UNIT- II

DESIGNING OPERATIONS & PRODUCTION PLANNING & CONTROL

New Product development, product Design, steps in process planning, value analysis/value
engineering, aims, functions, value Engineering Procedure, and application areas.
Standardization, Procedure & Application areas of Standardization. Stages in PPC.

NEW PRODUCT DEVELOPMENT

In business and engineering, new product development (NPD) is the complete process of
bringing a new product to market. New product development is described in the literature as the
transformation of a market opportunity into a product available for sale and it can be tangible
(that is, something physical you can touch) or intangible (like a service, experience, or belief). A
good understanding of customer needs and wants, the competitive environment and the nature of
the market represent the top required factors for the success of a new product. Cost, time and
quality are the main variables that drive the customer needs
 New Product Development (NPD) refers to the complete process of bringing a new product
to market.
 New product development is described in the literature as the transformation of a market
opportunity into a product available for sale and it can be tangible or intangible.

Causes for New product Development

 Increased competition
 Advances in the technology
 Environmental changes
 Product reaches the end of its product life cycle

New Product Development Process

1. Idea generation

The process of developing a new product begins with the generation of ideas. It is one of the
most crucial phases of product development and entails brainstorming an idea (or ideas) that
would help you overcome an existing customer problem in a novel and creative way. It’s critical
to have a thorough understanding of the target audience and their pain points, which you should
tackle while brainstorming ideas to help you meet customer needs.
There are two potential sources of fresh ideas:
 Internal source: The company generates new ideas internally. It includes both R&D and
staff contributions. Employees are frequently the biggest source of fresh ideas, as they are
constantly exposed to the product as well as consumer feedback. Organizations like
Toyota have created incentive programs to encourage their employees to come up with
viable ideas in this regard.
 External sources: The company seeks out new ideas from outside sources. It includes
external sources such as distributors and suppliers, as well as competitors. Customers are
the most significant external source since the new product development process stages
must be centered on delivering value to customers.

2. Idea screening

The new product development process’s second step builds on the first. You’ve amassed as
many ideas as possible and made a list of them. It’s now time to cross off any ideas that aren’t
good enough from your list.
However, there are more things to consider while screening a product idea than whether it is
“strong” or “weak.” Ideas must also be compatible with a company’s broader business plan and
direction.
The usability of these product concepts should be determined by three primary factors: return on
investment, affordability, and market potential. Other considerations include the product’s
capacity to be successfully marketed, its link to competing products, distribution, product
pricing, and production time.
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis might prove to be useful
when shortlisting new product development concepts.

3. Concept development & testing

Rather than testing the product itself, you would test the concept of your product at this stage. A
product concept is a more thorough version of the idea expressed in consumer-friendly terms.
The essential steps involved in concept creation are as follows:
 Measuring the gain/pain ratio
 Performing a competitor analysis
 Identifying the core product features
 Creating a value proposition chart
The test is the next logical step once you’ve developed a well-designed concept. Consumers
should be able to comprehend the concept and see if it has been effectively created. Your next
step should be to demonstrate your idea to a limited group of potential customers and evaluate it.

4. Business and marketing strategy development

Setting profit expectations is the purpose of this step in the new product development process.
Business analysis and marketing strategy are intertwined with developing a strategy for reaching
out to and connecting with a specific demographic and must be regarded as a critical phase in the
new product development process’s seven stages.
This stage, also known as marketing strategy development, involves a few key elements in the
construction of a good marketing mix. The following are some of these aspects:
 Definition of the target market, as well as the value proposition offered from the
customer’s point of view
 Profit targets over time, particularly during the first year
 Pricing, distribution, and overall budget
 Sales forecasts for the long run

5. Product development

Your product is fit to become a prototype or the first edition of a product at this point in the new
product development process. This way, you’ll have a physical representation of your concept
that you can test in real life rather than just on paper. This prototype, also known as a minimal
viable product (MVP), is a simple version of your product that will help you gain a sense of how
it works and point out areas that have to be improved.
For iterative and incremental development, a minimum viable product (MVP) could be
introduced and deployed in the market with minimal features. Naturally, modifications are based
on the fundamental response from customers, which is obtained through effective
communication and collaboration.
According to Gartner, many firms believe in involving customers in the early stages of product
development. This places them in a stronger position to create a product while adhering to
ergonomic guidelines.
R&D and operational expenses create a significant increase in spending at this stage. One or
more physical copies of the product concept will be developed and tested by the R&D
department.

