NEW PRODUCT DEVELOPMENT

GOODS Sudip Dutta, PGPM 2010 - 2012

PRODUCT DESIGN CONSIDERATIONS

When a product/service is designed:  The detailed characteristics of the product/service are established.  The characteristics of the product/service directly affects how the product/service can be produced/ delivered.  How the product/service is produced/delivered determines the design of the production/delivery system.

PRODUCT DESIGN CONTD

 Sources of Product Innovation  Developing New Products/Services  Getting Them to Market Faster  Improving Current Products/Services  Designing for Ease of Production  Designing for Quality  Designing and Developing New Services

PRODUCT DESIGN CONTD.

Forecasting Capacity Planning Facilities and Equipment

Product and Service Design Process Selection

Layout

Technological Change

Work Design

BASIC DESIGN OF A SOLAR CAR

FINALLY THE SOLAR CAR

LOCATION

A SEQUENCE OF DECISIONS
National Decision Political, social, economic stability; Currency exchange rates; . . . . . Climate; Customer concentrations; Degree of unionization; . . . . . Transportation system availability; Preference of management; . . . . . Site size/cost; Environmental impact; Zoning restrictions; . . . . .

Regional Decision

Community Decision

Site Decision

FACTORS AFFECTING THE LOCATION DECISION

 Economic Site acquisition, preparation and construction costs Labor costs, skills and availability Utilities costs and availability Transportation costs Taxes

FACTORS AFFECTING THE LOCATION DECISION

 Non-economic Labor attitudes and traditions Training and employment services Communitys attitude Schools and churches Recreation and cultural attractions Amount and type of housing available

ANALYZING SERVICE LOCATION DECISIONS

Consumer Behavior Research Market Research Data Gathering for Each Location Alternative Revenue Projections for Each Location Alternative Profit Projections for Each Location Alternative Why do customers buy our products and services? Who are our customers? What are their characteristics? Where are our customers concentrated? What are their traffic/spending patterns? What are the economic projections? What is the time-phased revenue? What are the projected revenues less time-phased operating costs?

LAYOUT

FACILITY LAYOUT
Facility layout means planning: for the location of all machines, utilities, employee workstations, customer service areas, material storage areas, aisles, restrooms, lunchrooms, internal walls, offices, and computer rooms for the flow patterns of materials and people around, into, and within buildings

LOCATE ALL AREAS IN AND AROUND BUILDINGS

Equipment Work stations Material storage Rest/break areas Utilities Eating areas Aisles Offices

PROCESS SELECTION
Variety Batch Job Shop Repetitive

How much
Flexibility

What degree
Volume

Expected output

Continuous

CLOSENESS RATING GRID

Dept. A Dept. B Dept. C Dept. D Dept. E Dept. F Dept. G 5 2 6 1 4 4 4 5 2 3 3 2 5 1 3 1 6 6 2 4 3

TYPICAL CLOSENESS RATINGS

Closeness Rating 1 2 3 4 5 6 of Rating Necessary Very Important Important Slightly Important Unimportant Undesirable Meaning

CAPACITY PLANNING, AGGREGATE PLANNING, MASTER SCHEDULE, AND SHORT-TERM SCHEDULING

Capacity Planning 1. Facility Size 2. Equipment Procurement

Long-term

Aggregate Planning 1. Facility Utilization 2. Personnel needs 3. Subcontracting Master Schedule 1. MRP 2. Disaggregation of master plan Short-term Scheduling 1. Work center loading 2. Job sequencing

Intermediate-term

Intermediate-term

Short-term

QUALITY

QUALITY DEFINITIONS


Design quality
 How does the product or service appear in preproduction or pre-delivery phases (i.e. on a CAD terminal, on a blueprint, etc.)

Conformance quality
 Degree to which the design specifications are met by the production or delivery system

QUALITY DEFINITIONS


Performance quality

Degree to which the product or service meets or exceeds customer expectations in the marketplace (i.e. product or service performance characteristics)

NATURE OF QUALITY
Dimensions of Quality Determinants of Quality Costs of Quality

BEST-IN-CLASS AND WORLD-CLASS

 Customers expectations of quality are not the same for different classes of products or services  Best-in-class quality means being the best product or service in a particular class of products or services  Being a world-class company means that each of its products and services are considered best-in-class by its customers

SOME DIMENSIONS OF PRODUCT QUALITY

 Performance relative to customers intended use  Features special characteristics  Reliability likelihood of breakdowns, malfunctions  Serviceability speed/cost/convenience of servicing  Durability amount of time/use before repairs  Appearance effects on human senses  Customer service treatment before/during/after sale  Safety user protection before/during/after use

DETERMINANTS OF QUALITY
 Quality of design products/service designed based on customers expectations and desires  Quality capability of production processes processes must be capable of producing the products designed for the customers  Quality of conformance capable processes can produce inferior product if not operated properly  Quality of customer service a superior product does not mean success; must have quality service also  Organization quality culture superior product and service requires organization-wide focus on quality

TOTAL QUALITY MANAGEMENT

TQM may be defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer

PDCA CYCLE

BENCHMARKING AND CONTINUOUS IMPROVEMENT

 Benchmarking The practice of establishing internal standards of performance by looking to how world-class companies run their businesses  Continuous Improvement The company makes small incremental improvements toward excellence on a continual basis