CassdddFQEFAADFAFDAadfasdfasdfasfasfh 3.pptx

asdfsadfsadfsqfsafasfSAdasasddf

1. Chapter 3: Design Of The Operations System 3.1 . Products and Services design 31-Mar-20 1 Instructor Aleel (MBA)

2. Purpose of a product design Designs are ‘creative’ in nature and they should be so; but the design should serve the organizational objectives while being creative. Since an organization has a purpose, the product design should help to serve that larger purpose. Providing value to the customer, the return on investment to the company and the competitiveness of the company should form the basis of the product design effort. A product’s design has tremendous impact on: what materials and components would be used, which suppliers will be included, what machines or what type of processes will be used to manufacture it, where it will be stored, how it will be transported. Since a customer does not necessarily imply an already tied-up customer, but also a potential one, what and how will the general yet target customer community be informed depends upon what the design of the product is. 31-Mar-20 2 Instructor Aleel (MBA)

3. Definition Product design - is the process of deciding on the unique characteristics and features of the company’s product and service. Process selection - is the development or acquisition of the process necessary to produce the designed product. The two way go together – products require processes and processes limit what products can be produced. A company can have a highly innovative design for its product , but if it has not determined how to make the product in a cost effective way, the product will stay a design forever. Product design and process selection affect product quality, product cost, and customer satisfaction. 31-Mar-20 3 Instructor Aleel (MBA)

4. Product/Service design and development Process Every business organization has to design, develop and introduce new products as a survival and growth strategy. Effective design: can provide a competitive edge matches product or service characteristics with customer requirements ensures that customer requirements are met in the simplest and least costly manner. reduces time required to design a new product or service minimizes revisions necessary to make a design workable Design is a critical process for a firm: Strategically, it defines firm’s customers and competitors Capitalizes on firm’s competencies and determines what new competencies need to be developed. Defines new markets and requires new process( change deriver) 31-Mar-20 4 Instructor Aleel (MBA)

5. Design of Goods vs. Services Product design deals with its form and function . Form implies the shape and appearance of the product while function is related to the working of the product. It specifies: materials to be used determines dimensions and tolerances defines appearance of the product set standards for performance Service design is unique in that we are designing both the service and the entire service concept. As with a tangible product, the service concept is based on meeting customer needs. The service design, however, adds the aesthetic and psychological benefits of the product. 31-Mar-20 5 Instructor Aleel (MBA)

6. Cont’d… Product design Defines appearance of product Specifies which materials are to be used Determines dimensions and tolerances Value stored in the product Often standardized Often designed in industry environment Quality inherent in product Service design Specifies what physical items, sensual benefits, and psychological benefits is to receive from service Depends on trained personnel Defines environment in which service will take place. Value conveyed as used Often customized Designed in market ( with customer) environment. Quality inherent in process 31-Mar-20 6 Instructor Aleel (MBA)

7. The product design process 31-Mar-20 7 Instructor Aleel (MBA)

8. Cont’d…. 31-Mar-20 8 Steps in the product design process Instructor Aleel (MBA)

9. A ) Idea generation- To remain competitive, companies must be innovative and bring out new products regularly. Sources of product ideas 1. Within the organization (Market researchers, Sales people, R&D, company workers, managers) 2. Customers complaints or suggestions Technological developments Competitors- way of using competitors’ ideas: i ) benchmarking- refers to finding the best-in-class product or process, measuring the performance of your product or process against it, and making recommendations for improvement based on the results. The benchmarked company may be in an entirely different line of business. ii) Reverse Engineering- carefully disassembling the product of competitor and analyze its parts and features to include best features in to its own product. 31-Mar-20 9 Instructor Aleel (MBA)

10. Reverse engineering at Ford company 31-Mar-20 10 Audi’s accelerator Pedal - Germany Taurus automobile- Ford Toyota’s fuel-gauge accuracy BMW’s tire and jack storage Of 400 features of competitors’ products, more than 300 were copied, adapted or enhanced Instructor Aleel (MBA)

11. B) Product( idea) Screening- involves evaluating ideas generated to determine their likelihood of success. Approximately 80 percent of ideas do not make it past the screening stage . Product concept is a detailed description of an idea, which you describe from the perspective of your customer. It is the value of the product idea to your customer - its value proposition Taking your customers' viewpoint when describing your product concept will help you test and evaluate how responsive your market will be to your product. Crucial questions to identify the value proposition of your product: What extra value does the product bring to the marketplace? How does the product create value for the customer? How is the product different from what is offered in the marketplace now? Will customers be interested in and willing to buy your product? How many customers will buy your product? Will they buy more than one? 31-Mar-20 11 Instructor Aleel (MBA)

