Transcript Chapter 1, Heizer/Render, 5th edition

What Operations Managers Do
Plan - Organize - Staff - Lead - Control
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Ten Critical Decisions
 Service, product design……………..
 Quality management…………………
 Process, capacity design…………..
 Location …………….…………………
 Layout design ………………………..
 Human resources, job design……..
 Supply-chain management…………
 Inventory management …………….
 Scheduling ……………………………
 Maintenance ………………………….
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Ch. 5
Ch. 6, 6S
Ch. 7, 7S
Ch. 8
Ch. 9
Ch. 10, 10S
Ch. 11,11s
Ch. 12, 14, 16
Ch. 3, 13, 15
Ch. 17
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The Critical Decisions
Quality management
Who is responsible for quality?
 How do we define quality?

Service and product design
What product or service should we offer?
 How should we design these products and
services?

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The Critical Decisions - Continued
Process and capacity design
What processes will these products require and in
what order?
 What equipment and technology is necessary for
these processes?

Location
Where should we put the facility
 On what criteria should we base this location
decision?

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The Critical Decisions - Continued
Layout design
How should we arrange the facility?
 How large a facility is required?

Human resources and job design
How do we provide a reasonable work
environment?
 How much can we expect our employees to
produce?

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The Critical Decisions - Continued
Supply chain management
Should we make or buy this item?
 Who are our good suppliers and how many should
we have?

Inventory, material requirements planning,
How much inventory of each item should we have?
 When do we re-order?

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The Critical Decisions - Continued
Intermediate, short term, and project
scheduling
Is subcontracting production a good idea?
 Are we better off keeping people on the payroll
during slowdowns?

Maintenance
Who is responsible for maintenance?
 When do we do maintenance?

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Operations
Management
Design of Goods and Services
Chapter 5
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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?
Need-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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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 production may be needed
Improved cost control, reduction in options
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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
Profit
Cash flow
Loss
Time
Introduction
Growth
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Maturity
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Decline
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50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Industry Leader
Percent of Sales From New Product
Top
Third
Middle
Third
Bottom
Third
Position of Firm in Its Industry
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Product-by-Value Analysis
Lists products in descending order of their
individual dollar contribution to the firm.
Helps management evaluate alternative
strategies.
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Scope of product development team
Product Development Stages
Idea generation
Assessment of firm’s ability to carry out
Customer Requirements
Functional Specification
Scope of design for
Product Specifications
manufacturability and
Design Review
value engineering teams
Test Market
Introduction to Market
Evaluation
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Quality Function Deployment
Identify customer wants
Identify how the good/service will satisfy
customer wants
Relate customer wants to product hows
Identify relationships between the firm’s
hows
Develop importance ratings
Evaluate competing products
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QFD House of Quaoity
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House of Quality Example
You’ve been assigned
temporarily to a QFD team.
The goal of the team is to
develop a new camera
design. Build a House of
Quality.
© 1984-1994 T/Maker Co.
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House of Quality Example
Customer
Requirements
Customer
Importance
Target Values
High relationship  Medium relationship  Low Relationship
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House of Quality Example
What the customer desires
(‘wall’)
Customer
Requirements
Customer
Importance
Aluminum
Parts
Auto
Focus
Auto
Exposure
Light weight
Easy to use
Reliable
Target Values
High relationship  Medium relationship  Low Relationship
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House of Quality Example
Average customer
importance rating
Customer
Requirements
Customer
Importance
Light weight
Easy to use
Reliable
3
2
1
Aluminum
Parts
Auto
Focus
Auto
Exposure
Target Values
High relationship  Medium relationship  Low Relationship
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House of Quality Example
Relationship between customer
attributes & engineering
characteristics (‘rooms’)
Customer
Requirements
Customer
Importance
Light weight
Easy to use
Reliable
3
2
1
Aluminum
Parts

Auto
Focus
Auto
Exposure




High relationship  Medium relationship  Low Relationship
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House of Quality Example
Target values for engineering
characteristics (‘basement’);
key output

Customer
Requirements
Customer
Importance
Light weight
Easy to use
Reliable
3
2
1
Target Values
Aluminum
Parts

