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Class 2

Class 2. Chapter 6 Chapter 8. STATES OF NATURE Good Foreign Poor Foreign DECISION Competitive Conditions Competitive Conditions. Expand $ 800,000 $ 500,000 Maintain status quo 1,300,000 -150,000 Sell now 320,000 320,000. Maximums: 1,300,000 ; 500,000, 320,000 maximax

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Class 2

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  1. Class 2 Chapter 6 Chapter 8

  2. STATES OF NATURE Good Foreign Poor Foreign DECISION Competitive Conditions Competitive Conditions Expand $ 800,000 $ 500,000 Maintain status quo 1,300,000-150,000 Sell now 320,000 320,000 Maximums: 1,300,000; 500,000, 320,000 maximax Minimums: 500,000; 320,000; -150,000 minimin

  3. Chapter 6 Products and Services

  4. Product Design • Specifies materials • Determines dimensions & tolerances • Defines appearance • Sets performance standards

  5. Service Design • Specifies what the customer is to experience • Physical items • Sensual benefits • Psychological benefits

  6. An Effective Design Process • Matches product/service characteristics with customer needs • Meets customer requirements in simplest, most cost-effective manner • Reduces time to market - haste vs. speed to market • Minimizes revisions - quality designed into the product

  7. Stages in the Design Process • Idea Generation — Product Concept - can you create your own market? What role does the voice of the customer play in idea generation? • Feasibility Study — Performance Specifications • Preliminary Design — Prototype - testing and redesign • Final Design — Final Design Specifications • Process Planning — Manufacturing Specifications - make to order/stock – assembly line?

  8. Idea generation Feasibility study Performance specifications Product or service concept Form design Suppliers Customers R&D Revising and testing prototypes Marketing Competitors Production design Functional design Design specifications Manufacturing or delivery specifications New product or service launch Pilot run and final tests Final design & process plans The Design Process

  9. Idea Generation • Suppliers, distributors, salespersons • Trade journals and other published material • Warranty claims, customer complaints, failures • Customer surveys, focus groups, interviews • Field testing, trial users • Research and development

  10. More Idea Generators • Perceptual Maps • Visual comparison of customer perceptions • Benchmarking • Comparing product/service against best-in-class • Reverse engineering • Dismantling competitor’s product to improve your own product

  11. GOOD TASTE LOW NUTRITION HIGH NUTRITION BAD TASTE Perceptual Map of Breakfast Cereals

  12. GOOD TASTE Cocoa Puffs LOW NUTRITION HIGH NUTRITION Cheerios Rice Krispies Wheaties Shredded Wheat BAD TASTE Perceptual Map of Breakfast Cereals

  13. Feasibility Study • Market Analysis - Market Segmentation • Economic Analysis • Technical / Strategic Analysis • Performance Specifications Not unlike mission analysis or Intelligence Preparation of the Battlefield

  14. Risk Analysis 1. Identify the Hazards 2. Assess hazards to determine risks. 3. Develop controls and make risk decisions. 4. Implement controls. 5. Supervise and evaluate. From FM 100-14

  15. Preliminary Design How will it look? • Create form & functional design • Build prototype • Test prototype • Revise prototype • Retest

  16. Functional Design(How the Product Performs) • Reliability • Probability product performs intended function for specified length of time • Maintainability • Ease and/or cost or maintaining/repairing product

  17. 0.90 0.90 Computing Reliability Components in series 0.90 x 0.90 = 0.81

  18. 0.90 0.90 0.90 R2 0.95 R1 Computing Reliability Components in series 0.90 x 0.90 = 0.81 Components in parallel 0.95 + 0.90(1-0.95) = 0.995

  19. MTBF MTBF + MTTR System Availability, SA = System Availability

  20. MTBF MTBF + MTTR System Availability, SA = PROVIDER MTBF (HR) MTTR (HR) A 60 4.0 B 36 2.0 C 24 1.0 System Availability

  21. MTBF MTBF + MTTR System Availability, SA = PROVIDER MTBF (HR) MTTR (HR) A 60 4.0 B 36 2.0 C 24 1.0 System Availability SAA = 60 / (60 + 4) = .9375 or 93.75% SAB = 36 / (36 + 2) = .9473 or 94.73% SAC = 24 / (24 + 1) = .96 or 96%

  22. Production Design • Part of the preliminary design phase • Simplification • Standardization • Modularity

  23. Final Design & Process Plans • Produce detailed drawings & specifications • Create workable instructions for manufacture • Select tooling & equipment • Prepare job descriptions • Determine operation & assembly order • Program automated machines

  24. Improving the Design Process • Design teams • Concurrent design • Design for manufacture & assembly • Design to prevent failures and ensure value • Design for environment • Measure design quality • Utilize quality function deployment • Design for robustness • Engage in collaborative design

  25. Breaking Down Barriers to Effective Design

  26. Design Teams Preferred solution = cross functional teams • Marketing, manufacturing, engineering • Suppliers, dealers, customers • Lawyers, accountants, insurance companies

  27. Concurrent Design • Improves quality of early design decisions • Decentralized - suppliers complete detailed design • Incorporates production process • Scheduling and management can be complex as tasks are done in parallel • include the customer in the process!!

