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© 2008 Prentice Hall, Inc.5 – 1 Operations Management Chapter 5 – Design of Goods and Services PowerPoint presentation to accompany Heizer/Render Principles.

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Presentation on theme: "© 2008 Prentice Hall, Inc.5 – 1 Operations Management Chapter 5 – Design of Goods and Services PowerPoint presentation to accompany Heizer/Render Principles."— Presentation transcript:

1 © 2008 Prentice Hall, Inc.5 – 1 Operations Management Chapter 5 – Design of Goods and Services PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 7e Operations Management, 9e Extensive changes have been made to this slide set by Ömer Yağız. (revised March 2012)

2 © 2008 Prentice Hall, Inc.5 – 2 Outline Global Company Profile: Regal Marine Global Company Profile: Regal Marine Goods and Services Selection Goods and Services Selection Product Strategy Options Support Competitive Advantage Product Strategy Options Support Competitive Advantage Product Life Cycles Product Life Cycles Life Cycle and Strategy Life Cycle and Strategy Product-by-Value Analysis Product-by-Value Analysis

3 © 2008 Prentice Hall, Inc.5 – 3 Outline - Continued Generating New Products Generating New Products New Product Opportunities New Product Opportunities Importance of New Products Importance of New Products Product Development Product Development Product Development System Product Development System Quality Function Deployment (QFD) Quality Function Deployment (QFD) Organizing for Product Development Organizing for Product Development Manufacturability and Value Engineering Manufacturability and Value Engineering

4 © 2008 Prentice Hall, Inc.5 – 4 Outline - Continued Issues for Product Design Issues for Product Design Robust Design Robust Design Modular Design Modular Design Computer-Aided Design (CAD) Computer-Aided Design (CAD) Computer-Aided Manufacturing (CAM) Computer-Aided Manufacturing (CAM) Virtual Reality Technology Virtual Reality Technology Value Analysis Value Analysis Ethics and Environmentally Friendly Design Ethics and Environmentally Friendly Design

5 © 2008 Prentice Hall, Inc.5 – 5 Outline - Continued Time-Based Competition Time-Based Competition Purchasing Technology by Acquiring a Firm Purchasing Technology by Acquiring a Firm Joint Ventures Joint Ventures Alliances Alliances Defining a Product Defining a Product Make-or-Buy Decisions Make-or-Buy Decisions Group Technology Group Technology

6 © 2008 Prentice Hall, Inc.5 – 6 Outline - Continued Documents For Production Documents For Production Product Life-Cycle Management (PLM) Product Life-Cycle Management (PLM) Service Design Service Design Documents for Services Documents for Services Application of Decision Trees to Product Design Application of Decision Trees to Product Design Transition to Production Transition to Production

7 © 2008 Prentice Hall, Inc.5 – 7 Product strategy Product strategy is vital for a companys success Product strategy is vital for a companys success Top companies focus on only a few products and then concentrate on those products Top companies focus on only a few products and then concentrate on those products –Honda – engine technology –Intel – microprocessors –Logitech – mice, keyboards –Microsoft – PC software –HP – laptops, printers

8 © 2008 Prentice Hall, Inc.5 – 8 Objective of Product Strategy to link product decision with to link product decision with –investment –market share –product life cycle –breadth (genişlik, çeşitlilik) of the product line Objective of product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage Objective of product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage

9 © 2008 Prentice Hall, Inc.5 – 9 Product selection-definition-design stages Product selection-definition-design stages The good or service the organization provides society The good or service the organization provides society Top organizations typically focus on core products Top organizations typically focus on core products Customers buy satisfaction, not just a physical good or particular service Customers buy satisfaction, not just a physical good or particular service Fundamental to an organization's strategy with implications throughout the operations function Fundamental to an organization's strategy with implications throughout the operations function Product Decision

10 © 2008 Prentice Hall, Inc.5 – 10 Product Strategy Options Differentiation Differentiation Shouldice Hospital – hernia (fıtık) treatment; Dünyagöz eye centers Shouldice Hospital – hernia (fıtık) treatment; Dünyagöz eye centers Low cost Low cost Taco Bell - minimum labor required Taco Bell - minimum labor required Rapid response Rapid response Toyota – changing consumer tastes; speed of product development Toyota – changing consumer tastes; speed of product development

11 © 2008 Prentice Hall, Inc.5 – 11 Product-by-Value Analysis Lists products in descending order of their individual dollar contribution to the firm Lists products in descending order of their individual dollar contribution to the firm Lists the total annual dollar contribution of the product Lists the total annual dollar contribution of the product Helps management evaluate alternative strategies Helps management evaluate alternative strategies This is in line with the Pareto priciple (vital few; not the trivial many)