6. Test marketing

You’re doing market testing when you release prototypes to the target demographics and ask for
their feedback on how well the product works. It involves inquiring about what your target
audience enjoys about your proposed product and what they want to see fixed or incorporated
into it.
Running a test of your product early on can ensure its success before investing too much time
and money. A positive response indicates that there is sufficient demand for the product, which
leads to the start of the manufacturing process.
There are two types of market testing methodologies:
 Alpha testing involves test engineers analyzing a product’s performance. They keep track
of the marketing mix’s effects on the final product. If there are any issues, changes are
planned and implemented before the final thumbs up.
 Beta testing involves customers using the product and giving input to the company. It has
to do with paying close attention to the customer’s voice. If there are any problems, they
are returned to the project team for correction.
7. Commercialization

Commercialization is the ultimate stage of the new product development process, where you put
your products on the market. The business will need to establish or rent a production facility in
this phase, which will incur the biggest expenditures. In the first year, a significant amount of
money might be spent on advertising, product promotion, and other marketing operations.
Here are a few of the most important considerations:
 Calculate the global market for your product and introduce an appropriate quantity based
on that estimate
 Make the relevant advertisements and stick to a marketing strategy that works
 Ensure your marketing strategy includes digital channels
 Prepare your consumers for a new product launch
 Choose a launch date and location for your product
 Keep a tight eye on your product and pay attention to its performance

PRODUCT DESIGN

 Product design is conceptualization of an idea about a product and transformation of the

idea into a reality. Product design is the process of creating a new product to be sold by a
business to its customers.
 Product design is concerned with the form and function of a product.
 Form design involves the determination of what a product would look like i.e the shape
and appearance of the product.
 Functional design deal with what the product will perform and how its performs.

Objectives of product design

 To ensure growth of the organization
 Profit generation in the long run
 To achieve the desired product quality
 To reduce the development time and cost to the minimum
 To ensure productivity or manufacturability
 To meet new customer requirements

Aspects of product design

 Design for Function
 Design for Making
 Design for Selling
Design for Function - A product must perform the function which its customer expects it to do.
If a product is designed by takings its functional features into account, then it will create satisfied
customers, and will further lead to having loyal customers.
Design for Making – A product design that solves the functional problem smoothly, but is
impossible to manufacture, is of no use. While designing a product, attention must be given to
materials, fastening devices etc.
The hardness of the material specified at the design stage must be within the permitted range
while machining.
In intricate design in order to join components, fasteners are used. Availability of this small
products plays crucial role for product completion, else design may become infeasible at
manufacturing stage itself.
Likewise, making use of standard parts is another important aspect of product design.
Operational convenience of various machineries must be taken into account at design stage itself.
Design for Selling - A product that functions well and easy to use but wanted by none is no use
to produce. It makes no difference whether the product is a pen or a machine, it has to sell itself
to its customers.
The features like, appearance and convenience, depending on customers needs are to be
considered. Product convenience can be improved using pre-determined motion-time systems.

Factors influencing product design

 Customers requirements
 Convenience of the operator or user
 Type of materials used
 Work methods & equipments
 Cost / price ratio
 Product Quality
 Process Quality
 Effect on existing products
 Packaging

Characteristics Of A Good Product Design

1) Good design is innovative.

The possibilities for innovation are not, by any means, exhausted. Technological development is
always offering new opportunities for innovative design. But innovative design always develops
in tandem with innovative technology, and can never be an end in itself.

2) Good design makes a product useful.

