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Heizer om10 ch05
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  • 1. 5 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall5 Design of Goodsand ServicesPowerPoint presentation to accompanyHeizer and RenderOperations Management, 10ePrinciples of Operations Management, 8ePowerPoint slides by Jeff Heyl
  • 2. 5 - 2© 2011 Pearson Education, Inc. publishing as Prentice HallOutline Global Company Profile: RegalMarine Goods and Services Selection Product Strategy Options SupportCompetitive Advantage Product Life Cycles Life Cycle and Strategy Product-by-Value Analysis
  • 3. 5 - 3© 2011 Pearson Education, Inc. publishing as Prentice HallOutline - Continued Generating New Products New Product Opportunities Importance of New Products Product Development Product Development System Quality Function Deployment (QFD) Organizing for Product Development Manufacturability and ValueEngineering
  • 4. 5 - 4© 2011 Pearson Education, Inc. publishing as Prentice HallOutline - Continued Issues for Product Design Robust Design Modular Design Computer-Aided Design (CAD) Computer-Aided Manufacturing(CAM) Virtual Reality Technology Value Analysis
  • 5. 5 - 5© 2011 Pearson Education, Inc. publishing as Prentice HallOutline - Continued Ethics, Environmentally FriendlyDesign, and Sustainability Systems and Life Cycle Perspectives Laws and Industry Standards Time-Based Competition Purchasing Technology by Acquiringa Firm Joint Ventures Alliances
  • 6. 5 - 6© 2011 Pearson Education, Inc. publishing as Prentice HallOutline - Continued Defining a Product Make-or-Buy Decisions Group Technology Documents For Production Product Life-Cycle Management(PLM) Service Design Documents for Services
  • 7. 5 - 7© 2011 Pearson Education, Inc. publishing as Prentice HallOutline - Continued Application of Decision Trees toProduct Design Transition to Production
  • 8. 5 - 8© 2011 Pearson Education, Inc. publishing as Prentice HallLearning Objectives1. Define product life cycle2. Describe a product development system3. Build a house of quality4. Describe how time-based competition isimplementedWhen you complete this chapter you shouldbe able to :
  • 9. 5 - 9© 2011 Pearson Education, Inc. publishing as Prentice HallLearning Objectives5. Describe how products and services aredefined by operations management6. Describe the documents needed forproduction7. Describe customer participation in thedesign and production of services8. Apply decision trees to product issuesWhen you complete this chapter you shouldbe able to :
  • 10. 5 - 10© 2011 Pearson Education, Inc. publishing as Prentice HallRegal Marine Global market 3-dimensional CAD system Reduced product development time Reduced problems with tooling Reduced problems in production Assembly line production JIT
  • 11. 5 - 11© 2011 Pearson Education, Inc. publishing as Prentice HallThe objective of the product decisionis to develop and implement aproduct strategy that meets thedemands of the marketplace with acompetitive advantageProduct Decision
  • 12. 5 - 12© 2011 Pearson Education, Inc. publishing as Prentice Hall The good or service the organizationprovides society Top organizations typically focus oncore products Customers buy satisfaction, not justa physical good or particular service Fundamental to an organizationsstrategy with implications throughoutthe operations functionProduct Decision
  • 13. 5 - 13© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Strategy Options Differentiation Shouldice Hospital Low cost Taco Bell Rapid response Toyota
  • 14. 5 - 14© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life Cycles May be any length from a fewhours to decades The operations function mustbe able to introduce newproducts successfully
  • 15. 5 - 15© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life CyclesNegativecash flowIntroduction Growth Maturity DeclineSales,cost,andcashflowCost of development and productionCashflowNet revenue (profit)Sales revenueLossFigure 5.1
