Chapter 3 - Product Design &

Process Selection

Operations Management
by
R. Dan Reid & Nada R. Sanders

4th Edition © Wiley 2010

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 Concurrent Engineering
Old “over-the-wall” sequential
products design process
 Each function did its work and
passed it to the next function

Improved Concurrent Engineering

process
 All functions form a design team
that develops specifications,
involves customers early, solves
potential problems, reduces
costs, & shortens time to market

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 Product Design & Process
Selection - defined
Product design – the process of defining all of the companies product
characteristics
 Product design must support product manufacturability (the ease
with which a product can be made)
 Product design defines a product’s characteristics of:

•appearance, tolerances, and

•

•materials,
• performance
•dimensions,
standards.

Process Selection – the development of the process necessary to

produce the designed product.

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The Product Design Process
Idea development: all products begin
with an idea whether from:
 customers,
 competitors or
 suppliers

Reverse engineering: buying a

competitor’s product

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Product Design Process
 Idea developments selection affects
 Product quality
 Product cost
 Customer satisfaction
 Overall manufacturability – the ease
with which the product can be made

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The Product Design Process
Step 1 - Idea Development - Someone thinks of a need and a
product/service design to satisfy it: customers, marketing,
engineering, competitors, benchmarking, reverse engineering
Step 2 - Product Screening - Every business needs a
formal/structured evaluation process: fit with facility and labor
skills, size of market, contribution margin, break-even analysis,
return on sales
Step 3 – Preliminary Design and Testing - Technical specifications
are developed, prototypes built, testing starts
Step 4 – Final Design - Final design based on test results, facility,
equipment, material, & labor skills defined, suppliers identified

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Process Selection
 Product design considerations must include the
process
 Intermittent processes:
 Processes used to produce a variety of products

with different processing requirements in lower

volumes. (such as healthcare facility)
 Repetitive processes:
 Processes used to produce one or a few

standardized products in high volume. (such as a

cafeteria, or car wash)

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Process Types
 Process types can be:
 Project process – make a one-at-a-time product
exactly to customer specifications
 Batch process – small quantities of product in
groups or batches based on customer orders or
specifications
 Line process – large quantities of a standard
product
 Continuous process – very high volumes of a fully
standard product
 Process types exist on a continuum

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 Process Decisions-Vertical Integration
& Make or Buy
 Vertical integration refers to the degree a firm chooses to do
processes itself- raw material to sales
 Backward Integration means moving closer to suppliers
 Forward Integration means moving closer to customers

 A firm’s Make-or-Buy choices should be based on the following

considerations:
 Strategic vision or goals
 Available capacity
 Expertise
 Quality considerations
 Speed
 Cost (fixed cost + variable cost)make = Cost (fixed cost + Variable cost)buy
 Business are trending toward less backward integration, more
outsourcing
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 Flowchart Symbols for Process Design
Purpose and Examples
Examples: Giving an
admission ticket to a
Tasks or operations
customer, installing a
engine in a car, etc.

Examples: How much

Decision Points change should be
given to a customer,
which wrench should
be used, etc.

Source: Chase, Jacobs & Aquilano, Operations Management for Competitive Advantage , 11/e
 Flowchart Symbols for Process Design
Purpose and Examples
Examples: Sheds,
Storage areas or lines of people waiting
queues for a service, etc.

Examples: Customers
moving to a seat,
Flows of
mechanic getting a
materials or
tool, etc.
customers

Source: Chase, Jacobs & Aquilano, Operations Management for Competitive Advantage , 11/e
 Process Improvement
Often stages in
the production
process can be
performed in
parallel, as
shown here in
(c) and (d). The
two stages can
produce
different
products (c) or
the same
product (d).
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 Process Performance Metrics
Process performance metrics – defined:
Measurement of different process
characteristics that tell us how a process is
performing
 Determining if a process is functioning properly
is required
 Determination requires measuring performance

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Process Performance Metrics

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 Metrics Example: At Zelle’s Dry Cleaning, it takes an
average of 3 ½ hours (210 minutes) to dry clean &
press a shirt, with value-added time estimated at 110
min. Workers are paid for a 7-hour workday but work
5 ½ hr/day, accounting for breaks and lunch. Zelle’s
completes 25 shirts per day, while the industry
standard is 28 for a comparable facility.
Process Velocity = (Throughput Time)/(Value-added time)
= (210 minutes/shirt)/(110 minutes/shirt) = 1.90
Labor Utilization = (Time in Use)/(Time Available)
= (5 ½ hr)/(7 hr) = .786 or 78.6%
Efficiency = (Actual Output)/(Standard Output)
= (25 shirts/day)/(28 shirts/day) = .89 or 89%

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 Throughput Time
A basic process performance
metric is throughput time. A
lower throughput time means
that more products can move
through the system. One goal of
process improvement is to
reduce throughput time.

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Linking Product Design &
Process Selection
 Product design and process selection are
directly linked
 Type of product selected defines type of
operation required
 Type of operation available defines broader
organizational aspects such as
 Equipment required
 Facility arrangement
 Organizational structure

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 Linking Product Design &
Process Selection con’t
Impact of Product Life Cycle:
Intermittent and repetitive operations
typically focus on producing products in
different stages of the product life cycle.
Intermittent is best for early in product
life; repetitive is better for later when
demand is more predicable.

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Linking Product Design &
Process Selection, con’t
 Impact of Competitive Priorities:
Intermittent operations are typically
less competitive on cost than
repetitive operations.

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 Linking Design & Process Selection: Summary
 Organizational Decisions appropriate for different types of operations

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Product and Service Strategy
 Type of operation is directly related to
product and service strategy
 Three basic strategies include
 Make-to-stock; in anticipation of demand
 Assemble-to-order; built from standard
components on order
 Make-to-order; produce to customer
specification at time of order
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Product and Service Strategy Options

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Flowchart for Different Product
Strategies at Antonio’s Pizzaria

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E-manufacturing
 Web-based environment creates numerous
business opportunities to include;
 Product design collaboration
 Process design collaboration
 Computer-aided design – uses computer
graphics to design new products
 Computer-integrated manufacturing –
integration of product design, process
planning, and manufacturing using an
integrated computer system

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Design of Services
 Service design is unique in that the service
and entire service concept are being designed
 must define both the service and concept
- Physical elements, & psychological benefits
e.g. promptness, friendliness, ambiance
 Product and service design must match the needs
and preferences of the targeted customer group

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Designing Services vs Products?
 Services are different from
manufacturing as they;
 Produce intangible products
 Involve a high degree of customer contact
 Type of service is classified according to
degree of customer contact

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 Service Design Matrix
 Service Characteristics
 Pure services

 Quasi-Manufacturing

 Mixed services

 Service Package
 The physical goods

 The sensual benefits

 The psychological benefits

 Differing designs
 Substitute technology for

people
 Get customer involved

 High customer attention

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Remanufacturing
Uses components of old products in the
production of new ones and has:
 Environmental benefits
 Cost benefits
Good for:
 Computers, televisions, automobiles

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Review of Learning Objectives
 Define product design and explain its
strategic impact on organizations
 Describe steps to develop a product
design
 Using break-even analysis as a tool in
selecting between alternative products
 Identify different types of processes
and explain their characteristics

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