Product Design in Operations Management: An Overview

Product design is one of the crucial stages in Operations Management. The design of a product or service is one of the most important steps. This will definitely affect the earnings of the product. The basic limiting characteristics of the production system design are set during the product design phase.

In designing the product, or the item to be processed in nonmanufacturing systems, the product designer specifies materials, tolerances, basic configurations, methods of joining parts and the like, and through these specifications sets the minimum possible production cost. The conscious effort to design for low manufacturing cost is often referred to as product design. Given the product design, process planning for manufacture must be carried out to specify the process required and the sequence of the processes.

The two basic steps in designing a product are functional design and production design

Functional Design

In the functional design step, the product is designed to be functional. Decisions are made on dimensions, materials to be used, type of final finish required for appearance and so on. At this stage, the designer is more concerned with the product itself than the methods of production. The main concerns are functional considerations, customer appeal, cost and ease of operation and maintenance.

Production Design

In the production design stage, the designer considers the introduction of modifications and new concepts into the product to make it more suitable for production. Some of the concepts employed in this stage include:

Standardization: The designer can facilitate the production of the part by standardization of a port or the whole product. Standardization can also cut production costs by eliminating the need for planning for several different product varieties. It allows firms to work larger and often economical, quantities of fewer items. However, standardization has limitations such as forestalling improvements and fewer options for customers.

Modular Design: Modular Designs facilitate production and maintenance. This type of design is used extensively in computers. Products are made easily detachable subassemblies or sections.

Simplification: Sometimes the designer may include some features in the design that, although not very critical to the function of the product, create severe problems in the production stage. To correct these situations, sometimes some parts of the design must be simplified.

Once developed, many products also undergo value analysis (value engineering). This is an attempt to see if any materials or parts can be substituted or redesigned in such a way as to continue to perform the desired or intended function but at a lower cost.

The nature of product design can affect costs in a wide variety of cost categories, going far beyond the direct labor and material costs involved. A list of categories affected by product design include:

• Raw material
• Equipment
• Direct Labor
• Indirect labor
• Tooling
• Engineering
• Sales and administration

Many of the indirect costs tend to be hidden. For example, the number of individual parts in a design can drastically, affect the indirect costs due to greater paperwork and the greater cost of ordering, storing and controlling the larger number of parts. Thus, the selection of product design must reflect consideration of all the foregoing factors.

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Our other articles on Operations Management include Lean Manufacturing, Just-in-Time, Inventory Management, ABC Analysis