The document provides information about designing new products and services. It discusses trends in product design such as a shift toward services and information technology. It also covers product life cycles and strategies for different stages. The document presents methods for managing design processes, including concurrent engineering. It provides an example of quality function deployment to translate customer wants into product characteristics. Finally, it discusses tools for decision making in product design, including using a decision tree to analyze introducing a new product.

5. Product Life Cycles Introduction Growth Maturity Decline Standardization Less rapid product changes - more minor changes Optimum capacity Increasing stability of process Long production runs Product improvement and cost cutting Little product differentiation Cost minimization Over capacity in the industry Prune line to eliminate items not returning good margin Reduce capacity Forecasting critical Product and process reliability Competitive product improvements and options Increase capacity Shift toward product focused Enhance distribution Product design and development critical Frequent product and process design changes Short production runs High production costs Limited models Attention to quality Best period to increase market share R&D product engineering critical Practical to change price or quality image Strengthen niche Cost control critical Poor time to change image, price, or quality Competitive costs become critical Defend market position OM Strategy/Issues Company Strategy/Issues HDTV CD-ROM Color copiers Drive-thru restaurants Fax machines Station wagons Sales 3 1/2” Floppy disks Internet

6. Product Life Cycle, Sales, Cost, and Profit Sales, Cost & Profit . Introduction Maturity Decline Growth Cost of Development & Manufacture Sales Revenue Time Cash flow Loss Profit

11. Percent of Sales From New Product

15. Product Development without Coordination As Marketing interpreted it. © 1984-1994 T/Maker Co . As the customer wanted it. © 1984-1994 T/Maker Co . As Engineering designed it. © 1984-1994 T/Maker Co. As Operations made it. © 1984-1994 T/Maker Co.

20. 72-Seat Regional Propeller Aircraft: Q400 Project

21. Snapshot of Aircraft Development Beginning in spring 1996, about 380 engineers and professionals from Bombardier and its major suppliers work together in a football-size design department for the Joint Definition Phase of Q400. In this phase, all major disciplines involved in aircraft design are represented. They included engineering, design, tooling, manufacturing, marketing, sales, procurement, customer/field support, spare parts, training, publications and many more. This phase also involved refining project objectives and further negotiations. Such a co-location of company engineers and suppliers benefits both parties. It facilitates superior communication among all functions and leverages suppliers' knowledge so that new process technology can be incorporated into product development.

22. Snapshot of Aircraft Development Milestones in this 6-month JDP, including different Deign Reviews, were to determine specific targets for delivering the commitments. These iterative and interactive loops are to drive and check the detailed timing and specs from all areas. When this process was completed, it was subject to a series of Participant Exit Reviews to freeze every interface design of different structures and systems. When the Project Director accepted that review, the representatives and suppliers involved could then exit the JDP process to complete their detailed design of items under their responsibility and prepare for production.

29. House of Quality Example  High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values

30. House of Quality Example  High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable What the customer desires (‘wall’) Aluminum Parts Auto Focus Auto Exposure

31. House of Quality Example  High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure 3 1 2 Average customer importance rating

32. House of Quality Example  High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure      3 2 1 Relationship between customer attributes & engineering characteristics (‘rooms’)

33. House of Quality Example  High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure      3 2 1 5 1 1 Target values for engineering characteristics (‘basement’); key output 

34. House of Quality Example  High relationship  Medium relationship  Low Relationship Customer Requirements Customer Importance Target Values Light weight Easy to use Reliable Aluminum Parts Auto Focus Auto Exposure      3 2 1 5 1 1 

35. Figure 5.5

40. Few Successes 0 500 1000 1500 2000 Development Stage Number 1000 Market requirement Design review, Testing, Introduction 25 Ideas 1750 Product specification 100 Functional specifications One success! 500

45. AgeTree Inc AgeTree, Inc. has developed a promising new product. The company’s management faces three choices: It can sell the idea of the new product to a company for $40,000, it can hire a consultant to study the market and then make a decision, or it can arrange financing for directly manufacturing the product. The study will cost AgeTree $25,000, and its management believes that there is about 2/3 of chances that a favorable market will be found. If the study is favorable, the company can sell the idea for $40,000, or it can manufacture the product. But even if a favorable market is found and the company manufactures the product, the chance of an ultimately successful production is about 60%. In this case, the company plans to sell 10,000 units of the product with a price of $50 each. The estimated fixed cost will be $190,000 and the variable cost will be $10 per unit. In case of unsuccessful results, the company will be able to sell approximately a half of its original number of units with the same price and costs. If the study is unfavorable, the management figures that it can still sell the idea for $40,000. Even with an unfavorable study, the company can still manufacture the product, but a successful product can be expected about once in every ten new-product introductions with the same results as those in case of the favorable study. If the AgeTree’s management decides to manufacture the product without the study, there is only a 1-in-4 chances of its being successful. The results will be exactly the same as previously mentioned.

46. Agetree Inc Sell idea Study Manufacture directly (0.67) favorable (0.33) unfavorable Sell idea Sell idea Manufacture Manufacture (0.6) success (0.4) fail (0.1) success (0.9) fail (50-10)*10,000-190,000=210,000 (50-10)*5,000-190,000=10,000 (0.25) success (0.75) fail 40,000 40,000-25,000=15,000 40,000-25,000=15,000 (50-10)*10,000-190,000 -25,000=185,000 (50-10)*5,000-190,000 -25,000=-15,000 (50-10)*10,000-190,000 -25,000=185,000 (50-10)*5,000-190,000 -25,000=-15,000 1 4 3 2 7 16 15 6 5 10 12 8 9 14 13 11

48. Cost Reduction of a Bracket via Value Engineering