class 2 chapter 5 chapter 6. chapter 5 products and services

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Class 2 Class 2 Chapter 5 Chapter 6

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Page 1: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Class 2Class 2

Chapter 5

Chapter 6

Page 2: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Chapter 5Chapter 5

Products and Products and ServicesServices

Page 3: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Product DesignProduct DesignSpecifies materialsSpecifies materialsDetermines dimensions & Determines dimensions &

tolerancestolerancesDefines appearanceDefines appearanceSets performance standardsSets performance standards

Page 4: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Service DesignService DesignSpecifies what the customer is to Specifies what the customer is to

experienceexperience Physical itemsPhysical items Sensual benefitsSensual benefits Psychological benefitsPsychological benefits

Page 5: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

An Effective Design An Effective Design ProcessProcess

Matches product/service characteristics with Matches product/service characteristics with customer customer needsneeds

Meets Meets customercustomer requirements in simplest, requirements in simplest, most cost-effective mannermost cost-effective manner

Reduces time to market - haste vs. speed to Reduces time to market - haste vs. speed to marketmarket

Minimizes revisions - quality designed into Minimizes revisions - quality designed into the productthe product

Page 6: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Stages in the Design ProcessStages in the Design Process Idea Generation — Product Concept - can you Idea Generation — Product Concept - can you

create your own market? What role does the create your own market? What role does the voice of the customer play in idea generation?voice of the customer play in idea generation?

Feasibility Study — Performance SpecificationsFeasibility Study — Performance Specifications Preliminary Design — Prototype - testing and Preliminary Design — Prototype - testing and

redesignredesign Final Design — Final Design SpecificationsFinal Design — Final Design Specifications Process Planning — Manufacturing Process Planning — Manufacturing

Specifications - make to order/stock – assembly Specifications - make to order/stock – assembly line? line?

Page 7: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

The Design ProcessThe Design Process

Pilot runand final tests

New product or service launch

Final designFinal design& process plans& process plans

Ideageneration

Feasibilitystudy

Product or Product or service conceptservice concept

Performance Performance specificationsspecifications

Functionaldesign

Form design

Production design

Revising and testing Revising and testing prototypesprototypes

Design Design specificationsspecifications

Manufacturing Manufacturing or delivery or delivery specificationsspecifications

SuppliersSuppliersR&DR&D

CustomersCustomers

MarketingMarketing CompetitorsCompetitors

Page 8: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Idea GenerationIdea Generation Suppliers, distributors, salespersonsSuppliers, distributors, salespersons Trade journals and other published Trade journals and other published

materialmaterial Warranty claims, customer complaints, Warranty claims, customer complaints,

failuresfailures Customer surveys, focus groups, Customer surveys, focus groups,

interviewsinterviews Field testing, trial usersField testing, trial users Research and developmentResearch and development

Page 9: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

More Idea GeneratorsMore Idea Generators Perceptual MapsPerceptual Maps

Visual comparison of Visual comparison of customer perceptionscustomer perceptions

BenchmarkingBenchmarking Comparing product/service Comparing product/service

against best-in-classagainst best-in-class

Reverse engineeringReverse engineering Dismantling competitor’s product to improve Dismantling competitor’s product to improve

your own productyour own product

Page 10: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Perceptual Map of Perceptual Map of Breakfast CerealsBreakfast Cereals

HIGH HIGH NUTRITIONNUTRITION

LOW LOW NUTRITIONNUTRITION

GOOD GOOD TASTETASTE

BAD BAD TASTETASTE

Page 11: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Perceptual Map of Perceptual Map of Breakfast CerealsBreakfast Cereals

HIGH HIGH NUTRITIONNUTRITION

LOW LOW NUTRITIONNUTRITION

GOOD GOOD TASTETASTE

Cocoa PuffsCocoa Puffs

BAD BAD TASTETASTE

Rice Rice KrispiesKrispies

WheatiesWheaties

CheeriosCheerios

Shredded Shredded WheatWheat

Page 12: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Feasibility StudyFeasibility Study Market Analysis - Market Analysis -

Market SegmentationMarket Segmentation Economic AnalysisEconomic Analysis Technical / Strategic AnalysisTechnical / Strategic Analysis Performance SpecificationsPerformance Specifications

Not unlike mission analysis orIntelligence Preparation of the Battlefield

Page 13: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Risk AnalysisRisk Analysis

1. Identify the Hazards

2.Assess hazards to determine risks.

