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5 - 1© 2014 Pearson Education, Inc. Design of Goods and Services PowerPoint presentation to accompany Heizer and Render Operations Management, Eleventh.

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Presentation on theme: "5 - 1© 2014 Pearson Education, Inc. Design of Goods and Services PowerPoint presentation to accompany Heizer and Render Operations Management, Eleventh."— Presentation transcript:

1 5 - 1© 2014 Pearson Education, Inc. Design of Goods and Services PowerPoint presentation to accompany Heizer and Render Operations Management, Eleventh Edition Principles of Operations Management, Ninth Edition PowerPoint slides by Jeff Heyl 5 © 2014 Pearson Education, Inc.

2 5 - 2© 2014 Pearson Education, Inc. Goods and Services Selection Figure 5.1 The higher the percentage of sales from the last 5 years, the more likely the firm is to be a leader. How many ideas does it take to get to a marketable product? When do you decide to produce the product? 50% – 40% – 30% – 20% – 10% – 0% – Industry leader Top third Middle third Bottom third Position of firm in its industry Percent of sales from new products

3 5 - 3© 2014 Pearson Education, Inc. The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage Product Decision Product strategy can be differentiation, Low Cost, Responsive

4 5 - 4© 2014 Pearson Education, Inc. Product Life Cycle Negative cash flow IntroductionGrowthMaturityDecline Sales, cost, and cash flow Cost of development and production Cash flow Net revenue (profit) Sales revenue Loss Figure 5.2 Goal of the product mgr is to introduce new products successfully!

5 5 - 5© 2014 Pearson Education, Inc. Life Cycle and Strategy Introductory Fine tuning may warrant unusual expenses for: Research, Product development, Process modification and enhancement, Supplier development Growth Product design begins to stabilize, Effective forecasting of capacity becomes necessary, Adding or enhancing capacity may be necessary Maturity Competitors now established, High volume, innovative production may be needed, Improved cost control, reduction in options, paring down of product line Decline Unless product makes a special contribution to the organization, must plan to terminate offering

6 5 - 6© 2014 Pearson Education, Inc. Product Life Cycle Costs Costs incurred Costs committed Ease of change ConceptDetailedManufacturingDistribution, designdesignservice, prototypeand disposal Percent of total cost 100 – 80 – 60 – 40 – 20 – 0 –

7 5 - 7© 2014 Pearson Education, Inc. Generating New Products What opportunities exist that will help us come up with an idea for a product?

8 5 - 8© 2014 Pearson Education, Inc. Generating New Products 1.Understanding the customer 2.Economic change 3.Sociological and demographic change 4.Technological change 5.Political and legal change 6.Market practice, professional standards, suppliers, distributors

9 5 - 9© 2014 Pearson Education, Inc. Scope of product development team Product Development Stages Scope for design and engineering teams Evaluation Introduction Test Market Functional Specifications Design Review Product Specifications Customer Requirements Feasibility Concept Figure 5.3

10 5 - 10© 2014 Pearson Education, Inc. Quality Function Deployment Process for turning wants into hows 1.Identify customer wants 2.Identify how the good/service will satisfy customer wants 3.Relate customer wants to product hows 4.Identify relationships between the firms hows 5.Develop customer importance ratings 6.Evaluate competing products 7.Compare performance to desirable technical attributes

11 5 - 11© 2014 Pearson Education, Inc. 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

12 5 - 12© 2014 Pearson Education, Inc. 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

13 5 - 13© 2014 Pearson Education, Inc. House of Quality Example Customer importance rating (5 = highest) Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 High resolution1 What the customer wants What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

14 5 - 14© 2014 Pearson Education, Inc. 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 High number of pixels Ergonomic design How to Satisfy Customer Wants

15 5 - 15© 2014 Pearson Education, Inc. Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 High resolution1 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

16 5 - 16© 2014 Pearson Education, Inc. House of Quality Example Low electricity requirements Aluminum components Auto focus Auto exposure High number of pixels Ergonomic design Relationships between the things we can do What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

17 5 - 17© 2014 Pearson Education, Inc. House of Quality Example Weighted rating Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 High resolution1 Our importance ratings What the Customer Wants Relationship Matrix Technical Attributes and Evaluation How to Satisfy Customer Wants Interrelationships Analysis of Competitors

18 5 - 18© 2014 Pearson Education, Inc. House of Quality Example Company A Company B GPGPFGGPPPGPGPFGGPPPP Lightweight 3 Easy to use 4 Reliable5 Easy to hold steady 2 High resolution1 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

19 5 - 19© 2014 Pearson Education, Inc. 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 2 circuits Failure 1 per 10,000 Panel ranking 0.5 A 75% 2 to

20 5 - 20© 2014 Pearson Education, Inc. House of Quality Example Completed House of Quality Low electricity requirements Aluminum components Auto focus Auto exposure High number of pixels Ergonomic design Company A Company B Lightweight3 Easy to use4 Reliable5 Easy to hold steady2 High resolution1 Our importance ratings 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

21 5 - 21© 2014 Pearson Education, Inc. House of Quality Sequence Figure 5.4 Deploying resources through the organization in response to customer requirements Production process Quality plan House 4 Specific components Production process House 3 Design characteristics Specific components House 2 Customer requirements Design characteristics House 1

22 5 - 22© 2014 Pearson Education, Inc. Organizing for Product Development Traditionally – distinct departments Duties and responsibilities are defined Difficult to foster forward thinking A Champion Product manager drives the product through the product development system and related organizations

