developing products and services. © 2008 pearson prentice hall --- introduction to operations and...

Developing Products and Services

© 2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036

Chapter 6, Slide 2

Chapter Objectives

Be able to: Explain why product design is important to a business’s

success. Describe the six dimensions of product design that are of

particular interest to operations and supply chain managers. Describe the five phases of product and service development

and explain the difference between sequential development and concurrent engineering.

Discuss the different roles played by such areas as engineering and accounting during the development process.

Describe some of the more common approaches to improving product and service designs, including the Define-Measure-Analyze-Design-Verify (DMADV) process, quality function deployment (QFD), design for manufacturability (DFM), and target costing.


Chapter 6, Slide 3

Developing Products and Services

• Why bother?

• New product development process

• What is good design?

– An operations and supply chain perspective


Chapter 6, Slide 4

Why Bother?

External benefits

Internal benefits

Exploit strengths/core competencies

Block competitors


Chapter 6, Slide 5

External Benefits

Competitive Advantage


Chapter 6, Slide 6

Internal Benefits

Shorter cycle time, less cost, less waste, …

For example:

• NCR 2760:– Only 15 “components”

– 85% fewer parts / 65% fewer vendors

– Snaps together

– Lifetime cost for a SINGLE fastener: $12,500


Chapter 6, Slide 7

Exploit Strengths and Core Competencies

• Honda – Motorcycles Automobiles

• John Deere– Farm equipment Lawn equipment

• Hewlett-Packard– Color printers Digital photography


Chapter 6, Slide 8

Block Competitors

Gillette

• “made a point of designing its Sensor razor so that it … would be difficult for competitors to copy”

Microsoft

• bundling Windows and Explorer


Chapter 6, Slide 9

Finally ...

• 30% of revenues and profits come from products introduced in the last 5 years

• Development time decreasing:– Typically 31 months in 1992– Less than 24 months now– Less than 18 months for many high-tech

products


Chapter 6, Slide 10

Operations and Supply Chain Operations and Supply Chain PerspectivesPerspectives

• Repeatability, testability and Repeatability, testability and serviceability of the designserviceability of the design

• Product volumesProduct volumes

• Product costsProduct costs

• Match with existing capabilitiesMatch with existing capabilities


Chapter 6, Slide 11

Repeatability, Testability and Repeatability, Testability and ServiceabilityServiceability

• Repeatability– Consistent production – Tolerance to manufacturing variations (robustness)

• Testability– Non-value added activity, so should be easy and

inexpensive to do

• Serviceability– Ease of repair, critical for products expected to be

serviced or repaired (autos)


Chapter 6, Slide 12

Product Volumes and CostProduct Volumes and Cost

• Determines process strategies– Types of equipment – Level of automation– Staffing required

• Determines level of customization

• Determines level of after-sales support


Chapter 6, Slide 13

‘Hidden’ Costs

• Number of parts in a product– Increased handling, tracking, and other

inventory costs– More procedures required

• Engineering changes– Affect entire supply chain

• Transportation costs– Logistics becoming a significant cost– Size, shape, weight, packaging are concerns


Chapter 6, Slide 14

Match with Existing Capabilities

• Product design flexibilityEasy to add features?Easy to upgrade?

Examples: PCs, home theater systems

• Process flexibilityShare processes / parts?Will upgrades make current operations

obsolete?

