Successful organizations ensure their processes meet customer needs in ways that make them more competitive vis-a-vis competitive products or services. Table 4.3 lists ten key objectives that ensure cost-effective designs.
The first ease of assembly. If a design has numerous components or complex assembly procedures, then more work is required to produce it than a simpler design. There will also be a greater likelihood that errors occur when handling and assembling components or when customers use it. The first objective is to simplify a design from a manufacturing perspective. Service systems use Lean methods for process simplification. A simplified product or process is easier to produce and has lower cost and higher quality. Designs should also be easy to disassemble and modify or highly configurable as in software applications. Examples for product design include designing components to snap-fit together rather than requiring the use of an adhesive or mechanical fastening to make disassembly easier and less expensive.
Designs should function over their useful life based on reliability and availability estimates. If an automobile is maintained according to the manufacturer’s service recommendations, it should be available for use. Its mechanical and electrical functions should perform according to initial reliability estimates. The easier and less costly a product is to install and maintain, the greater its perceived value to the customer. For service systems, the easier a new service system is to deploy, use, and maintain, the more likely it will be used by customers. Customer satisfaction increases when products or services are easy to use. When customers have problems using a product or service, they complain or return them. In some situations, failure to use them correctly causes breakage or injury to a customer. An example would be the purchase of an electronic device having too many features and functions, requiring customers to invest time to learn them. These may even be confusing and prevent use. In contrast, products such as software that can self-install, repair themselves, and initiate upgrades without customer intervention are preferred. Products and services should also be easy to dispose of or recycle.
In Figure 4.2, a qualitative representation of the rework aspect of a new design is shown. Best-in-class organizations ensure the design process has the necessary resources and is executed using tools and methods to achieve the ten design objectives listed in Table 4.3. If design flaws can be identified and eliminated during the concept and design phases, then the overall life cycle costs will be lower than if a new design is released and its flaws are found by external customers during commercialization. Studies show a cost multiplier effect when going from the design to other phases and then to customers. In other words, if a design flaw is found by an external customer, the results will be costly product returns, high
Engineering changes and rework.
Key Design Objectives
Contributing Cost Factors
warranty costs, and lower customer satisfaction. The required changes to the design and their impact on production operations may also cause significant cost increases.
New product or service project costs depend on the five major factors listed in Table 4.4. These include design lead time, the degree of technological risk the available capital and labor resources, the types and magnitude of the performance gaps that must be closed, and the technology available to produce the design. The longer the design phase lead time, the longer it takes to get to market. In some industries, the first to market receives 70% of the market share for the entire life cycle. In these industries, design lead times have dramatic impact on the profitability. The second factor is technological risk. Technological risk occurs when a design relies on leading- edge technology that has not been widely used for similar applications. In extreme situations, the technology is co-developed with the design itself. A new design poses high risk to an organization if it depends on the development of new technology. For this reason, technological risk needs to be estimated and managed to maintain planned schedules and cost. Projects not requiring leading-edge technology or having simple modifications and extensions to current products or services with proven solutions have less risk than unknown technology. Poor planning or long lead times also increase the risk of a design project because of increases in costs, whether that is materials, labor, tooling, or capital expenditures. Long lead times impact market share and future revenue.
If the performance targets exceed those seen by an organization during previous design iterations, there will be risk. Design risk increases when competencies cannot match new performance targets. If required technology is not available, then the design will fail or its profitability will be marginal over its life cycle.