CGMS401 Module 3.pdf

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Ryerson University
CMN 201
Ross Mc Naughton

27/3/2014 CGMS401, Module3- Learning Objectives Learning Objectives After completing this module, you should be able to: List the steps involved in new product/service designs Name some sources of ideas for new or revised designs Discuss key issues in product and service design Explain the importance of manufacturability Name the advantages and disadvantages of standardization in product and service design Discuss mass customization Discuss special considerations for service design Describe quality function deployment (QFD) Overview Products must be designed and redesigned to suit the ever-changing needs of a company’s customers. Failure to do this in today’s dynamic environment can lead to the failure of a company whether it be a manufacturer or service organization. It is imperative that a company address the product design process by: Identifying key issues in their product design. Managing the differences in the product design of services. Translating the voice of the customer into design attributes using tools such as the Quality Function Deployment - House of Quality diagram. The text cites a number of other examples of how successful companies are doing this, particularly one with which most Canadians are likely very familiar: McCain Foods of New Brunswick, the largest french fry producer in the world. Product Design Process The four key elements of the product design process are: A Product Approval Committee (PAC) – made up of senior decision makers Core Teams – plan and lead the product design process and is made up of cross functional members from a business group Phase Reviews (stage-gates) - milestone decision points Structured Development – project management techniques The PAC should always be a top priority for the Core Team of a business group hoping to develop a new product. Why? Because the PAC reviews many proposals from within the organization and it is therefore essential that a Core Team that wants funding treat phase reviews as highly competitive and at each phase put forward as sound a business case as possible. The PAC is going to be involved at all the phase reviews and will expect to see a more refined business proposal at progressive phases of the Product Design Process. 1/11 27/3/2014 CGMS401, Module3- Learning Objectives Product Design Phases Idea Generation Build a Business Case Development – Translate voice of the customer Testimony and Validation Launch The following diagram illustrates one process used to go through product design: You will see that in this particular process there are five review points. These are points where you go through the “gating process”, i.e., a go/no go decision. At each stage more information on cost, etc. is available to revise/strengthen your business case. Timelines for the process are also critical particularly in the electronics industry. Dell’s model in Figure 2-B on page118 shows critical activities in their process. Think about it The following link is a new technology (you may not believe this is real but it is) that is going to help speed up the process at the prototype phase. We will talk more about the potential for this technology as we go through the course. Where else do you think it could be used? What influence could it have on customization of products? Sources of Ideas Ideas Generation Here is an amusing and interesting video on ideas generation. How creative are you? 2/11 27/3/2014 CGMS401, Module3- Learning Objectives Do you recognize the barriers to creativity that many of us have? Video TED - Inspired talks by the world's greatest thinkers and doers So where do the ideas come from? In short, everywhere. Employees Marketing Research and Development (R&D) Customers Surveys or Focus Groups Competition Reverse engineering (the dismantling and inspecting of a competitor’s product to discover product improvements) Suppliers Suppliers provide valuable feedback as they have a broader view of the marketplace The internal sources are employees, mainly from Marketing and R&D, but also through employee suggestions programs. Ideas can also come from your competitor’s products by reverse engineering, which is taking it apart to see how it is made. Care must be taken when doing this so as not to use an idea that is patented or someone else's intellectual property. This is particularly true in the software business where there might be software that is licensed from another software company and embedded in the program you are taking apart. Issues in Product Design In the next part of the module the following issues, which need to be addressed by product designers, will be explored: Life Cycles Standardization Mass Customization Reliability Robust Design Legal and Ethical Issues Design for Environment Concurrent Engineering Computer-Aided Design (CAD) Design for Manufacturing and Assembly Component Commonality 3/11 27/3/2014 CGMS401, Module3- Learning Objectives Product “Life Cycles” Such a topic is a main concept in a Business School marketing course but certainly the concept is equally relevant to product and service design. Figure 4-3 on page 121 in the text shows a typical product life cycle. Incubation of product. Not known to many. Demand is low because it is unknown. Potential buyers wary as the “bugs” have likely not been fully “worked out”. Growth: demand is building because product is known to more potential purchasers. Product has likely been improved in terms of quality and price has usually dropped. Maturity: few design changes, much competition so demand may level off. Decline: attempt to prolong product’s useful life by improving reliability, decreasing price. Some products do not appear to exhibit “life cycles”. Typical items seem to have been around forever and there is no evidence of decline. Wooden pencils and other examples are cited by the text. Can you think of any not listed in the text? Standardization Standardization is the extent to which there is an absence of variety in a product, service or process. So the question is whether or not to standardize the product. Looking at this from the perspective of a manufacturer: If the product is composed of “standard” parts or components, what does this mean? A typical example of a standardized product might be a ½ inch or say a 14mm opening mechanics wrench. Such a wrench is made by dozens of companies. It will be very well made in most cases as it has been perfected over hundreds of years of manufacture. Such a wrench made in 1904 versus 2004 will be virtually identical in appearance and, without further more detailed examination, will for all intents and purposes be completely interchangeable. In reality, the new wrench will be made to tighter tolerances because newer steel 4/11 27/3/2014 CGMS401, Module3- Learning Objectives making technology will allow more precise manufacturing. In use the two wrenches will not be markedly different. Given that such a wrench is substantially unchanged in hundreds of years there would have been no research and development (R&D) expenses incurred in many, many years, high volumes of production of a truly “standard” item, much competition and thus very competitive pricing. “Standardized items” are, in summary, virtually identical products, made in high volumes and are INTERCHANGEABLE. Examples are items such as AA, AAA, B,C, D, 9V batteries, 1% or 2% milk, paper, gasoline, etc. A manufacturer of such products will attempt to differentiate their product by such approaches as trying to convince buyers that their product is really not identical but is in fact superior. The hoped for result is both an increased market share and higher profits. An example in the 2% milk category is Nestle’s “Natrel pur filtered" milk. It carries a higher price because of the extra step in manufacturing of “filtering” the milk. Competitors may or may not filter their product but Nestle touts their filtering as producing a superior product. The advantages and disadvantages of standardization come down to the following: Advantages Economies of scale reduce costs in production and purchasing Design time spent on improvements Reduced training costs and time Disadvantages Limits range of consumer appeal Designs frozen prematurely resist modifications Designing for Mass Customization Manufacturers like standardization - high volumes, low cost. Customers like variety but also like low cost. Is there a solution? Can we have the advantages of standardization while solving the problems of variety? The answer is yes - using a strategy of producing standardized goods or services, but incorporating some degree of customization such as: Delayed differentiation Modular design Delayed differentiation Delayed differentiation is producing but not quite completing a product or service until customer preferences are known. It is a postponement tactic. An example is a furniture maker who produces a dining room set but doesn’t apply colour stain until it is specified by the consumer. Benefits are a standardized product with its economies of scale and customized for the customer with a specified (by the customer) finish. Think about it Can you think of other example
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