Operations and Total Quality Management

Course Description: This course focuses on managing complex management system and processes to produce and distribute products and
services efficiently and effectively thru the various TQM frameworks, concepts and quality improvement tools necessary for implementing the quality
culture that characterizes world-class organization of the 21st century. It will introduce concepts around the ISO standards for performance excellence
and explore the key actions necessary for transforming government and non-governmental organizations into world-class organizations that deliver
ever-improving value to their customers, clients and constituents. It emphasizes on the interplay between financial effects of quality operations to
financial performance.

Midterm Module 2: Product and Service Design

Learning Objectives:

 Explain the strategic value of developing the goods and services

 Define what product and service design does
 Name key product and service design concerns
 Identify grounds for designing or redesigning of product
 List some of the principal sources of ideas for design
 Discuss the importance of legal , ethical and sustainable considerations when designing products and
services
 Explain the significance and aim of life cycle assessment
 Understand the meaning of “the 3 Rs”
 Discuss several key concerns when developing goods or services
 Discuss the two main issues relating to service design
 List and identify the features of well-designed service system
 List the service design guidelines

Strategic Product and Service Design

The importance of a company is the products and services it offers .Every facet of the organization is structured
around them. Product / service design-or redesign-should be strongly connected to the strategy of a company.

Product design is a blend of research and business capabilities to turn concepts into tangible and functional
objects. Service design combines people, communication and material components to develop a good service.

What does Product and Service Design Do?(Stevenson,2015)

 Translate customer needs and wishes into product and service needs
 Define existing services and products
 Create new products and services
 Formulate Quality Objectives
 Set reasonable cost targets
 Create and evaluate Prototypes
 Record all specifications
 Translate specifications for product and service into process specifications

Key Questions(Stevenson,2015)

 Is there a demand for this products and services?

Market size and demand profile of the consumers should be considered to answer this question.
 Operations and Total Quality Management

 Can we do it?
There are two factors to answer this question. One is Manufacturability which pertains to the
organisation's ability to create an item that can generate profit for them. Another is Serviceability which
refers to the organization’s ability to formulate a service at a reasonable cost and can generate profit for
the organization.
 What quality level is suited?
This can be answered by considering and defining these three aspects:

o Customer Expectations- This refers to the emotions, needs and ideas about certain products or
services that consumer have. For example, if customers prefer famous brands, they are expecting
that these brands have superior quality than less popular brands.
o Competitor Quality-In order for them to compete and gain brand recognition companies must
offer products that will surpass the quality of their competitors.
o And last is the product must be suitable with current offering
 Does it really make sense from an economic perspective?
An organization must take in consideration the following factors: Liability issues, ethical considerations,
issues with sustainability, costing and profit.

Reasons to Design or Redesign a Product (Stevenson 2015)

 Economic
 Social and Demographic
 Political, Liability, or Legal
 Competitive
 Cost or Availability
 Technological

What is an Idea?

Ideas are concepts that appear and go, and sometimes quite regularly. The genuinely great ideas typically emerge
in bursts of inspiration spontaneously though. Once we free ourselves from the ordinary, daily, traditional
thoughts that take up the space of thought in our minds, it is easier to come up with great ideas.

How do we define Idea Generation and why is it important?

Idea generation1 is defined as the process where abstract, concrete or graphic ideas are created, developed and
communicated. This is important and crucial because it enables you to expand the range of ideas beyond the
current thought.

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“Creative thinking inspires ideas. Ideas inspire change” – Barbara Januszkiewicz

Ideas can come from 3 factors which are stated below(Stevenson 2015):

 Supply Chain Based Idea Generation- The idea comes from several entities such as: customers, suppliers,
distributors, employees and maintenance personnel

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 Competitor Based Idea Generation- Ideas can be generated by studying how a competitor operates and
its products and services, many useful ideas can be generated.
o This also involves the use of reverse engineering to innovate a product.
*Reverse Engineering is referred to as the disassembling and testing a sample of a rival to
discover product enhancements. For example, When a new machine comes onto the market,
rival manufacturers can purchase and disassemble one machine to learn how it was designed and
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how it operates.
 Research Based Idea Generation- Ideas are from the organized efforts of the R and D team to enhance a
scientific knowledge or innovate their product.
o Basic Research- refers to the goal of advancing the state of knowledge about a subject without
any expectations of commercial applications in the near term. Basic research is a systematic
study aimed at increasing knowledge and understanding the fundamental aspects of phenomena
and observable facts, without taking into account specific applications to products and
processes.

