Operations &

Production Management
(OPM)
Dr. Muhammad Wasif
Visiting Faculty, IBA.

Product and Service Design

Dr. Muhammad Wasif

Operations & Production Management

Section 2.1

Introduction to Product &

Service Design

Dr. Muhammad Wasif

Operations & Production Management

Major factors in design strategy

Cost
Quality
Time-to-market
Customer

satisfaction

Competitive

advantage

Product and service design or redesign should be

closely tied to an organizations strategy

Dr. Muhammad Wasif

Operations & Production Management

10

Product or Service Design Activities

Translate

customer wants and needs into product and service

requirements
Refine

existing products and services

Develop

new products and services

Formulate

quality goals

Formulate

cost targets

Construct

and test prototypes

Document

specifications

Dr. Muhammad Wasif

Operations & Production Management

10

Reasons for Product or Service Design

Reasons

Examples

Economic

Low price grocery shop (Imtiaz supermarket)

Low maintenance products (disposable items)

Social &
demographic

High cost of fuel (Hybrid cars)

People believe in charity & religion (Chipa, Edhi, Alamgir welfares)

Political, liability,
or legal

Relate politics with charity to win people (KKF, Alkhidmat, SKH)

Have ISO certification for export goods (Llyods, SGS, BVQI)

Competitive

Women are willing to use cosmetics (different brands of shampoo)

People want easy and cheap communication (ufone, telenore etc.)

Cost or availability Islamic Banking

Technological

Dr. Muhammad Wasif

High speed internet (DSL, 4G, LTE)

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Product Life Cycles

May be any length from a few hours to decades

The operations function must be able to introduce new products

successfully
Product Life Cycles
Hours

Week

Months

Years

Foods

Magazines

Fashion apparel

Media tapes

Newspapers

Stationary items

Tech. Services

Players

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Sales, cost, and cash flow

Product Life Cycles

Cost of development and production
Sales revenue
Net revenue (profit)
Cash
flow
Negative
cash flow

Introduction

Dr. Muhammad Wasif

Loss

Growth

Maturity

Decline

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Product Development System

Ideas
Ability
Customer Requirements
Functional Specifications
Scope of
product
development
team

Product Specifications
Design Review
Test Market

Scope for
design and
engineering
teams

Introduction
Evaluation

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Operations & Production Management

15

Issues for Product Development

Robust

design small change in design do not disturb whole product.

Modular

design segmented components (E.g. subway buger)

Computer-aided

design (CAD) PC used as tool for faster design.

Computer-aided

manufacturing (CAM)

Virtual

reality technology simulations and analysis without prototypes,

e.g. (Witness software, Plant Simulation).

Value

analysis design improvement during production.

Environmentally
Dr. Muhammad Wasif

friendly design
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Product Development Continuum

External Development Strategies
Alliances
Joint ventures
Purchase technology or expertise
by acquiring the developer
Internal Development Strategies
Migrations of existing products
Enhancements to existing products
New internally developed products
Internal
Lengthy
High
Dr. Muhammad Wasif

Cost of product development

Speed of product development
Risk of product development

Shared
Rapid and/
or Existing
Shared

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Product Documents
Engineering drawing
Shows

dimensions, tolerances, and

materials
Shows

codes for Group Technology

Bill of Material
Lists

components, quantities and where

used
Shows

product structure

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Operations & Production Management

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Documents for Production

Assembly

drawing

Assembly

chart

Route
Work

sheet
Assembly drawing

order

Engineering

Assembly chart

change

notices (ECNs)
Route sheet
Dr. Muhammad Wasif

Operations & Production Management

Work order

15

Section 2.2

Quality Function Deployment

16

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33

Quality Function Deployment (QFD)

1.

Identify customer wants

2.

Identify how the good/service will

satisfy customer wants

3.

Relate customer wants to product

hows

4.

Identify relationships between the

firms hows

5.

Develop importance ratings

6.

Evaluate competing products

7.

Compare performance to desirable

technical attributes

Dr. Muhammad Wasif

Customer
importance
ratings

What the
customer
wants

Interrelationships

How to satisfy
customer wants

Relationship
matrix

Competitive
assessment

House of Quality is an approach that integrates

the voice of the customer into the product
and service development process.

Weighted rating

Target values
Technical
evaluation
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House of Quality Example

Your team has been charged with designing a
new camera for Great Cameras, Inc.
The first action is to construct a House of
Quality

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House of Quality Example

Interrelationships

What the
Customer
Wants

Relationship
Matrix

Analysis of
Competitors

How to Satisfy
Customer Wants

Technical
Attributes and
Evaluation

(1) What the

customer wants

Customer
importance
rating
(5 = highest)

Lightweight
Easy to use
Reliable
Easy to hold steady
Color correction
Dr. Muhammad Wasif

3
4
5
2
1
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House of Quality Example

Interrelationships

What the
Customer
Wants

Relationship
Matrix

Analysis of
Competitors

How to Satisfy
Customer Wants

Dr. Muhammad Wasif

Ergonomic design

Paint pallet

Auto exposure

Auto focus

Aluminum components

Low electricity requirements

Technical
Attributes and
Evaluation

(2) How to Satisfy

Customer Wants

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House of Quality Example

Interrelationships

What the
Customer
Wants

High relationship
Medium relationship
Low relationship
Lightweight
Easy to use
Reliable
Easy to hold steady
Color corrections

