OPERATIONS MANAGEMENT
CHECK POINT 65: PRODUCT AND SERVICE DESIGN AND STANDARDIZATION
Please Select Any Topic In Check Point 65 Below And Click. |
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DO I NEED TO KNOW THIS CHECK POINT?
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1. THE PURPOSE OF PRODUCTS AND SERVICES |
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THE PURPOSE OF PRODUCTS AND SERVICES |
Business owners and operations managers must be knowledgeable in the areas of product and service design and standardization which are an integral part of the operations management process.
The major outcome of the company's activities is represented by means of Products and Services provided to satisfy the needs of consumers in the marketplace.
Naturally, such needs vary at all times creating a continuous demand for new and improved products and services. These products and services may differ in their design, quality, price, and life span, but their main and common purpose is to perform effectively in accordance with the requirements of users. For this reason, business owners and operations managers must constantly search for and select new products and services to meet the ever-changing market needs and remain competitive at the same time.
Thus, if your company is involved in providing products or services to your customers, you must ensure that your management team subscribes to World Class Operational Guidelines which could be instrumental in transforming your company into a Lean Operational Organization. This will enable you to meet the constantly growing demand for high quality products and services at competitive prices in the marketplace. |
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2. WORLD CLASS OPERATIONAL GUIDELINES FOR PRODUCT AND SERVICE DESIGN |
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The prevailing World Class Operational Guidelines provide specific direction in relation to the product or service design as outlined below. |
WORLD CLASS OPERATIONAL
GUIDELINES FOR PRODUCT AND SERVICE DESIGN |
No. |
Details |
1. |
To design new products and services that are user-friendly and competitively priced. |
2. |
To minimize the time required to introduce new products and services in the marketplace. |
3. |
To ensure that products and services are produced in the most cost-effective manner. |
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To ensure that the quality and reliability of products or services remains high to secure customers' satisfaction in the long run. |
5. |
To ensure that the organization has all the necessary facilities to meet the demand of high quality of products and services at competitive costs. |
6. |
To ensure that new products or services require less materials, components and packaging. |
7. |
To ensure that the organization does not cause environmental problems, while manufacturing new products or providing new services. |
8. |
To ensure that new products or services add to the company's "bottom-line" and provide further opportunity for growth and development. |
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Note:
Some issues discussed below will relate solely to products or services, while other issues will relate to products and services. |
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3. PRODUCT AND SERVICE SELECTION |
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PRODUCT AND SERVICE SELECTION
The process of Product And Service Selection represents a combined effort by the marketing and operations executives and contributes toward the future survival, growth, and success of the company.
The source of the product and service selection usually originates from opportunities which may arise as a result of a careful examination of market conditions, existing product and service range, and special skills and resources of the organization. The process of product and service selection necessitates investigation of various organizational issues, and deals, with financial, operational, and marketing aspects. Some of the important operational considerations, for example, are outlined below.
A new product or service can be presented to the operations manager in the form of an idea, sketch, drawing, completely documented project, or a prototype scaled model which will be subsequently converted into a standard item. It is essential, therefore, for the operations manager to appreciate various aspects and procedures related to the process of selection and design of new products and services. |
PRODUCT AND SERVICE SELECTION CONSIDERATIONS |
No. |
Details |
1. |
Is additional equipment required? |
2. |
How adequate are the labor resources? |
3. |
Will the present workload be affected? |
4. |
Is the raw material for products available? |
5. |
How reliable are existing suppliers? |
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4. PRODUCT AND SERVICE DESIGN |
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PRODUCT AND SERVICE DESIGN
Once a new product or service has been selected and its nature has been described, the design of the product or service may begin.
Product And Service Design represents the activity of converting various requirements into a form suitable for the manufacturing or operational process, and further use.
Product and service design is based on a combination of creative and practical activities and may comprise seven steps outlined below. |
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THE PRODUCT AND SERVICE DESIGN PROCESS
Step 1: Product And Service Conception.
