designing goods and services and process selection
DESCRIPTION
Designing Goods and Services and Process Selection. Chapter 3. MGMT 326. Capacity, Facilities, & Work Design. Products & Processes. Quality Assurance. Planning & Control. Foundations of Operations. Managing Projects. Introduction. Strategy. Product Design. Process Design. - PowerPoint PPT PresentationTRANSCRIPT
Designing Goods and Servicesand Process Selection
Chapter 3
MGMT 326
Foundations
of Operatio
nsIntroductio
n
Strategy
ManagingProjects
QualityAssuran
ce
Capacity,Facilities,& WorkDesign
Planning& Control
Products &
Processes
ProductDesign
ProcessDesign
Designing Goods and Services
Service Design• Service package• Approaches to service design
Designing Goods
ProductCharacteristics• Form design• Functional design• Learning from other companies
Design Methods• Design for manufacture• Concurrent engineering
BasicConcepts
• Design and strategy• Feasibility study• Operations issues
Brief Outline of Chapter
Product design Process selection
Traditional manufacturing processes Service processes Automation
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.
Feasibility Study
Purpose is to determine whether the company can make a product that Meets the needs of customers in a target market Can be made by the company with the required
level of quality and delivery schedule Can be sold at a price that customers are willing
to pay While allowing the company to meet its profit
targets. This depends on costs estimated by Accounting and revenue estimated by Marketing
Operations Issues in Product Design
Product design and technology Product design is a joint responsibility of
marketing, operations, engineering (in manufacturing) and Accounting/Finance
Process technology (along with engineering)
Would we need a new or modified facility? Can the firm make this product with
consistent quality? How many workers will we need?
What skills will they need?
Designing Services – Service Package
Physical elements: facility, equipment and furnishings, inventories
Sensory and aesthetic aspects Psychological benefits Quality standards
Approaches to Service Design
Design for efficiency: Compete on consistency, cost, speed High standardization Limited variety Automation may be used High-volume services purchase at low
cost. Example: fast food
Approaches to Service Design (2)
Customer involvement in producing the service The customer does part of the work Reduces costs and may allow the
customer to do some customization Example: self-service salad bar
Many services use both high efficiency and customer involvement Examples: ATM's, vending machines, self-
checkouts in stores
Approaches to Service Design (3)
High customer attention Highly customized service, provided
by highly trained people Used in professional services
(medical care, legal services, high-end tax preparation services)
Also used by luxury retailers, hotels, restaurants
Designing Goods
Form design: Sensory aspects of the product (aesthetics) Size, color, shape, sound "Look and feel" Form design contributes to customer's
impressions of quality Functional design: how the product
performs
Form Design: How the Product Looks, Etc.
Ipod Nano Toyota Camry
Functional Design of GoodsWhat the Product Does
Functional Design of Goods (2)How the Product Performs
Fitness for use: product performs as intended
Durability: how long the product lasts
Reliability: consistent performance
Maintainability: ease and cost of repairs
Learning from Other Companies
Benchmarking: comparing your operations with those of a "best in class" firm Product benchmark – compare your product
with competing products Process benchmark
How competing products or services are produced
How other companies perform business functions
Cost benchmark – what your competitors spend to make comparable products
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: customer needs and satisfaction
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 (by eliminating bolts, screws, etc.) Reduces the time required to make the
product
Design for Manufacture (2)
Example of reducing the number of parts, operations, and tools.
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: Computer makers often buy
standard power supplies.
Sequential vs. Concurrent Design
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.
Advantages of Concurrent Engineering
Increases the chances of a successful product.
