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Chapter 4
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-2
Translate customer wants and needs into product and service requirements Refine existing products and services Develop new products and services Formulate quality goals Formulate cost targets Construct and test prototypes Document specifications Translate Product specifications into process specifications
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Reasons for Product or Service Redesign An organization takes into account both external and internal reasons in order to design a new product or service or redesign an existing product or service. The reasons listed next have often been the primary reason for the design process.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Reasons
1. Economic
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Bottom Line
What is important is to realize that whether its a single reason or multiple reasons for a design strategy, the end result should always be an improved, safe and reliable product which should bring revenue and competitive advantage to the organization
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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From a buyers stand point; What is the cost ? And Am I getting quality or value for my money ? From the Organization's standpoint; Is there demand for it? Can we do it ? Is outsourcing an option? Is it economical ? What are the liability issues? Is the level of quality appropriate?
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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And
Give Customer expect the VALUE they
Make HEALTH and SAFETY a primary concern Uniform Commercial Code Products SHOULD carry an implication of merchantability and fitness. (Warranties by the State
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Continue..
longer-lasting and betterfunctioning products will have to be replaced less frequently, reducing the impacts of producing replacements
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Imagine !!
Every year, Americans throw away 50 billion food and drink cans, 27 billion glass bottles and jars, and 65 million plastic and metal jar and can covers. More than 30% of our waste is packaging materials. Where does it all go? Some 85% of our garbage is sent to a dump, or landfill, where it can take from 100 to 400 years for things like cloth and aluminum to decompose. Glass has been found in perfect
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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McGraw-Hill/Irwin
Examine the functions of the parts of the product so that you reduce the cost of making or improve its performance in future So its Reducing the amount of waste you produce???! This is HOW .. Buy products that don't have a lot of packaging Instead of buying something you're not going to use very often, see if you can borrow it from someone
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Remember ..
You can always replace the worn-out defective parts of the product and resell it..This leads to the concept of Design for Disassembly..Which is designing products in such a way so that they can be easily taken apart Suggested Reading: Pg. no 139
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-20
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Demand
Decline Growth
Incubation
Time
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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PLC The life span of each stage of a product may vary from a few months to years. For an example, within no time some products reach growth stage as soon as they were introduced in the market. Now we will discuss about each stage of the product life cycle.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-23
Development Stage
The development stage can be a protracted stage and will involve activities such as design, planning, costing, test marketing, etc. The costs are high, with no earned revenue (and thus it does not register as a stage on the diagram)
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-24
1- Birth/Incubation/ Introduction Stage This is the stage where a product will be introduced after initial decisions like; Technology selection, Location and layout design of production facility After study of raw material, manpower resources availability
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-25
2- Growth Stage
This stage is about looking for growth. It is very critical in the operation management. The key of success is lying in this stage. How we take the product to people or how people will have the feel of necessity of the product depends on the efficient
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Stage 2- Growth
Sometimes the time taking to reach to growth stage will be faster because of the uniqueness of a product design or its usage when compared with its competitor's products. Major efforts are required at this stage to push with all possible strategies in an ethical
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-27
3- Maturity Stage
Once the product is established, the PLC enters into the maturity stage. At this stage organization takes feedback from various groups of users and improves the product usability with add on features and introduces different models without changing the basic
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-28
4- Decline/Death Stage
As discussed in maturity stage, in case business management could not predict the impact of the new product growth and lack of taking necessary changes in the product design, the product life cycle enters into the decline or death stage, which leads to the organization merging with new companies or liquidation or sale.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-29
Conclusion
The operation management of the organization should always keep watching the new trends of people's taste or requirements And the available latest technology and competitor's new proposals so that necessary actions can be taken in advance to decrease the growth stage Increase the span of the maturity stage.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-30
Standardization-Disadvantages
Extent to which there is absence of variety in a product, service or process. Designs may be frozen with too many imperfections remaining. High cost of design changes increases resistance to improvements. Decreased variety results in less consumer appeal.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-31
Extent to which there is absence of variety in a product, service or process. Fewer parts to deal with inventory & manufacturing Reduced training costs and time More routine handling, and
McGraw-Hill/Irwin
StandardizationAdvantages
in
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
purchasing, inspection
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Standardization- Advantages
Orders fill able from inventory Opportunities for long production runs and automation Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-33
A strategy of producing standardized goods or services, but incorporating some degree of customization. Several tactics makes this possible; Delayed differentiation Modular design
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-34
Delayed Differentiation
Delayed differentiation is a postponement tactic where the manufacturing process starts by making a generic or family product that is later differentiated into a specific end-product. This is a widely used method, especially in industries with high demand uncertainty, It can be effectively used to address
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-35
An example would be Benetton and their knitted sweaters that are initially all white, and then dyed into different colors only when the season/customer color preferences/demand is known.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Modular Design
Modular Design is an approach in which component is an approach that subdivides a system into smaller parts (modules) that can be independently created and then used in different systems to drive multiple functionalities. It allows; reduction in cost (due to lesser customization, and less learning time flexibility in design An example would be computers, If
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-37
Dell Computers has used MD successfully to become a dominant force in the PC industry by offering consumers the opportunity to configure modules according to their own specifications.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-38
Reliability
Reliability: The ability of a product, part, or system to perform its intended function under a prescribed set of conditions Failure: Situation in which a product, part, or system does not perform as intended Normal operating conditions: The set of conditions under which an items reliability is specified
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-39
Improving Reliability
Component design Production/assembly techniques Testing Redundancy/backup Preventive maintenance procedures User education System design
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-40
Robust Design
Robust Design: 1.Design that results in products or services that can function over a broad range of condition 2.Robust Design is a proven development philosophy focused on achieving target reliability 3.The objective is to make the endproduct immune to factors that could adversely affect performance
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-41
Robust Design
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Robust Design
Robust Design: Not just strong. Flexible! Idiot proof! Simple! Efficient! A product/process that produces consistent, high-level performance "despite being subjected to a wide range of changing client and manufacturing conditions...."