Relationship
Matrix

Technical
Attributes and
Evaluation

3
4
5
2
1

(3)Relationship matrix
Dr. Muhammad Wasif

Analysis of
Competitors

How to Satisfy
Customer Wants

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Interrelationships

House of Quality Example

What the
Customer
Wants

Relationship
Matrix

Analysis of
Competitors

How to Satisfy
Customer Wants

Dr. Muhammad Wasif

Operations & Production Management

Ergonomic design

Paint pallet

Auto exposure

Auto focus

Aluminum components

(4) Relationships
between the things
we can do

Low electricity requirements

Technical
Attributes and
Evaluation

15

House of Quality Example

Lightweight
Easy to use
Reliable
Easy to hold steady
Color corrections
Our importance ratings

3
4
5
2
1

How to Satisfy
Customer Wants

What the
Customer
Wants

Relationship
Matrix

Technical
Attributes and
Evaluation

1
1
3

22

27 27

32

25

(5) Weighted rating=

3x1+4x1+5x3=22
Dr. Muhammad Wasif

Analysis of
Competitors

High relationship (5)

Medium relationship (3)
Low relationship (1)

Interrelationships

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House of Quality Example

Interrelationships

(6) How well do competing

products meet customer
wants

Lightweight
Easy to use
Reliable
Easy to hold steady
Color corrections
Our importance ratings
Dr. Muhammad Wasif

G
G
F
G
P

3
4
5
2
1
22

Company B

Company A

What the
Customer
Wants

Relationship
Matrix

Analysis of
Competitors

How to Satisfy
Customer Wants

Technical
Attributes and
Evaluation

P
P
G
P
P

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Interrelationships

House of Quality Example

What the
Customer
Wants

(7) Compare performance to desirable

technical attributes

Technical
evaluation

Dr. Muhammad Wasif

Panel ranking

Failure 1 per 10,000

2 circuits

Technical
Attributes and
Evaluation

2 to

75%

0.5 A

Target values
(Technical
attributes)

Relationship
Matrix

Analysis of
Competitors

How to Satisfy
Customer Wants

Company A 0.7 60% yes 1

ok G

Company B 0.6 50% yes 2

ok F

Us

ok G

0.5 75% yes 2

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Company B

Company A

Ergonomic design

Paint pallet

Lightweight

G P

Easy to use

G P

Reliable

F G

Easy to hold steady

G P

Color correction

Panel ranking

Failure 1 per 10,000

2 to

75%

0.5 A

Target values
(Technical
attributes)

Company A

0.7 60% yes

ok

Technical Company B
evaluation Us

0.6 50% yes

ok

0.5 75% yes

ok

Operations & Production Management

22 9 27 27 32 25

2 circuits

Our importance ratings

Dr. Muhammad Wasif

Auto exposure

Auto focus

Aluminum components

Completed
House of Quality

Low electricity requirements

House of Quality Example

15

House of Quality Sequence

Deploying resources through the organization in response to
customer requirements

Quality
plan

Customer
requirements

House 1

Dr. Muhammad Wasif

House 2

House 3

Production
process

Design
characteristics

Design
characteristics

Specific
components

Specific
components

Production
process

House 4

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Section 2.3

Decision Tree

28

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42

Application of Decision Trees

Particularly useful when there are a series of
decisions and outcomes which lead to other
decisions and outcomes
Procedure

Include all possible alternatives and states of nature including doing nothing

Enter payoffs at end of branch

Determine the expected value of each branch and

prune the tree to find the alternative with the best
expected value

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Application of Decision Trees

(.4)

Purchase CAD
$388,000

High sales

(.6) Low sales

Hire and train engineers

$365,000
(.4)

High sales

(.6)
Low sales

Do nothing $0

$2,500,000
- 1,000,000
- 500,000
$1,000,000
$800,000
- 320,000
- 500,000
- $20,000
$2,500,000
- 1,250,000
- 375,000
$875,000
$800,000
- 400,000
- 375,000
$25,000

Revenue
Mfg cost ($40 x 25,000)
CAD cost
Net
Revenue
Mfg cost ($40 x 8,000)
CAD cost
Net loss
Revenue
Mfg cost ($50 x 25,000)
Hire and train cost
Net
Revenue
Mfg cost ($50 x 8,000)
Hire and train cost
Net

$0 Net
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Section 2.4

Service Design

31

Dr. Muhammad Wasif

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42

Service Design
Service

is an act

Service

delivery system

Facilities
Processes
Skills

Many

services are bundled with

products
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Service Design
(a) Customer participation in design
such as pre-arranged funeral services or
cosmetic surgery

Service typically includes direct interaction

with the customer
Increased opportunity for customization
Reduced productivity

(b) Customer participation in

delivery such as stress test for
cardiac exam or delivery of a
baby

Cost and quality are still determined at the

design stage
Delay customization
(c) Customer participation in design and
delivery such as counseling, college
Modularization
education, financial management of
personal affairs, or interior decorating
Reduce customer interaction,
often through
automation
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Service Systems
Service

systems range from those with little or no customer

contact to very high degree of customer contact such as:

Insulated

technical core (software development)

Production

line (automatic car wash)

Personalized
Consumer
Self

service (hair cut, medical service)

participation (diet program)

service (supermarket)

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Characteristics of Well Designed Service Systems

1.

Consistent with the organization mission

2.

User friendly

3.

Robust

4.

Easy to sustain

5.

Cost effective

6.

Value to customers

7.

Effective linkages between back operations

8.

Single unifying theme

9.

Ensure reliability and high quality

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Challenges of Service Design

Variable

requirements

Difficult

to describe

High

customer contact

Service

customer encounter

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References
Operations

Management, 10th Ed., by J. Heizer &

B. Render
Operations

Management, William J. Stevenson.

Operations

Management, 7th Ed., N. Slack, A.B.

Jones, R. Johnston.

Cases

in Operations Management, S. Chambers, C.

Harland, A. Harison, N. Slack.

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