12 © 2008 Prentice Hall, Inc.5 – 12 Product-by-Value Analysis Individual Contribution ($) Total Annual Contribution ($) Love Seat$102$36,720 Arm Chair$87$51,765 Foot Stool$12$6,240 Recliner$136$51,000 Sams Furniture Factory

13 © 2008 Prentice Hall, Inc.5 – 13 New Product Opportunities 1.Understanding the customer is basic 2.Economic change 3.Sociological and demographic change 4.Technological change 5.Political/legal change 6.Market practice, professional standards, suppliers, distributors Brainstorming is a useful tool

14 © 2008 Prentice Hall, Inc.5 – 14 Scope of product development team Product Development System Scope for design and engineering teams Evaluation Introduction Test Market Functional Specifications Design Review Product Specifications Customer Requirements Ability Ideas Figure 5.3 more detail in next slide

15 © 2008 Prentice Hall, Inc.5 – 15 Product Development System Fig. 5-3

16 © 2008 Prentice Hall, Inc.5 – 16 Quality Function Deployment Identify customer wants Identify customer wants Identify how the good/service will satisfy customer wants Identify how the good/service will satisfy customer wants Relate customer wants to product hows Relate customer wants to product hows Identify relationships between the firms hows Identify relationships between the firms hows Develop importance ratings Develop importance ratings Evaluate competing products Evaluate competing products Compare performance to desirable technical attributes Compare performance to desirable technical attributes

17 © 2008 Prentice Hall, Inc.5 – 17 QFD House of Quality Relationship matrix How to satisfy customer wants Interrelationships Competitive assessment Technical evaluation Target values What the customer wants Customer importance ratings Weighted rating

18 © 2008 Prentice Hall, Inc.5 – 18 House of Quality Example Your team has been charged with designing a new camera for Great Cameras, Inc. The first action is to construct a House of Quality

19 © 2008 Prentice Hall, Inc.5 – 19 House of Quality Example Customerimportancerating (5 = highest) Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color correction1 What the customer wants What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

20 © 2008 Prentice Hall, Inc.5 – 20 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Low electricity requirements Aluminum components Auto focus Auto exposure Paint pallet Ergonomic design How to Satisfy Customer Wants

21 © 2008 Prentice Hall, Inc.5 – 21 Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color corrections1 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors High relationship Medium relationship Low relationship Relationship matrix

22 © 2008 Prentice Hall, Inc.5 – 22 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Low electricity requirements Aluminum components Auto focus Auto exposure Paint pallet Ergonomic design Relationships between the things we can do

23 © 2008 Prentice Hall, Inc.5 – 23 House of Quality Example Weighted rating What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color corrections1 Our importance ratings

24 © 2008 Prentice Hall, Inc.5 – 24 House of Quality Example Company A Company B GPGPFGGPPPGPGPFGGPPPP Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 Color corrections1 Our importance ratings225 How well do competing products meet customer wants What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

25 © 2008 Prentice Hall, Inc.5 – 25 House of Quality Example What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors Target values (Technical attributes) Technical evaluation Company A0.760%yes1okG Company B0.650%yes2okF Us0.575%yes2okG 0.5 A 75% 2 to 2 circuits Failure 1 per 10,000 Panel ranking

26 © 2008 Prentice Hall, Inc.5 – 26 House of Quality Example Completed House of Quality Lightweight3 Easy to use4 Reliable5 Easy to hold steady2 Color correction1 Our importance ratings Low electricity requirements Aluminum components Auto focus Auto exposure Paint pallet Ergonomic design Company A Company B GPGPFGGPPPGPGPFGGPPPP Target values (Technical attributes) Technical evaluation Company A0.760%yes1okG Company B0.650%yes2okF Us0.575%yes2okG 0.5 A 75% 2 to 2 circuits Failure 1 per 10,000 Panel ranking

27 © 2008 Prentice Hall, Inc.5 – 27 House of Quality Sequence Design characteristics Specific components House 2 Customer requirements Design characteristics House 1 Specific components Production process House 3 Production process Quality plan House 4 Figure 5.4 Deploying resources through the organization in response to customer requirements

28 © 2008 Prentice Hall, Inc.5 – 28 Quality Function Deployment PLEASE REFER TO SLIDE SET TITLED QUALITY FUNCTION DEPLOYMENT (QFD) AVAILABLE AT THE COURSE PAGE

