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Chapter 4. Product/Service Design. Introduction. Progressive Corp. Prior to 1988, carved our profitable niche serving high-risk drivers In 1988 two major events occurred Allstate overtook it in high-risk niche California passed proposition 103

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chapter 4

Chapter 4

Product/Service Design

Chapter 4: Product/Service Design

introduction

Introduction

Chapter 4: Product/Service Design

progressive corp
Progressive Corp.
  • Prior to 1988, carved our profitable niche serving high-risk drivers
  • In 1988 two major events occurred
    • Allstate overtook it in high-risk niche
    • California passed proposition 103
  • Round-the-clock immediate response program adopted

Chapter 4: Product/Service Design

progressive corp continued
Progressive Corp. continued
  • Special vans equipped with air-conditioning, comfortable chairs, desk, and two cell phones.
  • Often settlement check offered on spot
  • 80% of accident victims contacted within 9 hours of learning of accident
  • 70% of vehicles inspected within one day
  • Typically claim wrapped up with a week

Chapter 4: Product/Service Design

thermos
Thermos
  • In 1992 had 25% share of $1 billion barbecue grill market
  • Product becoming a commodity
  • CEO believed consumers were too intelligent to be tricked by clever advertising and slick packaging
  • Survival dependent on constant innovation, high quality, at right price

Chapter 4: Product/Service Design

thermos continued
Thermos continued
  • Interdisciplinary team with representatives from marketing, manufacturing, engineering, and finance to design new grill
  • Team used to reduce project completion time
  • As example, initially designers opted for tapered legs

Chapter 4: Product/Service Design

thermos continued7
Thermos continued
  • Manufacturing noted that tapered legs would have to be custom made
  • Design changed to straight legs
  • Under previous system, manufacturing would not have found out about legs until design completed

Chapter 4: Product/Service Design

thermos continued8
Thermos continued
  • Team developed revolutionary electric grill
  • Technology used to give food barbecued taste
  • Burns cleaner than gas or charcoal
  • Grill won four design awards in its first year

Chapter 4: Product/Service Design

caterpillar
Caterpillar
  • Used virtual-reality system called CAVE (cave automatic virtual environment) to take large earthmoving equipment for test drive before it was actually built
  • Surround-screen and surround sound cube with 10-foot sides
  • Super-computer projects 3D graphics onto the walls

Chapter 4: Product/Service Design

caterpillar continued
Caterpillar continued
  • Inside CAVE, people can walk around and operate imaginary controls
  • System responds to movements
  • Provides many perspectives
  • Backhoe and wheel loader recently introduced incorporate visibility and performance improvements based on data collected from virtual test-drives

Chapter 4: Product/Service Design

themes illustrate in examples
Themes Illustrate in Examples
  • Two examples related to design of products and one to the design of a service
  • Importance of product and service design to an organization’s competitiveness
    • Progressive
    • Thermos

Chapter 4: Product/Service Design

themes continued
Themes continued
  • Technology
    • In Progressive’s case, new technology such as cellular phones made new service possible
    • In Caterpillar’s case, new technology used to enhance design process
  • Design Teams

Chapter 4: Product/Service Design

impacts of selection design decisions
Impacts of Selection/Design Decisions
  • Fit
  • Materials
  • Labor
  • Equipment
  • Process
  • Financing

Chapter 4: Product/Service Design

three stages in output selection and design
Three Stages inOutput Selection and Design
  • Selection stage
    • Idea generation
    • Screening and selection
  • Product and service design stage
    • Preliminary design
    • Prototype testing
    • Final design
  • Process design

Chapter 4: Product/Service Design

steps in product service selection and design
Steps in Product-Service Selection and Design

Chapter 4: Product/Service Design

the selection stage

The Selection Stage

Chapter 4: Product/Service Design

generation of ideas
Generation of Ideas
  • Employees with customer contact play a key role in generating new ideas
  • Can imitate proven new idea
  • Purchase new idea
  • Marketing “pull” versus technology “push”
  • Product versus process research

Chapter 4: Product/Service Design

the development effort
The Development Effort

Chapter 4: Product/Service Design

mortality curve of chemical product ideas from research to commercialization
Mortality Curve of Chemical Product Ideas from Research to Commercialization

Chapter 4: Product/Service Design

product process innovations over time
Product-Process Innovations Over Time

Chapter 4: Product/Service Design

screening and selection
Screening and Selection
  • Assessing technical feasibility
  • Determining up-front capital needs
  • Evaluation may include calculation of payback period, return on investment, or net present value

Chapter 4: Product/Service Design

analysis of organizational fit
Analysis of Organizational Fit
  • Experience with particular output
  • Experience with production system required for the output
  • Experience in providing an output to the same target recipients
  • Experience with the distribution system for the output

Chapter 4: Product/Service Design

typical checklist for organizational fit
Typical Checklist for Organizational Fit

Chapter 4: Product/Service Design

the aggregate project plan
The Aggregate Project Plan
  • Project Portfolio
    • Derivative projects
    • Breakthrough projects
    • Platform projects
    • R&D projects