  28. Design for Manufacture and Assembly • Design a product for easy& economical production • Incorporate production design early in the design phase • Improves quality and reduces costs • Shortens time to design and manufacture • also known as Design for Six Sigma

  29. Design for Six Sigma • Define – the goals of the design activity • Measure – customer input to determine what is critical to quality from the customers’ perspective – what are customer delighters? What aspects are critical to quality? • Analyze – innovative concepts for products and services to create value for the customer • Design – new processes, products, and services to deliver customer value • Verify – new systems perform as expected

  30. DFM Guidelines • Minimize the number of parts, tools, fasteners, and assemblies • Use standard parts and repeatable processes • Modular design • Design for ease of assembly, minimal handling • Allow for efficient testing and parts replacement

  31. Design for Assembly (DFA) • Procedure for reducing number of parts • Evaluate methods for assembly • Determine assembly sequence

  32. Design Review • Failure Mode and Effects Analysis (FMEA) • A systematic approach for analyzing causes & effects of failures • Prioritizes failures • Attempts to eliminate causes

  33. Value Analysis (Value Engineering) Is there value added? • Ratio of value / cost • Assessment of value : 1. Can we do without it? 2. Does it do more than is required? 3. Does it cost more than it is worth? 4. Can something else do a better job 5. Can it be made by less costly method, tools, material? 6. Can it be made cheaper, better or faster by someone else?Should we contract it out?

  34. Design for Environment • Design from recycled material • Use materials which can be recycled • Design for ease of repair • Minimize packaging • Minimize material & energy used during manufacture, consumption & disposal • green laws in Europe -

  35. Examples • Recycling of oil • carpets in land fills - 4 billion pounds in land fills annually • Xerox and Hewlett-Packard - pay for return of printer cartridges on larger printers

  36. Metrics for Design Quality • Percent of revenue from new products or services • Percent of products capturing 50% or more of the market • Percent of process initiatives yielding a 50% or more improvement in effectiveness • Percent of suppliers engaged in collaborative design

  37. Metrics for Design Quality • Percent of parts that can be recycled • Percent of parts used in multiple products • Average number of components per product • Percent of parts with no engineering change orders (ULLS/SAMS/SARSS) • Things gone wrong - should be identified by the returns process

  38. Quality Function Deployment (QFD) • Translates the “voice of the customer” into technical design requirements • Displays requirements in matrix diagrams • First matrix called “house of quality” • Series of connected houses

  39. Design for Robustness • Product can fail due to poor design quality • Products subjected to many conditions • Robust design studies • Controllable factors - under designer’s control • Uncontrollable factors - from user or environment • Designs products for consistent performance

  40. Consistency is Important • Consistent errors are easier to correct than random errors • Parts within tolerances may yield assemblies which aren’t • Consumers prefer product characteristics near their ideal values

  41. Characteristics of Services • Services are intangible • Service output is variable • Service have higher customer contact • Services are perishable • Service inseparable from delivery • Tend to be decentralized and dispersed • Consumed more often than products • Services can be easily emulated • Call girl principle – value diminishes after service is rendered

  42. A Well-Designed Service System is • Consistent with firm’s strategic focus • Customer friendly • Easy to sustain • Effectively linked between front & back office • Cost effective • Visible to customer

  43. Chapter 8 Processes and Technologies

  44. Process Strategy • Overall approach to producing goods and services • Defines: • Capital intensity • Process flexibility • Vertical integration • Customer involvement

  45. Types of Processes • Projects • Batch production • Mass production • Continuous production

  46. Process Selection with Break-Even Analysis Total cost = fixed cost + total variable cost TC = cf + vcv Total revenue = volume x price TR = vp Profit = total revenue - total cost Z = TR - TC = vp - (cf + vcv)

  47. Process Selection with Break-Even Analysis Total cost = fixed cost + total variable cost TC = cf + vcv Total revenue = volume x price TR = vp Profit = total revenue - total cost Z = TR - TC = vp - (cf + vcv) cf = fixed cost v = volume (i.e., number of units produced and sold) cv = variable cost per unit p = price per unit

  48. TR = TC vp = cf + vcv vp - vcv = cf v(p - cv) = cf v = cf p - cv Solving for Break-Even Volume

  49. Break-Even Analysis Fixed cost = cf = $2,000 Variable cost = cv = $5 per raft Price = p = $10 per raft

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