design of goods and services - university of northern …schragec/present 5.pdf1 chris schrage ops 5...

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Chris Schrage OPS 5 1

Design of Goods and Services

Operations ManagementChapter 5

2Chris Schrage OPS 5

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1st of the ten OM strategy decisions

� Products� TANGIBLE� INTANGIBLE

� Product offerings exploit core competencies� Technology� Customization

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Product Strategy Options

DifferentiationLow-costResponse


Product Life Cycle

� Introductory Phase

�Growth phase

�Maturity Phase

�Decline Phase


Product by Value Analysis

� Ranking of products based on dollar contribution to company� Individual product

contribution� Total annual contribution

� Focuses the strategic direction for products

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New product opportunities

� Understanding the customer� Economic change� Sociological and demographic

change� Technological change� Political/legal change� Other

� Market practice� Professional standards� Suppliers� Distributors


New Product Impact

� Generally first mover will acquire major market square

� Hamilton Sundstrand� 1 in 10 projects result in successful product

� Concept to market 15 to 20 years� Millions of dollars of investment per project

� Thousands of new projects every year� Only a fraction gain market acceptance or

enough market share to be profitable


Product Development� Concepts come from a variety of sources

� Internal� External

� Must be evaluated every step of the processIdeasFirm’s abilities or competenciesCustomer requirementsFunctional specificationsProduct specificationsDesign reviewTest marketIntroductionEvaluation

Scope of product

develop

ment team

Scope of design and engineering teams

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QFD- Quality Function Deployment

� Determining what the customer wants� Translating the customers desires into the design� Seven steps to “House of Quality”

� Identify customer Wants� Determine how the “product” will satisfy –

� Characteristics, features, aesthetics, attributes� Relate the Wants to Hows� Relate to the firm’s Hows� Develop importance ratings� Evaluate competing products� Consider technical attributes

� Your company� Competing firms


Organizing product development

Firm

R&D Engineering Manufacturing


Issues for Product Design

� Manufacturability� Value Engineering� Robust design� Modular design� CAD computer aided design� CAM computer aided manufacturing� Virtual reality � Value analysis� Ethics� Environmentally friendly designs

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Product Development Continuum

Cost

Speed

Risk

Internal

SharedHigh

RapidLengthy

Shared


External Development Strategies

� Purchasing technology by acquiring a firm� Joint ventures

� FAW-VW

� Alliances


Defining the product

� What is the function of the product?� How should the product be produced to fulfill its

purpose?� What levels of quality are required?

� Engineering Drawings� Bill of Materials

� Listing of components� (recipes)

� Portion-control standards

� Quality specifications

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Documents for production

�Assembly chart�Route sheet�Work order�Engineering change notice (ECN)�Configuration management�Product Life-Cycle Management (PLM)


Service Design

� Customer interaction� Design� Delivery

� Cost and Quality� Customization delayed to last stages� Modularize segments

� Customization

� Automation/reduced customer interaction

One or the other or both


Moment of Truth

ExperienceDetractors

StandardExpectations

ExperienceEnhancers

Customer Satisfaction

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Transition to Production

� Project managers� Product development

teams� Integration of the

product development and manufacturing organization

Goal is to make sure the transition from R&D to manufacturing isas smooth as possible.


Fighting change is like holding your breath. If you persist you will

die.