  • 16. 5 - 16© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life CycleIntroductory Phase Fine tuning may warrantunusual expenses for1. Research2. Product development3. Process modification andenhancement4. Supplier development
  • 17. 5 - 17© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life CycleGrowth Phase Product design begins tostabilize Effective forecasting ofcapacity becomes necessary Adding or enhancing capacitymay be necessary
  • 18. 5 - 18© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life CycleMaturity Phase Competitors now established High volume, innovativeproduction may be needed Improved cost control,reduction in options, paringdown of product line
  • 19. 5 - 19© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life CycleDecline Phase Unless product makes aspecial contribution to theorganization, must plan toterminate offering
  • 20. 5 - 20© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life Cycle CostsCosts incurredCosts committedEase of changeConcept Detailed Manufacturing Distribution,design design service,prototype and disposalPercentoftotalcost 100 –80 –60 –40 –20 –0 –
  • 21. 5 - 21© 2011 Pearson Education, Inc. publishing as Prentice HallProduct-by-Value Analysis Lists products in descendingorder of their individual dollarcontribution to the firm Lists the total annual dollarcontribution of the product Helps management evaluatealternative strategies
  • 22. 5 - 22© 2011 Pearson Education, Inc. publishing as Prentice HallProduct-by-Value AnalysisIndividualContribution ($)Total AnnualContribution ($)Love Seat $102 $36,720Arm Chair $87 $51,765Foot Stool $12 $6,240Recliner $136 $51,000Sam’s Furniture Factory
  • 23. 5 - 23© 2011 Pearson Education, Inc. publishing as Prentice HallNew Product Opportunities1. Understanding thecustomer2. Economic change3. Sociological anddemographic change4. Technological change5. Political/legal change6. Market practice, professionalstandards, suppliers, distributors
  • 24. 5 - 24© 2011 Pearson Education, Inc. publishing as Prentice HallImportance of New ProductsIndustryleaderTopthirdMiddlethirdBottomthirdFigure 5.2aPercentage of Sales from New Products50%40%30%20%10%Position of Firm in Its Industry
  • 25. 5 - 25© 2011 Pearson Education, Inc. publishing as Prentice HallDisney AttendanceFigure 5.2b50403020100Millionsofvisitors‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07Magic KingdomDisney-HollywoodEpcotAnimal Kingdom
  • 26. 5 - 26© 2011 Pearson Education, Inc. publishing as Prentice HallCisco Product RevenueFigure 5.2c35302520151050Billionsofdollars‘02 ‘03 ‘04 ‘05 ‘06 ’07 ‘08OtherRoutersSwitches
  • 27. 5 - 27© 2011 Pearson Education, Inc. publishing as Prentice HallScope ofproductdevelopmentteamProduct DevelopmentSystemScope fordesign andengineeringteamsEvaluationIntroductionTest MarketFunctional SpecificationsDesign ReviewProduct SpecificationsCustomer RequirementsAbilityIdeasFigure 5.3
  • 28. 5 - 28© 2011 Pearson Education, Inc. publishing as Prentice HallQuality FunctionDeployment1. Identify customer wants2. Identify how the good/service will satisfycustomer wants3. Relate customer wants to product hows4. Identify relationships between the firm’s hows5. Develop importance ratings6. Evaluate competing products7. Compare performance to desirable technicalattributes
  • 29. 5 - 29© 2011 Pearson Education, Inc. publishing as Prentice HallQFD House of QualityRelationshipmatrixHow to satisfycustomer wantsInterrelationshipsCompetitiveassessmentTechnicalevaluationTarget valuesWhat thecustomerwantsCustomerimportanceratingsWeightedrating
  • 30. 5 - 30© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleYour team has been charged withdesigning a new camera for GreatCameras, Inc.The first action isto construct aHouse of Quality
  • 31. 5 - 31© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleCustomerimportancerating(5 = highest)Lightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color correction 1What thecustomerwantsWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitors
