[MNGT 3156] Operations Management & Total Quality Management

CADIZ, Alecsandra Dominic Y.

BS Accountancy 3A
Pre-lectio Activity

Design of Goods and Services

In a business or company, once a decision is made to introduce a new

product or service to the market, they have to be defined first. Initially, we could
define products or services in terms of their intended functions. Subsequently, they
undergo the design phase, during which the company determines how to achieve
those functions. With this, management considers techniques and choices on how
their products can fulfill their purpose. For example, management could consider
design elements when defining a product. Decisions of the management regarding
equipment, facility layout, and human resources allocation cannot be made until the
product is properly defined, designed, and documented. Consequently, every
organization requires comprehensive documentation to articulate the specifics of its
products.

In service design, “moment of truth” means that the relationship between

the service provider and customer is crucial, resulting in high customer interaction.
During these moments, the customer's overall satisfaction with the service is
determined. The responsibility of an operations manager in this context is to identify
and understand these moments of truth within their service operations. Once
identified, the manager has to design and manage the operational processes in such
a way that they consistently meet or exceed the customer's expectations during
these crucial moments. This proactive approach ensures that customers have
positive and memorable experiences that lead to higher satisfaction. This "moment
of truth" encapsulates the experience that either reinforces, enhances, or diminishes
the customer's expectations.

As defined in the book, process chain refers to a “sequence of steps that

accomplishes an identifiable purpose of providing value to process participants.” In a
process chain network, there are three main process regions wherein activities
between participants (manufacturer, a service provider, or a customer) are
categorized. Firstly, the direct interaction region represents the set of activities
within each participant's domain that directly interact with or depend on the other
participant's actions. Next, the surrogate or substitute interaction region includes
activities that one participant can perform on behalf of the other. And finally, the
independent processing region encompasses activities that are entirely within the
control of each participant and do not require direct interaction or coordination with
the other participant. In essence, the process chain is an important concept in
process management and optimization, as it allows organizations to systematically
organize their activities to achieve specific objectives while considering the needs
and benefits of everyone participating in the process.

In product development, certai processes are undergone by companies and

their businesses. There has to be a continuous process of product development in
order to foster innovation and generate profits from new products. In this process, it
is imperative for a business to ensure that their internal processes are properly
thought out. The main stages in product development include establishing a product
development system. A product development system is a crucial component of a
company since it influences their ability to innovate, respond to changes in the
market, ensure quality, allocate their resources, and deliver value to customers.

Next the company has to identify customer requirements and translate them
into the attributes that each functional area can understand and act on through
quality function deployment (QFD). The "house of quality" is a tool used in QFD
to show how what customers want is connected to the product or service. By using
this tool, managers can carefully figure out this connection, which helps them design
products and processes that include the features customers want.

Next, there are four approaches to organizing for product development. The
first approach is by having separate departments - one for research and
development to do research, one for engineering to design the product, one for
manufacturing engineering to design how to make the product, and one for
production to actually make the product. Here there are clear descriptions of duties
and responsibilities for each department. However, this approach lacks forward
thinking.

Another approach is having a product manager to oversee and ensure the

product through the product development system. The third apprach and presumably
the most optimal one, is the use of teams - product development teams, design for
manufacturability teams , and value engineering teams. Finally, the last approach is
more centralized in a single organization as opposed to the utilization of teams.

Finally, in product development, the manufacturability and value

engineering stage focus on making improvements to the design and specifications
of a product at various stages of development, including research, development,
design, and preproduction. These improvements not only reduce costs but can also
lead to other advantages.