A product is bought to be used. It has to satisfy certain criteria, not only functional, but also
psychological and aesthetic. Good design emphasizes the usefulness of a product whilst
disregarding anything that could possibly detract from it.

3) Good design is aesthetic.

The aesthetic quality of a product is integral to its usefulness because products we use every day
affect our person and our well-being. But only well-executed objects can be beautiful.

4) Good design helps us to understand a product.

It clarifies the product’s structure. Better still, it can make the product talk. At best, it is self-
explanatory.

5) Good design is unobtrusive.

Products fulfilling a purpose are like tools. They are neither decorative objects nor works of art.
Their design should therefore be both neutral and restrained, to leave room for the user’s self-
expression.
6) Good design is honest.
It does not make a product more innovative, powerful or valuable than it really is. It does not
attempt to manipulate the consumer with promises that cannot be kept.

8) Good design is thorough, down to the last detail.

Nothing must be arbitrary or left to chance. Care and accuracy in the design process show
respect towards the consumer.

9) Good design is environment-friendly.

Design makes an important contribution to the preservation of the environment. It conserves
resources and minimises physical and visual pollution throughout the lifecycle of the product.

10) Good design is as little design as possible.

Less, but better – because it concentrates on the essential aspects, and the products are not
burdened with non-essentials. Back to purity, back to simplicity.

Modules of product design and Analysis

 Process planning and design
 Value analysis/ Value engineering
 Standardization& Simplification
 Make or Buy decision
 Ergonomic consideration in product design
 Concurrent engineering

PROCESS PLANNING

 Process planning is concerned with planning the conversion or transformation processes

needed to convert the materials into finished products
 It refers to the complete description of specific stages in production process and the
linkages between the stages that enable the production system to produce products or
services.
 Process planning is required mostly for new products or services.
 Process planning consists of two parts

1. Process design
2. Operations design

 Process design is concerned with the overall sequence of operations required to achieve
the product specifications. It specifies the type of work stations that are to be used, the
machines and equipment necessary and the quantities in which each are required.

 Operations design is concerned with the design of the individual manufacturing

operations. It consists of examining the man-machine relationship in the manufacturing
process for converting the raw materials into the finished or semi-finished product
Operations design must specify how much of man and machine time is required for each
unit of production.
Steps in Process Planning

1. Analyse the part’s print to get the overall picture of what is wanted.
2. Make recommendations or consult with Product engineers on design changes
3. List the basic operations required to produce the part of the drawing or specifications
4. Determine the most practical and economical manufacturing method and the form of
tooling required for each operation.
5. Devise the best way to combine the operations and put them in sequence
6. Specify the gauging required for the process.

VALUE ANALYSIS/VALUE ENGINEERING

 The term “value” is used in many different ways and consequently has many different
meanings. Value is nothing but fair return in exchange for goods, services or money. We
can calculate the value of something by dividing its performance by cost.
 Value, refers to Economic Value, which in itself can be divided into – Cost Value,
Exchange Value, Use Value and Esteem Value

Value = Performance (Function or Utility) / Cost.

Value can be increased either by increasing the utility for same cost or by decreasing the
cost for the same utility.
Cost Value – summation of labour, material, overhead and all other elements of cost
required to produce an item or provide a service.
Exchange Value –value refers to a price that a purchaser will offer for the product, price
being dependent upon satisfaction (value) which he derives from the product.
Use Value –It is the price paid by the buyer or cost incurred by the manufacturer to ensure
that the product performs its intended functions efficiently.
Esteem Value – It involves the qualities and appearance of a product which attract persons
and create in them a desire to possess the product. Esteem value is the price paid by the
buyer beyond the use value.

Value Analysis
 Value analysis is a set of techniques, knowledge, and skills used to improve the value of a
product by eliminating unnecessary costs or improving its functions without
compromising its quality, reliability, and performance.
 It involves understanding the components of a product and related costs.

