PRODUCT DESIGN
Product Decision / Analysis / product Development

Product Design 1) Product is anything that is capable of satisfying a felt need. A new product is the one which is truly innovative and is significantly different from other products. 2) Product Design specifies which materials are to be used, determines dimensions and tolerances define appearances of the product and sets standards of the performance. 3) Service Design specifies what physical items, sensual benefits and psychological benefits the customer is to receive from the service.
Design has a tremendous impact on the quality of product or service.

An Effective Design Process 1) Matches the product or service characteristics with customers requirement 2) Ensures customers requirements are met in simplest and least costly manner 3) Reduces the time required to design a new product or services 4) Minimize the revisions necessary to make a design workable.

Product Design and Development 1) New Product Design 2) Improvement in the design of existing product due to life cycle of a product

Product Decision: 1) the selection, definition and design of the products.

The existing of the organization depends upon how well it provides goods and services to society.
Since every product has life cycle the old product live for some time and die and hence new product are required for society this is due to changing societies, habits, tastes, liking etc.

Thus operation managers are required to design and develop product take it to the marketing support to the customer by training him how to use, provide warranty and repair services, distribution parts and upgrade the product with design improvement.

Selection of a product is choosing the product or a service to provide customer which will give a reasonable satisfaction to customer in terms of profits, profitability, increase in market shares, turnover growth etc.

Since the firm generates most of their revenue and profits from new products hence product selection, definition and design takes place on continuous basis.

Hence knowing how successfully find and develop new product is requirment of the operation manager.
Product selection is based on the greatest promise, which is based on analysis applied to product mix. The resources are to be invested in critical few and not in trivial many. Make SWOT analysis of the firm “Core Competency”.

1) A Product by Value Analysis
List the products in their descending order of their contribution to firm it also lists based on total contribution per year.

2) A product by value report
Allow management to evaluate possible strategies for each product.

1. Increasing Cash Flows – by increasing sales price or lowering unit costs. 2. Increasing Market Penetration – by improving quality or reducing cost.

3) By reducing cost – by improving product process.

This report tells management which product offering should he eliminated and which fails to justify further investment in R & D or Capital Equipment. The report focuses the top management attention on the direction for each product.

Operation manager plays a significant role in the initial stage of product life cycle. Its role diminishes as the product moves up in the life cycle and organization focus shifts towards maintain or increase market share and improve product quality and production process.

A core competency is one thing that it can do better than its competitors. This yields advantages to company.

A core competency has three characteristics

1. It provides potential access to wide variety of markets. 2. It increase perceived customer profits. 3. It is hard for competitors to imitate.

Concept of Product Life Cycle and Product Development Process

Product Life Cycle may be a matter of few hours (News Paper)
Months seasonal and fashions.
Years video Cassettes tapes and machines and equipments.

The product life cycle is similar to a human life cycle.

The life cycle goes to 4 stages. 1. Infancy Stage 2. Growth Stage 3. Maturity Stage 4. Decline Stage

Infancy Stage: 1. The products are design and develop in the Infancy Stage. In this stage the sales are dependent on promotion and other marketing efforts. a. Profits are other negative or quite insignificant. b. The product successfully survive this stage enters in growth stage sales are very low
Profits are loss
Competition little low levels then rising characteristics of customer innovations. 5. Growth Stage – sales volume increases exponentially. During this stage organization takes decisions regarding production capacity expansion. These decisions are dependent on the response to the product in market. 6. In maturity stage sales growth becomes stagnant, during this stage organization focus on improving the efficiency of the processes, minimizing costs etc.
Decline Stage – Finally product enter in the decline stage where sales shows down ward trend become obsolesce of technology used in products, changing customer requirement and availability of substitute or complementary products.
The operation management role significant in the initial stage of the product life cycle. Its role diminishes as the product moves up in the life cycle and organization focus shifts towards maintaining and increasing the market share and improving quality of the product and production processes.
Strategies and Issues during Product Life Cycle 1) Introduction Stage 3. Product design and development critical 4. Frequent product and process design changes 5. Short production runs 6. High production costs 7. Limited Models 8. Attention to quality
2) Growth Stage 1. Forecasting critical 2. Product and process reliability 3. Competitive product improvements and options 4. Increase capacity 5. Shift towards product focus 6. Enhance distribution

