By the end of the chapter the student should be able to:
(i) Outline the product development process
(ii) Explain four production processes
(iii) Outline the contribution of purchasing to product development
(iv) Relate operation to demand and supply networks
Product design process
New product designs can provide a competitive edge by bringing new ideas to the market quickly, doing a better job of
satisfying customer needs, or being easierto manufacture, use and repair. The product design processinvolvesthe steps of:
(i) generating ideas
(ii) productscreening
(iii) preliminary design and
(iv) Final design.
(i) Generating Ideas
Ideas for new products and services should be sought from a variety of sources including market research, customer viewpoints, the organisation‟s research and development (R&D) department if one exists, competitors or relevant developments in new technology. Competitors can provide a good source of ideas and it is important that the organisation analyses any new products they introduce to the market and make an appropriate response. Reverse Engineering is a systematic approach to dismantling and inspecting a competitor‟s product to look for aspects of design that could be incorporated into the organisation‟s own product. This is especially prevalent when the product is a complex assembly such as a car, where design choices are myriad. Benchmarking compares a product against what is considered the best in that market segment and the making recommendations on how the product can be improved to meet that standard.
(ii) Product Screening
The screening process consists of market analysis, economic analysis and technical analysis.
(a)Market analysis: Market analysis consists of evaluating the product concept with potential customers through interviews, focus groups and other data collection methods. The physical product may be tested by supplying a sample for customer evaluation. The market analysis should identify whether sufficient demand for the proposed product exists and its it with the existing marketing strategy. At a strategic level the organisation can use the product life cycle to determine the likely cost and volume characteristics of the product. The product life cycle describes the product sales volume over time. In the early introduction phase production costs are high and design changes may be frequent. However there should be little or no competition for the new product and so a premium price can be charged to customers attracted to innovative products. T h e growth phase sees a rapid increase in volumes and the possibility of competitors entering the market. At this stage it is important to establish the product in the market asfirmly as possible in order to secure future sales. Production costs should be declining as
process improvements and standard is action takes place. In the mature phase competitive pressures will increase and it is important that sales are secured through a branded product to differentiate it from competitors and a competitive price. There should be a continued effort at design improvement to both product and process. Some products, such as consumer durables, may stay in the mature phase almost indefinitely, and techniques such as advertising are used to maintain interest and market share
(b) Economic Analysis: Economic Analysis consists of developing estimates of production and demand costs and comparing them with estimates of demand. In order to perform the analysis requires an accurate estimate of demand as possible derived from statistical forecasts of industry sales and estimates of market share in the sector the product is competing in. These estimates will be based on a predicted price range for the product which is compatible with the position of the new product in the market. In order to assess the feasibility of the projected estimates of product costs in terms of such factors as materials, equipment and personnel must be estimated. Techniques such as cost/benefit analysis, decision theory and accounting measures such as net present value (NPV) and internal rate of return (IRR) may be used to calculate the profitability of a product. Another tool that can be used is the cost-volume-profit model that provides a simplified representation that can be used to estimate the profit level generated by a product at a certain product volume.
(c) Technical Analysis: Technical analysis consists of determining whether technical capability to manufacture the product. T his covers such issues as ensuring materials are available to make the product to the specification required, and ensuring the appropriate machinery and skills are available to work with these materials. The technical analysis must take into account the target market and so product designers have to consider the costs of manufacturing and distributing the product in order to ensure it can be sold at a competitive price. Strategic analysis involves ensuring that the product provides a competitive edge for the organisation, drawing on its competitive
strengths and is compatible with the core business
(iii) Preliminary Design
Product concepts that pass the feasibility stage enter preliminary design. The specification of the components of the package requires a product /service structure which describe sthe relationship between the components and a bill of materials or list of component quantities derived from the product structure. The process by which the package is created must also be specified in terms of mapping out the sequence of activities which are undertaken. This can be achieved with the aid of such devices as process lowcharts.
(iv) Final Design
The final design stage involves the use of a prototype to test the preliminary design until a final design can be chosen. Computer Aided Design (CAD) and Simulation Modelling can be used to construct a computer-based prototype of the product design.
