PRODUCTION AND OPERATIONS MANAGEMENT

Ch. 6: Design of Goods and Services

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Learning Objectives


How should products/services be designed systematically?

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Humor in Product Design

As the customer wanted it. As Marketing interpreted it.

1984-1994 T/Maker Co.

1984-1994 T/Maker Co.

As Operations made it.

As Engineering designed it.

1984-1994 T/Maker Co.

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What is a Product?


NeedNeed-satisfying offering of an organization

Example P&G

does not sell laundry detergent P&G sells the benefit of clean clothes
 

Customers buy satisfaction, not parts May be a good or a service

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Product Strategy Options

Product differentiation Low cost Rapid response

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Generation of New Product Opportunities

     Economic change Sociological and demographic change Technological change Political/legal change Changes in market practice professional standards suppliers and distributors
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Product Components
Product

Brand (Name)

Product Idea

Package

Physical Good

Features

Quality Level

Service (Warranty)

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Product Life Cycle

   

Introduction Growth Maturity Decline

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Product Life Cycle Introduction



Fine tuning
research product

development process modification and enhancement supplier development

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Product Life Cycle Growth

 

Product design begins to stabilize Effective forecasting of capacity becomes necessary Adding or enhancing capacity may be necessary

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Product Life Cycle Maturity

 

Competitors now established High volume, innovative production may be needed Improved cost control, reduction in options, paring down of product line

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Product Life Cycle Decline



Unless product makes a special contribution, must plan to terminate offering

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Product Life Cycle, Sales, Cost, and Profit

Sales, Cost & Profit .

Cost of Development & Manufacture

Sales Revenue Net Revenue

Loss Time

Introduction

Growth

Maturity
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Decline
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Percent of Sales From New Product

50% 40% 30% 20% 10% 0% Position of Firm in Its Industry
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Industry Leader Top Third Middle Third Bottom Third

Products in Various Stages of Life Cycle

Sales Introduction Growth Roller Blades Virtual Reality Maturity Jet Ski Boeing 727 Decline

Time
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Few Successes
Number

2000 1500

Ideas

1750
Market requirement Design review, Testing, Introduction

1000

1000 500 0

Functional specification

500

Product specification

100
Development Stage
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Product Development Stages

        

Idea generation Assessment of firms ability to carry out Customer Requirements Functional Specification Scope of design for Product Specifications manufacturability and value engineering Design Review teams Test Market Introduction to Market Scope of product development team Evaluation
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Idea Generation Stage

 

Provides basis for entry into market Sources of ideas

Market need (60-80%); engineering & (60operations (20%); technology; competitors; inventions; employees Identifies, defines, & selects best market opportunities
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Follows from marketing strategy

Customer Requirements Stage

Identifies & positions key product benefits Stated in core benefits proposition (CBP) Example: Long lasting with more power (Sears Die Hard Battery) House of Quality Identifies detailed list of product attributes desired by customer Customer Focus groups or Requirements 1-on-1 interviews
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Product Characteristics

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Functional Specification Stage

 

 

Defines product in terms of how the product would meet desired attributes Identifies products engineering characteristics Example: printer noise (dB) Prioritizes engineering characteristics House of Quality May rate product compared to competitors
Product Characteristics

Customer Requirements

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Product Specification Stage

 

Determines how product will be made Gives products physical specifications

Example: Dimensions, material etc.

Defined by engineering House of Quality drawing Done often on computer Component

ComputerComputer-Aided Design (CAD)

Specifications Product Characteristics

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Manufacturability and Value Engineering



Benefits:
reduced

complexity of products additional standardization of products improved functional aspects of product improved job design and job safety improved maintainability of the product robust design
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Issues for Product Development



Robust design
Product is designed so that small variations in production or assembly do not adversely affect the product

TimeTime-based competition
Product life cycles are becoming shorter

Modular design
Products designed in easily segmented components

ComputerComputer-aided design
Designing products at a computer terminal or work station

Value analysis
Seeks improvements leading either to a better product or a product which can be more economically produced

Product-byProduct-by-value analysis
Lists products in descending order of their individual dollar contribution to the firm

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Product Documents


Engineering drawing Shows dimensions, tolerances, & materials Shows codes for Group Technology Bill of Material Lists components, quantities & where used Shows product structure
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What documents are needed for production?