 “Value analysis is the organized systematic study of the function of a material, part,
component or system, to identify area of unnecessary costs that can be eliminated without
impairing the capacity of the item.”
 According to Society of American Value Engineering (SAVE), “ Value analysis is
systematic application of recognized techniques which identify the function of a product
 or service, establish a monetary value for the function and provide necessary function
reliability at lowest overall cost”.

Functions of VA

 It identifies the characteristics which make the product/component/part/item/device work

or sell. The function of any product is for its Work or for Selling purpose.

 WORK FUNCTIONS lend performance value while SELL FUNCTIONS provide

esteem value. Identification of the basic functions and determination of cost currently
being incurred on them are 2 major considerations of Value Analysis.

Functions are classified into 3 categories

1. Primary Functions
2. Secondary Functions
3. Tertiary Functions

Primary Functions – these are basic functions for which the product is specifically
designed to perform.
Ex: Bulb gives light; Chair supports weight, etc
Secondary Functions – functions which if deleted would not prevent the device from
performing its primary functions. Ex: Arms of chair provide support for hands. The
secondary functions are usually related to convenience.
Tertiary Functions – These are related to Esteem appearance.
Ex: A wooden table with a Glass top or Marble or Granite top gives esteemed appearance.

When to Apply Value Analysis (VA program):

1. Company’s products show decline in sales

2. Company’s prices are higher than those of its competitors
3. Raw material’s cost gone up suddenly
4. New designs are being introduced
5. Cost of manufacturing is rising disproportionate to the volume of production
6. Rate of return on investment has a falling trend
7. The firm is unable to meet its delivery commitments

Aims Of Value Analysis

1. To provide better value to a product/service.
2) To improve the company’s competitive position.
3) To ensure that every element of Cost ( Labour Materials Suppliers and service ) contribute
equally to the Function of the product.
4) To Eliminate unnecessary Cost.
Value Analysis Procedure

1. Identify the Product

2. Collect Relevant Information
3. Define Different Functions
4. Create different alternatives
5. Critically evaluate the alternatives
6. Develop the best alternative
7. Implement the Alternative
a. Identification and definition of the problem, i.e. ascertaining whether the customer is
being given the full use value and esteem value for the product he purchases and if not,
what is required to be done. In case of raw materials and components performance,
satisfaction in subsequent production or processes is to be seen.

b. The feasibility of the alternatives and exploring the best method of performing the
work at the minimum cost. For this purpose all relevant facts like drawing and design,
material specifications, material, labour, overhead and other costs, market competition
etc. are considered before proceeding farther with the job of value analysis.

c. The investment, if any, required for the alternative.

d. Percentage of the return on new investment. This return should be equal to or more
than the expected return on investment.

e. Costs resulting indirectly out of a decision to change to alternative like costs of items
becoming obsolete cost of training, etc.

f. The benefits from the alternative like reduction in costs and increased revenue.

g. Recommendation of the final proposal for implementation after considering the above
points which will increase use value and or esteem value.

VALUE ENGINEERING

 Value engineering refers to the systematic method of improving the value of a product
that a project produces.
 It is used to analyze a service, system, or product to determine the best way to manage
the important functions while reducing the cost.
 Value engineering encourages using alternative methods and materials that are less
expensive and do not lower the functionality of the system, service, or product.
Aims of Value Engineering

 Simplify the product

 Use cheaper and better materials
 Modify and improve product design
 Use efficient processes
 Reduce the product cost
 Increase the utility of the product by economical means
 Increase the profit

Process of Value Engineering

The basic steps of value engineering are listed as below:

1. Blast – (i) Identify the Product
(ii) Collect relevant information of the product
(iii) Define different functions
2. Create – (iv) Different Alternatives by Brainstorming.
(v) Critically evaluate the alternatives
3. Refine – (vi) Develop the best alternative
(vii) Implement the alternative

Application areas

 Machine tools industries

 Industries making accessories for machine tools
 Auto industries
 Construction Industry

Difference Between VA & VE

STANDARDIZATION

It is the base for all mass production systems. In reality, variety of components are used
interchangeably in different machines by different companies.

 Standardization means producing maximum variety of products form the minimum

variety of materials, parts ,tools and processes.

