PRODUCT AND PROCESS DESIGN

What is a Product?
2

 Need-satisfying offering of an organization

Example
P&G does not sell laundry detergent
P&G sells the benefit of clean clothes
 Customers buy satisfaction, not parts
 May be a good or a service
 New Product and Design Process
3

 The nature of the production process within a

company reflects the state of production technology
and the type of products manufactured.
 New products are continuously coming up replacing
the existing ones in the market, thus making POM
very dynamic in nature.
 In the case of a new company or an entirely new
product, the entire production process may have to
be designed and built from the sketch (diagram,
graphs or models).
4

 In an operating firm, the introduction of a new

product may require modification of the
present production facilities and processes
 In either case, it is essential for a production

manager to understand product design and

development process.

Production Planning
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 A new product Design of New

Products
development involves
Product Redesign
both pure research and
applied research. New Product
Uses
 The applied research
covers::::::::::::: New Product
Packaging

Production Planning
 Interaction of research
6

Production Planning
 Product Life Cycle
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 Introduction

 Growth

 Maturity

 Decline
 Product Life Cycle
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Introduction
 Fine tuning
research

product development
process modification and enhancement
supplier development
 Product Life Cycle
Growth
9

 Product design begins to stabilize

 Effective forecasting of capacity becomes necessary

 Adding or enhancing capacity may be necessary

 Product Life Cycle
Maturity
10

 Competitors now established

 High volume, innovative production may be needed

 Improved cost control, reduction in options, paring

down of product line
 Product Life Cycle
Decline
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 Unless product makes a special contribution, must

plan to terminate offering
 Product Life Cycle, Sales, Cost, and
Profit
12

Cost of
Development
Sales, Cost & Profit .

& Manufacture Sales Revenue

Net Revenue

Loss
Time
Introduction Growth Maturity Decline
 Products in Various Stages of Life
Cycle
13

Sales
Introduction Growth Maturity Decline

Roller Jet Ski

Blades
Boeing
727
Virtual
Reality

Time
 Product Specification Stage
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 Determines how product will be made

 Gives product’s physical specifications

 Example: Dimensions, material etc.

 Defined by engineering
drawing House of Quality
 Done often on computer
Component
 Computer-Aided Specifications

Design (CAD) Product

Characteristics
 Operational issues in product lifecycle
15

Production Planning
 Phasing Multiple Product
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 As the demand for an existing product decreases

during the later stages of their life cycle, new
products are to be developed and produced so that
the plant capacity has optimum utilization and
current market share is retained.

Production Planning
17

 However, it might be difficult sometime, to predict

whether the product is on the saturation phase,
growth phase or decline phase, mainly due to
rapid change in external environmental factors.
 In that situation, promotional strategies could be
elaborated to lengthen the life of the old product;
in the meantime, a new product may be designed
and be ready to launch.

Production Planning
 PRODUCT DEVELOPMENT SYSTEM
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 Product development system is a process consisting

the conceptualizing, designing, developing and
marketing of innovative or newly modified product.
 Product development system is expected to identify
product’s expectation likely to capture market
share, be cost-effective, and profitable. However, it
may not be and leads to product failure rather than
success

Production Planning
Quality Function Deployment
 Quality function deployment was first
developed in Japan in the Kobe Shipyards in
1970.

 Today more than 10,000 companies in

America and West Europe are utilizing the
techniques of QFD.
 Automotive industry the furthest in
implementation of QFD
 What is QFD?

 The efforts of these teams eliminate rework and

typically reduce development time by as much
as 50%.
 QFD helps identify new qualityQFD is an
analytical process which provides an approach
to deploying the voice of the customer through
all aspects of the product development process.
 technology and job functions to carry out

operations.
 House of Quality
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 House of quality (HOQ) is taken as part of a

quality function deployment process that
utilizes a planning matrix to relate customer
wants to how the firm is going to meet those
wants.
 It is a matrix defining the relationship between

customer desires and product.

Production Planning
QFD House of Quality
Interrelationships
Customer
importance
How to satisfy
ratings
customer wants

Competitive
assessment
What the Relationship
customer matrix
wants

Target values Weighted

rating
Technical
evaluation
 House of Quality Example

Your team has been charged

with designing a new camera
for Great Cameras, Inc.
The first action is
to construct a
House of Quality
 House of Quality Example
Interrelationships

How to Satisfy
Customer Wants

Competitors
Analysis of
What the What the
Customer
Relationship
Matrix
Wants
customer
wants Technical
Attributes and
Evaluation

Customer
importance
rating
Lightweight 3 (5 = highest)
Easy to use 4
Reliable 5
Easy to hold steady 2
Color correction 1
 Approaches to Organizing for
Product Development
• .