Product design evaluation methods
The major product design evaluation methods are briefly explained below:
(i) CAD simulation models: Used to evaluate product design and its perceived use during the different stages of design process.
(ii) Checklists: used to define operations of a product/system and identify users‟ needs.
(iii) Interviewing users: in order identify users‟ needs and the ability of a product to meet them
(iv) Mock-up evaluation: involves evaluating product usage with users participation
(v) Motion studies: used to evaluate motion performances and identify critical conditions Protocol analysis: involves evaluating a design, user‟s expertise level and understand users‟
(vi) Concept of products.
(vii) Prototype evaluation: To verify a design outcome under real conditions.
(viii) Task-analysis: used to define and evaluate operational procedures of a human/product/system.
Methods for Improving Product Design
The following two methods are available that in improving the design process.
(i) Design for Manufacture (DFM): Although the ability of the product or service to fulfill customers needs is a major factor in design there is also a need to ensure that the product designed can be produced easily and at low cost. Design for Manufacture (DFM) is a concept which provides guidelines on how this can be achieved using techniques such as simpliication, standardization and modularization. Simpliication involves a reduction in the number of components in the design in order to reduce cost and increase reliability. Standardisation involves using components that can be used in a number of products again reducing costs through economies of scale and minimising inventory. Modularisation means using modules or blocks of components that are standard across products. Again costs are reduced and reliability increased.
(ii) Concurrent Engineering: Concurrent engineering is when contributors to the design effort provide work throughout the design process as a team. This differs from the traditional design process when work is undertaken separately within functional areas such as engineering and operations. The problem with the traditional approach is the cost and time involved in bringing the product to market. In a traditional approach time is wasted when each stage in the design process waits for the previous stage to finish completely before it can commence and there may be a lack of communication between functional areas involved in the different stages of design. This can lead to an attitude of “throwing the design over the wall” without any consideration of problems that may be encountered by later stages. An example of this is decisions made at the preliminary design stage that adversely affect choices at the product build stage. This can cause the design to be repeatedly passed between departments to satisfy everyone‟s needs, increasing time and costs. By facilitating communication through the establishment of a project team problems   fthis type can be reduced. Production Process Selection
When considering product design the issue of the design of the process that is used to produce that design should be considered also. The design of processes is different in all organisations and should be related to the volume and variety of the demand for the product in the market. In order to assist in selecting the appropriate process, process designs can be categorised under four process types:
(i) Project
(ii) Jobbing
(iii) Batch
(iv) Mass
(v) Continuous
A description of each process type is followed by some examples of where each process type might be used. Project: Processes that produce products of high variety and low volume are termed projects. Project processes are used to make a one-of product to a customer specification. Normally transforming resources such as staff and equipment that make the product must move or be moved to the location of the product. Other characteristics of projects are that they may require the coordination of many individuals and activities, demand a problem-solving approach to ensure they are completed on time and have a comparatively long duration of manufacture. The timescale of the completion of the project is an important performance measure. Because each project is unique it is likely that transforming resources will comprise general purpose equipment which can be used on a number of projects. Examples of the use of a project process include build in gconstruction, interior design and custom-built furniture. Jobbing: Jobbing processes are used to make a one-of or low volume product to a customer specification. A feature of a jobbing process is that the product moves to the location of transforming resources such as equipment. Thus resources such as staff and equipment can be shared between many products. Other characteristics of jobbing processes are the use ofskilled labour in order to cope with the need for customisation (i.e. variety) and the use of general purpose equipment which is shared between the products. There tends to be low utilisation of equipment in jobbing processes due to the need to undertake frequent setting up of the machinery when moving from processing one product to another. Examples of the use of a jobbing process include bespoke tailors and precision engineers. Batch: Processes that produce products of medium variety and medium volume are termed batch which denotes that the products are grouped asthey move through the design process. In a batch process the product move sto the location of transforming resources such as equipment and so resources are shared between the batches. Instead ofsetting up