It involves all research studies and experiments designed to increase basic knowledge and
understanding in physical, engineering and environmental fields.

o Applied Research- The objective of this research is to use and apply the knowledge
commercially. For example, develop approaches for bringing change to Starbucks' global supply
chain operations with an aim of reducing cost.3
o Development- Transforms applied research findings into practical, commercial applications.

Legal Considerations (Stevenson,2015)

Product Liability- A supplier/manufacturer is liable for any accident or harm incurred by a faulty product.
Normally, it is accompanied by certain costs such as:

o Litigation
o Legal and Insurance Costs
o Settlement Costs
o Costly Product Recalls
o Reputation Effects

For instance, alcoholic beverage lawsuits are equivalent to those involving tampered drinks, but some facets
of those cases are distinct to alcohol. For example, some states enforce provisions that keep vendors of
adulterated alcoholic drinks responsible for injuries suffered by customers or their family members as a direct
result of the liquor ingestion.

Uniform Commercial Code- Under UCC, products have merchantability and fitness implications. The Uniform
Commercial Code (UCC) is a detailed set of laws governing all US trade transactions. It is not a federal law but a law
adopted uniformly by the state. Uniformity of law is important for business transactions between states in this
field.

Ethical Considerations- are those pertaining to the entity or societal level of moral principles and decision making.
They can affect a wide range of different types of communities, from those associated with health care,
government, business, religion and even social media.

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 Operations and Total Quality Management
In companies, ethical principles refer to a broad range of values customarily pursued by businesses that is adopted
by their managers and employees. It is not limited to, fostering fairness, integrity and quality, as well as
communication and diversity skills.

Under the ethical considerations product designers are pressured to speed up the design process and to reduce
their cost. Another is there is a building pressure in forcing trade off decisions such as answering questions like “
what if the product has an error?” Are they going to release the product even if there is a risk in damaging the
company’s reputation or they are going to fix the errors before releasing it to the market? Either way each decision
has its own consequences.

Sustainability

This pertains to the use of resources in ways that do not harm the environment and support human existence.
Sustainability focuses on addressing current needs, without undermining future generations ' ability to fulfil their
needs. The philosophy of sustainability consists of three pillars: economic, environmental, and social — also known
as income, earth, and person.

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Key aspect of designing for sustainability (Stevenson,2015)

Cradle to Grave Assessment (Life Cycle Assessment)

Is the assessment of the environmental effect of a good or service over its entire useful life. LCA is also regarded as
a "cradle-to - grave" method evaluation, stretching from earth raw material extraction to final development,
product use, and recycling / disposal.

LCA 's key purpose is to evaluate the full spectrum of environmental impacts assignable to goods and services by
measuring all material flow of inputs and outputs and determining how these material flows affect the
environment.

This focuses on the following factors:

 Global Warming
 Smog Formation
 Oxygen Depletion
 Solid Waste Generation

Reduce: Cost and Materials

Value Analysis(Stevenson,2015)

This refers to the examination of the role of parts and materials with an objective of reducing costs and/or
enhancing product output.

Key Questions in Value Analysis

 Is that element necessary; does it contain value; can it be removed?

 Are there other sources for the item?
 Could it use another source, component, or service instead?
 Operations and Total Quality Management

 Is it feasible to combine two or more parts?

 Can specifications be less resource intensive or money-saving?
 Have suppliers / providers proposed improvements?
 Could packaging be improved, or to make it less expensive?

Re Use: Re manufacturing

Re-manufacturing

The process of bringing used products to a "like-new" functioning state with matching warranty that is
considered to be a more sustainable manufacturing method since it can be more financially viable and less
destructive than conventional manufacturing.

