Product Strategy

What to produce?

Dr. Mervyn Márquez

e-mail: mervyn.marquez@uach.cl
 Product selection and design
Why?

1. Fast technological changes, which make existing products obsolete.

2. Practice of many competitors copying a successful product,

neutralizing advantage of an innovative product.

3. Changing needs and demands of customers that truncate product

life cycles.

4. Other changes: political, sociological and demographic.

 Why do new products fail?

1. Product does not really satisfy a need.

2. Product is not perceived as a different product.

3. Overestimation of demand.

4. It is perceived as a low value offer in relation to its price.

5. Bad marketing strategy design.

6. Lack of experience or knowledge of the sector and the market.

 Product life cycle
Sales: low Sales: increasing Sales: constant Sales: reducing
Costs: high Costs: reducing Costs: reducing Costs: constant
Profits: none Profits: some Profits: increasing Profits: reducing
Competition: none Competition: growing Competition: many Competition: reduced
Price: relative high Price: adaptive Price: adaptive Price: discount
Distribution: selective Distribution: intensive Distribution: intensive Distribution: limited
Promotion: informing Promotion: persuading Promotion: reminding Promotion: sales promotion
 Design of a Product

Functional Industrial Manufacturing

design design design
New product
Development stages
 Concurrent Engineering (CE)
It is a method of
designing and developing
products, in which the
different stages run
simultaneously, rather
than consecutively.
 Concurrent Engineering (CE)
It is a method of
designing and developing
products, in which the
different stages run
simultaneously, rather
than consecutively.

Flexible Engineering (Das, 2016)

 Concurrent Engineering (CE)
Why do companies
adopt CE methods?

1. Decrease design and development time.

2. Competitive advantage.

3. Enhanced productivity.
 Concurrent Engineering (CE)
Why do companies
adopt CE methods?

Product development cycle time reduced 40 – 60 %

Manufacturing costs reduced 30 – 40 %

Engineering change orders reduced more than 50%

Scrap and rework reduced by as much as 75%

 Concurrent Engineering (CE)
How to do it?

3D modeling software Product Lifecycle

CAD/CAM/CAE Management system
 Actividad
Decisiones estratégicas de un producto

Piense en algunos cambios que harías a la silla de clase, y descríbalos

textualmente o con un boceto.
 Product design approaches
VA / VE
Value Analysis and Value Engineering

Its purpose is to simplify products and processes,

achieve better or equivalent performance at a lower
cost, while maintaining all the functional requirements
defined by the customer

Value Engineering is concerned with new products.

Value Analysis is concerned with existing products.

 Product design approaches
VA / VE
Value Analysis and Value Engineering

Some questions:

Does the product have any unnecessary design features?

Is it possible for two or more parts to be combined into one?

How can we reduce weight?

Are there non-standardized parts that can be removed?

 Product design approaches
VA / VE
Value Analysis and Value Engineering

Benefits: Costs reduction

Reduction of product complexity

Standardization of components

Improvement of functional aspects of the product

Better maintenance of a product

Robust design
 Product design approaches
DFMA
Design for Manufacturing and Assembly

It is a design approach that focuses on ease of manufacture and

efficiency of assembly.

Shorter manufacturing and assembly time

Lower cost
Advantages
of DFMA Higher quality and sustainability
Increased reliability
Safety
 Product design approaches
DFMA
Design for Manufacturing and Assembly
1. Minimise the number of components

2. Design for ease of part-fabrication

3. Tolerances of parts

4. Clarity

5. Minimise the use of flexible components

6. Design for ease of assembly

7. Eliminate or reduce required adjustments

 Product design approaches
Robust Design
It means that the product is designed so that small variations
in production or assembly do not adversely affect the product.
 Product design approaches
Modular Design

It is an approach that subdivides a system into smaller parts

called modules, that can be independently created and then
used in different systems.
 Product design approaches
CAD
Computer-Aided Design

It is a computer technology that designs a product and

documents the design's process. CAD may facilitate the
manufacturing process by transferring detailed diagrams of a
product’s materials, processes, tolerances and dimensions.
 Product design approaches
Virtual Reality Technology

It is a visual form of communication in which images

substitute for the real thing but still allow the user to
respond interactively. The roots of virtual reality
technology in operations are in CAD.
 Product design approaches
Green Design or Sustainable Design

It seeks to reduce negative impacts on the environment and health

The basic objectives are to reduce consumption of non-renewable
resources, minimize waste, and create healthy, productive
environments.

Design for minimum consumption, emissions and pollution

Design for durability
Design for reparability
Design for the update
Design for recycling
 Product design approaches
Green Design or Sustainable Design

Benefits:

1. Develop safe and correct products in environmental terms.

2. Minimize waste of raw materials and energy.

3. Reduce environmental responsibility.

4. Increase cost effectiveness as a result of complying with

environmental standards.

5. Achieve recognition as good corporate citizens.

 Product design approaches
Green Design or Sustainable Design

Basic principles: 1. Make recyclable products

2. Use recycled materials

3. Use less harmful ingredients

4. Use lighter components

5. Use less energy

6. Use less material

 Product design approaches
Multi-Functional Design

Stimulates the search for multiple functions and a maximum

combination of functions that can best be served by the
design. People see value in products that have multiple
functions.
 Different meanings

Consumer: Affordability, aesthetics, and functionality

Manufacturer: Ease of manufacture

Designer: Emotion and personal engagement

Transporter: Weight and volume

Recycler: Ease of disassembly/disposal

Community: Environmental and ethical concerns

Das (2016)
 Product design tools
QFD
Quality Function Deployment

It is a process and set of tools used to effectively define

customer requirements and convert them into detailed
engineering specifications and plans to produce the
products that fulfill those requirements.
 Product design tools
QFD
Quality Function Deployment
House of Quality

A graphic technique for defining the relationship

between customer desires and product (or service).
 Product design tools
QFD
Quality Function Deployment
House of Quality
 Product design tools
Design Thinking
Design thinking is a non-linear, iterative process that teams use
to understand users, challenge assumptions, redefine problems
and create innovative solutions to prototype and test. It is most
useful to tackle problems that are ill-defined or unknown.
Interaction Design Foundation

Understand Explore Materialize

Empathize Define Ideate Prototype Test

References

Heizer, J. et al (2020). Operations management. 13a ed. Pearson.

Chase, R. et al. (2014). Administración de operaciones. 13a ed. Mc Graw-Hill.

Das, A. (2016). An introduction to operations management. Routledge

Domínguez, J. et al. (1995). Dirección de operaciones. Aspectos tácticos y operativos.

Schönsleben, P. (2016). Integral logistic management. 5ª ed. CRC Press.

Schroeder, R. et al. (2011). Administración de operaciones. 5a ed. Mc Graw-Hill.