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Chapter 5- Designing of Goods and Services

by: Aimee Castillon

Chapter 5- Designing of Goods and Services MBUS 306

Marketplace > George Mason University > Minor In Business > MBUS 306 > Chapter 5 Designing of Goods and Services
Aimee Castillon
GPA 3.61

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About this Document

Chapter 5 lecture notes. The highlighted bits are topics that will most likely be on the test
Managing projects/operations
Timothy Porter
Class Notes
businessminor, operations, Management, chapternotes, Porter
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This 12 page Class Notes was uploaded by Aimee Castillon on Sunday October 9, 2016. The Class Notes belongs to MBUS 306 at George Mason University taught by Timothy Porter in Fall 2016. Since its upload, it has received 6 views. For similar materials see Managing projects/operations in Minor In Business at George Mason University.

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Date Created: 10/09/16
GMU Aimee Castillon Operations Management MBUS 306 • Fall 2016 Heading: 10/3/2016 Notes: Chapter 5 Learning Objective: Case study: Regal Marine - Define product life - Global market cycle - 3D CAD system - Describe a product - Reduced product development time development system - Reduced problems with tooling - Build a house of - Reduced problems in production quality - Assembly line production - Explain how - JIT time-based Goods and services selection competition is - Organizations exist to provide goods or services to society implemented by OM - Great products are the key to success - Describe how - Top organizations typically focus on core products products and services - Customers buy satisfaction, not just a physical good or particular service are defined by OM - Fundamental to an organization’s strategy with implications throughout the - Describe the operations function documents needed for - Goods and services are the basis for an organization’s existence production - Limited and predictable life cycles requires constantly looking for, designing, - Explain how the and developing new products customer participates - New products generate substantial revenue in the design and delivery and services - Apply decision trees to product issues - - Product decision: the objective is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage - Product strategy options - Differentiation (i.e. Shouldice Hospital) - Low cost (i.e. Taco Bell) - Rapid response (i.e. Toyota) - Product life cycles - May be any length from a few days to decades - Operations function must be able to introduce new products successfully - Life cycle and strategy - - Introductory phase - Fine tuning may warrant unusual expenses for - Research; product development; process modification and enhancement; supplier development - Growth phase - Product design begins to stabilize - Effective forecasting of capacity becomes necessary - Adding or enhancing capacity may be necessary - Maturity phase - Competitors now established - High volume, innovative production may be needed - Improved cost control, reduction in options, paring down of product line - Decline phase - Unless product makes a special contribution to the organization, must plan to terminate offering These could be multiple choice questions Assembly drawing: think about buying furniture from - - Product-by-value analysis IKEA and then assembling them - Lists products in descending order of their individual dollar contribution to the firm - Lists the total annual dollar contribution of the product Work order → to be further - Helps management evaluate alternative strategies explored in Chapter 12 Generating new products 1. Understanding the customer 2. Economic change 3. Sociological and demographic change 4. Technological change 5. Political and legal change 6. Market practice, professional standards, suppliers, distributors Product development - - Quality function deployment (QFD) - - Organizing for product development - Traditionally -- distinct departments - Duties and responsibilities are defined - Difficult to foster forward thinking - A champion - Product manager drives the product through the product development system and related organizations - Team approach - Cross functional- representatives from all disciplines or functions - Product development teams, design for manufacturability teams, value engineering teams - Japanese “whole organization” approach - No organizational divisions - Manufacturability and v ​ alue engineering - Benefits - Reduced complexity of the product - Reduction of environmental impact - Additional standardization of components - Improvement of functional aspects of the product - Improved job design and job safety - Improved maintainability (serviceability) of the product - Robust design - Issues for product design - Robust design - Product is designed so that small variations in production or assembly do not adversely affect the product - Typically results in lower cost and higher quality - Modular design​ (i.e. Dell; Harley-Davidson) - Products designed in easily segmented components - Adds flexibility to both production and marketing - Improved ability to satisfy customer requirements - Computer-Aided Design (CAD)- ​ Using computers to design products and prepare engineering documentation - Shorter development cycles, improved accuracy, lower cost - Information and designs can be deployed worldwide - Extensions - Design for Manufacturing and Assembly (DFMA) - Solve manufacturing problems during the design stage - 3D Object modeling → small prototype development - CAD through the Internet - International data exchange through STEP - Computer-Aided Manufacturing (CAM) - Utilizing specialized computers and program to control manufacturing equipment - Often driven by the CAD system (CAD/CAM) - Benefits of CAD/CAM - Product quality - Shorter design time - Production cost reductions - Database availability - New range of