Example: Canon’s Remanufactured devices

Canon has been revamping devices with more than one feature since 1992. Today, Canon's business strategy
continues to shape its corporate ethos to optimize resource efficiency. Canon uses cascading-thinking systems
to capture resource value and focus on improving product remanufacturing, reuse of components, and
recycling. Canon also sells multifunctional remanufactured items as well as refurbished goods. The company
maximizes the value of its produced capital by acquiring and reselling used equipment from the market with
the same high-quality guarantee as original products.4

Refurbishing- refers to the renovation of used products by replacement of worn-out or defective

components, this can be done by another company or the manufacturer itself.

Reasons to Manufacture:

 Remanufactured products can be sold at around 50 percent of a new product's cost

 The process is comprised of unskilled and semi-skilled employees

Design for Disassembly- Refers to products that can be easily taken apart; the significance of each element is
recognized.

To see example please see the video: https://www.youtube.com/watch?v=MeN5dUSHQT0

Recycling

Recycling is about reprocessing and recovery of waste materials for use in new products. The basic phases of
recycling are the collection, sorting, or turn of waste materials into new items. This also applies to manufactured
parts and materials used in production.

Why Recycle? (Stevenson,2015)

 Cost Savings
 Environmental concerns
 Environmental considerations

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 Operations and Total Quality Management

Design for Recycling- Is a product design that takes into consideration the capacity to disassemble a recyclable
item.

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Product or Service Life stages (Stevenson,2015)5

Introduction Stage

For a business launching a new product, this stage of the process is the most costly. The product's market size is
limited, meaning that sales are low. Also, the cost of things like: R&D, consumer testing, and marketing required to
launch the product can be very high, especially if it is in a competitive sector of the market.

Growth Stage

The growth stage is usually characterized by a significant rise in revenue and earnings. As the business continues to
benefit from economies of scale in manufacturing, the profit margins will increase as well as the total amount of
income. It helps businesses to spend more resources in the promotional operation to optimize the value of this
stage of growth.

Maturity Stage

The product is already established during the maturity stage, and the manufacturer’s goal now is to retain the
market share they have accumulated. This is potentially the most profitable time for the majority of goods and
businesses need to spend wisely in whatever promotions they pursue. They need to consider any product
modifications or manufacturing process improvements which could give them a competitive advantage.

Decline Stage

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W. Stevenson(2015). 12th Edition Operations Management, Mc Graw Hill Education
 Operations and Total Quality Management
The demand for a commodity will gradually start to diminish; this is called the decline stage. This shrinkage may be
due to the saturation of the market ( i.e. all customers buying the product have already bought it), or because
consumers are switching to a different product type. While this downturn may be inevitable, companies can still
make some profit by transitioning to cheaper production methods and cheaper markets.

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Standardization

Refers to a framework of agreements that must be applied by all parties concerned in an industry or organization
to guarantee that all processes associated with the creation of a service's good or performance are conducted
within the rules. This is can apply to the large production of identical products. It should be standardized so that
consumers are assured that they are getting the same quality of goods.

Standardization can be seen in business processes as companies require a standardized quality level. For example,
many fast food franchises have reported comprehensive processes to ensure a burger is cooked in the same
manner regardless of which restaurant a customer visits in its franchise.

Design For Mass Customization(Stevenson,2015)

Mass Customization- This is a strategy to produce essentially standardized goods or services, but incorporating a
certain degree of customisation into the final product or service.

Facilitating Techniques

 Delayed Differentiation is a technique commonly used by firms producing generic and family-based
products that need to be distinguished into particular end products. For example, paint can be made
available in hundreds of colours. Producing this at the factories appears to lead to certain colors being
overproduced and others being under produced. All paints can be made from three or more base mixes.
The final color can be produced at a manufacturer or distributor.
 Modular Design is a design approach that builds things with standard interfaces, from independent parts.
This enables to configure designs, update, repair and reuse parts. The LEGO, a plastic building toy, is the
most well-known example of module design.