Step 2: Feasibility Study.
Step 3: Preliminary Design.
Step 4: Prototype Construction (For Products) And Simulation (For Services).
Step 5: Prototype Test (For Products).
Step 6: Final Product And Service Design.
Step 7: Pre-Production Test (For Products) And Pre-Operation Test (For Services). |
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5. PRODUCT AND SERVICE CONCEPTION |
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STEP 1: PRODUCT AND SERVICE CONCEPTION
Product And Service Conception represents the first step in the product or service design where the initial draft specifications are formulated and recorded. This is the most important step of the design activity and it provides the basis for subsequent actions.
Preliminary Specifications should be drawn up in detail by the designer, or design engineer in conjunction with information provided by marketing and sales employees. The prime purpose of the preliminary specifications is to provide basic information related to the exact requirements of the newly developed product or service. In essence, this process entails a translation of sales requirements into a set of technical terms developed by the designer.
As a result of the product and service conception process, certain specified information becomes available as outlined below. |
PRODUCT AND SERVICE RELATED INFORMATION |
No. |
Details |
1. |
Product or service performance and technical requirements. |
2. |
Product appearance requirements. |
3. |
Service performance requirements. |
4. |
Product or service selling price considerations. |
5. |
Date by which the product or service is required. |
6. |
Quantity in which the product is required. |
7. |
Frequency in which the service is required. |
8. |
Product manufacturing cost considerations. |
9. |
Service operational cost considerations. |
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6. PRODUCT AND SERVICE FEASIBILITY STUDY |
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STEP 2: PRODUCT AND SERVICE FEASIBILITY STUDY |
The Product Or Service Feasibility Study represents the second step in the product or service design. At this stage the new product or service viability should be investigated and first Draft Specifications evaluated.
As a result of the product and service feasibility study, the draft specifications will have to satisfy specific requirements as outlined below. |
PRODUCT AND SERVICE DESIGN REQUIREMENTS |
No. |
Details |
1. |
Marketing requirements. |
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Legal requirements. |
3. |
Manufacturing requirements for products. |
4. |
Operational requirements for services. |
5. |
Financial requirements. |
6. |
Distribution requirements. |
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MANUFACTURABILITY OF PRODUCTS AND VIABILITY OF SERVICES |
One of the important elements of the product or service feasibility study entails a detailed evaluation of specific manufacturing or operational requirements. This relates to manufacturability of the newly designed product, or viability of newly designed service. Their analysis will indicate the ease of product manufacturing, fabrication, assembly, or ease of providing the service, cost, productivity, and quality.(3) |
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7. PRODUCT PRELIMINARY DESIGN |
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STEP 3: PRODUCT PRELIMINARY DESIGN |
Product Preliminary Design represents the third step in the product design. The design of new products is carried out by designers or engineers in the design or engineering department within the company.
An increasing number of products are being designed by means of computers. The availability of Computer-Aided Design (CAD) facility enables the designers to create new and sophisticated products in a fraction of the time in comparison with the old design methods. |
ELEMENTS OF THE PRODUCT PRELIMINARY DESIGN |
No. |
Details |
1. |
This process may be initiated by a work order specifying the preliminary design parameters of the new product. |
2. |
During the process of product preliminary design, all necessary drawings should be prepared and finalized in accordance with the basic specifications and other design requirements. |
3. |
All design and manufacturing costs of the new product should be identified and calculated. |
4. |
As a result of the product preliminary design, the basic specification data will have to be tested to conclude the product's acceptance or rejection. This specification data will have to be used in the process of preparing working drawings to enable the construction of the first prototype. |
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ADVANTAGES OF THE COMPUTER-AIDED DESIGN |
No. |
Details |
1. |
Computer generated drawings and blueprints can be stored electronically, thereby providing important advantages during the product design processes. |
2. |
CAD systems provide additional savings in the process of product modification and blueprint storing procedures. |
3. |
CAD systems enable the designers to store relevant product information, such as product dimensions, tolerances, and material specifications, in a database and provide the needed information whenever required in various formats. |
4. |
CAD systems provide additional important design capabilities, such as engineering calculations, optimal weight or size determination, cost optimization, component reduction, product standardization, stress and thermal analysis, etc. |
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WHAT IS CAD-CAM? |
In recent years, CAD became an important part of a successful manufacturing formula, namely: CAD-CAM (CAM means Computer-Aided Manufacturing). In fact, it is virtually impossible to remain competitive in the current manufacturing environment without the CAD-CAM technology. This technology is a major part of world class manufacturing and it enables companies to design and manufacture high quality products at lower costs.