3) Maturity Stage 1. Standardization 2. Less rapid changes – more minor changes 3. Optimum capacity utilization 4. Increasing stability of process 5. Long production runs 6. Product improvement and cost cutting

4) Decline Stage 1. Little product differentiation 2. Cost minimization 3. Over capacity in the industry 4. Not giving good margin, prove line to eliminated items

Product design depends upon durability and life cycle (Life)
Product Life cycle, Sales, cost, Cash flows, Profits

New Product development Steps
Initial Design of Production Model / Commercial Model
Idea Generation

Feasibility Studies

Economic Evaluation

Prototype Design

Market Testing / Test Market
Prototype Testing

Final Design of Production Model

Idea Generation:
Ideas can come from various sources such as employee’s customers, intermediaries, vendors, market research, various departments and so on.
After a new idea selected it is screened to ascertain its feasibility in implementation.
Feasibility Studies:
This considers whether idea generated is feasible both technically and economically i.e. the firm has ability to carry out this idea.
Such studies test whether the production of the product to technically feasible and profitable to produce and market if idea is found to be both technically and economically feasible then prototype of the product is developed.
Prototype Design:
The prototype is tested under standard conditions and defects are noted. On the basis of result of testing the necessary changes are made in prototype. Then the prototype is a gain tested again. This process is carried out until the performance of the prototype reaches a satisfactory level. Once the final structure of is in place, the prototype design is evaluated for profitability. If the production of the model is profitable then prototype enters the production design stage.
Production Design: (Initial Design of production Model)
The initial production design is transformed into final production design after performance testing, production trials, and testing, economic studies and test marketing. These steps ensure that final product performs satisfactorily and can be produced efficiently in the desired quantities.
The product development process continues even after the launch of product. The product is modified or upgrade to adopt changing market conditions and or to adopt new technologies.
Specification of a Product
This means a definition of a product. The specification is defined in terms of its widely accepted form. i.e. its function, what it is to do. There are various options as how the product should achieve functional purposes. The product is defined by using many documents. 1) Engineering Draft 2) bill of manufacture product specification helps to assure efficient production erupt. Product design and development layouts, human resources. This is primarily dependent on the demands of market irrespective of whether this demand already exists or has to be created. If market ensure everything that is produced, then the best policy would be to select that product which yields the highest profit volume ratio or best prospects of doing so in reasonably feasible future.
In today’s scenario sales forecasting and market research data provides the basis for decision on production volume if the demands are fairly accurately known then production can be worked out which dictate the master production schedule and affects utilization of erupt manpower etc.
Whenever new project is projected the designer has to bear in mind the available resources of the plant and the possible implications of the plant having to acquire, modify or replace existing markets, erupt or subcontracts various components to other suppliers.
The following factors to be considered are to be analyzed in connection with product planning designing. 1) Demand satisfaction and consumer preferences 2) Product characteristics a) The functional aspect b) The operational aspect c) The durability and dependability aspects d) The aesthetic aspect

3) Economic Analysis:-
a) Profit Consideration
b) The effect of standardization, simplification and specialization
c) Break Even Analysis 4) Feasibility of Production 5) Product Reliability
Tools and Techniques used in designing of a probe. 1) Robust Design 2) Modular Design 3) Computer Aided Design (CAD) 4) Computer Aided Manufacturing (CAM) 5) Virtual Reality Technology 6) Value Analysis 7) Environmental Friendly Design 8) Concurrent / Simultaneous Engineering 9) Ergonomics 10) Value analysis / Value Engineering

1) Robust Design: a design that can be produced to requirements even with unfavorable conditions in production process. 2) Modular Design:- Parts or components of a product are subdivided into modules that are easily interchanged or replaced. The product would be less sensitive to manufacturing variations. e.g. airframe manufacturers, McDonalds and burger King uses (Pickles, Cheese, Sauces, meat Patties, French Fries etc.
CAD: Interactive use of a computer to develop and document product.
Design for manufacture and assly (DEMA) software that allows designers to look at the effect of design on manufacturing of the product.
3 D Object Modeling
The extension of CAD that builds small prototypes.