machinery between each product, as in a jobbing process, setups occur between batches, leading to a higher utilisation of equipment. Because of the relatively high volumes involved in batch it can be cost-effective to use specialised labour and equipment dedicated to certain product batches. A feature of batch processes is that, because it is difficult to predict when a batch of work will arrive at a machine, a lack of coordination can lead to many products waiting for that machine at any one time. These queues of work may dramatically increase the time the product takes to progress through the process. Examples of the use of a batch process include book printing, university classes and clothing manufacture. Line: Processes that produce products of high volume and low variety are termed line or mass processes. Although there may be variants within the product design the production process will essentially be the same for all the products. Because of the high volumes of product it is cost effective to use specialised labour and equipment. A feature of line processes is that the movement of the product may be automated using a conveyor system and the production process broken down into a number of small, simple tasks. In order to ensure a smooth low of product the process times per unit must be equalised at each stage of production using a technique called line balancing. Because of the low product variety, setting up of equipment is minimised and utilisation of equipment is high. Examples of the use of a mass process include cars, consumer durables. etc Continuous :Processes that operate continually to produce avery high volume o fa standard product are termed continuous .he products produced by a continuous operation are usually a continuous low such as oil and gas. Continuous processes use a large amount of equipment specialised and dedicated to producing a single product (such as an oil refinery for example). To make this large investment in dedicated equipment cost effective continuous processes are often in constant operation, 24 hours a day. The role of labour in the operation of the processes is mainly one of monitoring and control of the process equipment with little contact with the product itself. Examples of a continuous processinclude water treatment plants, electricity production and steelmaking. Environmentally friendly product design These is a product design approach which focuses on designing a product in a manner that does not harm the environment and if possible is beneficial to the environment

Objectives of environmentally friendly product design
i. Compatible with the concept of a recycling society and with business sustainability.
ii. Reducing impacts on the global environment.
iii. Ensuring the safety of users and the protection of the environment.
iv. Improving functions and performance of products and reducing their environmental impacts.
v. Reduction of environmental pollutants.
vi. Resource saving and energy saving.
vii. Sustainable use of natural resources.
viii. Use of recycled resources (promoting the 4Rs).
ix. Simplified waste treatment and disposal. Emphasis on safety-consciousness.
Environmental and safety information included on product labels
Guidelines for environmentally friendly product design
i. Design life cycles rather than products: All material inputs and energy use of a product during
its whole life cycle should be considered
ii. Minimize the energy consumption of a product.
iii. Increase product life time: A product should be made more durable from a technical point of view, or making it upgradeable
iv. Do not design products, but services: People do not always want a product. They want a solution for a certain problem. A service rather than a product can be the right solution.
v. Use a minimum amount of material: Often the amount of material can be reduced critically looking at dimensions, required strength and production techniques.
vi. Use recycled materials: recycled materials must be used as much as possible. If there is a demand for recycled materials the supply will follow certainly.
vii. Make recyclable products: Only products that are disassembled easily and have a high enough yield will be chosen for recycling.
Contributions Of Purchasing And Supply In Design Of Product And Services
Market globalization and the rapid advancement of technologies require that companies differentiate themselves with innovative products and services to create competitive advantage. Increasingly, manufacturers face shortened product life cycles and increased pressure to shorten their time to market. These factors, in conjunction with the reality that companies are increasing their reliance on outsourcing necessitate that organizations involve suppliers in the new product development process. The effective integration of suppliers into the product value / supply chain will be a key factor for manufacturers in achieving the improvements necessary to remain competitive. Moreover, because purchasing specialists are usually a key liaison between the supplier and the buyer, an investigation of their role in the new product design and development process is worthwhile. The purchasing function plays the following roles in product development:
(i) Coordinating role: If the project is of a more complex kind, for instance new technologies or materials are involved, the project purchaser gets a coordinating role. The prime mission for the project purchaser is then to work as link between the product development team and different purchasing specialists or suppliers.
(ii) Developing product specification: contributing to the development of the actual product by communicating criteria, norms and (im)possibilities regarding the development of new products (materials, components, assemblies) by suppliers. Some of these activities may be carried out by suppliers themselves.
(iii) Operation role: includes tasks like the planning and co-ordination of development activities of suppliers during a development project; preparing and starting such a development project is regarded as a preparation responsibility
(iv) Structure role: includes the permanent tasks related to the management of a base of preferred development suppliers
(v) Policy role: regards the formulation and communication of guidelines and policies regarding
the role and tasks of the different departments and suppliers in product development, and the
determination of develop-or-buy strategies.
