Chapter 1. Introduction
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Transcript Chapter 1. Introduction
Chapter 2. Customers, Products, and OM:
Strategy
Outline
Product Characteristics and the Customer
Corporate and Operations Strategy
Hierarchy of strategies
Order Winners and Qualifiers
Operations Strategy: Service vs. Manufacturing
Operations Strategy: Product Life Cycle
Product Design/Redesign Process/ QFD
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Product Characteristics and the Customer
Customer are classified by their product characteristic
preferences. Done through surveys and focus groups
Product Characteristics:
Aesthetics
Quality
Speed of Service/Delivery
Bundled Services
Cost
Variety/Customization
Warranties/Guarantees
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Corporate and Operations Strategy
One product can seldom satisfy all customer types
Companies recognize they must design products for a
specific market segment, leading to strategies
Strategy is a plan of attack (including which customers will
be “attacked”)
From the corporate strategy, functional strategies are
derived
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Hierarchy
of Strategies
MARKET
Functional Strategies
drive decision making
at multiple levels:
Strategic DM
Tactical DM
Operational/Day-today DM
CORPORATE
STRATEGY
MARKETING
STRATEGY
OPERATIONS
STRATEGY
Strategic Decision
Making
Tactical Decision
Making
FINANCE
STRATEGY
Products
Operation Priorities
Training Programs
Technology
Facilities
Procedures
Quality Programs
Operational Decision
Making
People and equipment schedules
Day-to-day inventory management
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Order Winners and Order Qualifiers
Order Qualifier: The level of a product characteristic(s) that
allow a product to be considered for selection
Order Winner: The level of a product characteristic(s) that
drive the customer decision to select a product
Order winners/qualifiers are dynamic
Changes as customer requirements change
Changes as competitive products change
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Order Winners and Order Qualifiers
Order winners become drivers for operations strategy
COST
QUALOITY/RELIABILITY
VARIETY/CUSTOMIZATION
SPEED OF SERVICE/DELIVERY
Operations Efficiency
Quality at Design/Zero Defects
Recognition of customer needs
Supply Chain Coordination
Focused Operations - few order winning characteristics
Operations as a driver for corporate strategy
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Operations Strategy: Services vs.
Manufacturing
Operational Strategies differ in implementation
Cost Strategy: Cost may be reduced in materials or
manufacturing locations versus in services is based on process
standardization and the level of resources
Manufacturing: tangible product, versus Service: “it falls on
your foot and it does not hurt”
Difficult to differentiate between services and products as
products are bundled with services
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Operations Strategy: Product Life Cycles
The life cycle of a product has an effect on the operations
strategy
Birth Stage: Product Design
Growth Stage: Capacity Management
Mature Stage: Increasing Efficiency and Quality
Decline Stage: Cost minimization and resource relocation
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Product Design/ Redesign Process
Product Design is
critical
Must match critical
customer
requirements
Design Steps
marketing
Determine Customer Requirements
engineering design
Idea Generation/Solutions
Initial Design/Prototypes
Design Review
Complete Functional Specifications
production/
manufacturing/
supply chain/
quality
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Initial Production and Market Test
Full Production
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Product Design/ Redesign Process
Past: “Over the wall design” vs. Today: Concurrent
Engineering - multi functional teams
Value Analysis: Analyzing process and products to eliminate
waste and simply products
Evaluating Designs: Quality Functional Deployment
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Quality Functional Deployment
Positive Relationship
COMPETITIVE EVALUATION
Negative Relationship
Number and Training
and Serving Staff
Transportation
Equipment
Serving Equipment
CUSTOMER REQUIREMENTS
Kitchen Space
and Equipment
PRODUCT ATTRIBUTES
Cooking Staff Skills
/Recipes Used
Used
extensiv
ely at
NASA
(simple
version)
The
House of
Quality
Strong Positive Relationship
DC= Distinct Catering
T= To your door Catering
M = Mama’s food Catering
Rank by Local Customers
(10=Best)
1
10
Variety in the Menu
6
On time Service
4
Aesthetic Pleasing
3
Food Taste
4
Competitive Price
5
T DC M
Pleasant Service
2
DC M
Importance Weighting
Modified Weighting
M
M
T
DC
DC
T
T M DC
T
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17
33
33
28
19
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27
DC
M
T
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21
11
Next Chapter
How to forecast product demand
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