Advantages:

o Failures are easier to treat and fix

o Easier to fix and install
o Manufacturing and design simplifications
o The cost of training is considerably lower

Disadvantages:

o Small set of possible product configurations

o Limited ability to fix a faulty module; frequent scrapping of the whole module

Reliability- Refers to a component/part or device’s ability to perform its intended function under a specified set
of conditions.
 Operations and Total Quality Management
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Robust Design . This is a design method which results in products or services which can operate under a broad
range of conditions. It is based on a model of energy transformation for mechanical, electrical, chemical, etc.
engineering systems. This unique concept to achieving quality assurance and robustness during the design stage is
based on identifying the optimal function of a product or process as opposed to the traditional methods of
focusing on "symptom analysis" as a basis for improvement.

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Degree of Newness (Stevenson, 2015)

Changes in Product and Service Design

 Existing products and services are modified

 Expanding the existing product line of goods and services
 Clone a product or a service of a competitor
 New service and product

The degree of change affects the product or service's uniqueness to the market and the organization in terms of
risks and benefits.

Quality Function Deployment (Stevenson,2015)

This is an approach which incorporates the "customer's voice" into both product creation and service
development. The aim is to ensure that the customer requirements are taken into account in every stage of
process.

The House of Quality Sequence(Stevenson 2015)

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Kano Model7

The Kano Model is a product or service development theory that allows you to identify which attributes you may
want to include in improving customer satisfaction in a product or a service. The model represents five groups

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 Operations and Total Quality Management
shown in the x and y axis. The y-axis is the extent of satisfaction of the requirement; the x-axis is the level of the
company's compliance or implementation of the requirement which is shown below:

Performance

These are the requirements that can be articulated by customers, and are at the top of their minds when
evaluating options. They are the most noticeable requirements of the model and the greater they are
accomplished, the more satisfaction they bring, the worse they are accomplished, the more dissatisfaction they
bring.

Basic

These are the requirements which consumers expect and which they take for granted. Customers are just neutral
when done well, but when done poorly customers are very displeased. Originally, Kano called these "must-be's,"
since they are the criteria that must be provided, and they are the market entry quality.

Excitement

These are the unforeseen and pleasurable surprises or delights. These are the innovations that you incorporate
into your offering. They delight the consumer when they are there, but when they are missing they do not really
cause any dissatisfaction, because the consumer never anticipated it is included in the product. Originally, Kano
called these "Attractive or Delighters" because they delight the customers.

Indifferent

These are the specifications that the consumers simply do not care if they are present or absent, their satisfaction
under either circumstance remains neutral.

Reverse

These are the conditions that trigger discontent when present and happiness when not present. These are very
rare, but occasionally they do happen.

Concurrent Engineering

Concurrent engineering is a method by which a few teams work simultaneously to create new products and
services within an organisation. By simultaneously engaging in various development aspects, the amount of time
engaged in bringing a new product onto the market is significantly reduced. Production, marketing and
procurement personnel may also be involved in loosely integrated cross-functional teams. The aim is to achieve
product designs that represent the customer's wants and the production capabilities of the company.
 Operations and Total Quality Management

Computer Aided Design

Computer-aided design (CAD) is a computer technology designing a product, and documenting the process of
design. CAD can stimulate the manufacturing process by submitting detailed diagrams of the materials, processes,
tolerances and dimensions of a product with different product conventions.

Advantages:

 Increases designer productivity, by 3-10 times

 Creates a list of manufacturing information and product specifications
 Provides development and cost analysis options on conceptual designs

CAD incorporating finite element analysis (FEA) can greatly decrease time to market. This enables developers
to carry out simulations which help to design, evaluate and market new products.

Production Requirements(Stevenson 2015)

Designers must consider the following:

 Equipment
 Skills
 Types of Materials
 Schedules
 Technologies
 Special Abilities

Manufacturability-This is the extent to which a good can be manufactured at minimum cost and maximum
reliability with relative easiness.8

Implications included:

 Cost
 Productivity
 Quality

Component Commonality- Where products have a high degree of similarity in features and components, multiple
products may use one element.