Benefits of involving the purchasing function in product design
(i) Reduced costs due to reduced product costs and development costs
(ii) increased product performance due to high quality inputs procured by purchasing department
(iii) reduced development time due to continued availability of inputs as procured by the
purchasing department
(iv) risks related to delivery are reduced due to the certainity guaranteed b the purchasing department‟s provision of inputs when required
Operations as a part of demand and supply networks
All businesses are both customers for some other businesses products and services and suppliers of products and services to their own customers (often businesses themselves). It would be extremely limited therefore to think about an operation in isolation. All operations are part of an interconnected network of, not only their own customers and suppliers, but their customers‟ customers and suppliers‟
suppliers. A supply network, is the collection of suppliers and customers with which the operation deals directly, and the total supply network, which includes customers‟ customers and suppliers‟ suppliers. In fact, no doubt second tier suppliers have third tier suppliers who are supplied by fourth tier suppliers and so on. Similarly, there may well be further tiers of customers. A supply network is a
pattern of temporal and spatial processes carried out at facility nodes and over distribution links, which adds value for customers through the manufacturing and delivery of products. It comprises the
general state of business affairs in which all kinds of material (work-in-process material as well as
finished products) are transformed and moved between various value-added points to maximize
the value added for customers. It can also be referred to as a supply chain. The evolution of today‟s
multi-tiered supply and demand networks is driven by the need to reduce costs and achieve long-term
competitive advantage. The focus of this benchmark report is to identify key process and technology
strategies that organizations need to adopt to regain control and visibility of their multi-enterprise
supply chain networks.
The advantages of thinking about how operations fit into the total supply network are long term and
strategic. They are,
i. It helps a company to understand how it can compete.
ii. It helps to identify the particularly significant relationships in the network.
iii. It helps a company to focus on long-term issues.
iv. It helps a company to identify cost reduction opportunities.
A fundamental and critical aspect of operations in the modern world is that of formulating, analyzing, and managing supply chains. Hence, in order to fully comprehend the scope of operations and operations management and to be able to advance theory and practice, we must consider supply chains. It is also important to emphasize the synergies between practice and the development of theory in operations management and in supply chain management. Operations management, typically, focuses on improving processes within an organization, whereas supply chain management uses and advances theory, tools, and practice for operations across organizations. Of course, many of the methodologies of relevance and application in operations management can be transferred to supply chain management. The reality of supply chain networks today includes not only competition but also cooperation since decision-makers in the supply chains must interact not only in terms of the product flows but also in terms of pricing in order to satisfy the consumers. At the same time, decision-makers in supply chains are characterized by their individualized objectives, which may include not only profit maximization, but also risk minimization, as well as the incorporation of environmentally conscious objectives, to
various degrees. The concept of supply chain networks is as applicable to services as it is to goods. Characteristics of supply and demand networks
(i) Large-scale nature and complexity of network topology.
(ii) Congestion, which leads to nonlinearities.
(iii) Alternative behavior of users of the networks, which may lead to paradoxical phenomena.
(iv) Possibly conflicting criteria associated with optimization.
(v) Interactions among the underlying networks themselves, such as the Internet with electric power, financial, and transportation and logistical networks.
(vi) Recognition of their fragility and vulnerability.
(vii) Policies surrounding networks today may have major impacts not only economically, but also socially, politically, and security-wise.
Review questions
(1) Outline the steps involved in product design
(2) Explain four production methods which maybe utilized by a manufacturing entity
(3) Highlight the characteristics of environmentally friendly product design
(4) Outline the characteristics of supply and demand networks
(5) Discuss the contribution of purchasing in the product design process
Hill, T 2005, Operations Management, 2nd edn, Palgrave Macmillan, Basingstoke.
Slack, N. and Lewis, M. (2011) Operations Strategy, 3rd edn, Pearson Education
Limited, Harlow.
Suri, R. (2010) It’s About Time: The Competitive Advantage of Quick Response Manufacturing,Productivity Press, NewYork.
Vonderembse, M.A. and White, G.P. (2004) Core Concepts of Operations Management, John WileyandSonsLtd., Chichester

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