Operations Management Design of Goods and Services 1

Operations Management Design of Goods and Services 1

Humor in Product Design As the customer wanted 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 Engineering designed it © 1984 -1994 T/Maker Co. 2

Product Development System Idea generation l Assessment of firm’s ability to carry out l Customer Requirements l Functional Specification l Product Specifications l Design Review l Test Market l Introduction to Market l Evaluation l 3

Quality Function Deployment l Determines what will satisfy the customer l Translates those desires into specific product characteristics l Product design process using crossfunctional teams l l Marketing, engineering, manufacturing “House of quality” tool used 8

Manufacturability and Value Engineering Help improve pdt’s design, pdn, maintainability & use l Benefits: l l l 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 l Focus on achieving functional specs in the most optimal manner l 9

Cost Reduction of a Bracket via Value Engineering 10

Issues for Product Development l Robust design l Modular design l Computer-aided design – DFMA; 3 D object modeling l Computer-aided manufacturing l Virtual Reality Technology l Value analysis l Environmentally friendly design 11

Robust Design l 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 12

Modular Design Products designed in easily segmented components. l Adds flexibility to both production and marketing l Customization possible through modularity l E. g. high-fidelity stereos, Harley Davidson, Mc. Donalds, Dell Computers, etc l 13

Computer Aided Design (CAD) l Interactively designing & documenting products at a computer terminal or work station l Design engineer develops rough sketch of product l Uses computer to draw product l Often used with CAM © 1995 Corel Corp. 14

Benefits of CAD l Shorter development cycles l Better products l Accurate flow of info to other departments l Helpful for tool-designers and programmers of CAM l Cost effective method for making design changes 15

Extensions of CAD l Design for Manufacturing and Assembly (DFMA) l 3 -D Object Modeling l CAD/CAM – CAD info is translated into machine control instructions (CAM) © 1995 Corel Corp. 16

Computer Aided Manufacturing (CAM) l Use of specialized computer programs to direct and control manufacturing equipment l CAD/CAM often used together © 1995 Corel Corp. 17

Benefits of CAD/CAM l Production Flexibility l Product Quality l Shorter design time l Database availability l New capabilities l l Example: rotate and depict objects in 3 D form Reduced production costs 18

Virtual Reality l Computer technology used to develop an interactive, 3 -D model of a product with the help of images l Especially helpful in design of layouts (factory, store, home, office) 19

Environmentally Friendly Designs l Goals include l Developing safe and environmentally sound products l Minimizing waste of raw materials and energy l Differentiating product from competitors l Reducing environmental liabilities 20

“Green” Manufacturing Making environmentally sound products through efficient processes l Make products recyclable e. g. Tuborg l Use recycled materials e. g. Scotch-Brite l Use less harmful ingredients l Use less energy l Use less material 21

Product Development Continuum External Development Strategies Alliances Joint Ventures Purchase Technology or Expertise by Acquiring the Developer Internal Development Strategies Migrations of Existing Products Enhancement to Existing Products New Internally Developed Products Internal --------Cost of Product Development------------ Shared Lengthy --------Speed of Product Development----- Rapid and/or Existing High ----------- Risk of Product Development ------------ Shared 22

Product Definition l l Engineering drawing l Shows dimensions, tolerances, & materials l Shows codes for Group Technology Bill of Material l Lists components, quantities & where used l Shows product structure 23

Group Technology Characteristics l Parts grouped into families l l Uses coding system l l Similar, more standardized parts Describes processing & physical characteristics Part families produced in manufacturing cells l Mini-assembly lines © 1984 -1994 T/Maker Co. 26

Group Technology Code Example 4 mm x 45° chamfer 80 mm 60 mm 112 mm Round Rod Product Code: 1 5 3 1 Part function (round rod) Material (steel) Max. length (50 < L < 150) Primary machine (lathe) 27

Group Technology Schemes Enable Grouping of Parts 28

Moment-of-Truth at a Computer Company Experience Detractors Standard Expectations I had to call more than once to get through. Only one local number needs to be dialed A recording spoke to me rather than a person I never get a busy signal 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. 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 29

Application of Decision Trees to Product Design Particularly useful when there a series of decisions and outcomes which lead to other decisions and outcomes. l Considerations: l l Include all possible alternatives and states of nature - including “doing nothing” Enter payoffs at end of branch Approach determining expected values by “pruning” tree 30

Operations Management Process Strategy

Process Strategies Involves determining how to produce a good or provide a service within constraints l Objective l l Meet or exceed customer requirements Meet cost & managerial goals Has long-run effects l l l Production efficiency Product & volume flexibility Cost & quality

Fit of Process, Volume, and Variety Low-Volume (Intermittent) Repetitive Process (Modular) High-Volume (Continuous) Process focus Mass High Variety projects, job shop, Customization One or few units (difficult to per run, high variety (print, carpentry) achieve, but Standard Register (allows huge rewards) customization) Repetitive Dell Computer Changes in modules (autos, motorcycles) Co. , Levis Modest runs, Jeans standardized modules Harley Davidson Low Variety; Changes in attributes (such as grade, quality, size, thickness, etc. ) Long runs only Product focus (commercial baked goods, steel, glass) Steel, Cement

Process-Focused Strategy Facilities are organized by process l Similar processes are together l l Example: All drill presses are together Low volume, high variety products l ‘Jumbled’ flow Product A Operatio l Other names l l Job shop n 1 2 Product B 3

Process-Focused Example Custom Woodworking Shop Cutting Planing Shaping Assembly Sanding Finishing 1 Job A Job B 1 2 5 6 3 2 4 3 4 Drilling Turning 7

Process Focus - Pros & Cons l Advantages l l l Greater product flexibility More general purpose equipment – equipments not dedicated to one product Disadvantages l l l High production cost per unit More difficult production planning & control Low equipment utilization (5% to 25%)

Process-Focus Examples Bank Hospital Machine Shop

Repetitive Focused Strategy l Facilities often organized by assembly lines l Characterized by modules l Parts & assemblies made in modules l Modules combined for many output options l Other names l Assembly line l Production line l E. g. auto-manufacturing, pc’s, house-hold

Assembly Line Example Raw Material Components 2 Co m po ne nt s. 1 Raw Material 4 Su ba ss em. 3 Components Product/Material Flow Production Operation 5 Subassem. Assemblies Fin. Goods 7

Repetitive Focus - Considerations l Product focused process that uses modules l More structured than process-focused, less structured than product focused l Enables semi-customization l Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, moderately high-variety model

Repetitive Focus - Examples Fast Food Clothes Dryer Mc. Donald’s over 95 billion served Truck

Repetitive Focus

Product-Focused Strategy l Facilities are organized by product l High volume, low variety l Conversion or further processing of undifferentiated materials such as petroleum, chemicals, or beer l Follows a predetermined sequence of steps, but flow is continuous rather than discrete – highly standardized l Other names l Line flow production

Production Process at NUCOR Steel

Product Focus - Pros & Cons l Advantages l Lower production cost per unit Lower but more specialized labor skills l Easier production planning and control l Higher equipment utilization (70% to 90%) l l Disadvantages l l Lower product flexibility More specialized equipment

Product-Focused Examples Soft Drinks (Continuous, then Discrete) Paper (Continuous)

Mass Customization l Using technology and imagination to rapidly mass-produce products that cater to unique customer desires l Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant