CHAPTER 3

PRODUCT PROCESS MANAGEMENT DESIGN

3.1 THE CONCEPT OF PRODUCT LIFE CYCLE

Products, like men, are mortal. They flourish for a time, then decline and die.
The life cycle of a product has many points of similarity with the human life
cycle. A product is born, grows lustily, attains a dynamic maturity, and then
enters its declining years. Like a human being a product that has not built up
its potential during its formative years is likely to be relatively unsuccessful
on its maturity. But, there are critical differences between the product and
the human life cycle. For instance, every person has an average life
expectancy. But the life expected of a product varies widely.
The concept of product failure is applicable both to new products and the
existing ones. There may, however, be varying periods of life spans for each
product: some failing immediately, other living for a longer period. The
product, thus, has “life cycles” just as human beings have. From its birth, a
product passes through various stages, until it is finally abandoned, i. e.
discontinued from the market. These stages taken together are referred, to
as “the product life cycle”. This life cycle of the product comprises of four
stages: Introduction, Growth, Maturity and Decline. It should be noted that it
is purely a theoretical concept.
The introduction stage is preceded by ‘production planning and
development’. This period requires greater investment. This investment
should be gradually recouped as the sales pick up. The concept of life cycle
would give the management an idea as to the time within which the original
investment could be recouped.
A product enters the introduction stage and the product will then become
available in the national market. Sales would begin gradually as potential
buyers come to know about the product through advertising and other
seIIing techniques. But the profits will be low as part of the investment is to
be recouped besides heavy expenditure on selling.
In the growth stage, both sales and profits will begin to increase. It is here
that similar other new products begin to appear in the market as substitutes
and offer competition. The management, therefore, should try to change its
approach by changing its strategy from “buy my product” to “try my
product”. At the end of this stage, the distribution arrangement is likely to
get completed and the prices, if necessary, are reduced a little.
The third stage is the maturity stage. During this stage the
manufacturers introduce new models or adopt methods such as trading-in,
etc., to promote the sale of their brands with a view to retaining their
position in the market. The number of buyers will continue to grow, but more
slowly. In economic terms this is the stage where supply exceeds demand.
Some of the promotional efforts may lengthen the span of this stage but they
will not offer a permanent solution.
At the final stage of decline, profit margins touch a low level, competition
becomes severe and customers start using newer and better products. It is
here that the story of a product ends-a natural but hard end.
The above discussion concentrates only on the life cycle of a product,
beginning with its introduction into the market (i.e., post-marketing). But a
series of processes are to be undertaken by the management prior to the
introduction of a product.
3.2 PRODUCT DESIGN
Product design is the process of ideating, developing, and refining products
that meet specific market needs and solve user problems. A product
designer helps create products that delight customers by defining product
and business goals, and anticipating market opportunities and user needs.
Production or operations strategy is directly influenced by product design for
the following reasons:
(i) As products are designed, all the detailed characteristics of each product
are established.
(ii) Each product characteristic directly affects how the product can be made
or produced (i.e., process technology and process design) and
(iii) How the product is made determines the design of the production
system (production design) which is the heart of production and operations
strategy.
Further, product design directly affects product quality, production costs and
customer satisfaction. Hence, the design of product is crucial to success in
today’s global competition. A good product design can improve the
marketability of a product by making it easier to operate or use, upgrading
its quality, improving its appearance, and/or reducing manufacturing costs. A
distinctive design may be the only feature that significantly differentiates a
product. An excellent design includes usability, aesthetics, reliability,
functionality, innovation and appropriateness.
The most obvious reason for product design is to offer new products to
