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Chapter 4

Chapter 4 BU385.docx

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Department
Business
Course
BU385
Professor
Paul Iyogun
Semester
Fall

Description
BU385 Chapter 4 – Product Design Week 3 -There is a link between the design of goods and services and the success of an organization -Product design is usually expensive and time consuming and many new product ideas die before being marketed -Product design – determining the form and function of the product -Products are redesigned to invigorate their demand and to take advantage of new technology Product Design Process -There are four elements to rapidly create new goods and services and to bring them to consumers: Product approval committee, structured development process, core teams, and phase reviews -The product approval committee consists of top management and oversees and directs the design/development activities -Core teams are cross functional teams empowered to plan and lead the design/development projects from idea to commercialization -Phase reviews are milestones during a new product design/development project when the progress of the core team is reviewed by the product approval committee -The structured development process is the use of project management techniques. It involves breaking each phase (stage) into steps and each step into activities -The usual phases for product design are: 1. Idea generation and preliminary assessment 2. Building a business case: Determine what customers want, determine the nature of produce and assess its technical feasibility, establish product goals and objectives, plan the nature of the production process, and perform a complete financial analysis 3. Development of product and process: Translate the “voice of the customer” into technical product specifications, such as product size, features, and so on 4. Testing and validation: perform external testing, finalize the product and process specifications, and buy the machines and equipment and start trial runs 5. Launch -A core team usually consists of a product manager, product designers, and manufacturing/operations representatives -This team-based approach of simultaneously designing the product and process is called concurrent engineering Sources of Ideas for New or Redesigned Products -Front-line employees – they have seen the problems in manufacturing/assembly operations or service delivery system caused by faulty design of the parts and products. Their feedback could improve the redesigned product -Suppliers of materials and parts/components and their contact within the organization, the purchasing agents, can be a rich source of ideas about the design/redesign of purchased items -Customers and their contact within the organization, the customer service and marketing/sales employees, are aware of problems with products -Marketing employees are often sources of ideas based on their studies of markets, buying patterns, and familiarity with demographics -Reverse engineering – dismantling a competitor’s product to discover what it is composed of and how the components work, searching for own-product improvements -Research and development (R&D) – lab scientists and engineers involved in creative work on a systematic basis to increase knowledge directed toward product and process innovation -Searching for new product ideas: -Listen to market complaints -Gaps in the market – 3M created the Pop-up tape dispenser to help those giftwrap by giving an extra hand BU385 Chapter 4 – Product Design Week 3 -Explore niche markets – Insurance companies that provide insurance to those who are normally rejected -Using new technology – Like RIM did in the 1990s -Create new market space – Body Shop did so by selling natural ingredients and healthy living instead of glamour and beauty Key Issues in Product Design Life Cycle -The decision to design a new substitute product or to redesign an existing product, and its timing, depends on the nature and length of the product’s life cycle -Life cycle – incubation, growth, maturity, saturation, and decline -Incubation – when an item is introduced, it may be treated as a curiosity. Demand is generally low because potential buyers are not yet familiar with the item -Growth – with the passage of time, design improvements usually create a more reliable and less costly product. Demand then grows -Maturity – there are few, if any design changes and demand levels off -Saturation – leads to a decline in demand -Decline – companies attempt to prolong the useful life of a product by improving its reliability, reducing costs of producing it, redesigning it, or introducing a new substitute product -Some products to not exhibit life cycles – paper clips, pencils, etc. -Services experience life cycles as well -Wide variations exist in the amount of time particular product takes to pass through a given phase of its life cycle Standardization -Standardization – extent to which there is an absence of variety in a part or product -Ex. Having limited types, sizes, and colours -Standardized products are made in large quantities of identical items: paper, gasoline, milk, etc. -Large volume production an
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