Standard for exchange for product data provides a format allowing the electronic transmittal of three dimensional data.
CAM: (Computer Aided manufacture) the use of information technology to control machinery. This refers to the use of specialized computer program’s to direct and control manufacturing equipment. When computer aided design (CAD) information is translated into instructions for computer aided manufacturing.
COMPUTER AIDED MANUFACTURING
It is defined as the effective utilization of computer technology in the management control operations of manufacturing facility through direct or indirect computer inter phase with physical and human resources of the company.
CAM is the concept that is used to design the general category of advanced approaches in manufacturing which uses the power of computer to automate the handling data as well as physical operations is the process.
CAM employees many modern manufacturing technologies like 1) CAD 2) CNC 3) Robotics 4) Distributed Processing 5) Automated Storage 6) Computer Modeling and Simulation and Data Communication
Virtual Reality Technology
A visual form of communication in which images substitute for reality and typically allow the user to respond interactively. This gives virtual picture of reality to the customer during the design stage and the features and their fitting can be seen in three dimensional views which give realistic position to the customer and any changes can be done according to customer’s expectations.

OPERATION MANAGEMENT
Introduction / Operation Strategy / Competitive Advantage / Time Based Competition
STRATEGY :- It is a plan that how the organization can achieve the desired objectives in the light of opposing pressures exerted by competition and its lighted resources are deployed effectively and efficiently and it guides the action.
Strategy is always used in competition. Today all business environments are in competition.
Recent trends in business environment 1. Buyers market due to change in liberalization of economical policy by Indian Government 2. Emphasis on customer i.e. customer is the king of the business. 3. The needs of the customers are changing every day (Dynamic Changes) 4. Emphasis on total quality Q = 5. Technological changes are very fast (The rate of change of technology very fast). 6. Old products are becoming absolvent and new products come up. 7. There is growing concern for environment should be free from pollution. 8. The customer wants on time delivery, with least cost and high quality. 9. Reduction in life cycle of product which results in reduction of lead cycle time of business and manufacturers. 10. People except products and services or emphasis on service more. 11. Involvement of people etc. 12. Global competition
Hence in such dynamic business environment business strategy is needed to achieve business objectives. (profits, Perpetuality in profits, Continuous Growth Business Objectives | Operational Objectives | 1. Profits | Minimum Inventory | 2. Better Customer Service | Effective Capacity Utilization | 3. Increased Market Shares | Raw Material Cost Control | 4. Faster Response | Shorter Through Put | 5. Increase in R.O.I | Defective Scrap Control | | To produce right quantity right quality at right time with minimum cost (produce). |

DEVELOPING OPERATION STRATEGIES
Corporate Objectives
Requirements to meet Competition

Operations
Functional Areas
Marketing
Finance /Accounts

Business Strategies
Business Plan

Operation Marketing
Finance

Operational Objectives (Operational Plan)
HR

STRATEGY OF OPERATIONS
Long Range decisions about products, Processes and Facilities
Operation
Markets Plan

1) Positioning the production system (Designing) production unit. 2) Product Service Design Development 3) Technology Selection and process development 4) Allocation of resources to strategic alternative 5) Facility planning

Factor Planning Process Planning Operational Planning Detail

Strategy :- it is broad, long term plan conceived to achieve business objectives. Strategies are developed at three levels. 1) Corporate Level 2) Business Level 3) Function of Level
Here we will look at functional level i.e. strategies decision concerning operational level.
Operational strategies such as choice of 1) Operating structure which is influenced by the nature of goods or services to be produced and the markets to be served.

