Transcript Chapter 1, Heizer/Render, 5th edition

Operations
Management
Design of Goods and Services
1
Humor in Product Design
As the customer wanted it
© 1984-1994 T/Maker Co.
As Operations made it
© 1984-1994 T/Maker Co.
As Marketing
interpreted it
© 1984-1994 T/Maker Co.
As Engineering
designed it
© 1984-1994 T/Maker Co.
2
Product Development System
Idea generation
 Assessment of firm’s ability to carry out
 Customer Requirements
 Functional Specification
 Product Specifications
 Design Review
 Test Market
 Introduction to Market
 Evaluation
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3
Quality Function Deployment
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Determines what will satisfy the customer

Translates those desires into specific product
characteristics

Product design process using cross-functional
teams

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Marketing, engineering, manufacturing
“House of quality” tool used
8
Manufacturability and
Value Engineering
Help improve pdt’s design, pdn, maintainability & use
 Benefits:
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reduced complexity of products
additional standardization of products
improved functional aspects of product
improved job design and job safety
improved maintainability of the product
Best cost-avoidance technique
 Focus on achieving functional specs in the most
optimal manner

9
Cost Reduction of a Bracket via
Value Engineering
10
Issues for Product Development

Robust design

Modular design
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Computer-aided design – DFMA; 3D object
modeling

Computer-aided manufacturing

Virtual Reality Technology

Value analysis
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Environmentally friendly design
11
Robust Design

Product is designed so that small variations in
production or assembly do not adversely
affect the quality of the product e.g IC
amplifier developed in AT&T
12
Modular Design
Products designed in easily segmented
components.
 Adds flexibility to both production and
marketing
 Customization possible through modularity
 E.g. high-fidelity stereos, Harley Davidson,
McDonalds, Dell Computers, etc
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13
Computer Aided Design (CAD)

Interactively designing & documenting 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.
14
Benefits of CAD

Shorter development cycles

Better products

Accurate flow of info to other departments

Helpful for tool-designers and programmers of
CAM

Cost effective method for making design
changes
15
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.
16
Computer Aided Manufacturing (CAM)

Use of specialized computer programs to
direct and control manufacturing
equipment

CAD/CAM often used together
© 1995 Corel Corp.
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Benefits of CAD/CAM

Production Flexibility

Product Quality

Shorter design time

Database availability

New capabilities

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Example: rotate and depict objects in 3D form
Reduced production costs
18
Virtual Reality

Computer technology used to develop an
interactive, 3-D model of a product with the
help of images

Especially helpful in design of layouts (factory,
store, home, office)
19
Environmentally Friendly Designs

Goals include

Developing safe and environmentally sound products
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Minimizing waste of raw materials and energy
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Differentiating product from competitors
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Reducing environmental liabilities
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“Green” Manufacturing
Making environmentally sound products through
efficient processes

Make products recyclable e.g. Tuborg

Use recycled materials e.g. Scotch-Brite
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Use less harmful ingredients
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Use less energy
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Use less material
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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 Definition
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Engineering drawing
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Shows dimensions, tolerances, &
materials
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Shows codes for Group Technology
Bill of Material

Lists components, quantities &
where used

Shows product structure
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Group Technology Characteristics
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Parts grouped into families
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Uses coding system
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Similar, more standardized parts
Describes processing & physical
characteristics
Part families produced
in manufacturing cells
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Mini-assembly lines
© 1984-1994 T/Maker Co. 26
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)
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Group Technology Schemes Enable
Grouping of Parts
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Moment-of-Truth at a Computer Company
Experience Detractors
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
Experience Enhancers
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
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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:
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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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Operations
Management
Process Strategy
Process Strategies
Involves determining how to produce a good
or provide a service within constraints
 Objective
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Meet or exceed customer requirements
Meet cost & managerial goals
Has long-run effects
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Production efficiency
Product & volume flexibility
Cost & quality
Fit of Process, Volume, and Variety
Low-Volume
(Intermittent)
High Variety
One or few units per
run, high variety
(allows customization)
Changes in modules
Modest runs, standardized
modules
Low Variety; Changes
in attributes (such as
grade, quality, size,
thickness, etc.)
Long runs only
Repetitive Process
(Modular)
Process focus
projects, job shop,
(print, carpentry)
Standard Register
High-Volume
(Continuous)
Mass
Customization
(difficult to achieve,
but huge rewards)
Repetitive
(autos, motorcycles)
Harley Davidson
Dell Computer Co.,
Levis Jeans
Product focus
(commercial baked
goods, steel, glass)
Steel, Cement
Process-Focused Strategy
Facilities are organized by process
 Similar processes are together
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Example: All drill presses are together
Low volume, high variety products
 ‘Jumbled’ flow
Product A
Operation
 Other names
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Job shop
1
Product B
2
3
Process-Focused Example
Custom Woodworking Shop
Cutting Planing Shaping Assembly Sanding Finishing
1
Job A
Job B
1
2
5
6
5
6
3
2
4
3
4
Drilling Turning
7
Process Focus - Pros & Cons
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Advantages
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Greater product flexibility
More general purpose equipment – equipments
not dedicated to one product
Disadvantages
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High production cost per unit
More difficult production planning & control
Low equipment utilization (5% to 25%)
Process-Focus Examples
Bank
Hospital
Machine
Shop
Repetitive Focused Strategy

Facilities often organized by assembly lines
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Characterized by modules
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Parts & assemblies made in modules
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Modules combined for many output options
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Other names
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Assembly line
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Production line
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E.g. auto-manufacturing, pc’s, house-hold appliances,
etc
Assembly Line Example
Raw Material
Components
4
2
Assemblies
1
Raw Material
3
Components
Product/Material Flow
Production Operation
5
Subassem.
Fin. Goods
7
Repetitive Focus - Considerations
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Product focused process that uses modules
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More structured than process-focused, less structured
than product focused
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Enables semi-customization
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Using modules, it enjoys economic advantage of
continuous process, and custom advantage of lowvolume, moderately high-variety model
Repetitive Focus - Examples
Fast
Food
Clothes
Dryer
McDonald’s
over 95 billion served
Truck
Repetitive Focus
Product-Focused Strategy

Facilities are organized by product
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High volume, low variety
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Conversion or further processing of undifferentiated
materials such as petroleum, chemicals, or beer

Follows a predetermined sequence of steps, but flow is
continuous rather than discrete – highly standardized

Other names

Line flow production
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Continuous production
Production Process at
NUCOR Steel
Product Focus - Pros & Cons
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Advantages
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Lower production cost per unit
Lower but more specialized labor skills
Easier production planning and control
Higher equipment utilization (70% to 90%)
Disadvantages
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Lower product flexibility
More specialized equipment
Product-Focused Examples
Soft Drinks
(Continuous,
then Discrete)
Paper (Continuous)
Mass Customization

Using technology and imagination to rapidly
mass-produce products that cater to unique
customer desires

Under mass customization the three process
models become so flexible that distinctions
between them blur, making variety and
volume issues less significant