The Development ProcessThe Development Process


Chapter 6, Slide 16

PlanningDesign and

DevelopmentPreparationand Launch

ConceptDevelopment

Time

Survival rateof an idea

$ spenton idea

Model of Development Process


Chapter 6, Slide 17

Concept Development

Planning Design and Development

Commercial Preparation

Launch

Propose new technologies

Develop product or service ideas

Identify general performance characteristics

Identify underlying technologies

Develop detailed specifications

Build and test prototypes

Resolve remaining technical problems

Evaluate field experience

Analyze warranty returns

Engineering Functional Activities


Chapter 6, Slide 18

Concept Development



Launch

Provide market input

Propose and investigate product or service concepts

Define target customer needs

Estimate sales and margins

Include customer in development effort

Conduct customer tests

Evaluate prototypes

Plan marketing rollout

Train sales force

Prepare sales procedures

Select distribution channels

Fill downstream supply chain

Sell and promote

Marketing Functional Activities


Chapter 6, Slide 19

Concept Development



Launch

Scan suppliers for promising technologies and capabilities

Develop initial cost estimates

Identify key supply chain partners

Develop detailed process maps of operations and supply chain flows

Test new processes

Build pilot units using new operations

Train personnel

Verify supply chain flows

Ramp up volumes

Meet cost targets

Meet quality and other performance target goals

Operations and Supply Chain Functional Activities


Chapter 6, Slide 20

Concurrent Engineering

CONCEPTDEVELOPMENT

PLANNING

DESIGN ANDDEVELOPMENT

COMMERCIALPREPARATION

LAUNCH

DEVELOPMENT TIME

Overlapping development phases requires tight coordination, but shrinks overall development time


Chapter 6, Slide 21

Design Players

• Engineering• Marketing• Accounting• Finance• Designers• Purchasing — presourcing• Suppliers — gray and black box

design participation


Chapter 6, Slide 22

Design Approaches

• DMADV (Define-Measure-Analyze-Design-Verify)

• QFD (Quality Function Deployment)• CAD (Computer-Aided Design)• CAD/CAM (Computer-Aided Design / Computer-

Aided Manufacturing)• DFM (Design for Manufacturability)• DFMt (Design for Maintainability)• DFSS (Design for Six Sigma)• DFE (Design for the Environment)


Chapter 6, Slide 23

DMADV

Steps

• Define goals and deliverables

• Measure and determine needs and specifications

• Analyze product or process options

• Design product or process

• Verify results


Chapter 6, Slide 24

Quality Function Deployment

INEXPENSIVE

RUGGED

GOOD LOOKING

MORE MEMORYFUNCTIONS

IMPORTANCE

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Chapter 6, Slide 25

QFD Linkages

PRODUCT CHARACTERISTICS

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PRODUCT SPECIFICATIONS

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Customer requirements product characteristics product specifications

process characteristics process specifications


Chapter 6, Slide 26

Design for Manufacturing (DFM)

What are the manufacturing costsof the proposed design?

What Impact?Costs OK?

Reducecomponent

costs

Reduceoperations

costs

Reducedistribution

costs

NO

NO

NOYES

Acceptable DesignGo Ahead


Chapter 6, Slide 27

Modular Design

• Allows higher level of customization

• Retains lower-cost advantage of higher volumes for core components

• Easier assembly

• Facilitates servicing and repairs

• Allows for upgrades


Chapter 6, Slide 28

Modular Design Examples

• Balley Engineered Structures– 7 different kinds of panels

– “Customized” walk-in coolers

– From these, assembles almost endless variety of finished products

• Personal Computer Manufacturers

• Manufactured Home Builders


Chapter 6, Slide 29

DFMt, DFSS, DFE

• DFMt — focuses on long-term serviceability of the product or service

• DFSS — focuses on achieving Six Sigma quality levels less than 3.4 defects per one million opportunities

• DFE — focuses on reducing environmental effects of product or process (Hewlett-Packard design guidelines, page 166)


Chapter 6, Slide 30

Target Costing:Value Analysis

Goals:• Maximize function / cost• How can we increase this ratio?• Focus on secondary functions

– Packaging– Shipping– Custom parts and tooling – Use of standard parts– Make versus buy

“A good cookie, a great razor” Case Studies

Nabisco and Gillette: Two contrasting approaches to

product design

developing products and services. © 2008 pearson prentice hall --- introduction to operations and...

Documents

supply chain management

supply chain perspective

services slide

explorer slide

pearson prentice hall

supply chain managers

chapter objectives

dimensions of product