remain competitive in the market. The second most important reason is to
make the business grow and increase profits. Also, when productivity gains
result in reduction of workforce, developing new products can mean adding
jobs and retaining surplus workforce instead of downsizing by layoffs/
retrenchment.
Sometimes product design is actually redesign or modification of existing
design instead of an entirely new design. The reasons for this include
customer complaints, accidents or injuries during product use, excessive
warranty claims or low demand. Sometimes product redesign is initiated to
achieve cost reductions in labour and material costs.
An excellent design provides competitive advantage to the manufacturer, by
ensuring appropriate quality, reasonable cost and the expected product
features. Firms of tomorrow will definitely compete not on price and quality,
but on product design.
Factors Influencing Product Design
The activities and responsibilities of product design include the following:
(i) Translating customer needs and wants into product and service
requirements
(ii) Refining existing products
(iii) Developing new products
(iv) Formulating quality goals
(v) Formulating cost targets
(vi) Constructing and testing prototype
(vii) Documenting specifications
Characteristics of Good Product Design
A good product design must ensure the following:
Function or performance: The function or performance is what the
customer expects the product to do to solve his/her problem or offer certain
benefits leading to satisfaction. For example, a customer for a motor bike
expects the bike to start with a few kicks on the kick peddle and also expects
some other functional aspects such as pick-up, maximum speed, engine
power and fuel consumption etc.
Appearance or aesthetics: This includes the style, colour, look, feel, etc.
which appeals to the human sense and adds value to the product.
Reliability: This refers to the length of time a product can be used before it
fails. In other words, reliability is the probability that a product will function
for a specific time period without failure.
Maintainability: Refers to the restoration of a product once it has failed.
High degree of maintainability is desired so that the product can be restored
(repaired) to be used within a short time after it breaks down. This is also
known as serviceability.
Availability: This refers to the continuity of service to the customer. A
product is available for use when it is in an operational state. Availability is a
combination of reliability and maintainability. High reliability and
maintainability ensures high availability.
Productibility: This refers to the ease of manufacture with minimum cost
(economic production). This is ensured in product design by proper
specification of tolerances, use of materials that can be easily processed and
also use of economical processes and equipments to produce the product
quickly and at a cheaper cost.
Simplification: This refers to the elimination of the complex features so
that the intended function is performed with reduced costs, higher quality or
more customer satisfaction. A simplified design has fewer parts which can be
manufactured and assembled with less time and cost. “
Standardization: Refers to the design activity that reduces variety among
a group of products or parts. For example, group technology items have
standardized design which calls for similar manufacturing process steps to
be followed. Standard designs lead to variety reduction and results in
economies of scale due to high volume of production of standard products.
However, standardized designs may lead to reduced choices for customers.
Specification: A specification is a detailed description of a material, part or
product, including physical measures such as dimensions, volume, weight,
surface finish etc. These specifications indicate tolerances on physical
measures which provide production department with precise information
about the characteristics of products to be produced and the processes and
production equipments to be used to achieve the specified tolerances
(acceptable variations). Interchangeability of parts in products produced in
large volumes (mass production and flow-line production) is provided by
appropriate specification of tolerances to facilitate the desired fit between
parts which are assembled together.
Safety: The product must be safe to the user and should not cause any
accident while using or should not cause any health hazard to the user.
Safety in storage, handling and usage must be ensured by the designer and
a proper package has to be provided to avoid damage during transportation
and storage of the product. For example, a pharmaceutical product while
used by the patient, should not cause some other side effect threatening the
user.

