improvements.
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Research & Development (R&D)
• Organized efforts to increase scientific knowledge or product innovation & may involve:– Basic Research advances knowledge about a
subject without near-term expectations of commercial applications.
– Applied Research achieves commercial applications.
– Development converts results of applied research into commercial applications.
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Legal– FDA, OSHA, IRS– Product liability– Uniform commercial code
• Ethical– Releasing products with defects
• Environmental– EPA
Legal, Ethical, and Environmental Issues
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Regulations & Legal Considerations
• Product Liability - A manufacturer is liable for any injuries or damages caused by a faulty product.
• Uniform Commercial Code - Products carry an implication of merchantability and fitness.
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Product Design
• Product Life Cycles
• Robust Design
• Concurrent Engineering
• Computer-Aided Design
• Modular Design
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Life Cycles of Products or Services
Time
Incubation
Growth
Maturity
Saturation
Decline
Dem
and
Figure 4-2
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Advantages of Standardization
• Fewer parts to deal with in inventory & manufacturing
• Reduced training costs and time
• More routine purchasing, handling, and inspection procedures
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Advantages of Standardization (Cont’d)
• Orders fillable from inventory
• Opportunities for long production runs and automation
• Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Disadvantages of Standardization
• Designs may be frozen with too many imperfections remaining.
• High cost of design changes increases resistance to improvements.
• Decreased variety results in less consumer appeal.
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Mass customization:– A strategy of producing standardized
goods or services, but incorporating some degree degree of customization
– Delayed differentiation– Modular design
Mass Customization
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Delayed differentiation is a postponement tactic– Producing but not quite completing a
product or service until customer preferences or specifications are known
Delayed Differentiation
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Modular Design
Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. It allows:
– easier diagnosis and remedy of failures
– easier repair and replacement
– simplification of manufacturing and assembly
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Reliability
• Reliability: The ability of a product, part, or system to perform its intended function under a prescribed set of conditions
• Failure: Situation in which a product, part, or system does not perform as intended
• Normal operating conditions: The set of conditions under which an item’s reliability is specified
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Improving Reliability
• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Robust Design: Design that results in products or services that can function over a broad range of conditions
Robust Design
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Taguchi Approach Robust Design
• Design a robust product– Insensitive to environmental factors either in
manufacturing or in use.
• Central feature is Parameter Design.
• Determines:– factors that are controllable and those not
controllable– their optimal levels relative to major product
advances
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Designing for Manufacturing
Beyond the overall objective to achieve customer satisfaction while making a reasonable profit is:
Design for Manufacturing(DFM)
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
4-30
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Concurrent Engineering
Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase.
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
“Over the Wall” Approach
DesignMfg
New Product
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Computer-Aided Design
• Computer-Aided Design (CAD) is product design using computer graphics.
– increases productivity of designers, 3 to 10 times
– creates a database for manufacturing information on product specifications
– provides possibility of engineering and cost analysis on proposed designs
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Manufacturability
• Manufacturability is the ease of fabrication and/or assembly which is important for:
– Cost
– Productivity
– Quality
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Design for manufacturing (DFM)
• Design for assembly (DFA)
• Design for recycling (DFR)
• Remanufacturing
• Design for disassembly (DFD)
• Robust design
Product design
4-35
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Recycling: recovering materials for future use
• Recycling reasons– Cost savings– Environment concerns– Environment regulations
Recycling
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Tangible – intangible
• Services created and delivered at the same time
• Services cannot be inventoried
• Services highly visible to customers
• Services have low barrier to entry
• Location important to service
Differences Between Product and Service Design
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Service Variability & Customer Influence Service Design
Variabilityin
ServiceRequire-
ments
Figure 4-3
Degree of Contact with Customer
High
Moderate
Low
None
None Low Moderate High
TelephonePurchase
Dept. StorePurchase
CustomizedClothing
InternetPurchase
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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Quality Function Deployment– Voice of the customer– House of quality
Quality Function Deployment
QFD: An approach that integrates the “voice of the customer” into the product and service development process.
4-39
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
The House of Quality
Correlation matrix
Designrequirements
Customerrequire-ments
Competitiveassessment
Relationshipmatrix
Specificationsor
target values
Figure 4-5
4-40
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
Customer Requirements
Importance to Cust.Easy to close
Stays open on a hill
Easy to open
Doesn’t leak in rain
No road noise
Importance weighting
Engineering Characteristics
Ene
rgy
need
ed
to c
lose
doo
r
Che
ck f
orce
on
leve
l gr
ound
Ene
rgy
need
ed
to o
pen
door
Wat
er r
esis
tanc
e
10 6 6 9 2 3
7
5
3
3
2
X
X
X
X
X
Correlation:Strong positivePositiveNegativeStrong negative
X*Competitive evaluation
X = UsA = Comp. AB = Comp. B(5 is best)
1 2 3 4 5
X AB
X AB
XAB
A X B
X A B
Relationships:Strong = 9Medium = 3Small = 1Target values
Red
uce
ener
gy
leve
l to
7.5
ft/lb
Red
uce
forc
eto
9 lb
.
Red
uce
ener
gy to
7.5
ft/l
b.
Mai
ntai
ncu
rren
t lev
el
Technical evaluation(5 is best)
54321
B
A
X
BAX B
AX
BXA
BXABA
X
Doo
r se
al
resi
stan
ce
Acc
oust
. Tra
ns.
Win
dow
Mai
ntai
ncu
rren
t lev
el
Mai
ntai
ncu
rren
t lev
el
House of Quality Example
4-41
McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Product and Service Design
• Shorten time-to-market• Package products and services• Increase emphasis on component
commonality• Use multiple-use platforms• Consider tactics for mass customization• Look for continual improvement
Operations Strategy