5
Auto
Focus
Auto
Exposure




1
1
High relationship  Medium relationship  Low Relationship
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House of Quality Example

Customer
Requirements
Customer
Importance
Light weight
Easy to use
Reliable
3
2
1
Target Values
Aluminum
Parts

5
Auto
Focus
Auto
Exposure




1
1
High relationship  Medium relationship  Low Relationship
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Organizing for Product
Development
Historically – distinct departments
Duties and responsibilities are defined
 Difficult to foster forward thinking

Today – team approach
Representatives from all disciplines or functions
 Concurrent engineering – cross functional team

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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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Cost Reduction of a Bracket via
Value Engineering
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Issues for Product Development
Robust design
Time-based competition
Modular design
Computer-aided design
Value analysis
Environmentally friendly design
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Robust Design
Product is designed so that small variations
in production or assembly do not adversely
affect the product
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Modular Design
Products designed in easily segmented
components.
Adds flexibility to both production and
marketing
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Computer Aided Design (CAD)
 Designing products at
a computer terminal or
work station
Design engineer
develops rough
sketch of product
 Uses computer to
draw product

 Often used with CAM
© 1995 Corel Corp.
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Benefits of CAD/CAM
 Shorter design time
 Database availability
 New capabilities

Example: Focus more on product ideas
 Improved product quality
 Reduced production costs
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Extensions of CAD
 Design for Manufacturing
and Assembly (DFMA)
 3-D Object Modeling
 CAD/CAM – CAD info is
translated into machine
control instructions (CAM)
© 1995 Corel Corp.
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Virtual Reality
Computer technology used to develop an
interactive, 3-D model of a product.
Especially helpful in design of layouts
(factory, store, home, office)
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Value Analysis
Focuses on design improvement during
production
Seeks improvements leading either to a
better product or a product which can be
more economically produced.
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Environmentally Friendly Designs
Benefits
Safe and environmentally sound products
 Minimum raw material and energy waste
 Product differentiation
 Environmental liability reduction
 Cost-effective compliance with environmental
regulations
 Recognition as good corporate citizen

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“Green” Manufacturing
Make products recyclable
Use recycled materials
Use less harmful ingredients
Use lighter components
Use less energy
Use less material
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Time-based Competition
Product life cycles are becoming shorter.
Faster developers of new products gain on
slower developers and obtain a competitive
advantage
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Product Development Continuum
External Development Strategies
Alliances
Joint Ventures
Purchase Technology or Expertise by Acquiring the
Developer
Internal Development Strategies
Migrations of Existing Products
Enhancement to Existing Products
New Internally Developed Products
Internal ----------------------Cost of Product Development --------------------- Shared
Lengthy --------------------Speed of Product Development---------------Rapid and/or
Existing
High ------------------------- Risk of Product Development ----------------------- Shared
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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
© 1984-1994 T/Make
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Monterey Jack
(a) U.S. grade AA. Monterey cheese shall conform to the following
requirements:
(1)Flavor. Is fine and highly pleasing, free from undesirable flavors and
odors. May possess a very slight acid or feed flavor.
(2)Body and texture. A plug drawn from the cheese shall be reasonably
firm. It shall have numerous small mechanical openings evenly
distributed throughout the plug. It shall not possess sweet holes,
yeast holes, or other gas holes
(3)Color. Shall have a natural, uniform, bright and attractive
appearance.
(4)Finish and appearance - bandaged and paraffin-dipped. The rind
shall be sound, firm, and smooth providing a good protection to the
cheese
Code of Federal Regulation, Parts
53 to 109,. Revised as of Jan. 1,
1985, General Service
Administration
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Engineering Drawing Example
2-1/2
13/16
diameter
1
13/32
diameter
1/4 R
2-1/4
13/16
45°
3/8
13/16
5/16
1-5/8
Bracket
Scale: FULL
Drawn: J. Thomas
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A- 435-038
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Engineering Drawings - Show
Dimensions, Tolerances, etc.
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Bill of Material Example
© 1995 Corel Corp.
Bill of Material
P/N: 1000
Name: Bicycle
P/N
Desc
Qty
1001
Handle Bars
1
1002
Frame Assy
1
1003
Wheels
2
1004
Frame
1
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Units Level
Each
1
Each
1
Each
2
Each
2
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Bill of Materials – Manufacturing Plant
and Fast-Food Restaurant
Bill of Material for a Panel Weldment
Number
A60-71
Hard Rock Café’s Hickory BBQ Bacon
Cheeseburger
Description
Qty
Panel Weldm’t
1
A 60-7
R 60-17
R 60-428
P 60-2
Lower Roller Assembly
Roller
Pin
Locknet
1
1
1
1
60-72
R 60-57-1
A 60-4
02-50-1150
Guide Assem. Rear
Support Angle
Roller Assem.
Bolt
1
1
1
1
A 60-73
A 60-74
R 60-99
02-50-1150
Guide Assm, Front
Support Weldm’t
Wear Plate
Bolt
1
1
1
1
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Description
Qty
Bun
Hamburger Patty
Cheddar Cheese
Bacon
BBQ Onions
Hickory BBQ Sauce
Burger Set
Lettuce
Tomato
Red Onion
Pickle
French Fries
Seasoned Salt
11-inch Plate
HRC Flag
1
8 oz.
2 slices
2 strips
½ cup
1 oz.
1 leaf
1 slice
4 rings
1 slice
5 oz.
1 tsp
1
1
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Make-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
 Uses coding system