 It is process of establishing standards or units of measure by which extent, quality

,quantity, value performance etc., may be compared and measured

If we examine these components used in different products interchangeably we can surely

observe that in terms of size, shape and function all perform similarly though the products are
different and companies manufacturing them are different.

Ex: Bearings, Nuts, Bolts, Springs, Screws, Axle and Tyres in automobiles and

Plugs & sockets in electrical switches.

These components which are manufactured by third parties can be used by any two brands of
different companies. Thus, there should be common standard or a Universal Standard so that
these components can be used interchangeably made by small vendors too.

Standards convey the sense that only certain specific sizes are made and sold. Standardization
solves all problems for big manufacturers not to worry on making trivial parts as they can be
procured from small vendors, if these standards are followed.

Standardization is the process of establishing standards or units of measure by which quality,

quantity, value, performance, etc may be compared, measured and maintained.

Standardization is concerned with

1. Dimensions
2. Performance Requirements
3. Design Requirements
4. Safety Requirements
5. Codes of Practice, methods of test, etc
Advantages of Standardization
 Fewer specifications, drawings and part lists have to be prepared and issued.
 Lower unit cost.
 Better quality products.
 Increased interchangeability of parts.
 Better utilization of manpower and equipment.
 Accurate delivery dates.
 Better services of production control, stock control, purchasing, etc.
 Minimum inventory cost.

Standardization Procedure

1. With the help of market research, Sales statistics, etc., determine what is to be sold in
future.
2. Define a range of products
3. From the range of products, selects the minimum variety of components matching the
range for manufacturing
4. Introduce new materials, components, etc., if necessary

Application of Standardization
 Finished products, e.g. cars and televisions
 Sub assemblies and components e.g automobile gearboxes, auto electric bulbs.
 Materials e.g. plain carbon, alloy steels, Oils and greases.
 Production equipments e.g. machine tools, press, welding equipments, etc.

PRODUCTION PLANNING AND CONTROL (PPC)

 Production planning and control manages and schedules the allocation of human
resources, raw materials, work centers, machinery, and production processes. It finds the
most efficient way to produce finished goods with the lead times needed to meet
production demand
 Production planning and control refers to two strategies that work cohesively throughout
the manufacturing process.
 Production planning
 Production control
Production planning helps manufacturers work smarter by efficiently managing internal
resources to meet customer orders or demand. It solves what, when, and how much to
produce.
It establishes production capacity and identifies what raw materials, bill of materials, or
alternate bill of materials are needed to meet demand.
 Production control monitors production and measures performance, providing visibility
and reporting.
It includes different control techniques to achieve optimal levels of production
performance.

Objectives of production planning and control

 Optimize resources and the scheduling of resources to meet production demand

 Ensure an efficient schedule
 Have resources ready when needed
 Keep inventory at optimal levels
 Increase productivity of internal resources (human, work centers, machines, tooling, etc.)
 Improve customer satisfaction
 Ensure the right person gets assigned to specific processes
 Coordinate with other departments (sales, customer service, purchasing, etc.)

Stages in PPC
1.Planning
2.Routing
3.Scheduling
4.Loading
5.Dispatching
6.Follow-up
 Planning determines what will be produced, by whom, and how. It formulates the plan
for labor, equipment, work centers, and material requirements needed for production.
 Routing determines the path raw materials flow within the factory. Using the sequence,
raw materials are transformed into finished goods.
Scheduling emphasizes “when” the operation will be completed. It aims to make the
most of the time given for the completion of the operation.
 Loading looks into the amount of work loaded against machines or workers. The total
time to perform new work is added to the work already scheduled for the machine or
workstation.
 Dispatching is the release of orders and their instructions. It follows the routing and
scheduling directions. This step ensures all items are in place for the employees to do
their jobs.
 Follow-up
Also known as expediting, follow-up locates fault or defects, bottlenecks, and loopholes
in the production process.
In this step, the team measures the actual performance from start until the end and then
compares it with the expected performance.