capabilities - Virtual reality technology​- Computer technology used to develop an interactive, 3D model of a product from the basic CAD data - Allows people to “see” the finished design before a physical model is built - Very effective in large-scale designs such as plant layout - Value analysis - Focuses on design improvement during production - Seeks improvements leading either to a better product or a product which can be produced more economically with less environmental impact - Sustainability and Life Cycle Assessment (LCA) - Sustainability- meeting the needs of present w/o compromising the ability of future generations to meet their needs - LCA- formal evaluation of the environmental impact of a product Product development continuum - Product life cycles are becoming shorter and the rate of technological change is increasing - Developing new products faster can result in a competitive advantage - Time-based competition - - Purchasing technology by acquiring a firm - Speeds development - Issues concern the fit between acquired organization and product and the host - Joint ventures - Both organizations learn - Risks are shared - Alliances- cooperative agreements b/t independent organizations - Useful when technology is developing - Reduces risks Defining a product - First definition is in terms of functions - Rigorous specifications are developed during the design phase - Manufactured products will have an e ​ ngineering drawing - Bill of Material (BOM) lists the components of a product - - Product documents - Engineering drawing​ shows dimensions, tolerances, and materials - Shows codes for Group Technology - - Bills of Material list components, quantities and where used - Shows product structure - - - Group technology - Parts grouped into families with similar characteristics - Coding system describes processing and physical characteristics - Part families can be produced in dedicated manufacturing cells - - Benefits - Improved design - Reduced raw material and purchases - Simplified production planning and control - Improved layout, routing, and machine loading - Reduced tooling setup time, work-in-process, and production time Documents for production - Assembly drawing​ shows exploded view of product - Details relative locations to show how to assemble the product - - Assembly chart- i​ dentifies the point of production where components flow into subassemblies and ultimately into the final product - - Route sheet​ lists the operations and times required to produce a component - - Work order​- instructions to produce a given quantity of a particular item, usually to a schedule - - Engineering change notices (ECNs)-​ correction or modification to a product’s definition or documentation - Engineering drawing - Bill of materials - Quite common with long product life cycles, long manufacturing lead times, or rapidly changing technologies - Configuration management- ​ product’s planned and changing components are accurately identified and control and accountability for change are identified and maintained - Need to manage ECNs has led to the development of configuration management systems - Product life-cycle management (PLM) - Integrated software that brings together most, if not all, elements of product design and manufacture - Product design - CAD/CAM, DFMA - Product routing - Materials - Assembly - environmental Service design - Service typically includes direct interaction with the customer - Process-chain-network (PCN) analysis f ​ ocuses on the ways in which processes can be designed to optimize interaction between firms and their customers - - Direct interaction region includes process steps that involve interaction b/t participants - The surrogate (substitute) interaction region includes process steps in which one participant is acting on another participant’s resources - The independent processing region includes steps in which the supplier and/or the customer is acting on resources where each has maximum control - All three regions have similar operating issues but the appropriate way of handling the issues differs across regions - Service operations exist only within the area of direct and surrogate interaction - PCN analysis provides insight to aid in positioning and designing processes that can achieve strategic objectives - Adding service efficiency - Service productivity is notoriously low b/c of customer involvement in the design or delivery of the service, or both - Complicates product design - Limit the options: improves efficiency and ability to meet customer expectations - Delay customization - Modularization: eases customization of a service - Automation: reduces cost, increases customer service - Moment of truth: critical moments b/t customer and organization that determine customer satisfaction - Documents for service - High levels of customer interaction necessitates different documentation - Often explicit job instructions - Scripts and storyboards and other techniques - Application of decision trees to production design - Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes - Procedure - Include all possible alternatives and states of nature -- including “doing nothing” - Enter payoffs at end of branch - Determine expected value of each branch and “prune” the tree to find the alternative with best expected value - Transition to production- k ​ nowing when to move to production - Product development can be viewed as evolutionary and never complete - Product must move from design to production in a timely manner - Most products have a trial production period to insure producibility - Develop tooling, quality control, training - Ensures successful production - Responsibility must also transition as the product moves through its life cycle - Line management takes over from design - Three common approaches to managing transition - Project managers - Product development teams - Integrate product development and manufacturing organizations


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