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HR Om11 ch05
HR Om11 ch05
HR Om11 ch05
and Services 5
PowerPoint presentation to accompany
Heizer and Render
Operations Management, Eleventh Edition
Principles of Operations Management, Ninth Edition
© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. 5-1
Outline
► Global Company Profile: Regal Marine
► Goods and Services Selection
► Generating New Products
► Product Development
► Issues for Product Design
► Product Development Continuum
► Global market
► 3-dimensional CAD system
► Reduced product development time
► Reduced problems with tooling
► Reduced problems in production
► Assembly line production
► JIT
© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. 5-6
Goods and Services Selection
► Organizations exist to provide goods or
services to society
► Great products are the key to success
► Top organizations typically focus on core
products
► Customers buy satisfaction, not just a
physical good or particular service
► Fundamental to an organization's
strategy with implications throughout the
operations function
© 2014 Pearson Education, Inc. 5-7
Goods and Services Selection
► Goods or services are the basis for an
organization's existence
► Limited and predicable life cycles
requires constantly looking for,
designing, and developing new
products
► New products generate substantial
revenue
40% –
Percent of sales from
10% –
0% – Figure 5.1
Industry Top Middle Bottom
leader third third third
► Differentiation
► Shouldice Hospital
► Low cost
► Taco Bell
► Rapid response
► Toyota
Sales revenue
Net revenue (profit)
Cash
flow
Negative
cash flow Loss
Figure 5.2
Growth Phase
► Product design begins to
stabilize
► Effective forecasting of capacity
becomes necessary
► Adding or enhancing capacity
may be necessary
Decline Phase
► Unless product makes a special
contribution to the organization,
must plan to terminate offering
80 –
Percent of total cost
60 – Costs incurred
40 –
20 – Ease of change
0–
Concept Detailed Manufacturing Distribution,
design design service,
prototype and disposal
© 2014 Pearson Education, Inc. 5 - 18
Product-by-Value Analysis
Customer Requirements
Functional Specifications
Introduction
Evaluation
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
What the
customer wants
Customer
importance
rating
(5 = highest)
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Low electricity requirements
Aluminum components
Ergonomic design
Customer Wants
Auto exposure
Auto focus
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Medium relationship
Low relationship
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
Relationship matrix
© 2014 Pearson Education, Inc. 5 - 27
House of Quality Example
Interrelationships
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Relationships between
the things we can do
Aluminum components
Ergonomic design
Auto exposure
Auto focus
How to Satisfy
Customer Wants
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Lightweight 3
Easy to use 4
Reliable 5
Easy to hold steady 2
High resolution 1
Our importance ratings 22 9 27 27 32 25
Weighted rating
How to Satisfy
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Company A
Company B
How well do competing
products meet customer
wants
Lightweight 3 G P
Easy to use 4 G P
Reliable 5 F G
Easy to hold steady 2 G P
High resolution 1 P P
How to Satisfy
Competitors
Analysis of
What the
Relationship
Customer
Matrix
Wants
Technical
Attributes and
Evaluation
Panel ranking
Target values
(Technical
2 circuits
attributes)
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F
Aluminum components
Ergonomic design
Auto exposure
Company A
Company B
Auto focus
Completed
House of Lightweight
Easy to use
3
4
G P
G P
Quality Reliable
Easy to hold steady
5
2
F G
G P
High resolution 1 P P
Our importance ratings 22 9 27 27 32 25
Panel ranking
(Technical
attributes)
2 circuits
2’ to ∞
0.5 A
75%
Company A 0.7 60% yes 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F
© 2014 Pearson Education, Inc. Us 0.5 75% yes 2 ok G 5 - 32
House of Quality Sequence
Deploying resources through the organization
in response to customer requirements
Quality
plan
Production
process
Production
Specific
House
process
components
components
House 4
Specific
Design
characteristics
characteristics
3
House
Design
2
requirements
Customer
House
1
Figure 5.4
© 2014 Pearson Education, Inc. 5 - 33
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
Figure 5.5
1. Product quality
2. Shorter design time
3. Production cost reductions
4. Database availability
5. New range of capabilities
Figure 5.8
Figure 5.10
© 2014 Pearson Education, Inc. 5 - 59
Group Technology Benefits
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
► Assembly drawing
► Assembly chart
► Route sheet
► Work order
► Engineering change notices (ECNs)
Setup Operation
Process Machine Operations Time Time/Unit
1 Auto Insert 2 Insert Component 1.5 .4
Set 56
2 Manual Insert Component .5 2.3
Insert 1 Set 12C
3 Wave Solder Solder all 1.5 4.1
components
to board
4 Test 4 Circuit integrity .25 .5
test 4GY
Work Order
Production Delivery
Dept Location
Figure 5.12
▶ Automation
▶ Reduces cost, increases customer
service
▶ Moment of truth
▶ Critical moments between the customer
and the organization that determine
customer satisfaction
(.4)
High sales
(.6)
Low sales
Do nothing
Figure 5.13
© 2014 Pearson Education, Inc. 5 - 80
Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
(.4)
High sales= (.4)($1,000,000) + (.6)(– $20,000)
EMV (purchase CAD system)
(.6)
Low sales
Do nothing
Figure 5.13
© 2014 Pearson Education, Inc. 5 - 81
Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
(.4)
High sales= (.4)($1,000,000) + (.6)(– $20,000)
EMV (purchase CAD system)
= $388,000
(.6)
Low sales
Do nothing
Figure 5.13
© 2014 Pearson Education, Inc. 5 - 82
Decision Tree Example
$2,500,000 Revenue
(.4) – 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD – 500,000 CAD cost
$388,000 High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales – 320,000 Mfg cost ($40 x 8,000)
– 500,000 CAD cost
Hire and train engineers – $20,000 Net loss
$365,000
$2,500,000 Revenue
(.4) – 1,250,000 Mfg cost ($50 x 25,000)
– 375,000 Hire and train cost
High sales
$875,000 Net
$800,000 Revenue
(.6) – 400,000 Mfg cost ($50 x 8,000)
– 375,000 Hire and train cost
Low sales
Do nothing $0 $25,000 Net