3.Develop controls and make risk decisions.

4. Implement controls.

5.Supervise and evaluate.From FM 100-14

Page 14: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Preliminary DesignPreliminary Design

Create form & functional designCreate form & functional designBuild prototypeBuild prototypeTest prototypeTest prototypeRevise prototypeRevise prototypeRetestRetest

How will it look?

Page 15: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Functional DesignFunctional Design(How the Product Performs)(How the Product Performs)

ReliabilityReliability Probability product performs intended Probability product performs intended

function for specified length of timefunction for specified length of time

MaintainabilityMaintainability Ease and/or cost or Ease and/or cost or

maintaining/repairing productmaintaining/repairing product

Page 16: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Computing ReliabilityComputing Reliability

0.90 0.90 0.90 x 0.90 = 0.810.90 x 0.90 = 0.81

Components in seriesComponents in series

Page 17: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Computing ReliabilityComputing Reliability

0.90 0.90 0.90 x 0.90 = 0.810.90 x 0.90 = 0.81

0.95 + 0.90(1-0.95) = 0.9950.95 + 0.90(1-0.95) = 0.995

Components in seriesComponents in series

Components in parallelComponents in parallel

0.95

0.90RR22

RR11

Page 18: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

System AvailabilitySystem Availability

System Availability, SA = System Availability, SA = MTBFMTBF

MTBF + MTTRMTBF + MTTR

Page 19: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

System AvailabilitySystem Availability

System Availability, SA = System Availability, SA = MTBFMTBF

MTBF + MTTRMTBF + MTTR

PROVIDERPROVIDER MTBF (HR)MTBF (HR) MTTR (HR)MTTR (HR)

AA 6060 4.04.0BB 3636 2.02.0CC 2424 1.01.0

Page 20: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

System AvailabilitySystem Availability

System Availability, SA = System Availability, SA = MTBFMTBF

MTBF + MTTRMTBF + MTTR

PROVIDERPROVIDER MTBF (HR)MTBF (HR) MTTR (HR)MTTR (HR)

AA 6060 4.04.0BB 3636 2.02.0CC 2424 1.01.0

SASAAA = 60 / (60 + 4) = .9375 or 93.75% = 60 / (60 + 4) = .9375 or 93.75%

SASABB = 36 / (36 + 2) = .9473 or 94.73% = 36 / (36 + 2) = .9473 or 94.73%

SASACC = 24 / (24 + 1) = .96 or 96% = 24 / (24 + 1) = .96 or 96%

Page 21: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Production DesignProduction Design

Part of the preliminary Part of the preliminary design phasedesign phase

SimplificationSimplification StandardizationStandardization ModularityModularity

Page 22: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Final Design & Final Design & Process PlansProcess Plans

Produce detailed drawings & Produce detailed drawings & specificationsspecifications

Create workable instructions for Create workable instructions for manufacturemanufacture

Select tooling & equipmentSelect tooling & equipment Prepare job descriptionsPrepare job descriptions Determine operation & assembly orderDetermine operation & assembly order Program automated machinesProgram automated machines

Page 23: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Improving the Design Improving the Design ProcessProcess

Design teamsDesign teams Concurrent designConcurrent design Design for manufacture & assemblyDesign for manufacture & assembly Design to prevent failures and ensure valueDesign to prevent failures and ensure value Design for environmentDesign for environment Measure design qualityMeasure design quality Utilize quality function deploymentUtilize quality function deployment Design for robustnessDesign for robustness Engage in collaborative designEngage in collaborative design

Page 24: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Breaking Down Barriers to Effective Design

Page 25: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design TeamsDesign Teams

Marketing, manufacturing, Marketing, manufacturing, engineeringengineering

Suppliers, dealers, customersSuppliers, dealers, customersLawyers, accountants, insurance Lawyers, accountants, insurance

companiescompanies

Preferred solution = cross functional teams

Page 26: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Concurrent DesignConcurrent Design Improves quality of early design Improves quality of early design

decisionsdecisions Decentralized - suppliers complete Decentralized - suppliers complete

detailed design detailed design Incorporates production processIncorporates production process Scheduling and management can be Scheduling and management can be

complex as tasks are done in parallelcomplex as tasks are done in parallel include the include the customer customer in the in the

process!!process!!