  • 32. 5 - 32© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitorsLowelectricityrequirementsAluminumcomponentsAutofocusAutoexposurePaintpalletErgonomicdesignHow to SatisfyCustomer Wants
  • 33. 5 - 33© 2011 Pearson Education, Inc. publishing as Prentice HallLightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1House of Quality ExampleWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitorsHigh relationshipMedium relationshipLow relationshipRelationship matrix
  • 34. 5 - 34© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitorsLowelectricityrequirementsAluminumcomponentsAutofocusAutoexposurePaintpalletErgonomicdesignRelationshipsbetween thethings we can do
  • 35. 5 - 35© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleWeightedratingWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitorsLightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 9 27 27 32 25
  • 36. 5 - 36© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleCompanyACompanyBG PG PF GG PP PLightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color corrections 1Our importance ratings 22 5How well docompeting productsmeet customer wantsWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitors
  • 37. 5 - 37© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleWhat theCustomerWantsRelationshipMatrixTechnicalAttributes andEvaluationHow to SatisfyCustomer WantsInterrelationshipsAnalysisofCompetitorsTargetvalues(Technicalattributes)TechnicalevaluationCompany A 0.7 60% yes 1 ok GCompany B 0.6 50% yes 2 ok FUs 0.5 75% yes 2 ok G0.5A75%2’to∞2circuitsFailure1per10,000Panelranking
  • 38. 5 - 38© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality ExampleCompletedHouse ofQualityLightweight 3Easy to use 4Reliable 5Easy to hold steady 2Color correction 1Our importance ratingsLowelectricityrequirementsAluminumcomponentsAutofocusAutoexposurePaintpalletErgonomicdesignCompanyACompanyBG PG PF GG PP PTarget values(Technicalattributes)TechnicalevaluationCompany A 0.7 60% yes 1 ok GCompany B 0.6 50% yes 2 ok FUs 0.5 75% yes 2 ok G0.5A75%2’to∞2circuitsFailure1per10,000Panelranking22 9 27 27 32 25
  • 39. 5 - 39© 2011 Pearson Education, Inc. publishing as Prentice HallHouse of Quality SequenceFigure 5.4Deploying resources through theorganization in response tocustomer requirementsProductionprocessQualityplanHouse4SpecificcomponentsProductionprocessHouse3DesigncharacteristicsSpecificcomponentsHouse2CustomerrequirementsDesigncharacteristicsHouse1
  • 40. 5 - 40© 2011 Pearson Education, Inc. publishing as Prentice HallOrganizing for ProductDevelopment Historically – distinct departments Duties and responsibilities aredefined Difficult to foster forward thinking A Champion Product manager drives the productthrough the product developmentsystem and related organizations
  • 41. 5 - 41© 2011 Pearson Education, Inc. publishing as Prentice HallOrganizing for ProductDevelopment Team approach Cross functional – representativesfrom all disciplines or functions Product development teams, designfor manufacturability teams, valueengineering teams Japanese “whole organization”approach No organizational divisions
  • 42. 5 - 42© 2011 Pearson Education, Inc. publishing as Prentice HallManufacturability andValue Engineering Benefits:1. Reduced complexity of products2. Reduction of environmental impact3. Additional standardization of products4. Improved functional aspects of product5. Improved job design and job safety6. Improved maintainability (serviceability) ofthe product7. Robust design
  • 43. 5 - 43© 2011 Pearson Education, Inc. publishing as Prentice HallCost Reduction of a Bracketvia Value EngineeringFigure 5.5
  • 44. 5 - 44© 2011 Pearson Education, Inc. publishing as Prentice HallIssues for ProductDevelopment Robust design Modular design Computer-aided design (CAD) Computer-aided manufacturing (CAM) Virtual reality technology Value analysis Environmentally friendly design
  • 45. 5 - 45© 2011 Pearson Education, Inc. publishing as Prentice HallRobust Design Product is designed so that smallvariations in production orassembly do not adversely affectthe product Typically results in lower cost andhigher quality