29 © 2008 Prentice Hall, Inc.5 – 29 Manufacturability and Value Engineering Benefits: Benefits: 1.Reduced complexity of products 2.Additional standardization of products 3.Improved functional aspects of product 4.Improved job design and job safety 5.Improved maintainability (serviceability) of the product 6.Robust design

30 © 2008 Prentice Hall, Inc.5 – 30 Cost Reduction of a Bracket via Value Engineering Figure 5.5

31 © 2008 Prentice Hall, Inc.5 – 31 Issues for Product Development Robust design Robust design Modular design Modular design Computer-aided design (CAD) Computer-aided design (CAD) Computer-aided manufacturing (CAM) Computer-aided manufacturing (CAM) Virtual reality technology Virtual reality technology Value analysis Value analysis Environmentally friendly design Environmentally friendly design

32 © 2008 Prentice Hall, Inc.5 – 32 Robust Design Product is designed so that small variations in production or assembly do not adversely affect the product Product is designed so that small variations in production or assembly do not adversely affect the product Typically results in lower cost and higher quality Typically results in lower cost and higher quality

33 © 2008 Prentice Hall, Inc.5 – 33 Modular Design Products designed in easily segmented components Products designed in easily segmented components Adds flexibility to both production and marketing Adds flexibility to both production and marketing Improved ability to satisfy customer requirements Improved ability to satisfy customer requirements

34 © 2008 Prentice Hall, Inc.5 – 34 Using computers to design products and prepare engineering documentation Using computers to design products and prepare engineering documentation Shorter development cycles, improved accuracy, lower cost Shorter development cycles, improved accuracy, lower cost Information and designs can be deployed worldwide Information and designs can be deployed worldwide Computer Aided Design (CAD)

35 © 2008 Prentice Hall, Inc.5 – 35 Design for Manufacturing and Assembly (DFMA) Design for Manufacturing and Assembly (DFMA) Solve manufacturing problems during the design stage Solve manufacturing problems during the design stage 3-D Object Modeling 3-D Object Modeling Small prototype development Small prototype development CAD through the internet CAD through the internet International data exchange through STEP International data exchange through STEP Extensions of CAD

36 © 2008 Prentice Hall, Inc.5 – 36 Computer-Aided Manufacturing (CAM) Utilizing specialized computers and program to control manufacturing equipment Utilizing specialized computers and program to control manufacturing equipment Often driven by the CAD system (CAD/CAM) Often driven by the CAD system (CAD/CAM)

37 © 2008 Prentice Hall, Inc.5 – 37 1.Product quality 2.Shorter design time 3.Production cost reductions 4.Database availability 5.New range of capabilities Benefits of CAD/CAM

38 © 2008 Prentice Hall, Inc.5 – 38 Virtual Reality Technology Computer technology used to develop an interactive, 3-D model of a product from the basic CAD data Computer technology used to develop an interactive, 3-D model of a product from the basic CAD data Allows people to see the finished design before a physical model is built Allows people to see the finished design before a physical model is built Very effective in large-scale designs such as plant layout Very effective in large-scale designs such as plant layout

39 © 2008 Prentice Hall, Inc.5 – 39 Value Analysis Focuses on design improvement during production Focuses on design improvement during production Seeks improvements leading either to a better product or a product which can be produced more economically Seeks improvements leading either to a better product or a product which can be produced more economically

40 © 2008 Prentice Hall, Inc.5 – 40 Ethics and Environmentally Friendly Designs It is possible to enhance productivity, drive down costs, and preserve resources Effective at any stage of the product life cycle Design Design Production Production Destruction Destruction

41 © 2008 Prentice Hall, Inc.5 – 41 The Ethical Approach View product design from a systems perspective View product design from a systems perspective Inputs, processes, outputs Inputs, processes, outputs Costs to the firm/costs to society Costs to the firm/costs to society Consider the entire life cycle of the product Consider the entire life cycle of the product

42 © 2008 Prentice Hall, Inc.5 – 42 Goals for Ethical and Environmentally Friendly Designs 1.Develop safe and more environmentally sound products 2.Minimize waste of raw materials and energy 3.Reduce environmental liabilities 4.Increase cost-effectiveness of complying with environmental regulations 5.Be recognized as a good corporate citizen

43 © 2008 Prentice Hall, Inc.5 – 43 Guidelines for Environmentally Friendly Designs 1.Make products recyclable 2.Use recycled materials 3.Use less harmful ingredients 4.Use lighter components 5.Use less energy 6.Use less material

44 © 2008 Prentice Hall, Inc.5 – 44 Defining The Product First definition is in terms of functions First definition is in terms of functions Rigorous specifications are developed during the design phase Rigorous specifications are developed during the design phase Manufactured products will have an engineering drawing Manufactured products will have an engineering drawing Bill of material (BOM) lists the components of a product Bill of material (BOM) lists the components of a product