Page 27: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design for Design for Manufacture and AssemblyManufacture and Assembly

Design a product for easyDesign a product for easy& economical production& economical production

Incorporate production Incorporate production design early in the design phasedesign early in the design phase

Improves quality and reduces costs Improves quality and reduces costs Shortens time to design and Shortens time to design and

manufacturemanufacture also known as Design for Six Sigmaalso known as Design for Six Sigma

Page 28: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design for Six SigmaDesign for Six Sigma• Define – the goals of the design activity• Measure – customer input to determine what is

critical to quality from the customers’ perspective – what are customer delighters? What aspects are critical to quality?

• Analyze – innovative concepts for products and services to create value for the customer

• Design – new processes, products, and services to deliver customer value

• Verify – new systems perform as expected

Page 29: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

DFM GuidelinesDFM Guidelinesü Minimize the number of parts, tools, Minimize the number of parts, tools,

fasteners, and assembliesfasteners, and assembliesü Use standard parts and repeatable Use standard parts and repeatable

processesprocessesü Modular designModular designü Design for ease of assembly, minimal Design for ease of assembly, minimal

handlinghandlingü Allow for efficient testing and parts Allow for efficient testing and parts

replacementreplacement

Page 30: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design for Assembly Design for Assembly (DFA)(DFA)

Procedure for reducing number of Procedure for reducing number of partsparts

Evaluate methods for assemblyEvaluate methods for assembly Determine assembly sequenceDetermine assembly sequence

Page 31: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design ReviewDesign ReviewFailure Mode and Effects Analysis Failure Mode and Effects Analysis

(FMEA)(FMEA)A systematic approach for analyzing A systematic approach for analyzing

causes & effects of failurescauses & effects of failuresPrioritizes failuresPrioritizes failuresAttempts to eliminate causesAttempts to eliminate causes

Page 32: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Value Analysis Value Analysis (Value Engineering)(Value Engineering)

Ratio of value / costRatio of value / cost Assessment of value : Assessment of value :

1. Can we do without it?1. Can we do without it?2. Does it do more than is required?2. Does it do more than is required?3. Does it cost more than it is worth?3. Does it cost more than it is worth?4. Can something else do a better job4. Can something else do a better job5. Can it be made by less costly method, tools, 5. Can it be made by less costly method, tools,

material?material?

6. Can it be made cheaper, better or faster by 6. Can it be made cheaper, better or faster by someone else?someone else? Should we contract it out?Should we contract it out?

Is there value added?

Page 33: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design for EnvironmentDesign for Environment Design from recycled materialDesign from recycled material Use materials which can be recycledUse materials which can be recycled Design for ease of repairDesign for ease of repair Minimize packagingMinimize packaging Minimize material & energy Minimize material & energy

used during manufacture, used during manufacture, consumption & disposalconsumption & disposal

green laws in Europe - green laws in Europe -

Page 34: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

ExamplesExamples

• Recycling of oil

• carpets in land fills - 4 billion pounds in land fills annually

• Xerox and Hewlett-Packard - pay for return of printer cartridges on larger printers

Page 35: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Metrics for Design QualityMetrics for Design Quality

ü Percent of revenue from new Percent of revenue from new products or servicesproducts or services

ü Percent of products capturing 50% Percent of products capturing 50% or more of the marketor more of the market

ü Percent of process initiatives Percent of process initiatives yielding a 50% or more yielding a 50% or more improvement in effectivenessimprovement in effectiveness

ü Percent of suppliers engaged in Percent of suppliers engaged in collaborative designcollaborative design

Page 36: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Metrics for Design QualityMetrics for Design Quality

ü Percent of parts that can be recycledPercent of parts that can be recycledü Percent of parts used in multiple Percent of parts used in multiple

productsproductsü Average number of components per Average number of components per

productproductü Percent of parts with no engineering Percent of parts with no engineering

change orders (ULLS/SAMS/SARSS)change orders (ULLS/SAMS/SARSS)ü Things gone wrong - should be Things gone wrong - should be

identified by the returns processidentified by the returns process

Page 37: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Quality Function Quality Function Deployment (QFD)Deployment (QFD)

Translates the “voice of the Translates the “voice of the customer” into technical design customer” into technical design requirementsrequirements