  • 46. 5 - 46© 2011 Pearson Education, Inc. publishing as Prentice HallModular Design Products designed in easilysegmented components Adds flexibility to both productionand marketing Improved ability to satisfy customerrequirements
  • 47. 5 - 47© 2011 Pearson Education, Inc. publishing as Prentice Hall Using computers todesign products andprepare engineeringdocumentation Shorter developmentcycles, improvedaccuracy, lower cost Information anddesigns can bedeployed worldwideComputer Aided Design(CAD)
  • 48. 5 - 48© 2011 Pearson Education, Inc. publishing as Prentice Hall Design for Manufacturing and Assembly(DFMA) Solve manufacturing problems during thedesign stage 3-D Object Modeling Small prototypedevelopment CAD through theinternet International dataexchange through STEPExtensions of CAD
  • 49. 5 - 49© 2011 Pearson Education, Inc. publishing as Prentice HallComputer-AidedManufacturing (CAM) Utilizing specialized computersand program to controlmanufacturing equipment Often driven by the CAD system(CAD/CAM)
  • 50. 5 - 50© 2011 Pearson Education, Inc. publishing as Prentice Hall1. Product quality2. Shorter design time3. Production cost reductions4. Database availability5. New range of capabilitiesBenefits of CAD/CAM
  • 51. 5 - 51© 2011 Pearson Education, Inc. publishing as Prentice HallVirtual Reality Technology Computer technology used todevelop an interactive, 3-D model ofa product from the basic CAD data Allows people to ‘see’ the finisheddesign before a physical model isbuilt Very effective in large-scale designssuch as plant layout
  • 52. 5 - 52© 2011 Pearson Education, Inc. publishing as Prentice HallValue Analysis Focuses on design improvementduring production Seeks improvements leading eitherto a better product or a productwhich can be produced moreeconomically with lessenvironmental impact
  • 53. 5 - 53© 2011 Pearson Education, Inc. publishing as Prentice HallEthics, EnvironmentallyFriendly Designs, andSustainability It is possible to enhance productivityand deliver goods and services in anenvironmentally and ethicallyresponsible manner In OM, sustainability means ecologicalstability Conservation and renewal of resourcesthrough the entire product life cycle
  • 54. 5 - 54© 2011 Pearson Education, Inc. publishing as Prentice HallEthics, EnvironmentallyFriendly Designs, andSustainability Design Polyester film and shoes Production Prevention in production andpackaging Destruction Recycling in automobiles
  • 55. 5 - 55© 2011 Pearson Education, Inc. publishing as Prentice HallEthics, EnvironmentallyFriendly Designs, andSustainability
  • 56. 5 - 56© 2011 Pearson Education, Inc. publishing as Prentice HallThe Ethical ApproachView product design from asystems perspective Inputs, processes, outputs Costs to the firm/costs to societyConsider the entire life cycle ofthe product
  • 57. 5 - 57© 2011 Pearson Education, Inc. publishing as Prentice HallThe Ethical Approach Goals1. Developing safe end environmentallysound practices2. Minimizing waste of resources3. Reducing environmental liabilities4. Increasing cost-effectiveness ofcomplying with environmentalregulations5. Begin recognized as a goodcorporate citizen
  • 58. 5 - 58© 2011 Pearson Education, Inc. publishing as Prentice HallGuidelines for EnvironmentallyFriendly Designs1. Make products recyclable2. Use recycled materials3. Use less harmful ingredients4. Use lighter components5. Use less energy6. Use less material
  • 59. 5 - 59© 2011 Pearson Education, Inc. publishing as Prentice HallLaws and IndustryStandardsFor Design … Food and Drug Administration Consumer Products Safety Commission National Highway Safety Administration Children’s Product Safety Act
  • 60. 5 - 60© 2011 Pearson Education, Inc. publishing as Prentice HallLaws and IndustryStandardsFor Manufacture/Assembly … Occupational Safety and HealthAdministration Environmental Protection Agency Professional ergonomic standards State and local laws dealing withemployment standards, discrimination, etc.
