Transcript Chapter 1, Heizer/Render, 5th edition

Operations
Management
Design of Goods and Services
Chapter 5
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Outline
 GLOBAL COMPANY PROFILE: REGAL
MARINE
 GOODS AND SERVICES SELECTION
Product Strategy Options Support Competitive
Advantage
 Product Life Cycles
 Life Cycle and Strategy
 Product-by-value Analysis

 GENERATING NEW PRODUCTS


New Product Opportunities
Importance of New Products
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Outline - continued
 PRODUCT DEVELOPMENT




Product Development System
Quality Function Deployment (QFD)
Organizing for Product Development
Manufacturability and Value Engineering







Robust Design
Modular Design
Computer-Aided Design (CAD)
Computer-Aided Manufacturing
Virtual Reality Technology
Value Analysis
Environmentally Friendly Design
 ISSUES FOR PRODUCT DESIGN
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Outline - continued
 Time-Based Competition



Purchase of Technology by Acquiring Firm
Joint Ventures
Alliances
 Defining the Product
Make-or-buy Decisions
Group Technology
 DOCUMENTS FOR PRODUCTION
 SERVICE DESIGN
 Documents for Service


 Application of Decision Trees to Product
Design
 Transition to Production
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Learning Objectives
When you complete this chapter, you should be able
to :
Identify or Define:










Product life cycle
Product development team
Manufacturabililty and value engineering
Robust design
Time-based competition
Modular design
Computer aided design
Value analysis
Group technology
Configuration management
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Learning Objectives - Continued
When you complete this chapter, you should be able
to:
Explain:
Alliances
 Concurrent engineering
 Product-by-value analysis
 Product documentation

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Regal Marine
Global market
3-dimensional CAD
reduced product development time
 reduced problems with tooling
 reduced problems in production

Assembly line
JIT
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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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© 1984-1994 T/Maker Co.
5-8
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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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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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Legislation/ Implementation Date
Electrical-Waste directive
(2006)
Telecom-data-protection
directive (mid-2003)
Biotech-Labeling laws (2003)
Warning
Pedestrian-protection
initiative (2001-2012) (when
all new cars sold in Europe
must comply)
Chemicals review (staggered
through 2012)
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Stated Purpose
Industry Criticism
Makes electrical equipment
easier to recycle in part by
banning some hazardous
substances
Protects privacy on e-mail and
the internet
Bans some common flame
retardants, raising the likelihood of
fires
Strengthens existing food-label
laws and introduces labeling for
animal feed containing
genetically modified content
Reduces injuries and casualties
in road accidents
Encourages food processors and
supermarkets to avoid using
genetically modified ingredients, and
farmers could stop growing them
Raises costs of cars and restricts
automaker’s design freedom
Eliminates health hazards due to
chemicals
Restricts even minute use of
dangerous substances, such as
ethanol, in products such as
cosmetics and detergents
5-12
Makes surfing more onerous by
restricting use of “cookies” to
remember peoples preferences
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Product Components
Product
Brand
(Name)
Physical
Good
Product
Idea
Quality
Level
Features
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Package
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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
Profit
Cash flow
Loss
Time
Introduction
Growth
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Maturity
5-19
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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Products in Various Stages of Life
Cycle
Sales
Growth
Introduction
Roller
Blades
Maturity
Decline
Jet Ski
Boeing
727
Virtual
Reality
Time
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Few Successes
Number
2000
1500
Ideas
1750
Design review,
Testing, Introduction
Market
requirement
1000
1000
500
0
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Functional
specifications
500
Product
specification
100
25
One
success!
Development Stage
5-22
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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 Sequence Indicates
How to Deploy Resources to Achieve
Customer Requirements
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Idea Generation Stage
 Provides basis for entry into market
 Sources of ideas

Market need (60-80%); engineering & operations (20%);
technology; competitors; inventions; employees
 Follows from marketing strategy

Identifies, defines, & selects best market opportunities
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Customer Requirements Stage
 Identifies & positions key product benefits
Stated in core benefits proposition (CBP)
 Example: Long lasting with more power
(Sears’ Die Hard Battery)

 Identifies detailed list of product
attributes desired by customer

House of Quality
Focus groups or
1-on-1 interviews
Product
Characteristics
Customer
Requirements
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Functional Specification Stage
 Defines product in terms of how the
product would meet desired attributes
 Identifies product’s engineering
characteristics

Example: printer noise (dB)
 Prioritizes engineering characteristics
 May rate product compared
to competitors’
House of Quality
Product
Characteristics
Customer
Requirements
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Product Specification Stage
 Determines how product will be made
 Gives product’s physical specifications
 Example: Dimensions, material etc.
 Defined by engineering
drawing
 Done often on computer
House of Quality
Computer-Aided
Design (CAD)

Component
Specifications
Product
Characteristics
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Quality Function Deployment
 Product design process using
cross-functional teams

Marketing, engineering, manufacturing
 Translates customer preferences into specific
product characteristics
 Involves creating 4 tabular ‘Matrices’ or ‘Houses’

Breakdown product design into increasing levels of detail
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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
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-60
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
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-61
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-62
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
© 1984-1994 T/Maker Co.
Group Technology Code Example
4mm x 45° chamfer
80mm
60mm
Round Rod
Product Code:
1 5 3 1
112mm
Part function (round rod)
Material (steel)
Max. length (50 < L < 150)
Primary machine (lathe)
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-63
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Group Technology Schemes
Enable Grouping of Parts
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-64
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Group Technology Benefits
 Improved product design
 Reduced purchases
 Reduced work-in-process inventory
 Improved routing & machine loading
 Reduced setup & production times
 Simplified production planning & control
 Simplified maintenance
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-65
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Production Documents
Assembly Drawing
Assembly chart
Route sheet
Work order
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-66
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Assembly Drawing
 Shows exploded view of product
Head
Neck
End
Cap
Handle
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-67
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Assembly Chart for
A Tuna Sandwich
1
Tuna Fish
SA1
2
3
Tuna
Assy
A1
Sandwich
Mayonnaise
FG
Bread
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
A2
5-68
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Assembly Drawing and Assembly
Chart
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-69
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-70
Setup
Time
5
Operation
Time/Unit
.030
8
.050
15
3.000
10
.025
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Work Order
Authorizes producing a given item, usually to a schedule
© 1984-1994 T/Maker Co.
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-71
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Engineering Change Notice (ECN)
A correction or modification of an engineering
drawing or bill of material
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-72
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
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
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-73
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Service Design Nature of Customer Participation
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-74
© 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.
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-75
© 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
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-76
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

PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-77
© 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
 Fourth: recognize that responsibility must also transition
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-78
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458