Displays requirements in matrix Displays requirements in matrix diagramsdiagrams

First matrix called “house of quality”First matrix called “house of quality” Series of connected housesSeries of connected houses

Page 38: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Design for RobustnessDesign for Robustness Product can fail due to poor design Product can fail due to poor design

qualityquality Products subjected to many conditionsProducts subjected to many conditions Robust design studiesRobust design studies

Controllable factors - under designer’s Controllable factors - under designer’s controlcontrol

Uncontrollable factors - from user or Uncontrollable factors - from user or environmentenvironment

Designs products for consistent Designs products for consistent performanceperformance

Page 39: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Consistency is ImportantConsistency is Important

Consistent errors are easier to correct Consistent errors are easier to correct than random errorsthan random errors

Parts within tolerances may yield Parts within tolerances may yield assemblies which aren’tassemblies which aren’t

Consumers prefer product Consumers prefer product characteristics near their ideal valuescharacteristics near their ideal values

Page 40: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Characteristics of ServicesCharacteristics of Services• Services are intangibleServices are intangible• Service output is variable Service output is variable • Service have higher customer contactService have higher customer contact• Services are perishableServices are perishable• Service inseparable from deliveryService inseparable from delivery• Tend to be decentralized and dispersedTend to be decentralized and dispersed• Consumed more often than productsConsumed more often than products• Services can be easily emulatedServices can be easily emulated• Call girl principle – value diminishes after Call girl principle – value diminishes after

service is renderedservice is rendered

Page 41: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

A Well-Designed A Well-Designed Service System isService System is

Consistent with firm’s strategic Consistent with firm’s strategic focusfocus

CustomerCustomer friendly friendly Easy to sustainEasy to sustain Effectively linked between front & Effectively linked between front &

back officeback office Cost effectiveCost effective Visible to Visible to customercustomer

Page 42: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Chapter 6Chapter 6

Processes and Processes and TechnologiesTechnologies

Page 43: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process StrategyProcess Strategy

Overall approach to producing Overall approach to producing goods and servicesgoods and services

Defines:Defines:Capital intensityCapital intensityProcess flexibilityProcess flexibilityVertical integrationVertical integrationCustomer involvementCustomer involvement

Page 44: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Types of ProcessesTypes of Processes

ProjectsProjectsBatch productionBatch productionMass productionMass productionContinuous productionContinuous production

Page 45: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process Selection with Process Selection with

Break-Even AnalysisBreak-Even AnalysisTotal costTotal cost = fixed cost + total variable cost= fixed cost + total variable cost

TCTC = = ccff + + vcvcvv

Total revenueTotal revenue == volume x pricevolume x priceTRTR = = vpvp

ProfitProfit = total revenue - total cost= total revenue - total costZZ == TR - TCTR - TC

= = vpvp - ( - (ccff + + vcvcvv))

Page 46: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Break-Even AnalysisBreak-Even AnalysisFixed costFixed cost = = ccff = $2,000 = $2,000

Variable costVariable cost = = ccvv = $5 per raft = $5 per raft

PricePrice = = pp = $10 per raft = $10 per raft

Page 47: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Break-Even AnalysisBreak-Even AnalysisFixed costFixed cost = = ccff = $2,000 = $2,000

Variable costVariable cost = = ccvv = $5 per boogie board = $5 per boogie board

PricePrice = = pp = $10 per board = $10 per board

The break-even point isThe break-even point is

v v = = = 400 boards= = = 400 boardsccff

p p - - ccvv

20002000

10 - 510 - 5

Page 48: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process PlanningProcess Planning Make-or-buy decisionsMake-or-buy decisions Process selectionProcess selection Specific equipment selectionSpecific equipment selection Process plansProcess plans Process analysisProcess analysis

Page 49: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Make-or-Buy DecisionsMake-or-Buy Decisions

1. Cost1. Cost

2. Capacity2. Capacity

3. Quality3. Quality

4. Speed4. Speed

5. Reliability5. Reliability

6. Expertise6. Expertise

What about

Proprietary Information?

Barrier to Make-or-Buy?