  • 61. 5 - 61© 2011 Pearson Education, Inc. publishing as Prentice HallLaws and IndustryStandardsFor Disassembly/Disposal … Vehicle Recycling Partnership Increasingly rigid laws worldwide
  • 62. 5 - 62© 2011 Pearson Education, Inc. publishing as Prentice HallTime-Based Competition Product life cycles are becomingshorter and the rate oftechnological change isincreasing Developing new products fastercan result in a competitiveadvantage
  • 63. 5 - 63© 2011 Pearson Education, Inc. publishing as Prentice HallInternal Cost of product development SharedLengthy Speed of product development Rapid and/or ExistingHigh Risk of product development SharedProduct DevelopmentContinuumEXTERNAL DEVELOPMENT STRATEGIESAlliancesJoint venturesPurchase technology or expertiseby acquiring the developerINTERNAL DEVELOPMENT STRATEGIESMigrations of existing productsEnhancements to existing productsNew internally developed productsFigure 5.6
  • 64. 5 - 64© 2011 Pearson Education, Inc. publishing as Prentice HallAcquiring Technology By Purchasing a Firm Speeds development Issues concern the fit between the acquiredorganization and product and the host Through Joint Ventures Both organizations learn Risks are shared Through Alliances Cooperative agreements betweenindependent organizations
  • 65. 5 - 65© 2011 Pearson Education, Inc. publishing as Prentice HallDefining The Product First definition is in terms offunctions Rigorous specifications aredeveloped during the design phase Manufactured products will have anengineering drawing Bill of material (BOM) lists thecomponents of a product
  • 66. 5 - 66© 2011 Pearson Education, Inc. publishing as Prentice Hall Engineering drawing Shows dimensions, tolerances, andmaterials Shows codes for Group Technology Bill of Material Lists components, quantities andwhere used Shows product structureProduct Documents
  • 67. 5 - 67© 2011 Pearson Education, Inc. publishing as Prentice HallMonterey Jack Cheese(a) U.S. grade AA. Monterey cheese shall conform to the followingrequirements:(1) Flavor. Is fine and highly pleasing, free from undesirable flavors andodors. May possess a very slight acid or feed flavor.(2) Body and texture. A plug drawn from the cheese shall be reasonablyfirm. It shall have numerous small mechanical openings evenlydistributed 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 andparaffin-dipped. The rind shall be sound,firm, and smooth providing a goodprotection to the cheese.Code of Federal Regulation, Parts 53 to 109,General Service Administration
  • 68. 5 - 68© 2011 Pearson Education, Inc. publishing as Prentice HallEngineering DrawingsFigure 5.8
  • 69. 5 - 69© 2011 Pearson Education, Inc. publishing as Prentice HallBills of MaterialBOM for Panel WeldmentNUMBER DESCRIPTION QTYA 60-71 PANEL WELDM’T 1A 60-7 LOWER ROLLER ASSM. 1R 60-17 ROLLER 1R 60-428 PIN 1P 60-2 LOCKNUT 1A 60-72 GUIDE ASSM. REAR 1R 60-57-1 SUPPORT ANGLE 1A 60-4 ROLLER ASSM. 102-50-1150 BOLT 1A 60-73 GUIDE ASSM. FRONT 1A 60-74 SUPPORT WELDM’T 1R 60-99 WEAR PLATE 102-50-1150 BOLT 1 Figure 5.9 (a)
  • 70. 5 - 70© 2011 Pearson Education, Inc. publishing as Prentice HallBills of MaterialHard RockCafe’s HickoryBBQ BaconCheeseburgerDESCRIPTION QTYBun 1Hamburger patty 8 oz.Cheddar cheese 2 slicesBacon 2 stripsBBQ onions 1/2 cupHickory BBQ sauce 1 oz.Burger setLettuce 1 leafTomato 1 sliceRed onion 4 ringsPickle 1 sliceFrench fries 5 oz.Seasoned salt 1 tsp.11-inch plate 1HRC flag 1Figure 5.9 (b)
  • 71. 5 - 71© 2011 Pearson Education, Inc. publishing as Prentice Hall Parts grouped into families withsimilar characteristics Coding system describesprocessing and physicalcharacteristics Part families can be producedin dedicated manufacturing cellsGroup Technology
  • 72. 5 - 72© 2011 Pearson Education, Inc. publishing as Prentice HallGroup Technology SchemeFigure 5.10(a) Ungrouped Parts(b) Grouped Cylindrical Parts (families of parts)Grooved Slotted Threaded Drilled Machined
  • 73. 5 - 73© 2011 Pearson Education, Inc. publishing as Prentice Hall1. Improved design2. Reduced raw material and purchases3. Simplified production planning andcontrol4. Improved layout, routing, andmachine loading5. Reduced tooling setup time, work-in-process, and production timeGroup Technology Benefits
  • 74. 5 - 74© 2011 Pearson Education, Inc. publishing as Prentice HallDocuments for Production Assembly drawing Assembly chart Route sheet Work order Engineering change notices (ECNs)
  • 75. 5 - 75© 2011 Pearson Education, Inc. publishing as Prentice HallAssembly Drawing Shows explodedview of product Details relativelocations toshow how toassemble theproductFigure 5.11 (a)
