Summary Chapter 5

CHAPTER 5: PRODUCT DESIGN
Product Life Cycles
Introductory Phase
Still in “fine-tuned” for the market, as are their production techniques, they may warrant unusual
expenditures for research, product development, process modification and enhancement, and
supplier development.
Growth Phase
The product design has begun to stabilize, and effective forecasting of capacity requirements is
necessary.
Maturity Phase
Competitors are established (Improved cost control, reduction in operations, and a paring down of
the product line may be effective or necessary for profitabilty and market share).
Decline Phase
Unless it has a unique contribution to the firm’s reputation or its product line or can be sold with an
unusually high contribution, their production should be terminated.
Product Development
Quality Function Deployment (QFD)
A process for determining customer requirements (customer “wants”) and translating them into the
attributes (the “hows) that each functional area can understand and act on.
Organizing for Product Development
1. Research departments
2. Assign a product manager to “champion” the product
3. Product development teams
Teams charged with moving from market requirements for a product to achieving product
success.
4. Concurrent engineering
Use of cross-functional teams in product design and preproduction manufacturing.
Manufacturability and Value Engineering
Activities that help to improve a product’s design, production, maintainability, and use.
These include:
1. Reduced complexity of the product
2. Reduction of environmental impact
3. Additional standarizaton of components
4. Improvement of functional aspects of the product
5. Improved job design and job safety
6. Improved maintainability of the product
7. Robust design
Issues for Product Design

Robust Design
A design that can be produced to requirements even with unfavorable conditions in the production
process.
Modular Design
A design in which parts or components of a prodcut are subdivided into modules that are easily
interchanged or replaced.
Computer-Aided Design (CAD) and Computer-Aided Manufacturing (CAM)
CAD : Interactive use of a computer to develop and document a product.
CAM : The use of information technology to control machinery.
Virtual Reality Technology
A visual form of communication in which images substitute for reality and typically allow the user to
respond interactively.
Value Analysis
A review of successful products that takes place during the production process.
Sustainability and Life Cycle Assessment (LCA)
Product Development Continuum

Purchasing Technology by Acquiring a Firm
Joint Ventures
Firms establishing joint ownership to pursue new products or markets.
Alliances
Cooperative agreements that allow firms to remain independent, but pursure strategies consistent
with their individual missions.
Defining a Product
Make-or-Buy Decisions
The choice between producing a component or a service and purchasing it from an outside source.
Group Technology
A product and component coding system that specifies the size, shape, and type of processing; it
allows similar products to be grouped.
Documents for Production

Assembly Drawing
An exploded view of the product.
Route sheet
A listing of the operations necessary to produce a component with the material specified in the bill
of material.
Work Order
An instruction to make a given quantity of a particular item.
Engineering Change Notice (ECN)
A correction or modification of an engineering drawing or bill of material.
Service Design
Process-Chain-Network (PCN) Analysis
Analysis that focuses on the ways in which processes can be designed to optimize interation
between firms and their customers.
The activities are organized into three process regions for each participants:
1. Direct interaction: Involve interaction between participants.
2. The surrogate (substitute) interaction: One participant is acting on another participant’s
resources, such as their information, materials, or technologies.
3. The independent processing: Acting on resources where each has maximum control.
Adding Service Efficiency
1. Limit the options
2. Delay customization
3. Modularization
4. Automation
5. Moment of truth
Documents for Services
Because of the high customer interaction, the documents for moving the product to production
often take the form of explicit job instructions or script.
Application of Decision Trees to Product Design

To form a decision tree, we use the following procedure:
1. Be sure that all possible alternatives and states of nature are included in the tree
2. Payoffs are entered at the end of the appropriate branch
3. The objective is to determine the expected value of each course of action

Summary Chapter 5

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Summary Chapter 5

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CHAPTER 5: PRODUCT DESIGN

Product Life Cycles

Quality Function Deployment (QFD)

Organizing for Product Development

Issues for Product Design

Product Development Continuum

Documents for Production

Application of Decision Trees to Product Design

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