Operations Management

Design of Goods and Services

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As Engineering designed 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 the customer wanted it

© 1984-1994 T/Maker Co.

Humor in Product Design

Product Development System

Idea generationAssessment of firm’s ability to carry outCustomer RequirementsFunctional SpecificationProduct SpecificationsDesign ReviewTest MarketIntroduction to MarketEvaluation

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Quality Function Deployment Determines what will satisfy the

customer

Translates those desires into specific product characteristics

Product design process using cross-functional teams Marketing, engineering, manufacturing

“House of quality” tool used

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Manufacturability and Value Engineering

Help improve pdt’s design, pdn, maintainability & use

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

Best cost-avoidance technique Focus on achieving functional specs in the

most optimal manner

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Cost Reduction of a Bracket via Value Engineering

Issues for Product Development

Robust designModular designComputer-aided design – DFMA; 3D

object modelingComputer-aided manufacturingVirtual Reality TechnologyValue analysisEnvironmentally friendly design

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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

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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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Interactively designing & documenting products at a computer terminal or work station

© 1995 Corel Corp.

Computer Aided Design (CAD)

Design engineer

develops rough

sketch of product

Uses computer to

draw product

Often used with

CAM

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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

Benefits of CAD

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Design for Manufacturing and

Assembly (DFMA)

3-D Object Modeling

CAD/CAM – CAD info is

translated into machine control

instructions (CAM)© 1995 Corel Corp.

Extensions of CAD

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Use of specialized computer

programs to direct and control

manufacturing equipment

CAD/CAM often used together

© 1995 Corel Corp.

Computer Aided Manufacturing (CAM)

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Production Flexibility

Product Quality

Shorter design time

Database availability

New capabilities Example: rotate and depict objects in 3D

form

Reduced production costs

Benefits of CAD/CAM

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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)

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Environmentally Friendly Designs

Goals include Developing safe and environmentally

sound products

Minimizing waste of raw materials and

energy

Differentiating product from competitors

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

Use less harmful ingredients

Use less energy

Use less material

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Product Development Continuum

External Development StrategiesAlliances

Joint Ventures Purchase Technology or Expertise by Acquiring the Developer

Internal Development StrategiesMigrations of Existing Products

Enhancement to Existing ProductsNew 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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Engineering drawing Shows dimensions,

tolerances, & materials

Shows codes for Group Technology

Bill of Material Lists components,

quantities & where used

Shows product structure

Product Definition

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Parts grouped into families Similar, more standardized parts

Uses coding system Describes processing & physical

characteristics Part families produced

in manufacturing cells Mini-assembly lines

© 1984-1994 T/Maker Co.

Group Technology Characteristics

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112mm112mm

60mm60mm

4mm x 45° chamfer4mm x 45° chamfer

80mm80mm Product Code: 1 5 3 1

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

Round Rod

Group Technology Code Example

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Group Technology Schemes Enable Grouping of Parts

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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

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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: Include all possible alternatives and states

of nature - including “doing nothing” Enter payoffs at end of branch Approach determining expected values

by “pruning” tree

Operations Management

Process Strategy

Process Strategies

Involves determining how to produce a good or provide a service within constraints

Objective Meet or exceed customer requirements Meet cost & managerial goals

Has long-run effects Production efficiency Product & volume flexibility Cost & quality

Fit of Process, Volume, and Variety

Process focusprojects, job shop,

(print, carpentry)Standard Register

Repetitive(autos, motorcycles)

Harley DavidsonProduct focus

(commercial baked goods, steel, glass)

Steel, Cement

High VarietyOne or few units per run, high variety(allows customization)

Changes in modulesModest runs, standardized modules

Low Variety; Changes in attributes (such as grade, quality, size, thickness, etc.) Long runs only

Mass Customization

(difficult to achieve, but huge rewards)

Dell Computer Co., Levis Jeans

Low-Volume(Intermittent)

Repetitive Process(Modular)

High-Volume(Continuous)

Process-Focused Strategy

Facilities are organized by process

Similar processes are together Example: All drill presses are

together Low volume, high variety

products ‘Jumbled’ flow Other names

Job shop

OperationProduct A

Product B

1111 2222 3333

Process-Focused Example

CuttingCutting AssemblyAssembly SandingSanding FinishingFinishingPlaningPlaning

DrillingDrilling

ShapingShaping

TurningTurning

1111 5555 7777

3333

2222

1111 6666

3333

6666

4444

2222Job AJob AJob AJob A

Job BJob B

4444 5555

Custom Woodworking ShopCustom Woodworking Shop

Process Focus - Pros & Cons

Advantages Greater product flexibility More general purpose equipment –

equipments not dedicated to one product

Disadvantages High production cost per unit More difficult production planning &

control Low equipment utilization (5% to 25%)

Process-Focus Examples

Bank

Machine Shop

Hospital

Repetitive Focused Strategy

Facilities often organized by assembly lines

Characterized by modules Parts & assemblies made in modules

Modules combined for many output options

Other names Assembly line Production line E.g. auto-manufacturing, pc’s, house-hold

appliances, etc

Assembly Line Example

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3311

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7755

ComponentsComponents Subassem.Subassem.

AssembliesAssemblies

Product/Material FlowProduct/Material Flow

Production OperationProduction Operation

Raw MaterialRaw Material ComponentsComponents

Components.

Components.

Subassem.

Subassem.

Raw MaterialRaw Material

Fin. GoodsFin. Goods

Repetitive Focus - Considerations

Product focused process that uses modules

More structured than process-focused, less

structured than product focused

Enables semi-customization

Using modules, it enjoys economic

advantage of continuous process, and

custom advantage of low-volume,

moderately high-variety model

Repetitive Focus - Examples

Truck

Clothes Dryer

Fast Food

McDonald’sover 95 billion served

McDonald’sover 95 billion served

Repetitive Focus

Product-Focused Strategy

Facilities are organized by product

High volume, low variety

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

Continuous production

Production Process at NUCOR Steel

Product Focus - Pros & Cons

Advantages Lower production cost per unit Lower but more specialized labor skills Easier production planning and control Higher equipment utilization (70% to

90%)

Disadvantages Lower product flexibility More specialized equipment

Product-Focused Examples

Paper (Continuous)

Soft Drinks (Continuous, then Discrete)

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