  • 76. 5 - 76© 2011 Pearson Education, Inc. publishing as Prentice HallAssembly Chart1234567891011R 209 AngleR 207 AngleBolts w/nuts (2)R 209 AngleR 207 AngleBolt w/nutR 404 RollerLock washerPart number tagBox w/packing materialBolts w/nuts (2)SA1SA2A1A2A3A4A5LeftbracketassemblyRightbracketassemblyPoka-yokeinspectionFigure 5.11 (b)Identifies the point ofproduction wherecomponents flow intosubassemblies andultimately into thefinal product
  • 77. 5 - 77© 2011 Pearson Education, Inc. publishing as Prentice HallRoute SheetLists the operations and times requiredto produce a componentSetup OperationProcess Machine Operations Time Time/Unit1 Auto Insert 2 Insert Component 1.5 .4Set 562 Manual Insert Component .5 2.3Insert 1 Set 12C3 Wave Solder Solder all 1.5 4.1componentsto board4 Test 4 Circuit integrity .25 .5test 4GY
  • 78. 5 - 78© 2011 Pearson Education, Inc. publishing as Prentice HallWork OrderInstructions to produce a given quantityof a particular item, usually to a scheduleWork OrderItem Quantity Start Date Due DateProduction DeliveryDept Location157C 125 5/2/08 5/4/08F32 Dept K11
  • 79. 5 - 79© 2011 Pearson Education, Inc. publishing as Prentice HallEngineering Change Notice(ECN) A correction or modification to aproduct’s definition ordocumentation Engineering drawings Bill of materialQuite common with long product lifecycles, long manufacturing lead times, orrapidly changing technologies
  • 80. 5 - 80© 2011 Pearson Education, Inc. publishing as Prentice HallConfiguration Management The need to manage ECNs has ledto the development of configurationmanagement systems A product’s planned and changingcomponents are accuratelyidentified and control andaccountability for change areidentified and maintained
  • 81. 5 - 81© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Life-CycleManagement (PLM) Integrated software that bringstogether most, if not all, elements ofproduct design and manufacture Product design CAD/CAM, DFMA Product routing Materials Assembly Environmental
  • 82. 5 - 82© 2011 Pearson Education, Inc. publishing as Prentice HallService Design Service typically includes directinteraction with the customer Increased opportunity for customization Reduced productivity Cost and quality are still determined atthe design stage Delay customization Modularization Reduce customer interaction, oftenthrough automation
  • 83. 5 - 83© 2011 Pearson Education, Inc. publishing as Prentice HallService DesignFigure 5.12
  • 84. 5 - 84© 2011 Pearson Education, Inc. publishing as Prentice HallService DesignFigure 5.12
  • 85. 5 - 85© 2011 Pearson Education, Inc. publishing as Prentice HallMoments of Truth Concept created by Jan Carlzon ofScandinavian Airways Critical moments between thecustomer and the organization thatdetermine customer satisfaction There may be many of these moments These are opportunities to gain orlose business
  • 86. 5 - 86© 2011 Pearson Education, Inc. publishing as Prentice HallMoments-of-TruthComputer Company HotlineFigure 5.13•The technician wassincerely concerned andapologetic about myproblem•He asked intelligentquestions that allowed meto feel confident in hisabilities•The technician offeredvarious times to havework done to suit myschedule•Ways to avoid futureproblems were suggestedExperience EnhancersBest•Only one local numberneeds to be dialed•I never get a busy signal•I get a human being toanswer my call quicklyand he or she is pleasantand responsive to myproblem•A timely resolution to myproblem is offered•The technician is able toexplain to me what I canexpect to happen nextStandard ExpectationsBetter•I had to call more thanonce to get through•A recording spoke to merather than a person•While on hold, I getsilence, and wonder if Iam disconnected•The technician soundedlike he was reading aform of routine questions•The technician soundeduninterested•I felt the technicianrushed meExperience Detractors
  • 87. 5 - 87© 2011 Pearson Education, Inc. publishing as Prentice HallDocuments for Services High levels of customerinteraction necessitatesdifferent documentation Often explicit job instructionsfor moments-of-truth Scripts and storyboards areother techniques
  • 88. 5 - 88© 2011 Pearson Education, Inc. publishing as Prentice HallFirst Bank Corp. Drive-upTeller Service Guidelines Be especially discreet when talking to the customerthrough the microphone. Provide written instructions for customers who must fill outforms you provide. Mark lines to be completed or attach a note withinstructions. Always say “please” and “thank you” when speakingthrough the microphone. Establish eye contact with the customer if the distanceallows it. If a transaction requires that the customer park the car andcome into the lobby, apologize for the inconvenience.