The CAD-CAM methodology, in fact, represents another essential element of Lean Operations and could contribute extensively to a successful performance of a Lean Operational Organization. |
PRODUCT MANUFACTURABILITY |
The issue of the Product Manufacturability is also an integral part of the product preliminary design. This aspect of the product design deals with several questions, as outlined below.
The product manufacturability and other related manufacturing process issues are discussed in detail in the context of Process Design in Tutorial 4. |
PRODUCT MANUFACTURABILITY QUESTIONS |
No. |
Details |
1. |
How will the product be manufactured in the existing production facility? |
2. |
What additional machinery, equipment, and tooling will be required? |
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WHAT IS MODULAR DESIGN? |
Another important element of an effective design relates to Modular Design of products. The prime objective of modular design is to create a range of products with components which can be easily replaced or interchanged with components of other similar products.
Modular design of product enables manufacturers to reduce product design, manufacturing, and assembly costs without compromising on quality. This, in turn, enables the company to offer products at reduced prices in the marketplace without sacrificing the profitability. Modular design of products is particularly important in light of Product Standardization Requirements which are discussed in detail in this Check Point. |
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8. SERVICE PRELIMINARY DESIGN |
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STEP 3: SERVICE PRELIMINARY DESIGN |
Some of the issues related to the Preliminary Design of services are similar to the corresponding issues related to product design, while other issues are quite different as outlined below. |
SIMILARITY BETWEEN SERVICE AND PRODUCT PRELIMINARY DESIGN |
No. |
Details |
1. |
What are the elements of the new service? |
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Who will be involved in providing each element of the new service? |
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What equipment or plant will be required for the provision of new service? |
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What will be the cost of each element of the new service? |
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Which part of the existing service can be incorporated in the new service? |
6. |
What are the timing parameters of the new service? |
7. |
How can the service be provided to customers in the most cost effective manner? |
8. |
How will the new service affect the company's ability to meet its existing commitments? |
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DIFFERENCE BETWEEN SERVICE AND PRODUCT PRELIMINARY DESIGN |
No. |
Details |
1. |
Product is tangible, while service is intangible. However, in both cases the main focus is on customer satisfaction. |
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Product is manufactured, while service is rendered. For this reason customers can discover problems with a product before receiving it, while problems with a service can be discovered only after it has been rendered. Subsequently, the service design process must incorporate effective training procedures for the service providers. |
3. |
Product can be stored, while service can’t be stored. This imposes additional restrictions on the operational capacity design, since there can be no "service inventory" in the stores. |
4. |
Product is delivered in a "package", while service is rendered during a "process". This creates an additional dimension which must be taken into account during the service design process to ensure full customers' satisfaction. |
5. |
Product can be delivered at any location, while rendering service may require a special location which will be acceptable to the customer. Location selection, therefore, is very important in the service design process. |
6. |
Product does not require contact between the manufacturer and the customer, while service may require various levels of contact between the service provider and the customer. It is essential, therefore, to identify the degree of contact requirement between the service provider and the customer and to take it into account during the process of service design. |
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SERVICE BLUEPRINT |
The Service Blueprint represents a useful tool in the service preliminary design process. Such a blueprint, like a drawing for a new product, will help to analyze and summarize relevant details of the proposed new service. The main elements of a good service blueprint are outlined below.
