STUDY OUTLINE FOR CHAPTER 4
PRODUCT and SERVICE DESIGN
1. Why is product or service design strategically important?
For the success and prosperity of an organization. It has an impact on future activities. Consequently decisions in this area of the most fundamental that managers must make.
2. List some of the things that product and service design does.
1) Translates customer wants and needs into product and service requirements. (marketing, operations)
2) Develop new products and services. (marketing)
3) Formulate cost targets (accounting, finance, operations)
4) Document specifications
3. Give a few examples for each of these major reasons for design or redesign:
Economic- low demand, excessive warrant claims, the need to reduce cost
Social and Demographic- aging baby boomers, population shifts
Political, liability, legal- government changes, safety issues, new regulations
Competitive- new or changed products or services, new advertising/promotions
Cost or availability- of raw materials, components, labor, water, energy
Technological- in product components, processes
4. What are the key questions of product and service design?
1) Is there a demand for it? What is the potential size of the market, and what is the expected demand profile (long/short term, will it grow slowly/quickly?
2) Can we do it? Do we have the necessary knowledge, skill, equipment, capacity, and supply chain capability? For products, this known as MANUFACTURABILITY; for services, this is known as SERVICEABILITY. Also, is outsourcing some or all of the work an option?
3) What level of quality is appropriate? Customers expect? What level of quality do competitors provide for similar items? How would it fit with our current offerings?
4) Does it make sense from an economic standpoint? What are the potential liability issues, ethical considerations, sustainability issues, costs, and profits? For nonprofits, is the cost within budget?
5. Briefly define or explain these terms:
Value analysis- Examination of the function of parts and materials in an effort to reduce cost and/or improve product performance.
Manufacturability- the capability of an organization to produce an item at an acceptable profit.
Serviceability- The capability of an organization to provide a service at an acceptable cost or profit.
Uniform Commercial Code- products carry an implication of merchantability and fitness; that is a product must be usable for its intended purposes.
6. What is cradle-to-grave analysis, and why is it becoming increasingly important?
The assessment of the environmental impact of a product or service throughout its useful life, focusing on such factors as global warming. It is increasingly important because of the products impact on the earth, or growing and harvesting of plant materials, through fabrication of parts and assembly operations, or other processes used to create products, as well as the use or consumption of the product, and final disposal at the end of a product’s useful life. Energy consumption, pollution and waste, and transportation in all phases.
7. What are the 3 Rs?
Reduce: Value Analysis
Reuse: Remanufacturing- refurbishing used products by replacing worn-out or defective components.
Recycle: Recovering materials for future use.
8. Why is standardization a factor in design?
Refers to extent to which there is absence of variety in a product (calculators), service (automatic carwash), or process (delivers standardized service or produce standardized goods). They are made in large quantities.
Advantages- fewer parts to deal with, reduced training costs and time, more routine purchasing- handling and inspection procedures, orders fillable from...
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