Depends on the production technology/machinery available Adapted to the manufacturing process implemented What, who, when, how should be done with our machines

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Gate Valve

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Exploded Drawing of the Gate Valve

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Engineering Drawing of the Gate Valve

Provide part specifications and dimensions in sufficient detail for manufacturing

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Parts List of the Gate Valve

The parts list provides a listing of the component parts of a product. In addition to make or buy decisions, a parts list includes part number, part name, number of parts per product, and drawing references

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Bill of Materials for the Gate Valve

Bill of materials is also referred to as a structured parts list since it includes all of the information typically included in the parts list, as well as information concerning the structure of the product.

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Make-orMake-or-Buy Decisions


Decide whether or not you want (or need) to produce an item May be able to purchase the item as a standard item from another manufacturer

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Group Technology Characteristics



Parts grouped into families

Similar, more standardized parts Describes processing & physical characteristics

Uses coding system

Part families produced in manufacturing cells

MiniMini-assembly lines
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Group Technology Code Example

4mm x 45 chamfer 80mm 112mm
Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe)
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Round Rod

60mm

Product Code: 1 5 3 1

Group Technology Benefits

     

Improved product design Reduced purchases Reduced work-in-process inventory work-inImproved routing & machine loading Reduced setup & production times Simplified production planning & control

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Production Documents


  

Assembly Drawings Assembly chart Route sheet Work order

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Assembly Drawing


Shows exploded view of product

Head

Neck End Cap

36

Handle
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Assembly Chart
1
Tuna Fish SA1 Tuna Assy

A1
Sandwich

Mayonaise

FG

Bread

A2

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Assembly Chart I
It is an analog model of the assembly process. Circles with a single link denote basic components, circles with several links denote assembly operations/subassemblies, and squares represent inspection operations.

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Assembly Chart II

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Route Sheet


Lists all operations

Route Sheet for Bracket
Sequence 1 2 3 4 Machine Shear # 3 Shear # 3 Drill press Brake press Operation Shear to length Shear 45 corners Drill both holes Bend 90 Setup Time 5 8 15 10 Operation Time/Unit .030 .050 3.000 .025

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Information Gathering
Information about process :
- Route sheet (equipment and operation times) - Precedence Diagram (prerequisite assembly steps before new assembly step) - Operation process chart (processing operations, assembly operations, and inspections)

Route Sheet for one Component of the Gate Valve

Route sheet summarizes whether a part will be purchased or produced, how the production of a part will be achieved, what equipment will be used, and how long it take to perform each operation.

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Precedence Diagram for Assembling the Gate Valve

A precedence diagram establishes the prerequisite assembly steps that must be completed before performing a given assembly step.

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Operations Process Chart

By superimposing the route sheets and the assembly chart, a chart results that gives an overview of the flow within the facility. This chart is the operations process chart.

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Work Order
Authorizes producing a given item, usually to a schedule

1984-1994 T/Maker Co.

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Engineering Change Notice (ECN)



A correction or modification of an engineering drawing or bill of material

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Configuration Management


A system by which a products planned and changing components are accurately identified and for which control and accountability of change are maintained

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Application of Decision Trees to Product Design

 

Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes. Considerations: Include all possible alternatives and states of nature - including doing nothing Enter payoffs at end of branch Approach determining expected values by pruning tree

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Transition to Production


First issue: knowing when to move to production! Second: must view product development as evolutionary, not responsibility of single individual/department Third: expect to need a trial production period to work the bugs out Fourth: recognize that responsibility must also transition
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Documents in the design of services

 

Are they needed? Whenever rules must be applied in many different sites (e.g. Mcdonalds) Whenever procedures must be followed to fullfil requirements

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McDonalds manuals

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McDonalds manuals

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What do you need to implement this reception message?

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