Describes processing & physical
characteristics
 Part families produced
in manufacturing cells

Mini-assembly lines
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© 1984-1994 T/Maker Co.
Group Technology Schemes
Enable Grouping of Parts
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Production Documents
Assembly Drawing
Assembly chart
Route sheet
Work order
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Assembly Drawing
 Shows exploded view of product
Head
Neck
End
Cap
Handle
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Assembly Chart for
A Tuna Sandwich
1
Tuna Fish
SA1
2
3
Tuna
Assy
A1
Sandwich
Mayonnaise
FG
Bread
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Assembly Drawing and Assembly
Chart
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Route Sheet
 Lists all operations
Route Sheet for Bracket
Sequence
Machine
Operation
1
Shear # 3
2
Shear # 3
3
Drill
press
Brake
press
Shear to
length
Shear 45°
corners
Drill both
holes
Bend 90°
4
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Setup
Time
5
Operation
Time/Unit
.030
8
.050
15
3.000
10
.025
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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 product’s planned and
changing components are accurately
identified and for which control and
accountability of change are maintained
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Service Design Nature of Customer Participation
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Improving Customer Relations at
a Drive-up Window
 Be especially discreet when talking with customer through the
microphone
 Provide written instructions for customers who must fill out
forms you provide
 Mark lines to be completed or attach a note with instructions
 Always say ”please” and “thank you”
 Establish eye contact with the customer if the distance allows it
 If the transaction requires that the customer park the car and
come into the lobby, apologize for the inconvenience.
Transparency Masters to accompany Heizer/Render –
Principles of Operations Management, 5e, and Operations
Management, 7e
1-63
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Moment-of-Truth at a Computer
Company
Experience Detractors
Experience Enhancers
Standard Expectations
I had to call more than once to
get through.
Only one local number needs to
be dialed
A recording spoke to me rather
than a person
I never get a busy signal
While on hold, I get silence,and
wonder if I am disconnected.
The operator sounded like he
was reading a form of routine
questions.
The operator sounded
uninterested
I felt the operator rushed me.
I get a human being to answer
my call quickly and he or she is
pleasant and responsive to my
problem
A timely resolution to my
problem is offered
The operator is able to explain
to me what I can expect to take
place
Transparency Masters to accompany Heizer/Render –
Principles of Operations Management, 5e, and Operations
Management, 7e
1-64
The operator was
sincerely concerned and
apologetic about my
problem
He asked intelligent
questions that allowed
me to feel confident in
his abilities
The operator offered
various times to have
work done, to suit my
schedule
Ways to avoid future
problems were
suggested
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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

Transparency Masters to accompany Heizer/Render –
Principles of Operations Management, 5e, and Operations
Management, 7e
1-65
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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
Transparency Masters to accompany Heizer/Render –
Principles of Operations Management, 5e, and Operations
Management, 7e
1-66
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458