Benefits:

 Saves time in designing products

 Training is standard for assembly and installation
 There is a great opportunity to buy in bulk from suppliers
 Parts used for repairs are common
 There must be fewer items in the inventory

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 Operations and Total Quality Management
Service Design

Service design is a process where the developer aims to create optimum service experiences. It includes a holistic
view of all the players involved, their relationships, and the help of resources and infrastructures. Service design
often entails the use of customer journey maps which tell the story of the interactions between different
customers and a brand.

Key Issues:

 The degree to which service requirements vary

 Degree of contact and engagement with customers

Differences between Service and Product Design

 In general, products are tangible and services are intangible

 Services are designed and delivered simultaneously
 Cannot inventory services
 Services are highly noticeable to consumers
 Some services have low entry- and exit barriers
 Location decisions is important to service design, and convenience is a major factor
 Service systems range from those with no or little contact with the customer to those with a very high
level of customer contact
 Alternatively, variability in demand creates waiting lines or idle service resources

The Well-Designed Service System (Stevenson 2015)

Characteristics:

 Consistent of the mission of the organisation

 User friendly
 Be robust where variability is a factor
 Easy to sustain
 Cost effective
 Having an importance which is clear to the customer
 Having effective connections between rear and front-of-house operations
 Having a single and unified theme
 Have design features and controls that guarantee dependable and high-quality service

Successful Service Design (Stevenson 2015)

 Define a detailed service package

 Concentrate on the operation from a customer perspective
 Take into account the image of the service package and the message it will convey to both customers and
prospective clients
 Recognize that the familiarity of designers with the system can give them a totally different perspective to
that of the customer, and take actions to fix this
 Ensure managers are active and support the concept until implemented
 Defining the quality for tangibles and intangibles
 Make sure recruitment , training and reward policies match service expectations
 Establish procedures for handling predictable as well as unpredictable events
 Operations and Total Quality Management

 Establish a framework for tracking, sustaining and enhancing service

Assessment: Analytic Paper

Below is a link of a documentary about Bugatti Chiron. Write an analytic paper showcasing every aspect
and application of our discussion. Please see the link https://www.youtube.com/watch?v=ihfjEFGdZdc

Rubrics:

Rubrics
Answer (point is clear and substantial) 30

Reason (Answer is supported and is critically observed in the 20

video)
Analysis (Theoretical concepts and discussions are observed 30
and applied)
Conclusion (States a conclusion with justification based on 10
reasonable interpretation
Grammar and usage mechanics (Spelling, punctuations, proper 10
capitalization and sentence construction)

Total 100pts.

References:
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framework-table-of-contents/apics-ombok-framework-2.5
https://www.cleverism.com/lexicon/customer-expectations/
https://www.viima.com/blog/idea-generation
https://www.npd-solutions.com/reverse-engineering.html
https://www.law.cornell.edu/cfr/text/32/272.3
https://research-methodology.net/research-methodology/research-types/applied-research/
https://www.forthepeople.com/product-liability-attorneys/examples-of-defective-products/
https://www.reference.com/world-view/examples-ethical-considerations-2f9df24afc7e8954
https://www.investopedia.com/terms/s/sustainability.asp
https://www.sciencedirect.com/topics/engineering/cradle-to-grave-assessment
https://link.springer.com/referenceworkentry/10.1007%2F978-1-4020-8939-8_93
https://www.ceguide.org/Strategies-and-examples/Make/Remanufacturing
https://www.britannica.com/science/recycling
https://productlifecyclestages.com/
https://www.investopedia.com/terms/s/standardization.asp
https://fluxconnectivity.com/2019/05/21/%ef%bb%bfwhat-is-delayed-differentiation/
https://www.anovatm.com/what-is-robust-design/
https://www.kanomodel.com/about-the-kano-model/
https://www.interaction-design.org/literature/topics/service-design

W. Stevenson(2015). 12th Edition Operations Management, Mc Graw Hill Education

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Operations and Total Quality Management