Design of Products and Services

Design of Products and Services

Designing new products and getting then to market quickly is the challenge facing manufacturers in all the industries.

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• How manufactured products are designed.
• How the process to produce them is selected.

Product Design

Product design is integral to the success of many companies and differs significantly depending on the industry.

Companies often outsource major functions (such as product design) rather than support these functions in-house.

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The producing companies are called:

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Contract manufacturers

Product Design

A contract manufacturer is an organization that performs manufacturing and/or purchasing needed to produce a product or device nor for itself, but as a service to another firm.

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Product Design

With the use of contract manufacturers and its potential advantages, a firm must decide what its core competency should be.

The goal is to have a core competency that yields a long-term competitive advantage to the company.

A company’s core competency is the one thing that it can do better than its competitors.

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Product Design

Examples of Core Competency

Product Design

A core competency has three characteristics:

1. It provides potential access to a wide variety of markets.
2. It increases perceived customers benefits.
3. It is hard for competitors to imitate.

Product Design

The real challenge for a firm is to decide exactly how the various functions critical to success will be handled.

1. The fully vertically integrated firm where all activities from the design to the fabrication of the individual parts are handled in-house.
2. A company that only sells products and outsources all the design and manufacturing functions.

Product Development Process

Product Development Process

The six phases of the generic development process are the following:

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0. Planning.

1. Concept development.
2. System-level design.
3. Detail design.
4. Testing and refinement.
5. Production ramp-up.

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Product Development Process

0. Planning

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This phase begins with corporate strategy and includes assessment of technology developments and market objectives.

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Product Development Process

1. Concept development

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A concept is a description of the form, function, and features of a product and is usually accompanied by a set of specifications, an analysis of competitive products, and an economic justification of the project.

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Product Development Process

2. System-level design

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The system-level design phase includes the definition of the product architecture and the decomposition of the product into subsystems and components.

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The final assembly scheme for the production system is usually defined during this phase as well.

Product Development Process

3. Detail design

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This phase includes the complete specification of the geometry, materials, and tolerances of all the unique parts in the product and the identification of all the standard parts to be purchased from suppliers.

Product Development Process

4. Testing and refinement

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This phase involves the construction and evaluation of multiple preproduction versions of the product.

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Prototypes are tested to determine whether the product will work as designed and whether the product satisfies customer needs.

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Product Development Process

5. Production ramp-up

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The product is made using the intended production system.

The purpose of the ramp-up is to train the workforce and to work out any remaining problems in the production processes.

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Products produced are sometimes supplied to preferred customers to evaluate.

Product Development Process

Different process development according to the organizations strategy

• Market pull.
• Technology push.
• Platform Products.
• Process-intensive products.
• Customized Products.
• High-Risk Products.
• Quick-Build Products.
• Complex systems.

Designing Products for Manufacture

and Assembly

Designing Products for Manufacture and Assembly

Design.

• The aesthetic design of a product.
• Establishment the basic parameters of a system.
• Detailing of the materials, shapes, and tolerance of the individual parts of a product.

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An activity that starts with sketches of parts

and assemblies and then progress to the

computer-aided design (CAD).

Designing Products for Manufacture and Assembly

How Does Design for Manufacturing and Assembly (DFMA) Work?

DFMA is oriented toward the Engineering of the product with an emphasis on reducing production cost.

The greatest improvements related to DFMA arise from simplification of the product by reducing the number of separate parts.

Designing Products for Manufacture and Assembly

In order to guide the designer in reducing the part count, the methodology provides three criteria:

1. During the Operation of the product, does the part move relative to all other parts already assembled?

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• Must the part be of a different material tan, or be isolated from, other parts already assembled?

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• Must the part be separate from all other parts to allow the disassembly of the product for adjustment or maintenance?

Designing Service Products

Service products are very different because direct customer involvement in the process in terms of both the time that it takes to serve a customer and the level of knowledge required of the firm’s employees.

• How will this variability be addressed?

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• What are the implications for operational cost and the customer service experience?

Designing Service Products

How different the new service is compared to the current services offered by the firm?

Here are three general factors to consider when determining this:

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Designing Service Products

A useful way of analyzing the process similarity for new service development is by specifying the complexity and divergence of the proposed service process relative to the basic service process.

Complexity

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Is the number of steps involved in a service and the possible actions that can be taken at each step.

Divergence

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Is the number of ways a customer/service provider interaction can vary at each step according to the needs and abilities of each .

Economic Analysis of Product Development Projects

Economic analysis is useful in at least two different circumstances

1. Go / no-go milestone.
• Should we try to develop a product to address a new market opportunity?
• Should we proceed with the implementation of a selected concept?
• Should we launch the product we have developed?

These decisions typically arise at the end of each phase of development.

2. Operational design and development decisions. Operational decisions involve questions such as:
• Should we spend $100,000 to hire an outside firm to develop this component in order to save two months of development time?
• Should we launch the product in four months at a unit cost of $450 or wait six months, when we can reduce the cost to $400?

Economic Analysis of Product Development Projects

Consider the case of a product development team in the midst of developing a new photograph printer, the CI-700.

• Should the team take more time for developing in order to make the product available on multiple computers “platforms,” or would a delay in bringing the CI-700 to market be too costly?

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• Should the product use proprietary print media or commonly available Premium-Quality print media?

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• Should the team increase development spending in order to increase the reliability of the CI-700?

Economic Analysis of Product Development Projects

Sensitive Analysis to Understand Project Trade-Off

Sensitive analysis use the financial model to answer “what if”, questions by calculating the changes in NPV corresponding to a change in the factors included in the model.

Many other scenarios can be developed for the project:

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1. Project development time.
2. Sales volume.
3. Product cost or sales price.
4. Development cost.

Measuring product development performance

There is strong evidence that generating a steady stream of new products to market is extremely important to competitiveness.

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