Page 50: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Rationale for Off Shore to Low Country Source

94.00%

37.00%

27.00%23.00% 22.00% 21.00% 20.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

$ Savings procuredgoods

Penetration to newmarket

inventory redux inc customer service access newtechnology

reduced cycle time log cost reductions

Source: Aberdeen Research, “Low-Cost Country Sourcing Success Strategies: Maximizing and Sustaining the Next Big Supply Savings Opportunity,” Jun 2005

Page 51: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Specific Equipment Specific Equipment SelectionSelection

1.1. Purchase costPurchase cost

2.2. Operating costOperating cost

3.3. Annual savingsAnnual savings

4.4. Revenue enhancementRevenue enhancement

5.5. Replacement analysisReplacement analysis

6.6. Risk and uncertaintyRisk and uncertainty

7.7. Piecemeal analysis – “one piece at Piecemeal analysis – “one piece at

a time”a time”

Page 52: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process PlansProcess Plans BlueprintsBlueprints Bill of material Flat or multiple Bill of material Flat or multiple

layers - part or assemblylayers - part or assembly Assembly chart /Assembly chart /

product structure diagramproduct structure diagram Operations process chart - list of Operations process chart - list of

operations involved in assemblyoperations involved in assembly Routing sheet - sequence of eventsRouting sheet - sequence of events

Page 53: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Operations Process ChartOperations Process ChartPart name Crevice Tool

Part No. 52074

Usage Hand-Vac

Assembly No. 520

Oper. No. Description Dept. Machine/Tools Time

10 Pour in plastic bits 041 Injection molding 2 min

20 Insert mold 041 #076 2 min

30 Check settings 041 113, 67, 650 20 min& start machine

40 Collect parts & lay flat 051 Plastics finishing 10 min

50 Remove & clean mold 042 Parts washer 15 min

60 Break off rough edges 051 Plastics finishing 10 min

Page 54: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process AnalysisProcess Analysis The systematic examination of all aspects The systematic examination of all aspects

of a process to improve its operationof a process to improve its operation FasterFaster More efficientMore efficient Less costlyLess costly More responsiveMore responsive

Basic toolsBasic tools Process flowchartProcess flowchart Process diagramsProcess diagrams Process mapsProcess maps

Page 55: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process Flowchart SymbolsProcess Flowchart Symbols

OperationsOperations

InspectionInspection

TransportationTransportation

DelayDelay

StorageStorage

Page 56: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process FlowchartProcess Flowchart

Ste

p

Op

erat

ion

Tra

nsp

ort

Insp

ect

Del

ay

Sto

rag

e

Dis

tan

ce(f

eet)

Tim

e(m

in)Description

ofprocess

1

2

3

4

5

6

7

8

9

10

11

Unload apples from truck

Move to inspection station

Weigh, inspect, sort

Move to storage

Wait until needed

Move to peeler

Apples peeled and cored

Soak in water until needed

Place in conveyor

Move to mixing area

Weigh, inspect, sort

TotalPage 1 0f 3 480

30

5

20

15

360

30

20

190 ft

20 ft

20 ft

50 ft

100 ft

Date: 9-30-02Analyst: TLR

Location: Graves MountainProcess: Apple Sauce

Page 57: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process DiagramProcess Diagram

Reserve Storage

Quality Assurance

Back to Vendor

UPS

Parcel Post

Next-Day UPS

Mono-gramming

Embroid-ering

Hemming

Gift Boxing

Receiving Active Bins Picking Packing Shipping

Page 58: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Process MapProcess Map

Place order

Drink

Eat salad or soup

Eat dinner

Receives check

Gives payment to waiter

Collect change, leave tip

Fill in tip amount

Give order to waiter

Prepare dinner order

Prepare soup or salad order

Give order to waiter

Is order complete?

Give soup or salad order to chef

Give dinner order to chef

Get drinks for customer

Deliver salad or soup order to customer

Deliver dinner to customer

Deliver check to customer

Receive payment for meal

Cash or Credit?

Bring change to customer

Run credit card through

Return credit slip to customer

Collect tip

YY

NN

CreditCredit

CashCash

CustomerCustomer WaiterWaiter Salad ChefSalad Chef Dinner ChefDinner Chef

Page 59: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Principles for Redesigning Principles for Redesigning ProcessesProcesses

• Remove waste, simplify, Remove waste, simplify, consolidateconsolidate

• Link processes to create valueLink processes to create value• Let the swiftest and most capable Let the swiftest and most capable

executeexecute• Capture information digitally and Capture information digitally and

propagatepropagate

Page 60: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Principles for Redesigning Principles for Redesigning ProcessesProcesses

• Provide visibility through Provide visibility through information about process statusinformation about process status