3.3 PROCESS SELECTION

Process choice determines whether resources are organized around products
or processes in order to implement the flow strategy. It depends on the
volumes and degree of customisation to be provided. These major process
decisions are discussed in the following paragraphs:
The production manager has to choose from five basic process types — (i)
job shop, (ii) batch, (iii) repetitive or assembly line, (iv) continuous
and (v) project.
(i) Job shop process: It is used in job shops when a low volume of high-
variety goods are needed. Processing is intermittent, each job requires
somewhat different processing requirements. A job shop is characterised by
high customisation (made to order), high flexibility of equipment and skilled
labour and low volume. Firms having job shops often carry out job works for
other firms. A job shop uses a flexible flow strategy, with resources
organised around the process.
(ii) Batch process: Batch processing is used when a moderate volume of
goods or services is required and also a moderate variety in products or
services. A batch process differs from the job process with respect to volume
and variety. In batch processing, volumes are higher because same or
similar products or services are repeatedly provided, examples of products
produced in batches include paint, ice cream, soft drinks, books and
magazines.
(iii) Repetitive process: This is used when higher volumes of more
standardised goods or services are needed. This type of process is
characterised by slight flexibility of equipment (as products are
standardised) and generally low labour skills. Products produced include
automobiles, home appliances, television sets, computers, toys etc.
Repetitive process is also referred to as line process as it include production
lines and assembly lines in mass production. Resources are organised
around a product or service and materials move in a line flow from one
operation to the next according to a fixed sequence with little work-in-
progress inventory. This kind of process is suitable to “manufacture-to-stock”
strategy with standard products held in finished goods inventory. However,
“assemble-to-order” strategy and “mass customisation” are also possible in
repetitive process.
(iv) Continuous process: This is used when a very highly standardised
product is desired in high volumes. These systems have almost no variety in
output and hence there is no need for equipment flexibility. A continuous
process is the extreme end of high volume, standardised production with
rigid line flows. The process often is capital intensive and operate round the
clock to maximize equipment utilization and to avoid expensive shut downs
and shut ups. Examples of products made in continuous process systems
include petroleum products, steel, sugar, flour, paper, cement, fertilizers etc.
(v) Project process: It is characterised by high degree of job customisation,
the large scope for each project and need for substantial resources to
complete the project. Examples of projects are building a shopping centre, a
dam, a bridge, construction of a factory, hospital, developing a new product,
publishing a new book etc. Projects tend to be complex, take a long time and
consist of a large number of complex activities. Equipment flexibility and
labour skills can range from low to high depending on the type of projects.
3.4 PROCESS DESIGN
Process Design is concerned with the overall sequences of operations
required to achieve the product specifications. It specifies the type of work
stations to be used, the machines and equipments necessary to carry out the
operations. The sequences of operations are determined by (a) the nature
of the product, (b) the materials used, (c) the quantities to be
produced and (d) the existing physical layout of the plant.
(a) The Nature of the Product
The characteristics of the product being manufactured greatly influence the
sequence of operations. For example, if the product requires assembly of
multiple components, the operations will involve stages of assembly. If it's a
complex product, the sequence may involve several intricate steps, while
simpler products may have more straightforward sequences.
(b) The Materials Used
Different materials have different properties and require specific processes
for shaping, cutting, joining, etc. The sequence of operations needs to
accommodate the properties of the materials used in the manufacturing
process. For instance, metals may require machining processes such as
milling or turning, while plastics may require molding processes.
(c) The Quantities to be Produced
The quantity of products to be manufactured can affect the sequence of
operations. For large quantities, the manufacturing process may be
optimized for efficiency and speed, possibly utilizing assembly line
techniques or automation. Conversely, for smaller quantities or custom
orders, the process may be more flexible, allowing for more varied
sequences of operations.
(d) The Existing Physical Layout of the Plant
The layout of the manufacturing plant plays a significant role in determining
the sequence of operations. Factors such as the location of machinery,
storage areas, and workflow patterns influence how materials flow through
the production process. The sequence must be designed to optimize the use
of space and resources within the existing layout.
3.5 PROCESS STRATEGY
A process strategy is an organisation’s approach to process selection for
the purpose of transforming resource inputs into goods and services
(outputs). The objective of a process strategy is to find a way to produce
goods and services that meet customer requirement and product
specification (i.e., design specifications) within the constraints of cost and
other managerial limitations. The process selected will have a long-term
effect on efficiency and production as well as flexibility, cost, and quality of
the goods produced. Hence it is necessary that a firm has a sound process
strategy at the time of selecting the process.
Key aspects in process strategy include:
(i) Make or buy decisions
(ii) Capital intensity and
(iii) Process flexibility
Make or buy decisions refer to the extent to which a firm will produce
goods or provide services in-house or go for outsourcing (buying or
subcontracting).
Capital intensity refers to the mix of equipment and labour which will be
used by the firm.
Process Flexibility refers to the degree to which the system can be
adjusted to changes in processing requirements due to such factors as
changes in product or service design, changes in volume of products
produced and changes in technology.
Three process strategies: Virtually every good or service is made by using
some variation of one of three process strategies. They are: (i) process
focus (ii) repetitive focus and (iii) product focus.
Each of these three strategies are discussed below:
(i) Process Focus: Majority (about 75 per cent) of global production is
devoted to low volume, high variety products in manufacturing facilities
called job shops. Such facilities are organised around performing processes.
For example, the processes might be welding, grinding or painting carried
out in departments devoted to these processes. Such facilities are process
focused in terms of equipment, machines, layout and supervision. They
provide a high degree of product flexibility as products move intermittently
between processes. Each process is designed to perform a wide variety of
activities and handle frequent changes. Such processes are called
intermittent processes. These facilities have high variable costs and low
utilisation of facilities.
(ii) Repetitive Focus: A repetitive process is a product oriented production
process that uses modules. It falls between product focus and process focus.
It uses modules which are parts or components prepared often in a
continuous or mass production process.
A good example of repetitive process is the assembly line which is used for
assembling automobiles and household appliances and is less flexible than
process-focused facility. Personal computer is an example of a repetitive
process using modules in which the modules are assembled to get a custom
product with the desired configuration.
(iii) Product Focus: It is a facility organized around products, a product
oriented, high-volume low-variety process. It is also referred to as continuous
process because it has very long continuous production run. Examples of
product focused processes are steel, glass, paper, electric bulbs, chemicals
and pharmaceutical products, bolts and nuts etc. Product-focused facilities
need standardization and effective quality control. The specialized nature of
the facility requires high fixed cost, but low variable costs reward high facility
utilization.