Special care should be given to attending to customers’ enquiries by phone or online. Customers more than ever expect a fast response from the service providers. It is essential, therefore, to design the service in such a way, where customers will not have to wait for excessive periods of time to get through to a “living person” on the other end of the phone.
Unfortunately, many small business owners often lose customers who become very frustrated when they are placed on hold and tossed from one extension to another on the phone without being able to resolve their issues. All online enquiries should be attended by service providers in reasonable a period of time to ensure customer satisfaction. |
ELEMENTS OF A SERVICE BLUEPRINT |
No. |
Details |
1. |
Establish the basic parameters and limitations of the proposed new service. |
2. |
Identify and summarize all steps involved in the new service. |
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Develop a flowchart of all main steps related to the new service. |
4. |
Identify potential strengths and weaknesses of the proposed flow chart and each step. |
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Develop a suitable time frame for executing each step of the new service. Keep in mind that time and quality are two very important parameters during the service rendition process. Thus, if customers can get what they want from your service at minimum time and maximum quality at the right price - your new service design will have a chance for success. |
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Analyze the key profitability factors related to the new service design. Identify factors which may cause a negative response from customers thereby potentially reducing the profitability of the newly proposed service. Among prime profitability factors are time, quality, and reliability of the service. Establish design parameters which will ensure that negative response by customers will be minimized, and positive response will be maximized to secure a successful and profitable operation. |
7. |
Develop service response procedures on the phone and online to avoid excessive waiting time to ensure a high level of customer satisfaction. |
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9. PRODUCT PROTOTYPE CONSTRUCTION |
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STEP 4: PRODUCT PROTOTYPE CONSTRUCTION
Product Prototype Construction represents the fourth step in the product design and is carried out by production employees in conjunction with the engineering department. The main objective at this stage is to translate the information laid down in specifications and working drawings into a real prototype.
The cost requirement of the final product should be viewed in the context of further production considerations. These considerations depend substantially on the manufacturing methods applied during the production process and the necessary quantities of manufactured goods. Development of a product prototype has several advantages outlined below. |
ADVANTAGES OF A PRODUCT PROTOTYPE CONSTRUCTION |
No. |
Details |
1. |
It is often impossible to take into account all details during the preliminary design stage. Therefore, only the completion of a working prototype will provide additional information related to product design parameters. Such a prototype should meet as many of the basic design requirements as possible, and any differences should be taken into account. |
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Although cost considerations should not be ignored, the technical requirements and appearance play the most important role at this stage of product development. The prototype should provide a clear indication of the feasibility of the proposed design in meeting all aspects of the required product specifications. |
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10. SERVICE SIMULATION AND TESTING |
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STEP 4: SERVICE SIMULATION AND TESTING
Since service is an intangible commodity, no prototype can be built to illustrate it. However, depending upon the nature of the service, it might be useful to develop Service Simulation And Testing procedures whereby the service provider will create the environment and conditions which will be similar to "the real thing".
A typical example of such service simulation and testing may be illustrated by what students go through in any medical school while learning how to extract teeth (on dummies), or conduct other essential medical procedures. Obviously, no customer would like to get a service from a medical doctor and, particularly, a dentist, knowing that he or she is "the first customer".
Since some types of services may offer experience similar to "going to the dentist", it is essential to consider service simulation and testing during the service design process to ensure the ultimate high quality of service and customer satisfaction. |
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11. PRODUCT PROTOTYPE TEST |
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STEP 5: PRODUCT PROTOTYPE TEST |
Product Prototype Test represents the fifth step in the product design and it's purpose is to evaluate the performance of the newly developed product.