• Fit the process with sensors and Fit the process with sensors and feedback loopsfeedback loops

• Add analytic capabilitiesAdd analytic capabilities• Connect, collect and create Connect, collect and create

knowledge around the processknowledge around the process• Personalize the processPersonalize the process

Page 61: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Other ways to redesign the Other ways to redesign the processprocess

• Define• Measure• Improve

• Define• Measure• Analyze• Improve • Control

Velocity Management Methodology

General Electric’sSix Sigma Methodology

Page 62: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Techniques for Generating Techniques for Generating Innovative IdeasInnovative Ideas

Vary entry point to a problemVary entry point to a problem Draw analogiesDraw analogies Change your perspectiveChange your perspective Use attribute brainstormingUse attribute brainstorming

Page 63: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Information TechnologyInformation Technology

Management Information Systems Management Information Systems (MIS)(MIS) Move large amounts of dataMove large amounts of data

Decision Support Systems (DSS)Decision Support Systems (DSS) Add decision making supportAdd decision making support

Expert SystemExpert System Recommend decision based on Recommend decision based on

expert knowledgeexpert knowledge

Page 64: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Artificial IntelligenceArtificial IntelligenceNeural networksNeural networks

Emulate interconnections in Emulate interconnections in brainbrain

Genetic algorithmsGenetic algorithmsBased on adaptive capabilities in Based on adaptive capabilities in

naturenatureFuzzy logicFuzzy logic

Simulate human ability to deal Simulate human ability to deal with ambiguitywith ambiguity

Page 65: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Enterprise SoftwareEnterprise SoftwareCollect, analyze, and make decisions Collect, analyze, and make decisions

based on databased on dataERP - Enterprise Resource PlanningERP - Enterprise Resource PlanningManaging wide range of processesManaging wide range of processes

Human resources, materials management, Human resources, materials management, supply chains, accounting, finance, supply chains, accounting, finance, manufacturing, sales force automation, manufacturing, sales force automation, customer service, customer order entrycustomer service, customer order entry

Finding hidden patterns through data Finding hidden patterns through data miningmining

Page 66: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

ERPERP

• SAP – 42% of market; forecast to 43% in 2006

• Oracle – 20%; forecast to 23% 2006

• Sage Group – 6%

• Microsoft – 4%

• Horror Stories – Hershey’s, Dell

Page 67: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Advanced CommunicationsAdvanced Communications

Electronic data interchange (EDI)Electronic data interchange (EDI) Internet, extranetsInternet, extranets Wireless communicationsWireless communications Teleconferencing & Teleconferencing &

telecommutingtelecommuting Bar coding, Radio Frequency IdentificationBar coding, Radio Frequency Identification Virtual realityVirtual reality Distance Learning?

Page 68: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

RFIDRFID• Active Tags• Always on • Battery powered• Can be read from

up to 300 ft• US Army • Savi Tags

• Passive Tags• Small• Must be activated• May be turned off• England• California• Rolex

Page 69: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Automated Material Automated Material HandlingHandling

ConveyorsConveyorsAutomated guided vehicle (AGV)Automated guided vehicle (AGV)Automated storage & retrieval Automated storage & retrieval

system (ASRS) Grainger/Defense system (ASRS) Grainger/Defense Distribution Center, San JoaquinDistribution Center, San Joaquin

Page 70: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Flexible Manufacturing Flexible Manufacturing Systems (FMS)Systems (FMS)

Programmable machine toolsProgrammable machine tools Controlled by common computer networkControlled by common computer network Combines flexibility with efficiencyCombines flexibility with efficiency Reduces setup & queue timesReduces setup & queue times cellular layout - more on design next cellular layout - more on design next

weekweek

Page 71: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

RoboticsRobotics Programmable manipulatorsProgrammable manipulators Follow specified pathFollow specified path Better than humans with respect to Better than humans with respect to

Hostile environmentsHostile environments Long hoursLong hours ConsistencyConsistency

Adoption has been slowed by ineffective Adoption has been slowed by ineffective integration and adaptation of systemsintegration and adaptation of systems

Welding at Harley Davidson PlantWelding at Harley Davidson Plant

Page 72: Class 2 Chapter 5 Chapter 6. Chapter 5 Products and Services

Next WeekNext Week

• 8 Jun: Chapter 7, 9; Handout Mid Term