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Taguchis Approach
Its easier to make a product that is insensitive to environmental factors, instead of controlling them like manufacturing imperfections, and deterioration
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-44
Idea generation Feasibility analysis Product specifications Process specifications Prototype development Design review Market test Product introduction Follow up evaluation
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-45
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Concurrent Engineering
Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Concurrent Engineering
It is to achieve a smooth transition from design to production Decreases development time Its about bringing design and manufacturing people together in the design phase Marketing, purchasing and manufacturing pple working as cross-functional teams The emphasis is on Problem
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-49
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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DFM
Products are initially conceptualized to provide a particular capability and meet identified performance objectives and specifications. a product can be designed in many different ways. The designer's objective must be to optimize the product design with the production system.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-51
DFM
A company's production system includes its suppliers, material handling systems, manufacturing processes, labor force capabilities and distribution systems. A designer's primary objective is to design a functioning product within given economic and schedule constraints Hence the designing of products
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-52
DFA
Design for Assembly is a process by which products are designed with ease of assembly in mind. If a product contains fewer parts it will take less time to assemble, thereby reducing assembly costs. In addition, if the parts are provided with features which make it easier to grasp, move, orient and insert them, this will also reduce assembly time and assembly costs.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-53
DFA
The reduction of the number of parts in an assembly has the added benefit of generally reducing the total cost of parts in the assembly. This is usually where the major cost benefits of the application of design for assembly occur. Examples; Sony Walkman and Swatch Watch, in which parts are inserted in straight-down moves
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-54
QFD
An approach that integrates the voice of the customer into both product and service type QFD is designed to help planners focus on characteristics of a new or existing product or service from the viewpoints of market segments, company, or technology development needs.
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-55
Manufacturability
Manufacturability is the ease of fabrication and/or assembly which is important for:
Cost Productivity Quality
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-56
Kano Model
n c f i a S r e m o t s u C
Customer Needs
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-57
The Kano model is a theory of product development and customer satisfaction which classifies customer preferences into five categories: Attractive One-Dimensional Must-Be Indifferent Reverse
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-58
KANO MODEL
Attractive Quality These attributes provide satisfaction when achieved fully, but do not cause dissatisfaction when not fulfilled, These are attributes that are not normally expected, For example, a thermometer on a package of milk showing the temperature of the milk One-dimensional Quality These attributes result in satisfaction when fulfilled and dissatisfaction when not fulfilled, An example of this would be a milk package that is said to have ten percent more milk for the same price will result in customer satisfaction, but if it only contains six percent then the customer will feel misled and it will lead to dissatisfactionWilliam J. Stevenson Operations Management, Seventh Edition, by
McGraw-Hill/Irwin
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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KANO MODEL
Must-be Quality These attributes are taken for granted when fulfilled but result in dissatisfaction when not fulfilled. An example of this would be package of milk that leaks. Customers are dissatisfied when the package leaks, but when it does not leak the result is not increased customer satisfaction. Since customers expect these attributes and view them as basic, then it is unlikely that they are going to tell the company about them when asked about quality attributes. Indifferent Quality These attributes refer to aspects that are neither good nor bad, and they do not result in either customer satisfaction or Operations J. customer dissatisfaction. Management, Seventh Edition, by WilliamInc. Stevenson reserved. Copyright 2002 by The McGraw-Hill Companies, All rights
McGraw-Hill/Irwin
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KANO MODEL
Reverse Quality These attributes refer to a high degree of achievement resulting in dissatisfaction and to the fact that not all customers are alike. For example, some customers prefer hightech products, while others prefer the basic model of a product and will be dissatisfied if a product has too many extra features.[1]
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Tangible intangible Services created and delivered at the same time, car wash, a haircut Services cannot be inventoried Services highly visible to customers Services have low barrier to entry Service has to be innovative to be effective
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Service Design
Location is important to service design Convenience is a major factor Service design in terms of customer contact..Low versus High Personalized services versus SW development Word of cautionreducing customer choices may result in dissatisfaction, e.g.: A cable operator who would bundle the channels without your choice
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-64
Continue..
Standardizing or simplifying reduces the cost but lowers the appeals Its best utilized when Customer demand in incorporated
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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McGraw-Hill/Irwin
Major Steps in Service Blue Printing Establish boundaries Decide the level of detail Identify the sequence of actions and interactions refer to table 4.7 page 163 Develop time estimates for ach phase f the process Identify potential failure points Develop a plan to combat
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-67
Being consistent with the org. mission Being user-friendly Being robust if variability is a factor Easy to sustain cost-effective Offering values that obvious to customer
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-68
Challenges of Service Design Variable requirements that requires a range of inputs and outputs Difficult to describe, verbal descriptions are somewhat imprecise Customer contact is usually higher
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-69
Guidelines
Describe the package in detail Focus on the operation from customer perspective Consider the image that package presents Recognize the design familiarity with the system Make sure you have the support from mgmt as far as the design is concerned and also when is implemented
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-70
Guidelines
Quality described in terms of tangibles n intangibles Make sure that the rewards, training and recruitment policies are consistent with the service expectations Establish procedures to handle both predictable and unpredictable events Establish a system to monitor and
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-71
Operations Strategy
Shorten time-to-market Package products and services Increase emphasis on component commonality Use multiple-use platforms Consider tactics for mass customization Look for continual improvement
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
4-72
Is this YOU ??
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
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McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.