Some of the issues related to the product prototype test are outlined below. |
PRODUCT PROTOTYPE TEST RELATED ISSUES |
No. |
Details |
1. |
The prototype should be tested in real life conditions, and for this purpose some potential users could be of great assistance. Their comments and feedback may be invaluable throughout the product development process. |
2. |
The prototype's performance should be monitored during such tests and appropriate results should be properly evaluated. |
3. |
The prototype should be examined by the production department and the design team to establish possible manufacturing problems. |
4. |
All components, sub-assemblies, and the final assembly should be examined separately and detailed manufacturing cost estimates should be prepared. |
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PRODUCT REDESIGN REQUIREMENTS |
As a direct result of a product prototype test, certain parts may have to be redesigned or substituted by other parts in order to meet relevant manufacturing requirements.
Sometimes, there is a need to redesign a particular product in order to satisfy manufacturing cost considerations. This could be achieved by substituting cheaper materials or by appropriately altering the manufacturing process itself. Finally, the prototype test results should be confirmed and documentation prepared for the final product design. |
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12. FINAL PRODUCT DESIGN |
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STEP 6: FINAL PRODUCT DESIGN
Final Product Design represents the sixth step in the product design and is carried out by the design team responsible for the whole project development.
Once all the preceding stages have been accomplished, it is necessary to summarize all relevant information - material specifications, working drawings, manufacturing data and tooling requirements - and to pass them for a final approval by the chief designer.
As a result of the final product design procedure all specifications should be summarized and confirmed and all working drawings approved for the actual manufacturing process. |
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13. FINAL SERVICE DESIGN |
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STEP 6: FINAL SERVICE DESIGN
Final Service Design is also important in the new service design process. At this stage, it is essential to summarize all relevant information related to the service provider - material specification, location specification, tooling requirements, and any other details related to the service - and to pass them on for final approval by the chief designer.
As a result of the final service design procedure, all specifications should be summarized and confirmed, and all working documents approved for the actual service operation. |
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14. PRE-PRODUCTION TESTING OF PRODUCTS |
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STEP 7: PRE-PRODUCTION TESTING OF PRODUCTS |
Pre-Production Testing Of Products represents the last stage of the product design and is carried out by employees in the operations department and the design team.
The main objective of this stage is to summarize all details of the manufacturing process, and particularly in the case of large-scale production requirements, to carry out a pilot test conducted under real production conditions.
The new product should be tested to customer specifications with equipment that will be used in the actual manufacturing process. This test should be undertaken prior to the start of the main production operation in order to identity any further faults or problems. During the process of pre-production testing, various elements outlined below should undergo final evaluation.
As a result of the pre-production testing procedure, all products, materials, equipment, and labor specifications should be summarized and finally approved prior to commencement of the actual manufacturing process. |
ELEMENTS OF THE PRE-PRODUCTION TESTING OF PRODUCTS |
No. |
Details |
1. |
Product specifications. |
2. |
Manufacturing drawings. |
3. |
List of components. |
4. |
Manufacturing processing data. |
5. |
List of tools, dies, and jigs. |
6. |
Material specifications. |
7. |
Details of equipment. |
8. |
Details of special labor skills. |
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15. PRE-OPERATIONAL TESTING OF SERVICES |
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STEP 7: PRE-OPERATIONAL TESTING OF SERVICES
Pre-Operational Testing Of Services represents the final stage in the new service design process. This process is similar to the pre-production testing of new products with the only difference being that products are tangible while services are not.
In the case of medical doctors and dentists, the testing of their medical services must be completed while they are still in school. Once they pass all tests and get their diplomas, doctors are ready to provide the real service to real customers. |
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16. THE CRITICAL PATH METHOD |
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THE CRITICAL PATH METHOD
The process of product and service design must be properly planned and controlled to ensure acceptable results and thorough execution of the specific project. One of the most effective methods for product or service design, planning, and control is the Critical Path Method (CPM).
