designing goods and services chapter 3, part 1. operations and operations strategy designing an...
TRANSCRIPT
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Designing Goods and Services
Chapter 3, Part 1
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Operations and Operations Strategy
Designing an Operations System
Managing an Operations System
Done
We are here
Overview of Management 326
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Designing an Operations System
Projectmanagement
:A design
tool
• Product design• Process design• Quality system• Lean systems
• Capacity planning• Facility location• Facility layout• Work design
Done
This week: Product and process design
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Lecture Outline
Product design concepts Strategy and product design Operations issues in product design
Designing goods Form design and functional design Examples
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Lecture Outline (2)
Techniques for designing goods Design for the environment Benchmarking and reverse
engineering Technical specifications for goods Design for manufacture Concurrent engineering
Lands' End adapted concurrent engineering to services
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Lecture Outline (3)
Designing services Service package Classifying services Approaches to service design
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Strategy and Product Design
The core product may be a good or a service Product design should support the business
strategy Product design should meet the needs of a
target market. Product design should give the company a
competitive advantage.
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Operations Issues in Product Design
Product design and technology Process technology Would we need a new or modified
facility? Can the firm make this product with
consistent quality at a price that customers are willing to pay?
Does our labor force have the needed skills?
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Designing Goods
Form design: Sensory aspects of the product (aesthetics) Size, color, shape, sound "Look and feel" – "smoothness", quality
impression Functional design: how the product
performs
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Functional Design of Goods
Fitness for use: performs as intended
Durability: how long the product lasts
Reliability: consistent performance
Maintainability: ease and cost of repairs
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Steelcase Wide Chair
Adapt old technology to a new market
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Berkline Chairlift ReclinersRegular and Large Versions
• Adapt a product for a new market• Adapt technology from another industry
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Rectangular Watermelons
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Toyota Prius, Version 2
•New Product Technology• New Process Technology
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Learning from Other Companies
Benchmarking: comparing your operations with those of a "best in class" firm Product benchmark Process benchmark Cost benchmark
In services, the product and the process often overlap. You may benchmark the product and the
process at the same time.
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Learning from Other Companies (2)
Reverse engineering: taking your competitor's products apart and figuring out how it is made Physical products Software
Market research on competitor's products
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Design for the Environment: Materials
Make the product recyclable. Make the product from recycled
materials. Use renewable materials. Make products from safer materials
Example: lead-free paint Use less material in the product and
packaging.
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Design for the Environment
Recyclable Parts in a BMW
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Design for the Environment: Energy
Make products that require less energy.
Make products that use alternative energy sources – wind, solar, etc. Wind power Solar power
Make products that use renewable energy sources Example: Ethanol from corn
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Technical Specifications for Goods
Dimensions Examples: length, diameter Target value: ideal or desired
value for a dimension Tolerance: how much can the
actual dimension vary from the target value without affecting performance or aesthetics?
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Design for Manufacture
Value engineering: Eliminate product features that add cost but do not add value to the customer.
Reduce the number of parts. Reduces the cost of ordering, purchasing,
and storing parts. Reduces the space required to hold
inventory Reduces the number of tools and
operations required Reduces the time required to make the
product
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Design for Manufacture (2)
Example of reducing the number of parts, operations, and tools.
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Design for Manufacture (3)
Modular design: Design products to be assembled from standard components. Example: Dell buys standard video cards,
processors, power supplies, hard drives, etc., and assembles computers
Use standard parts to reduce design costs and purchasing costs. Examples: Manufacturers use standard
screws.
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Concurrent Engineering
Design the product and the process at the same time.
Use a design team that includes marketing, operations, engineering, operations, and suppliers. Stay in touch with customers during the
design process. Requires good project
management and coordination among all groups involved.
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Advantages of Concurrent Engineering:
Marketing
Increases the chances of a successful product.
Shortens time to market. Supplier expertise can help design a
product that meets customer needs
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Advantages of Concurrent Engineering:
Finance and Operations
Reduces design costs. Reduces the need to make expensive
changes in the product and the process later.
The product can be made consistently, in a quality manner, at a price that customers will pay.
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Product Design Teams at Lands' End
Buyer Quality specialist Inventory manager Copywriter Catalog artist Administrative support
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Designing Services – Service Package
Physical elements: facility, equipment and furnishings, inventories
Sensory and aesthetic aspects Psychological benefits Quality standards
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Classifying Services (1)
Pure services High, face-to-face customer contact Low standardization Examples: medical care, law offices,
accounting firms, universities, schools, health clubs
Employees must have technical job skills and customer relations skills
Facility must be adapted to customer needs. Meet customer needs and be as cost-
effective as possible.
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Classifying Services (2)
Quasi-manufacturing services: Contact with customers is limited to
telephone, mail, or Internet Examples: Internet retailers, distribution
centers Employees who have phone contact with
customers need both technical job skills and customer service skills
Other employees need technical job skills. Manage for efficiency. Design facility for efficiency.
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Classifying Services (3)
Mixed services: "Front office": high customer contact.
May have low standardization Manage like a pure service.
"Back office": Little customer contact. Manage for efficiency but meet customer
service deadlines. Examples: car repair shop, retail
banks.
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Approaches to Service Design
Design for efficiency: High standardization Limited variety Automation High-volume services purchase at low cost.
Customer involvement in producing the service Self-service salad bar
High customer attention: pure services, high-end hotels and retailers