Unit 3: Product Design and Process Selection
If you have purchased a mobile phone recently, you have witnessed a product category with perhaps the most diverse range of product designs in the marketplace. The variety can be mind-boggling. Looking back a year or two, you can probably recall a very promising design that faded away from the shelves after a few months. Have you ever wondered what happened to those short-lived products?
Businesses want to design the products that consumers demand. A good marketing department can tell the organization what consumers want and even convince consumers that they want it. A company with the most wonderful product concept cannot be successful unless it can devise a process to profitably manufacture the product. In this unit, we will consider the steps in designing a product with the manufacturing process in mind. We will look at several models businesses can use to select the best design process or analyze an existing process.
Completing this unit should take you approximately 6 hours.
Upon successful completion of this unit, you will be able to:
- describe the steps in the product/service design process;
- discuss how managers can use the cost-volume-profit model to estimate profit level by volume;
- apply customer needs research methods as a way to improve design; and
- evaluate the appropriateness of applying project, batch, mass, and continuous process types.
- describe the steps in the product/service design process;
3.1: Generating Ideas
Read this section on the importance of innovation to the design process. Often, we think of innovation as what happens when a creative person has a stroke of genius. In reality, innovation is a process that any individual within any type of organization can engage in as a normal part of the daily work. It’s all about making something better, whether that’s an actual product or a process used in the organization.
Watch this video to learn how design is defined and what makes good design. Good design is often difficult. Once you understand user needs, the creative process requires that those needs be met in the most pleasing and useful way possible. Brainstorming is a method used to help facilitate a good design process.
Watch this video on the importance of developing a culture of creativity to drive business success. Culture is the foundation of what and how we do things within an organization. The culture must support a creative approach to solving problems, designing products/services, and testing new ideas. Consider how you would apply this information to the operations landscape.
Read this article and consider the importance of following the four-part process to determine a product or service worth a company investment. Every new idea has the potential to be useful for a customer. However, the product/service is only useful to the company if a good return on investment (ROI) exists. The financial importance of resource investment must be considered during the screening process.
3.2: Product Screening
Read this article to explore the challenges of choosing a successful product design. A new product strategy is important for successful screening. This provides you with another way that screening a new product can be approached. As you can see, there is a variety in the types of approaches available.
- Read this section to explore how a product/service is evaluated for an appeal to the marketplace. Once you have identified that users may want or need a particular type of product or service, you are faced with deciding how best to satisfy that want/need. The product development process provides a systematic way to approach this often-complex issue. By the end of this article, you will be able to outline the stages of new product development.
- Make forum posts: 1
After you've spent some time reviewing what you have learned so far in this unit, post about this topic on the discussion forum. Respond to your classmates' posts, as well.
Considering the importance of product selection, review each development and selection tool provided in this unit. Do a web search to identify at least one additional method for development or screening. How might you use these tools together to choose between three good ideas? Does one method appear more useful than the others? Why?
Click on the Unit 3 Discussion Part 1 and then on 'reply' to post your response.
3.3: Preliminary and Final Design
Watch this video to see the movement of a preliminary idea to a final design that is ready for a market. This is important because not every idea should or can move forward to a final design phase. There are many different considerations when looking at preliminary designs. This is not only a creative process but also an analytical evaluation.
Product/service feasibility analysis is crucial to a successful design. This type of analysis is used to analyze the market and product feasibility of the product or service. An organization can develop a wonderful product or service but fail to gain market share. This is often directly related to gaps in the feasibility analysis.
Watch this surprisingly interesting video about how the aluminum can came to be designed and perfected. It demonstrates the careful attention given to even the simplest of items that we use every day.
Predicting future sales, volume levels, and market conditions can be challenging. However, many tools can help organizations forecast more accurately and effectively. One of these tools is the cost-volume-profit analysis. Companies can begin this process by evaluating their break-even point. From there, they will set profit goals, consider their fixed and variable costs, and determine the volume needed to achieve their goals. The cost volume profit analysis also enables an organization to consider how changes in each factor within the equation might impact the overall outcome. At the end of the section, you will be able to identify the factors that enable companies to estimate volume.
The profit equation can be expressed as:
Profit = total revenues – (total variable costs + total fixed costs)
Companies can use this equation to determine their break-even points and volume levels and evaluate how changes in any one factor can impact the overall outcome. Additionally, companies need to identify the contribution margin, which is the amount each unit sold contributes to fixed costs and profit increases. It is particularly interesting to note that airlines measure their break-even points as load factors, which is the percentage of seats filled. Because of this, airlines must operate efficiently to lower their break-even points and fill as many seats as possible on all of their flights. At the end of this section, you should be able to recognize the relationship between costs, profits, and volume levels and how small changes in any one element can result in big differences in the outcome.
3.4: Customer Needs Research and Methods for Improving Product Design
Read this chapter, which explores the consumer decision-making process and the factors that impact our buying behavior. Consider the implications of this information to companies launching new products or seeking to update and refresh current products. At the end of the chapter, think about the questions asked and how they might apply to companies with which you are familiar.
Product development is risky. There are many different ways that an organization can fail to do this well and gain a competitive advantage. After you read, complete the exercise at the end of the section.
3.5: Process Selection
Different types of production can be used within a manufacturing organization. As you read, pay particular attention to batch and flow production.
Read this article to explore how continuous production works in a manufacturing environment. Though the article deals with the pharmaceutical industry, consider how the points discussed apply to other industries. As you read, think about how operations managers must choose what method is appropriate given the business' requirements.
Read this article for an analysis of batch processing and cycle time efficiency. The article is quite technical but gives insight into how batch processing can be evaluated in business processes and manufacturing environments.
- Make forum posts: 1
After you've spent some time reviewing what you have learned so far in this unit, post about this topic on the discussion forum. Respond to your classmates' posts, as well.
You have been hired as a consultant for a company that wants to manufacture high-end bicycles. The owners of the new business have designed a bike that can be sold to cyclists that choose to compete. They have asked you to evaluate and recommend the best manufacturing process. Use the information from this unit to write a recommendation to the owners. Include support for your choices.
Click on the Unit 3 Discussion, Part 2 and then on 'reply' to post your response.
Unit 3 Activity and Assessment
In this activity, you will continue working on your operations management plan by addressing how the current state of the economy will affect your business, and applying the Transformation Model that you learned about in this unit.
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.