Module 04.01 Key Concept: Product Life Cycle Managment and Quality Function Deployment
Product Life Cycles can be any length – from a few days to decades depending on the product or service. Think about products or services you have purchased. How much change has happened there? Look at the electronics industry vs. the diaper industry vs. the electric utility business. Are there differences Life Cycles?
Any distinct Life Cycle goes through 4 general phases: Introduction, Growth, Maturity, and Decline. Each one has different issues to consider.
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Introductory Phase: Fine tuning may warrant unusual expenses for: Research, Product development, Process modification and enhancement, Supplier development.
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Growth Phase: Product design begins to stabilize and effective forecasting of capacity becomes necessary as adding or enhancing capacity may be necessary.
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Maturity Phase: Competitors are now likely established. High volume, innovative production may be needed. Improved cost control, reduction in options, and paring down of the product line will likely be required.
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Decline Phase: Unless product makes a special contribution to the organization, there should be a plan to terminate the offering.
There are therefore different operational change and cost implications at each Phase.
A Product by Value Analysis can be useful / required to drive strategic product development, promotion and withdraw decisions. In this process company analysts lists products in descending order of their individual dollar contribution to the firm as well as the total annual dollar contribution of the product. This information can be used to helps management evaluate alternative strategies and prioritize actions going forward.
We already reviewed the importance of creating products and services that meet customer needs. In general this requires excellent understanding of the customer as well as all the changes happening in the business / industry and external environment such as: Economic change, Sociological and demographic change, Technological change, Political and legal change, Market practice, professional standards, suppliers, distributors.
Basic Product Development project move through many different stages. Requirements will of course vary by product / service segment and industry but all follow a general framework presented in the text.
This process can often be complex and have a long realization time frame from idea creation to product / service launch (market realization). Formalized approaches are need to manage costs, expedite time to market and manage costs. Quality Function Deployment is one of these processes.
Quality Function Deployment (QFD) is methodology designed to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the resulting product design process QFD tries to
eliminate the gap between what the customer wants in a new product and what the product is capable of delivering. In general, the process is designed to ensure that Products and Services are defined and developed so that customer needs will be met with quality products / services at lowest cost. The basic process uses a series of seven steps. Each one is framed as a Matrix and connected they create what is referred to as the “House of Quality”.
- Identify customer wants
- Identify how the good/service will satisfy customer wants
- Relate customer wants to product hows
- Identify relationships between the firm’s hows
- Develop customer importance ratings
- Evaluate competing products
- Compare performance to desirable technical attributes
- Reduced complexity of the product / service
- Reduction of environmental impact
- Additional standardization of components
- Improvement of functional aspects of the product
- Improved job design and job safety
- Improved maintainability (serviceability) of the product
- Robust design
- Robust design
- Modular design
- Computer-aided design (CAD)
- Computer-aided manufacturing (CAM)
- Virtual reality technology
- Value analysis
- Sustainability and Life Cycle Assessment (LCA)
Robust Design: Product is designed so that small variations in production or assembly do not adversely affect the product. Typically this results in lower cost and higher quality.
Modular Design: Products are designed in easily segmented components. This adds flexibility to both production and marketing with the ultimate benefit of improved ability to satisfy customer requirements.
Computer Aided Design (CAD): Involves the use of computers to design products and prepare engineering documentation. This results in shorter development cycles, improved accuracy and lower cost. Information and designs can be deployed worldwide.
Computer Aided Manufacturing (CAM): Involves the use of specialized computers and programs to control manufacturing equipment. It is often driven by the CAD system (CAD/CAM). The use of CAD and CAM can result in the following benefits: higher product quality; shorter design time; production cost reductions; better database availability and a new range of capabilities.
Virtual Reality Technology: represents computer technology used to develop an interactive, 3-D model of a product from the basic CAD data. It allows people to ‘see’ the finished design before a physical model is built. This approach is very effective in large-scale designs such as a plant layout.
Value Analysis: focuses on design improvement during production. It seeks improvements leading either to a better product or a product which can be produced more economically with less environmental impact.
Sustainability and Life Cycle Assessment (LCA): Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their needs. LCA is a formal evaluation of the environmental impact of a product.