7. why should capacity be considered along with product design and process selection?

Presentation on theme: "Product Design and Process Selection"— Presentation transcript:

1 Product Design and Process Selection
Chapter 3 Product Design and Process Selection

2 What and How to Produce Product design is to determine what to produce or to offer. Process selection is to determine how the product is produced or offered.

3 Product Design Product design defines all aspect of the product to be offered to customers, such as material, measurement, dimension, specification, appearance, performance, components, … Product must be consistent with the Business strategy Product design is a joint work of marketing, operation and engineering.

4 Where the Idea Comes from?
The driving force of the idea of a new product is customer. Competitors are also a source of idea. Reverse engineering on competitor’s product Suppliers are the third source of idea in product design.

5 Product Screening Evaluating the alternatives of a new product in terms of operation, marketing, and finance, and select one.

6 Break-Even Analysis A technique to compute the amount of goods a company needs to sell to cover the cost. At break-even point, QBE, total revenue is equal to total cost.

7 Example (p.61) Data about a new line of footwear:
Initial investment: $52,000. Cost of making each pair: $9. If it is sold at $25/pair, how many pairs must be sold to break even? If 4,000 pairs were sold, what would be the profit?

8 B-E Analysis in Product Screening
For each product in each assumed situation, selling price and fixed cost for example, a break-even amount is calculated. By comparing the break-even amounts, the alternative products with low performance can be screened out.

9 Procedure of Product Design
Step 1 - Idea Development Step 2 - Product Screening Step 3 – Preliminary Design and Testing Step 4 – Final Design

10 Product Life Cycle Four stages of a product life: Introduction Growth
Maturity Decline

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12 Concurrent Engineering

13 Process Selection Process selection is to determine how to organize the production or delivery of the product.

14 Types of Process Intermittent Operation Repetitive Operation
Is used to produce a variety of products with different processing requirements in lower volumes. Repetitive Operation Is used to produce one or a few standardized products in higher volumes.

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16 Facility Layout in Intermittent and Repetitive Operations

17 Layout of an animal clinic

18 Alternatives of Process
Based on product standardization (variety) and product volume: Project process (unit production); Batch process; Line process; Continuous process.

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20 Production / Customer Interface
Three alternative strategies for production/customer interface: Make-to-stock Assemble-to-order Make-to-order

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23 Considerations in Product and Process design

24 Process Performance Metrics

25 Example (p.73) Data about Frantz Title Company:
It takes 4 hours to get a title ready on average, in which the value-added time is about 30 minutes; During 8 hours working time of an officer, only 6 hours are committed to work, taking lunch and break times out; The company processes 8 titles per day on average, with an industry standard of 10 titles for a comparable facility. Determine process velocity, labor utilization and efficiency for the company.

26 Classification of Services

27 Some Terminologies Vertical integration (p.78) Outsourcing
Automation (p.80) Flexible manufacturing system (FMS) (p.81) Numerically controlled machine (p.82) Computer-aided design (CAD) (p.83) Computer-integrated manufacturing (CIM) (p.83)