Chapter 1, Heizer/Render, 5th edition

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Transcript Chapter 1, Heizer/Render, 5th edition

Operations Management

Design of Goods and Services

Humor in Product Design

As the customer wanted it.

As Marketing interpreted it.

As Operations made it.

As Engineering designed it.

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-3 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Strategy Options

 Product differentiation  Low cost  Rapid response PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-4 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-5 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Components

Product Brand (Name) Product Idea Package Physical Good Features Quality Level Service (Warranty)

Product Life Cycle

 Introduction  Growth  Maturity  Decline PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-7 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Life Cycle

Introduction

 Fine tuning  research  product development  process modification and enhancement  supplier development PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-8 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Life Cycle

Growth

 Product design begins to stabilize  Effective forecasting of capacity becomes necessary  Adding or enhancing capacity may be necessary PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-9 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-10 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Life Cycle

Decline

 Unless product makes a special contribution, must plan to terminate offering PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-11 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Life Cycle, Sales, Cost, and Profit

Cost of Development & Manufacture Sales Revenue

Loss Cash flow Profit

Introduction Growth

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Maturity

5-12

Time Decline

Products in Various Stages of Life Cycle

Sales Introduction Growth

Roller Blades

Maturity

Jet Ski

Decline

Boeing 727 Virtual Reality PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e

Time

Few Successes

Number 2000 Ideas 1750 1500 1000 500 0 Market requirement 1000 Functional specifications 500 Design review, Testing, Introduction Product specification 100 25 One success!

PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e

Development Stage

Product-by-Value Analysis

 Lists products in descending order of their individual dollar contribution to the firm.

 Helps management evaluate alternative strategies.

Product Development Stages

 Idea generation  Assessment of firm’s ability to carry out  Customer Requirements  Functional Specification  Product Specifications  Design Review  Test Market  Introduction to Market  Evaluation

Scope of design for manufacturability and value engineering teams

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-17 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

QFD House of Quaoity

House of Quality Sequence Indicates How to Deploy Resources to Achieve Customer Requirements

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-20 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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  Focus groups or 1-on-1 interviews House of Quality

Customer

Product Characteristics

Requirements

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

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  Computer-Aided Design (CAD)

House of Quality

Component Specifications

Product Characteristics

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-24 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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.

House of Quality Example

Customer Requirements Customer Importance Target Values  High relationship  Medium relationship  Low Relationship PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-26 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

House of Quality Example

What the customer desires (‘wall’)

Customer Requirements

Light weight Easy to use Reliable

Target Values Customer Importance

Aluminum Parts Auto Focus Auto Exposure  High relationship  Medium relationship  Low Relationship PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-27 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

House of Quality Example

Average customer importance rating

Customer Requirements Customer Importance

Aluminum Parts Auto Focus Auto Exposure Light weight Easy to use Reliable

Target Values

 High relationship 3 2 1  Medium relationship  Low Relationship PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-28 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

House of Quality Example

Relationship between customer attributes & engineering characteristics (‘rooms’)

Customer Requirements

Light weight Easy to use Reliable

Customer Importance

3 2 1 Aluminum Parts  Auto Focus   Auto Exposure    High relationship  Medium relationship  Low Relationship PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-29 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

House of Quality Example

Target values for engineering characteristics (‘basement’); key output



Customer Requirements

Light weight Easy to use Reliable

Target Values Customer Importance

3 2 1 Aluminum Parts  5 Auto Focus   1 Auto Exposure   1  High relationship  Medium relationship  Low Relationship PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-30 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

House of Quality Example



Customer Requirements

Light weight Easy to use Reliable

Target Values Customer Importance

3 2 1 Aluminum Parts  5 Auto Focus   1 Auto Exposure   1 

High relationship



Medium relationship



Low Relationship

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-32 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-33 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Cost Reduction of a Bracket via Value Engineering

Issues for Product Development

 Robust design  Time-based competition  Modular design  Computer-aided design  Value analysis  Environmentally friendly design PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-35 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Robust Design

 Product is designed so that small variations in production or assembly do not adversely affect the product PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-36 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Modular Design

 Products designed in easily segmented components.

 Adds flexibility to both production and marketing PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-37 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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

Benefits of CAD/CAM

 Shorter design time  Database availability  New capabilities  Example: Focus more on product ideas  Improved product quality  Reduced production costs PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-39 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Extensions of CAD



Design for Manufacturing and Assembly (DFMA)



3-D Object Modeling



CAD/CAM – CAD info is translated into machine control instructions (CAM)

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) PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-41 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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.

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 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-43 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

“Green” Manufacturing

 Make products recyclable  Use recycled materials  Use less harmful ingredients  Use lighter components  Use less energy  Use less material PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-44 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Time-based Competition

 Product life cycles are becoming shorter.

 Faster developers of new products gain on slower developers and obtain a competitive advantage PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-45 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Product Development Continuum

External Development Strategies

Developer Alliances Joint Ventures

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

Product Documents

 Engineering drawing  Shows dimensions, tolerances, & materials  Shows codes for

Group Technology

Bill of Material Example

Bill of Material P/N: P/N

1000 1001

Name: Desc

Bicycle Handle Bars

Qty

1 1002 1003 1004 Frame Assy Wheels Frame 1 2 1

Units Level

Each 1 Each Each Each 1 2 2 PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations Management, 7e 5-48 © 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 5-49 © 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 5-50 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 © 1984-1994 T/Maker Co.

Group Technology Code Example

4mm x 45° chamfer

Round Rod

80mm 60mm

Product Code: 1 5 3 1

112mm Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe)

Group Technology Schemes Enable Grouping of Parts

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 5-53 © 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 5-54 © 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 5-55 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 © 1984-1994 T/Maker Co.

Assembly Chart for A Tuna Sandwich

1 2 Tuna Fish SA1 Tuna Assy Mayonnaise A1 Sandwich FG 3 Bread A2

Assembly Drawing and Assembly Chart

Route Sheet

 Lists all operations

Sequence 1 2 3 4 Route Sheet for Bracket Machine Operation Setup Time Shear # 3 5 Shear # 3 Drill press Brake press Shear to length Shear 45° corners Drill both holes Bend 90° 8 15 10 Operation Time/Unit .030

.050

3.000

.025

Work Order

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 5-60 © 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 5-61 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Service Design Nature of Customer Participation

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.

Moment-of-Truth at a Computer Company

Experience Detractors I had to call more than once to get through.

A recording spoke to me rather than a person 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.

Standard Expectations Only one local number needs to be dialed I never get a busy signal 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 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

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 5-65 © 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 Fourth: recognize that responsibility must also transition 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