Japanese “Whole
A Champion Distinct Departments Team Approach Organization”
Approach
 Distinct Department

• It is a U.S. based traditional

approach of having distinct
departments for product
development.
• For instance, the research and
Distinct development department is for
conducting the necessary research
Department to aid new product development.
 A Champion

• The approach believes in

assigning a product
manager who drives the
product through the product
A development system and
related organization
Champion
 Team Approach

• Under the team approach, the

product is developed through the
cross-functional team.
• The team includes a
representative from marketing,
Team purchasing, design engineering,
manufacturing, production, and
approach field service personnel.
 Japanese Approach

• This approach is based on Japanese

style of group effort and teamwork.
• This approach does not believe on
dividing organization into research
and development, engineering,
Japanese “whole production and so forth. This is based
organization” on all activities are in one
organization.
approach
 VALUE ENGINEERING

• Value engineering is an exercise or

method of analyzing a product’s features,
systems, materials, etc., to realize
essential capabilities at the lowest cost
while maintaining consistent performance,
quality, reliability, and safety.
• It aims to improve designs and
specifications at every stage of product
development.
 Benefits of Value Engineering

• Reduced complexity of products

• Additional standardization of products
• Improved functional aspects of product
• Improved job design and job safety
• Improved maintainability (serviceability) of
the product
• Robust design
Product Development Process
 Manufacturing Process
• Manufacturing process is an adoption of
certain method and technology for
transformation of raw materials and
required components into desired final
product.
• The five generic process types, which have
become a part of classic production
management, are project, jobbing, batch,
line and continuous process operations
 Project Processes

• Project processes refer to process

characterized by low volume and high
variety as it deals with construction project
which is highly customized and timescale
of making the product or service is
relatively long.
• The activities that carried out in the course
of making a product can be unstructured.
 Jobbing Processes

• A jobbing process is a process where

varieties of custom products are made
with small batches.
• So, it is characterized by very high variety
and low volumes.
• Jobbing process is differing from the
project process from the perspective of
resource utilization.
 Batch Processes

• Batch production is a technique used in

manufacturing, in which the object in
question is created stage by stage over a
series of workstations, and
differentbatches of products are made
 Line (Mass) Processes
• Mass processes are generally used to
produce more standardized goods in high
volume.
• Producing standardized products doesn’t
mean producing any variety.
• Mass processes can produce several
variants of the product; however, the
primary process of production is not
affected by the production of several
variants.
 Continuous Processes

• Continuous processes are one step ahead

from mass processes where a higher
volume of outputs is produced with lower
variety.
• They also usually operate for long and
continuous production runs.
 Mass Customization Process

• In addition to above mentioned five

processes, Heizer, et. al. (2015) has
introduced mass customization process.
• Mass customization is the process that
brings the variety of products traditionally
provided by low-volume manufacture (e.g.,
jobbing process) at the cost of
standardized high-volume (e.g.,
continuous process) production.
 Service Process

• Service process refers to the actual

procedures, mechanism and flow of
activities by which the service is delivered
– service delivery and operating system.
 Transferability of generic
process to services
• Project: management consultancy,
banqueting
• Jobbing: management development
programme, design, and installation of a
computer system
• Batch: computer bureau
• Line: preparatory operation in fast food
restaurants
• Continuous process: not used in service
operations.
 Types of Service Processes

• Professional service as
the service associated
with relatively few
transactions, highly
customized, process-
Professional oriented, with relatively
long contact time, with
Services most value added in the
front office, where
considerable judgment is
applied in meeting
customer needs.
 • Mass service as service
where there are many
customer transactions,
involving limited contact
time and little customization.
Mass • The offering is
predominantly product-

Services oriented with the most value

being added in the back
office and little judgment
applied by the front office
staff.
 • Service shop as a
categorization which
falls between
Service professional and
mass services with
the levels of the
Shops classification
dimensions falling
between the other
two extremes.
 CAPACITY PLANNING

• Capacity planning is the process of

determining the capacity requirements in
the future.
• The relation of capacity planning and
location decision is concerned with
maintaining a balance between the
capacity of the firm and demand of
location.
MEASUREMENT OF THE CAPACITY
 TYPES OF THE CAPACITY

• It is the maximum rate of output that

Design can be achieved under ideal
conditions.
• It depends upon the number and
Capacity capacity of machines and equipment
coupled with labour.

• Effective capacity is the maximum

Effective rate of the output which can be
achieved under the operating
constraints.
Capacity • It is always lower than the design
capacity.
 • The maximum output
rate achieved under
the constraints of
machine breakdowns,
Actual labour inefficiencies
and absenteeism,
Capacity defective products,
late deliveries of
materials by the
supplier and so on.
Numerical:1
 Capacity Decisions

• The capacity planning decision is one of

the major strategic decisions in operations
management, more specifically, in the
process or system design, having long-
term consequences for the organization.
• Working with too fewer capacity influences
negatively on meeting customers’ demand
resulting in increased backlogs, or
potential loss of customers.
• Similarly, having too much capacity leads
organization facing the problem of
underutilization of facility.
• Therefore, accessing optimum capacity is
essential for every type of organization,
which is primarily determined by
forecasting demand.