Chapter 4: Product/Service Design

the aggregate project plan26
The Aggregate Project Plan

Chapter 4: Product/Service Design

an example aggregate project plan
An Example AggregateProject Plan

Chapter 4: Product/Service Design

using the aggregate project plan
Using the AggregateProject Plan
  • Identify gaps in portfolio
  • Evaluate resource requirements
  • Employee development

Chapter 4: Product/Service Design

the product service design stage

The Product/Service Design Stage

Chapter 4: Product/Service Design

the product design stage
The Product Design Stage
  • Preliminary Design
  • Prototype Testing
  • Final Design

Chapter 4: Product/Service Design

preliminary design
Preliminary Design
  • Tradeoff Analysis
  • Standardization
  • Modularity
  • Computer-Aided Design

Chapter 4: Product/Service Design

tradeoff analysis factors to consider
Function

Cost

Size and shape

Appearance

Quality

Reliability

Environmental impact

Producability

Timing

Accessibility

Recipient input requirements

Tradeoff Analysis Factors to Consider

Chapter 4: Product/Service Design

using qfd to link customers attributes to technical component and operation requirements
Using QFD to link customers’ attributes to technical, component, and operation requirements

Chapter 4: Product/Service Design

the house of quality for a car door
The House of Qualityfor a Car Door

Chapter 4: Product/Service Design

advantages of standardization
Advantages of Standardization
  • Minimizes number of parts needed to stock
  • Minimizes number of equipment setups
  • Simplified operations procedures
  • Quantity discounts due to larger purchases
  • Minimized service and repair problems

Chapter 4: Product/Service Design

disadvantages of standardization
Disadvantages of Standardization
  • Possible lower quality because standard parts used rather than specially made parts
  • Inflexible production

Chapter 4: Product/Service Design

modularity

computer

5 choices for RAM

5 hard drive sizes

5 choices for CPU

4 modem choices

5 x 5 x 5 x 4 = 500 possible computer configurations with only 19 different parts

Modularity

Chapter 4: Product/Service Design

computer aided design
Computer-Aided Design
  • Develop drawings on computer screen
  • Can retrieve old designs and changes as necessary rather than creating new designs from scratch
  • Computer-aided engineering (CAE)
  • Computer-aided process planning (CAPP)
  • Computer-aided manufacturing (CAM)

Chapter 4: Product/Service Design

prototype testing
Prototype Testing
  • Design concept developed in preliminary stage tested
  • Physical models
  • Computer simulation
  • Rapid prototyping (RP)
  • Actual product or service
  • Accept, extend, modify, or reject preliminary design

Chapter 4: Product/Service Design

final design
Final Design
  • Simplification and value analysis
  • Safety and human factors
  • Reliability
  • Manufacturability

Chapter 4: Product/Service Design

methods to speed new output introduction
Methods to Speed New Output Introduction
  • Contract R&D
  • Product/process teams
  • Overlap development stages
  • Combine/eliminate stages
  • Incremental emphasis
  • More extensive application
  • Use new technologies

Chapter 4: Product/Service Design

commercialization

Commercialization

Chapter 4: Product/Service Design

commercialization43
Commercialization

Process of moving an idea for a new product or service from concept to market

Chapter 4: Product/Service Design

history of the typewriter
History of the Typewriter
  • Mechanical typewriter dominated market for 25 years
  • Then the electromechanical typewriter dominated market for 15 years
  • Electric typewriter dominated for the next 7 years
  • First generation microprocessor based machines dominated for next 5 years

Chapter 4: Product/Service Design

characteristics of companies with superior commercialization capabilities
Characteristics of Companies with Superior CommercializationCapabilities
  • Commercialize two to three times as many new products and processes as their competitors
  • Two to three times as many technologies incorporated into products
  • Get product to market in half time
  • Compete in twice as many product and geographic markets

Chapter 4: Product/Service Design

example assume following applies to laser printer industry
Example: Assume following applies to laser printer industry
  • Market growing 20% annually
  • Prices declining 12% annually
  • Five year life cycle

As a project leader, would you choose between incurring a 30% cost overrun to finish project on schedule or miss deadline by six months?

Chapter 4: Product/Service Design

laser printer example continued
Laser Printer example continued
  • Incurring the 30% cost overrun will reduce cumulative profits by 2.3%
  • Launching printer six months late will reduce cumulative profits by 33%

Chapter 4: Product/Service Design

to improve commercialization capability must measure it
To Improve Commercialization Capability Must Measure It
  • Time to market
  • Range of markets
  • Number of markets
  • Breadth of technologies

Chapter 4: Product/Service Design

improving commercialization capability
Improving Commercialization Capability
  • Make it a priority
  • Set goals and benchmarks
  • Build cross-functional teams
  • Promote hands-on management to speed actions and decisions

Chapter 4: Product/Service Design

disruptive technologies
Disruptive Technologies
  • Disruptive technologies
  • Sustaining technologies

Chapter 4: Product/Service Design

performance trajectories traditional versus online distance education learning programs
Performance Trajectories: Traditional Versus Online Distance Education Learning Programs

Chapter 4: Product/Service Design

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