Shorter design time Shortens time to market. Reduces design costs
Supplier expertise can help design a product that meets customer needs at lower cost
Reduces the need to make expensive changes in the product and the process later
Types ofAutomation
• Computer-aided design and engineering• Robots• Material handling• FMS• CIM
Process Selection
Intermittent
• Project• Batch
ProcessDesign Tools• Reengineering• Flowcharts
Automation
Advantages and
Disadvantages
Process Types
Repetitive• Assembly line• Continuous
Impact of Process Type• Layout• Inventory policy• Costs
Intermittent Operations
Intermittent operations: processes used to produce a variety of products with different processing requirements at lower volumes Project processes: used to make one-of-a-
kind items to customer specifications Batch processes: used to make small
quantities of products in batches based on customer orders or specifications Also called job shops
Repetitive Operations
Repetitive operations: Processes used to make one product or a few standardized products in high volume Line process – also called an assembly line
or flow shop May have assemble-to-order options
Continuous process: operates continuously, produces a high volume of a fully standardized product
Some firms use more than one type of process
Underlying Process Relationship Between Volume and Standardization
High-volumeprocesses areusually morestandardizedthan low-volumeprocesses.
Process Choice and Layout
Intermittent operations usually use a process (department) layout: workers & equipment are grouped by function•Different products may take different paths through the production processRepetitive operations use a product layout: workers & equipment are grouped in the order in which they will be needed. The product passes from one work station to the next.
Process Choice and Inventory Policy
Process Choice and Costs
Intermittent processes Lower capital costs than repetitive processes Lower breakeven point than repetitive processes High variable cost per unit High total cost per unit
Repetitive processes Higher capital costs than intermittent processes Higher breakeven point than intermittent
processes Low variable cost per unit Low total cost per unit if volume is high
Process Design Tools
Process flow analysis is a tool used to analyze and document the sequence of steps within a total process. Usually first step in process reengineering.
Process reengineering is the fundamental rethinking and radical redesign of a process to bring about dramatic improvements in performance Cost Quality Time Flexibility
Process Design Tools (2)
Both operations processes and business processes can be re-engineered.
Re-engineer a process before you automate it or computerize it.
Process Flow in a Pizza Restaurant
Automation
The use of equipment to perform work without human operators, at least for a period of time May involve a single machine, a group of
machines, or an entire factory ATM’s and vending machines are
examples of automation in services
Automation (2)
Advantages Consistent quality Capacity to produce a large volume of goods Low variable costs Low total costs if volume is high
Disadvantages Large-scale automation is not cost-justified
unless volume is high Computer or equipment failure can shut
down production Expertise required to maintain equipment
Computer-Aided Design & Engineering
Computer-aided design (CAD): use of computer software to design products Similar software is used to make
animated films Computer-aided engineering (CAE): use of
computer software to evaluate and improve product designs
Specialized CAD/CAE software is used by architects and landscape architects
Data Flow in Manufacturing Technology
Computeraided design (CAD)
Computeraidedengineering(CAE)
Productdesigndata Final
design?
No
YesFinaldesigndata
Computeraidedprocessplanning(CAPP)
Manufacturinginstructions
Computeraidedmanufacturing(CAM)
Finishedgoods
Computer Aided Manufacturing (CAM)
and Robots
CAM is the use of a computer to program and controlre-programmablemanufacturing equipment
A traditional robot is a mechanical arm with a power supply and a computer that controls the movements of the arm
Uses of Robots
Uses of robots in processes Monotonous work, such as assembly line
work Work that is hard or unhealthy for people,
such as painting or nuclear plant cleanup Work that requires great precision
Making integrated circuits Surgery – guided by a surgeon
Uses of robots in products: Robot vacuum cleaners, lawn mowers, toys, assistive robots for disabled people
Automated Materials Handling
Conveyor belts are used in manufacturing & services
Robots move materials short distances
Automated guided vehicles move materials longer distances in plants, offices, hospitals
Automated guided vehicle
Flexible Manufacturing System (FMS)
System that links flexible manufacturing cells and/or robot assembly lines under control of a central computer
Includes materials handling Usually includes automated inspection
Flexible Manufacturing System (FMS)
System that links flexible manufacturing cells and/or robot assembly lines under control of a central computer
Includes materials handling Usually includes automated inspection
Parts Finishedgoods
Load Unload
Computer control room
Machine Machine
Machine
Machine Machine
Machine
Tools Tools
Conveyor
Flexible Manufacturing System
Computer Integrated Manufacturing (CIM)
CAD, CAE, and CAPP Flexible Manufacturing System Production planning and inventory
management Purchasing Common databases and control systems for all
these functions Provides product flexibility, cost savings, and
short manufacturing lead times