Chapter-4 Product and Service Design.pptx
- 1. Kahsu Mebrahtu (Asst. Professor) MBA PROGRAMME MEKELLE UNIVERSITY,CBE Kahsu Mebrahtu, Mekelle University, College of Business and Economics
- 2. • New products and services are the lifeblood of an organization: It provide a competitive edge by bringing new ideas to the market quickly Strategically, it defines a firm’s customers , as well as its competitors It capitalizes on a firm’s core competencies and determines what new competencies need to be developed
- 3. An effective design process: Matches product or service characteristics with customer requirements Ensures that customer requirements are met in the simplest and least costly manner Reduces the time required to design a new product or service , and Minimizes the revisions necessary to make a design workable Kahsu Mebrahtu, Mekelle University, College of Business and Economics
- 4. PART I: PRODUCT DESIGN What is product? What is new product? Product design : Defines the appearance of the product Sets standards for performance Specifies which materials are to be used and Determines dimensions and tolerances Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 4
- 5. Strategies for New-Product Introduction Market Pull (“We Make What We Can Sell”) Technology Push (“We Sell What We Can Make”) Inter-functional View Competitors : Perceptual maps Benchmarking and Reverse engineering Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 5
- 6. New Product Development Process Concept Development Development of Detailed Product Design& Prototyping Pilot Production/Testing Mass Production and Commercialization Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 6
- 7. Stage I. Concept Development & Feasibility Study This involves: Generating Ideas for the new product New ideas can be generated from: .. The market .. Within the company (technology push& inter-functional) ..Competitors Market surveys , focus groups and interview are important tools to get product ideas from customers. Brain storming, panel discussions , Delphi-method etc are important tools in generating ideas from within. Marketing and sales departments have big role at this stage . The outputs of this stage should be : ..concept design and defining the target market Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 7
- 8. Design Process (cont.) Copyright 2006 John Wiley & Sons, Inc. 5-8 Pilot run and final tests New product or service launch Final design & process plans Idea generation Feasibility study Product or service concept Performance specifications Functional design Form design Production design Revising and testing prototypes Design specifications Manufacturing or delivery specifications Suppliers R&D Customers Marketing Competitors
- 9. Idea Generation Sources Company’s own R&D department Customer complaints or suggestions Marketing research Suppliers Salespersons in the field Factory workers New technological developments Competitors Copyright 2006 John Wiley & Sons, Inc. 5-9
- 10. 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 Copyright 2006 John Wiley & Sons, Inc. 5-10
- 11. cont… Feasibility Study • At this stage the promising concepts undergo a feasibility study that includes several analyses: Market analysis- assesses whether there is enough demand for the proposed product –this requires customer survey Economic analysis –estimating production and development costs and comparing with estimated sales volume (tools such as cost/benefit analysis , net present value or IRR. Technical and strategic analyses –answer questions such as: Does the new product require new technology Is the risk or capital investment excessive Does the company have sufficient labour and management skills Does the new product provides a competitive advantage for the company Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 11
- 12. Performance specification- Performance specifications are written for product concepts that pass the feasibility study and are approved for development Kahsu Mebrahtu, Mekelle University, College of Business and Economics
- 13. Stage II. Development of Detailed Product Design& Prototyping • This stage includes performing the following activities: A. Rapid Prototyping -This involves building a prototype , testing the prototype, revising the design, retesting etc. B. Form Design-refers to the physical appearance of product-its shape, colour, size ,and style . Aesthetics such as image , market appeal and personal identification C. Functional Design This is concerned with how the product performs . It seeks to meet the performance specifications of fitness for use by the customer Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 13
- 14. Cont… • How ever the detailed product design need to be evaluated in terms of the following criteria: Achievement of customer requirements and product specifications Expected quality and reliability of the product Reducibility and cost of the product The impact on production of the company’s other products Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 14
- 15. Stage III: Pilot Production/Testing This stage requires the following activities : Small quantity production Market test of the sample products Gathering customer opinion on the sample products Based on the customer feedback making the necessary design changes in the product STAGE IV : Mass Production and Commercialization Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 15
- 16. Concurrent Design A new approach to design that involves simultaneous design of products and processes by design teams Improves quality of early design decisions Involves suppliers Incorporates production process Scheduling and management can be complex as tasks are done in parallel Copyright 2006 John Wiley & Sons, Inc. 5-16
- 17. 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: reducing number of parts in an assembly evaluating methods of assembly determining an assembly sequence Copyright 2006 John Wiley & Sons, Inc. 5-17
- 18. 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 Copyright 2006 John Wiley & Sons, Inc. 5-18
- 19. 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 Copyright 2006 John Wiley & Sons, Inc. 5-19
- 20. 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? Copyright 2006 John Wiley & Sons, Inc. 5-20
- 21. DFM: An Example Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 21 (c) Final design Design for push-and-snap assembly (b) Revised design One-piece base & elimination of fasteners (a) The original design Assembly using common fasteners
- 22. 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 Copyright 2006 John Wiley & Sons, Inc. 5-22
- 23. Modular Design Allow greater variety Develop a series of basic product components (modules) for later assembly Reduces complexity and costs associated with large number of product variations Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 23
- 24. Kahsu Mebrahtu, Mekelle University, College of Business and Economics
- 25. Special Considerations in Service Design Services are intangible Service output is variable Service have higher customer contact Services are perishable Service inseparable from delivery Services tend to be decentralized and dispersed Services are consumed more often than products Services can be easily emulated(copied or imitated ) Copyright 2006 John Wiley & Sons, Inc. 5-25
- 26. Service Design Process Copyright 2006 John Wiley & Sons, Inc. 5-26 Performance Specifications Service Delivery Specifications Physical items Sensual benefits Psychological benefits Design Specifications Service Provider Customer Customer requirements Customer expectations Activities Facility Provider skills Cost and time estimates Schedule Deliverables Location Service Concept Service Package Desired service experience Targeted customer
- 27. 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 Copyright 2006 John Wiley & Sons, Inc. 5-27
- 28. High v. Low Contact Services (cont.) Facility location Convenient to customer Copyright 2006 John Wiley & Sons, Inc. 5-28 Design Decision High-Contact Service Low-Contact Service Near labor or transportation source Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 Facility layout Must look presentable , accommodate customer needs and facilitate interaction with the customer Designed for efficiency
- 29. High v. Low Contact Services (cont.) Quality control More variable since customer is involved in process; customer expectations and perceptions of quality may differ; customer present when defects occur Copyright 2006 John Wiley & Sons, Inc. 5-29 Design Decision High-Contact Service Low-Contact Service Measured against established standards; testing and rework possible to correct defects Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 Capacity Excess capacity required to handle peaks in demand Planned for average demand
- 30. High v. Low Contact Services (cont.) Worker skills Must be able to interact well with customers and use judgment in decision making Copyright 2006 John Wiley & Sons, Inc. 5-30 Design Decision High-Contact Service Low-Contact Service Technical skills Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 Scheduling Must accommodate customer schedule Customer concerned only with completion date
- 31. The Service Triangle Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 31 The Customer The Service Strategy The People The Systems
- 32. Service Strategy: Focus and Advantage Performance Priorities • Treatment of the customer • Speed and convenience of service delivery • Price • Variety • Quality of the tangible goods • Unique skills that constitute the service offering Kahsu Mebrahtu, Mekelle University, College of Business and Economics 3 - 32