45 © 2008 Prentice Hall, Inc.5 – 45 Engineering drawing Engineering drawing Shows dimensions, tolerances, and materials Shows dimensions, tolerances, and materials Shows codes for Group Technology Shows codes for Group Technology Bill of Material Bill of Material Lists components, quantities and where used Lists components, quantities and where used Shows product structure Shows product structure Product Documents

46 © 2008 Prentice Hall, Inc.5 – 46 Engineering Drawings Figure 5.8

47 © 2008 Prentice Hall, Inc.5 – 47 Bills of Material BOM for Panel Weldment NUMBERDESCRIPTIONQTY A 60-71PANEL WELDMT1 A 60-7LOWER ROLLER ASSM.1 R ROLLER1 R PIN1 P 60-2 LOCKNUT1 A 60-72GUIDE ASSM. REAR1 R SUPPORT ANGLE1 A 60-4 ROLLER ASSM BOLT1 A 60-73GUIDE ASSM. FRONT1 A SUPPORT WELDMT1 R WEAR PLATE BOLT1 Figure 5.9 (a)

48 © 2008 Prentice Hall, Inc.5 – 48 Bills of Material Hard Rock Cafes Hickory BBQ Bacon Cheeseburger DESCRIPTIONQTY Bun1 Hamburger patty8 oz. Cheddar cheese2 slices Bacon2 strips BBQ onions1/2 cup Hickory BBQ sauce1 oz. Burger set Lettuce1 leaf Lettuce1 leaf Tomato1 slice Tomato1 slice Red onion4 rings Red onion4 rings Pickle1 slice Pickle1 slice French fries5 oz. Seasoned salt1 tsp. 11-inch plate1 HRC flag1 Figure 5.9 (b)

49 © 2008 Prentice Hall, Inc.5 – 49 Parts grouped into families with similar characteristics Parts grouped into families with similar characteristics Coding system describes processing and physical characteristics Coding system describes processing and physical characteristics Part families can be produced in dedicated manufacturing cells Part families can be produced in dedicated manufacturing cells Group Technology

50 © 2008 Prentice Hall, Inc.5 – 50 Group Technology Scheme Figure 5.10 (a) Ungrouped Parts (b) Grouped Cylindrical Parts (families of parts) GroovedSlotted ThreadedDrilledMachined

51 © 2008 Prentice Hall, Inc.5 – 51 1.Improved design 2.Reduced raw material and purchases 3.Simplified production planning and control 4.Improved layout, routing, and machine loading 5.Reduced tooling setup time, work-in- process, and production time Group Technology Benefits

52 © 2008 Prentice Hall, Inc.5 – 52 Documents for Production Assembly drawing Assembly drawing Assembly chart Assembly chart Route sheet Route sheet Work order Work order Engineering change notices (ECNs) Engineering change notices (ECNs)

53 © 2008 Prentice Hall, Inc.5 – 53 Assembly Drawing Shows exploded view of product Shows exploded view of product Details relative locations to show how to assemble the product Details relative locations to show how to assemble the product Figure 5.11 (a)

54 © 2008 Prentice Hall, Inc.5 – 54 Assembly Chart R 209 Angle R 207 Angle Bolts w/nuts (2) R 209 Angle R 207 Angle Bolt w/nut R 404 Roller Lock washer Part number tag Box w/packing material Bolts w/nuts (2) SA 1 SA 2 A1 A2 A3 A4 A5 Left bracket assembly Right bracket assembly Poka-yoke inspection Figure 5.11 (b) Identifies the point of production where components flow into subassemblies and ultimately into the final product

55 © 2008 Prentice Hall, Inc.5 – 55 Route Sheet Lists the operations and times required to produce a component SetupOperation ProcessMachineOperationsTimeTime/Unit 1Auto Insert 2Insert Component Set 56 2Manual Insert Component.52.3 Insert 1 Set 12C 3Wave SolderSolder all components to board 4Test 4Circuit integrity.25.5 test 4GY

56 © 2008 Prentice Hall, Inc.5 – 56 Work Order Instructions to produce a given quantity of a particular item, usually to a schedule Work Order ItemQuantityStart DateDue Date ProductionDelivery DeptLocation 157C1255/2/085/4/08 F32Dept K11

57 © 2008 Prentice Hall, Inc.5 – 57 Engineering Change Notice (ECN) A correction or modification to a products definition or documentation A correction or modification to a products definition or documentation Engineering drawings Engineering drawings Bill of material Bill of material Quite common with long product life cycles, long manufacturing lead times, or rapidly changing technologies