Operational Strategy Frame Work from customer needs to order fulfillment

STRATEGIC VISION
CUSTOMER NEEDS
New Development
Existing Product
Other Fullfilment & Customer Service
New Product Development
Competative Dimensions and Requirements
Quality Price
Dependability Speed
Falixibility
Enterprice Capabilities
Operational Capabilities
Suppliers Capabilities
R & d
Distribution
People
System
Technology

Developing Manufacturing Strategy
The main objectives of manufacturing strategy development are 1) To translate required competitive dimensions. 9typically obtained from marketing) into specific performance requirement for operations 2) To make plan necessary to ensure that (operations and enterprise) capabilities are sufficient to accomplish them.

1) The steps for prioritizing these dimensions are as follows. 1) Segment the market according to product group. 2) Identify product requirements demand patterns and profit margin of each group. 3) Determine order winner and order qualifier for each group. 4) Convert order winners into specific perform requirements.
Thus the product groups differ in their manufacture requirements.
Manufacture Requirements

1. Produce to stock - Standard Product 2. Produce to order - Customized Product 3. Product Specification 4. Customer – Whom to make 5. Product Range 6. Design Changes - Frequent 7. Quality - Conformance / Reliability / Performance 8. Quality Required (High, Low, Medium) 9. Demand Variation 10. Order Winner – Price / 11. Qualifiers – Dealing Lead Time / Delivery Lead Time / Quality Conformance

2) Operation Strategies competitive weapon i.e. Competitive advantage.

In early 1990 following the liberalisation of Indian economy policy many companies from Japan, Europe, North America, and Korea started operations in India. Most of our Indian companies were not in a position to compete against them as their products were costlier and of lower quality.

At this point many Indian companies realised that they had to improve their operations strategies to improve their productivity.

Thus today operation strategies form integral part of strategic planning process of the most companies. They deal with development of operational plans for manufacturing facilities of the organisation.

Operation Strategy as Competitive Weapon

One of the key objectives of any business organisation is to reach position where it is able to attract more customers than competencies in determining its choice of products, markets operational strengths can be used effectively as competitive weapons.

1) The strategies should exploits opportunities and strength 2) Neutralies the Threats

There are three Conception Ways to achieve strategic goals

3) Response More Responsive 1) Cost Leader Ship
(Cheaper)
2) Differentiating better or at least different

Operation Manager translates these strategic concepts into tangible tasks to be completed.

Any one or communication of these strategies concept can generate a system that has unique advantages over competitors.

3) Achieving Competative Advantages through operations
A compatetive advantage is a creation of unique advantage over competitors. 1) Shorter Cycle Time: enters market earlier gains sufficient market share. 2) Production Flexibility – some organizations specialize in having a highly flexible and responsive operations. This enables production lines to be reconfigured within short time and make new different products. i.e. Many customized product in small quantity very fast. 3) Low cost process like using scrap and converting into raw material and make final product. Big steel mills take increase a raw material and convert in to steel. Which small steel mills convert scrap and make 4) Convince and location of the factory – Courier like Desk to Desk courier company is strong competitor to DHL and FedEx in India as it has deep penetration and covers large number of Indian towns and cities. 5) Product variety and factory size – Grocery stores with supermarkets. Since super market display variety of products and benefits from economics of scale. 6) Quality – Higher quality of a firms increase market share while commencing more prices.

Competitive Dimension 1) Cost or Price: Make the product or delivery the service cheap (Low cost0. 2) Quality: make great product and delivery great service make a defect free product quality is build up in the process make a better process. 3) Delivery speed: Make the product or deliver the service quickly (lead time reduce) 4) Delivery Reliability: On time delivery, deliver what it is promised. 5) Flexibility in volume of production as per the customer requirement (make customized different products in low volume quickly). 6) Flexibility and new products introduction speed, (change it very fast) ability of producing variety of products according to customer choice in shortest period. 7) Other products – specific criteria – “Support it”

Offer Special Services. 1. Technical Liaison and Support 2. Use of Concurrent working on different aspects of a product ( 3. Sales Service – Service after sales in shortest time.