  • 89. 5 - 89© 2011 Pearson Education, Inc. publishing as Prentice HallApplication of DecisionTrees to Product Design Particularly useful when there are aseries of decisions and outcomeswhich lead to other decisions andoutcomes
  • 90. 5 - 90© 2011 Pearson Education, Inc. publishing as Prentice HallApplication of DecisionTrees to Product Design1. Include all possible alternatives andstates of nature - including “doingnothing”2. Enter payoffs at end of branch3. Determine the expected value ofeach branch and “prune” the tree tofind the alternative with the bestexpected valueProcedures
  • 91. 5 - 91© 2011 Pearson Education, Inc. publishing as Prentice Hall(.6)Low sales(.4)High sales(.6) Low sales(.4)High salesDecision Tree ExamplePurchase CADHire and train engineersDo nothingFigure 5.14
  • 92. 5 - 92© 2011 Pearson Education, Inc. publishing as Prentice Hall(.6) Low sales(.4)High salesDecision Tree ExamplePurchase CAD(.6)Low sales(.4)High salesHire and train engineersDo nothingFigure 5.14$2,500,000 Revenue- 1,000,000 Mfg cost ($40 x 25,000)- 500,000 CAD cost$1,000,000 Net$800,000 Revenue- 320,000 Mfg cost ($40 x 8,000)- 500,000 CAD cost- $20,000 Net lossEMV (purchase CAD system) = (.4)($1,000,000) + (.6)(- $20,000)
  • 93. 5 - 93© 2011 Pearson Education, Inc. publishing as Prentice Hall(.6) Low sales(.4)High salesDecision Tree ExamplePurchase CAD(.6)Low sales(.4)High salesHire and train engineersDo nothingFigure 5.14$2,500,000 Revenue- 1,000,000 Mfg cost ($40 x 25,000)- 500,000 CAD cost$1,000,000 Net$800,000 Revenue- 320,000 Mfg cost ($40 x 8,000)- 500,000 CAD cost- $20,000 Net lossEMV (purchase CAD system) = (.4)($1,000,000) + (.6)(- $20,000)= $388,000$388,000
  • 94. 5 - 94© 2011 Pearson Education, Inc. publishing as Prentice Hall(.6)Low sales(.4)High sales(.6) Low sales(.4)High salesDecision Tree ExamplePurchase CAD$388,000Hire and train engineers$365,000Do nothing $0$0 Net$800,000 Revenue- 400,000 Mfg cost ($50 x 8,000)- 375,000 Hire and train cost$25,000 Net$2,500,000 Revenue- 1,250,000 Mfg cost ($50 x 25,000)- 375,000 Hire and train cost$875,000 Net$2,500,000 Revenue- 1,000,000 Mfg cost ($40 x 25,000)- 500,000 CAD cost$1,000,000 Net$800,000 Revenue- 320,000 Mfg cost ($40 x 8,000)- 500,000 CAD cost- $20,000 Net lossFigure 5.14
  • 95. 5 - 95© 2011 Pearson Education, Inc. publishing as Prentice HallTransition to Production Know when to move to production Product development can be viewed asevolutionary and never complete Product must move from design toproduction in a timely manner Most products have a trial productionperiod to insure producibility Develop tooling, quality control, training Ensures successful production
  • 96. 5 - 96© 2011 Pearson Education, Inc. publishing as Prentice HallTransition to Production Responsibility must also transition as theproduct moves through its life cycle Line management takes over from design Three common approaches to managingtransition Project managers Product development teams Integrate product development andmanufacturing organizations
  • 97. 5 - 97© 2011 Pearson Education, Inc. publishing as Prentice HallAll rights reserved. No part of this publication may be reproduced, stored in a retrievalsystem, or transmitted, in any form or by any means, electronic, mechanical, photocopying,recording, or otherwise, without the prior written permission of the publisher.Printed in the United States of America.

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