58 © 2008 Prentice Hall, Inc.5 – 58 Configuration Management The need to manage ECNs has led to the development of configuration management systems The need to manage ECNs has led to the development of configuration management systems A products planned and changing components are accurately identified and control and accountability for change are identified and maintained A products planned and changing components are accurately identified and control and accountability for change are identified and maintained

59 © 2008 Prentice Hall, Inc.5 – 59 Product Life-Cycle Management (PLM) Integrated software that brings together most, if not all, elements of product design and manufacture Integrated software that brings together most, if not all, elements of product design and manufacture Product design Product design CAD/CAM, DFMA CAD/CAM, DFMA Product routing Product routing Materials Materials Assembly Assembly Environmental Environmental

60 © 2008 Prentice Hall, Inc.5 – 60 Service Design Service typically includes direct interaction with the customer Service typically includes direct interaction with the customer Increased opportunity for customization Increased opportunity for customization Reduced productivity Reduced productivity Cost and quality are still determined at the design stage Cost and quality are still determined at the design stage Delay customization as late in the process as possible Delay customization as late in the process as possible Modularization (health insurance packages, ISP services) Modularization (health insurance packages, ISP services) Reduce customer interaction, often through automation (ATMs, e-ticket) Reduce customer interaction, often through automation (ATMs, e-ticket)

61 © 2008 Prentice Hall, Inc.5 – 61 Service typically includes direct interaction with the customer Service typically includes direct interaction with the customer Increased opportunity for customization Increased opportunity for customization Reduced productivity Reduced productivity Cost and quality are still determined at the design stage Cost and quality are still determined at the design stage Delay customization Delay customization Modularization Modularization Reduce customer interaction, often through automation Reduce customer interaction, often through automation (c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating Service Design Figure 5.12 (a) Customer participation in design such as pre-arranged funeral services or cosmetic surgery (b) Customer participation in delivery such as stress test for cardiac exam or delivery of a baby

62 © 2008 Prentice Hall, Inc.5 – 62 Moments of Truth Kritik an or zurnanın zırt dediği an Concept created by Jan Carlzon of Scandinavian Airways Concept created by Jan Carlzon of Scandinavian Airways Critical moments between the customer and the organization that determine customer satisfaction Critical moments between the customer and the organization that determine customer satisfaction There may be many of these moments There may be many of these moments These are opportunities to gain or lose business These are opportunities to gain or lose business

63 © 2008 Prentice Hall, Inc.5 – 63 The technician was sincerely concerned and apologetic about my problem He asked intelligent questions that allowed me to feel confident in his abilities The technician offered various times to have work done to suit my schedule Ways to avoid future problems were suggested Experience Enhancers Only one local number needs to be dialed I never get a busy signal I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem A timely resolution to my problem is offered The technician is able to explain to me what I can expect to happen next Standard Expectations Moments-of-Truth Computer Company Hotline I had to call more than once to get through A recording spoke to me rather than a person While on hold, I get silence,and wonder if I am disconnected The technician sounded like he was reading a form of routine questions The technician sounded uninterested I felt the technician rushed me Experience Detractors Figure 5.13

64 © 2008 Prentice Hall, Inc.5 – 64 Documents for Services High levels of customer interaction necessitates different documentation High levels of customer interaction necessitates different documentation Often explicit job instructions for moments-of-truth Often explicit job instructions for moments-of-truth Scripts and storyboards are other techniques Scripts and storyboards are other techniques

65 © 2008 Prentice Hall, Inc.5 – 65 SERVICE BLUEPRINTING & FAILSAFING

66 © 2008 Prentice Hall, Inc.5 – 66 SERVICE BLUEPRINTING & FAILSAFING

67 © 2008 Prentice Hall, Inc.5 – 67 Transition to Production Know when to move to production Know when to move to production Product development can be viewed as evolutionary and never complete Product development can be viewed as evolutionary and never complete Product must move from design to production in a timely manner Product must move from design to production in a timely manner Most products have a trial production period to insure producibility Most products have a trial production period to insure producibility Develop tooling, quality control, training Develop tooling, quality control, training Ensures successful production Ensures successful production

68 © 2008 Prentice Hall, Inc.5 – 68 Transition to Production Responsibility must also transition as the product moves through its life cycle Responsibility must also transition as the product moves through its life cycle Line management takes over from design Line management takes over from design Three common approaches to managing transition Three common approaches to managing transition Project managers Project managers Product development teams Product development teams Integrate product development and manufacturing organizations Integrate product development and manufacturing organizations


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