Elements of Operation Strategy 1) Designing production System (Job order, Batch order Mass) This is key responsibility of any operation manager. It involves in designing product the production system and inventory policy for finished goods for each product line.

Customized Product Design
Product Design Standard Product Design

Customized Product Design when the level of customization is high and quantity requirement is low. Products are designed to satisfy individual customer. The emphasis on the product design is on quality and on time delivery rather than cost. Ex. Turbines, boilers, transformer power, cranes etc.
Standardized Product Design is employed when an organization is involved in production of limited variety of products. Here products are produced in high batches (quantity is more) hence importance is given to cost control and quality rather than the flexibility of the system. Ex. Fans, refrigerator, coolers, televisions all these are consumer durables.

Product Focused System
Production System Process Focused system

Product Focused System: These systems are used in mass production materials, equipment tools are arranged in

Process Focused System: are designed to support production departments that perform work like painting, asseby packing these systems are highly flexible and can easily modified to support other product design hence they are used in production on of customized products.

Finished goods Inventory Policy

1) Produce to Stock 2) Produce to Order

Produce to Stock: The product are produced well in advance and stored on ware houses from where they are dispatched as per customer orders. These policy is suitable for manufacturing products, parts, or components. Which have seasonal demand and will have general applicable like (nut bolts) and products like sugar, steel.

Produce to Order: here production starts only after the company receives customers order. The production halts until another order is received. This is called as intermittent production systems.

Design of Product and Services

Technology Selection and Process Development

Process Planning: Sequencing process planning of processes and facilities

Facility Planning: facilities like selection of site plant layouts material handling systems skill of person, Job design, equipment selection, maintain policy.

OPERATION MANAGEMENT

1) Production Design and Analysis / Production Development 2) Process Selection / Process Design / Process analysis / 3) Facility Location / Plant Layout 4) Capacity Planning / Capacity Decision / Waiting Times / 5) Aggregate Planning 6) Basics of MRP / ERP 7) Basic of Schedule 8) Basic of Project Management 9) Basics of W.S. / Job Design 10) Basics of Quality Control / S.Q.C / T.Q.M 11) Value analysis / V. E. 12) Basics of Environmental Management ISO 14000 / ISO 12000

Time Based Competition

Time based competition is the extension of (JIT) system into every face of product delivery cycle starting from R and D through marketing to distribution of the product.

Time based competition is a new concept where time is considered as an important factor in achieving the competitiveness in the market. This can be done by reducing time require to design, produce, inspect, packaging, market and distribute the product. The organization needs to change the current process and adopt new process.

Time based competition can be achieved

1) Fast to market 2) Fast to Produce

Fast to Market
The companies who are fast coming up with new product or improving their existing products design or characteristics can achieve competative advantage over others.

Times Based Competitive
Fast to Market
Fast to Produce
Quick Introduction of New Products
Reduction in product Lead Time
Competative Advantage High Market Share
Reduce Inventory
Low Cost
Done By
Done By
Done By
Done By

Budgets with over 50% cost but come in the market on time are more profitable the budgets who are at required cost but arrived 6 months late in the market.

The company can increase market share by continuously improving its products so as to meet the changing demands of the consumers.

Fast to Produce

Here the companies try to reduce the overall time required to deliver product to the consumer. The company make sure that time is reduced at each and every stage of product lead time. This results in overall cost reduction as the time required will be less and level of inventory gets reduced.

Some customers known as impatient customers give more importance to ON TIME DELIVERY of the product and are ready to premium prices for the same. The organization who are fast to produce can attract such type customers for their products.

Thus time based competition is a new approach to increase the market share and to get competative advantage over competition.