23 5 - 23© 2014 Pearson Education, Inc. Organizing for Product Development Team (project) approach Cross functional – representatives from all disciplines or functions Product development teams, design for manufacturability teams, value engineering teams Japanese whole organization approach No organizational divisions

24 5 - 24© 2014 Pearson Education, Inc. Manufacturability and Value Engineering Concerned with improvement of product: 1.Reduced complexity of the product 2.Reduction of environmental impact 3.Additional standardization of components 4.Improvement of functional aspects of the product 5.Improved job design and job safety 6.Improved maintainability (serviceability) of the product 7.Robust design

25 5 - 25© 2014 Pearson Education, Inc. Cost Reduction of a Bracket via Value Engineering Figure 5.5

26 5 - 26© 2014 Pearson Education, Inc. Issues for Product Design Robust design Modular design (http://www.youtube.com/watch?v=yEWOk -5qWRk) CAD/CAM 3D modelling, 3D printing Value analysis - QI Sustainability and Life Cycle Assessment

27 5 - 27© 2014 Pearson Education, Inc. Product Development Continuum InternalCost of product development Shared LengthySpeed of product developmentRapid and/ or Existing HighRisk of product developmentShared External Development Strategies Alliances Joint ventures Purchase technology or expertise by acquiring the developer Internal Development Strategies Migrations of existing products Enhancements to existing products New internally developed products Figure 5.6

28 5 - 28© 2014 Pearson Education, Inc. Defining a Product First definition is in terms of functions Rigorous specifications are developed during the design phase Manufactured products will have an engineering drawing Bill of material (BOM) lists the components of a product

29 5 - 29© 2014 Pearson Education, Inc. Monterey Jack Cheese (a)U.S. grade AA. Monterey cheese shall conform to the following requirements: (1) Flavor. Is fine and highly pleasing, free from undesirable flavors and odors. May possess a very slight acid or feed flavor. (2) Body and texture. A plug drawn from the cheese shall be reasonably firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not possess sweet holes, yeast holes, or other gas holes. (3) Color. Shall have a natural, uniform, bright and attractive appearance. (4) Finish and appearancebandaged and paraffin-dipped. The rind shall be sound, firm, and smooth providing a good protection to the cheese. Code of Federal Regulation, Parts 53 to 109, General Service Administration

30 5 - 30© 2014 Pearson Education, Inc. Engineering Drawings Figure 5.8

31 5 - 31© 2014 Pearson Education, Inc. Bills of Material BOM for a 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)

32 5 - 32© 2014 Pearson Education, Inc. 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 Tomato1 slice Red onion4 rings Pickle1 slice French fries5 oz. Seasoned salt1 tsp. 11-inch plate1 HRC flag1 Figure 5.9 (b)

33 5 - 33© 2014 Pearson Education, Inc. Group Technology Scheme Figure 5.10 (a) Ungrouped Parts (b) Grouped Cylindrical Parts (families of parts) GroovedSlotted ThreadedDrilledMachined

34 5 - 34© 2014 Pearson Education, Inc. Documents for Production Assembly drawing Assembly chart Route sheet Work order Engineering change notices (ECNs)

35 5 - 35© 2014 Pearson Education, Inc. Assembly Drawing Shows exploded view of product Details relative locations to show how to assemble the product Figure 5.11 (a)

36 5 - 36© 2014 Pearson Education, Inc. 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

37 5 - 37© 2014 Pearson Education, Inc. 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

38 5 - 38© 2014 Pearson Education, Inc. 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

39 5 - 39© 2014 Pearson Education, Inc. Engineering Change Notice (ECN) A correction or modification to a products definition or documentation Engineering drawings Bill of material Quite common with long product life cycles, long manufacturing lead times, or rapidly changing technologies

40 5 - 40© 2014 Pearson Education, Inc. Adding Service Efficiency Service productivity is notoriously low partially because of customer involvement in the design or delivery of the service, or both Complicates product design In what ways can service delivery become more efficient?

41 5 - 41© 2014 Pearson Education, Inc. Adding Service Efficiency Limit the options Improves efficiency and ability to meet customer expectations Delay customization Modularization Eases customization of a service

42 5 - 42© 2014 Pearson Education, Inc. Adding Service Efficiency Automation Reduces cost, increases customer service Moment of truth Critical moments between the customer and the organization that determine customer satisfaction

43 5 - 43© 2014 Pearson Education, Inc. Documents for Services Scripts and Storyboards Guidelines Decision Trees Procedure

44 5 - 44© 2014 Pearson Education, Inc. (.6) Low sales (.4) High sales (.6) Low sales (.4) High sales Decision Tree Example Purchase CAD $388,000 Hire and train engineers $365,000 Do nothing $0 $0 Net $800,000Revenue – 400,000Mfg cost ($50 x 8,000) – 375,000Hire and train cost $25,000Net $2,500,000Revenue – 1,250,000Mfg cost ($50 x 25,000) – 375,000Hire and train cost $875,000Net $2,500,000Revenue – 1,000,000Mfg cost ($40 x 25,000) – 500,000CAD cost $1,000,000Net $800,000Revenue – 320,000Mfg cost ($40 x 8,000) – 500,000CAD cost – $20,000Net loss Figure 5.13

45 5 - 45© 2014 Pearson Education, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.


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