The main objective of the Critical Path Method is to determine a pre-planned sequence of activities that will provide sufficient guidance throughout the project to achieve its timely completion. Each progressive stage of product or service design is compared with the CPM Chart to ensure that all project requirements are met.
A typical CPM Chart describing various elements of product development and introduction to the market is illustrated below. |
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17. SMALL BUSINESS EXAMPLE
THE CRITICAL PATH METHOD |
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THE CRITICAL PATH METHOD |
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18. PRODUCT AND SERVICE STANDARDIZATION |
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PRODUCT AND SERVICE STANDARDIZATION |
Apart from new product and service design procedures, it is necessary to establish effective Product And Service Standardization, and to determine its influence on various activities of the company.
Product or service variety represents a typical situation within any manufacturing or service organization as described below. |
PRODUCT AND SERVICE VARIETY |
No. |
Details |
1. |
A range of products is made and different materials are used in conjunction with various manufacturing methods. The degree of product variety differs from one company to another, but its control is considered to be an important managerial responsibility. |
2. |
A range of services is provided using various operational methods. The degree of service variety differs from one service provided to another, however, its control is an important managerial responsibility. |
3. |
In the case of products, for example, an increased product range usually requires an additional number of components and enlarged storage facilities. This may subsequently increase the workload in the operations department and cause unnecessary difficulties in inventory control. |
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PRODUCT VARIETY REDUCTION PROGRAM |
The increased product range may cause problems in many aspects of the company's activities and, therefore, it may be necessary to develop a Product Variety Reduction Program.
This process is known as Product Range Optimization and comprises three elements illustrated below.
The reduction and optimization of the product range provides greater efficiency in design efforts and increased productivity in the operations department as outlined below. |
PRODUCT RANGE OPTIMIZATION |
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Product Range
Simplification |
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Product Range
Standardization |
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Product Range
Specialization |
| The process of identifying the product variety and reducing existing product lines by excluding slow-moving items. |
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The product range classification based on a reduced number of product lines. |
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The product range classification based on the availability of particular knowledge and skills. |
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ADVANTAGES OF A PRODUCT RANGE OPTIMIZATION |
No. |
Details |
1. |
Extended periods of production runs and decreased unproductive periods of machine setting and breakdown time. |
2. |
Improved efficiency of production planning, work scheduling, and machine loading procedures. |
3. |
Increased level of labor, plant and equipment utilization in the production facility. |
4. |
Reduction in inventory holding requirements and improved storage space utilization. |
5. |
Increased efficiency and cost reduction of inventory control and frequent inventory counting procedures. |
6. |
Simplification of the overall production control procedures. |
7. |
Simplification of purchasing procedures because fewer purchase orders are needed, although for larger quantities. |
8. |
Increased efficiency of the selling efforts and improved results in the marketing department. |
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WHEN SHOULD THE PRODUCT RANGE OPTIMIZATION BE INITIATED? |
The Product Range Optimization program can be initiated at any time and it should proceed in various departments simultaneously.
Such a program provides substantial benefits to the company's overall performance and is particularly significant in product design, manufacturing, financial, and selling activities.
The ultimate result of an effective product range optimization will be a higher customer satisfaction and increased profitability of the organization.
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SERVICE RANGE OPTIMIZATION |
Service Range Optimization is very similar in principle to the product range optimization with obvious differences, based on the nature of products and services.
Thus, if your company's main business is to provide a range of specific services to customers, it is essential that your operations management team pays attention to the Service Range Standardization for reasons similar to the product range standardization.
The ultimate result of an effective service range optimization will be higher customer satisfaction and increased profitability of the organization. |
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19. FOR SERIOUS BUSINESS OWNERS ONLY |
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ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY? |
Reprinted with permission. |
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20. THE LATEST INFORMATION ONLINE |
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LESSON FOR TODAY:
When You Are Through Changing Your
Products And Services - You Are Through!
Bruce Barton |
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