12. C) Feasibility study/product screening -The company’s product screening team evaluates the product design idea according to the needs of the major business functions; that is: Feasibility study consists of a market analysis, an economic analysis, and a technical/strategic analysis. a) Operations /Technical What are the production needs of the proposed new product and how do they match our existing resources? Will we need new facilities, technology and equipment? Do we have the labor and management skills to make the product? Can the material for production be readily obtained? Does the new product provide a competitive advantage for the company? b ) Marketing What is the potential size of the market for the proposed new product? How much effort will be needed to develop a market for the product and What is the long-term product potential? through customer surveys, interviews, focus groups, or market tests 31-Mar-20 12 Instructor Aleel (MBA)

13. c) Finance What is the proposed new product’s financial potential, cost, and return on investment? Is the risk or capital investment excessive? Unfortunately, there is no magic formula for deciding whether or not to pursue a particular product idea. Managerial skill and experience, however, are key. Fortunately, we have decision-making tools to help us evaluate new product ideas. A popular one is break-even analysis – computing the breakeven point. An assessment can then be made as to how difficult or easy it will be to cover costs and make a profit. A product with a break-even quantity that is hard to attain might not be a good product choice to pursue 31-Mar-20 13 Instructor Aleel (MBA)

14. Cont’d…. 31-Mar-20 14 BEQ= BEQ = Performance specification report –a written report for product concepts that pass the feasibility study and are approved for development- they describe the function of the product-what should the product do to satisfy customer needs, . Output of feasibility study Instructor Aleel (MBA)

15. D) Preliminary Design and Testing- Design engineers translate general performance specifications into technical specifications. It involves building prototypes( Preliminary design) and testing them. Rapid prototyping : creating, testing, and revising a preliminary design model. Changes are made based on test results, and the process of revising, rebuilding a prototype, and testing continues until a visible design is determined. For service companies this may entail testing the offering on a small scale and working with customers to refine the service offering. Staying long in testing risks imitation of the product by competitor, while rushing creates the risk that all the “bugs” have not been worked out, which can prove very costly. The iterative process of revising, rebuilding a prototype, and testing involves form and functional design, as well as production design. It is important that these design decisions be performed concurrently at the rapid prototype stage as design decisions affect sales strategies, efficiency of manufacture, assembly quality, speed of repair, and product cost. 31-Mar-20 15 Instructor Aleel (MBA)

16. Concurrent design: a new approach to design that involves the simultaneous design of products and processes by design teams. Improves quality of early design decisions and cost Involves suppliers Incorporates production process Uses a price-minus system unlike cost plus in traditional approach Scheduling and management can be complex as tasks are done in parallel. 31-Mar-20 16 Instructor Aleel (MBA)

17. Sequential vs. Concurrent design Traditional approach: “over-the-wall” approach, because the designers would throw their design “over-the-wall” to operations then had to decide how to produce the product. There are many problems with the old approach: First, it is very inefficient and costly- Concurrent engineering allows everyone to work together so these problems do not occur. Second, it takes a longer amount of time than when product and process design are performed concurrently Third, it does not create a team atmosphere, which is important in today’s work environment. Rather, it creates an atmosphere where each function views its role separately in a type of “us versus them” mentality With concurrent engineering the team is responsible for designing and getting the product to market. Team members continue working together to resolve problems with the product and improve the process. 31-Mar-20 17 Instructor Aleel (MBA)

18. Typical BMW( top two) and Ford (bottom) car form 31-Mar-20 18 Instructor Aleel (MBA)

19. E. Final product Design - Product design process cont’d… This is where final product specifications are drawn up. The final specifications are then translated into specific processing instructions to manufacture the product, which include : selecting equipment, outlining jobs that need to be performed, identifying specific materials needed and suppliers that will be used, and all the other aspects of organizing the process of product production. Launching a new product involve ramping up production, coordinating supply chain, rolling out mkt plans. 31-Mar-20 19 Instructor Aleel (MBA)

20. Organizing for Product Development Historically – 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 31-Mar-20 20 Instructor Aleel (MBA)

21. Defining The Product 31-Mar-20 21 First definition is in terms of functions Rigorous specifications are developed during the design phase Manufactured products will have an engineering 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 Bill of Material Lists components, quantities and where used Shows product structure Instructor Aleel (MBA)

22. Service Design Services are acts, deeds, performances or relationships that produce time, place, form or psychological utilities for customers. Service- Something that is done to or for a customer Service delivery system- The facilities, processes, and skills needed to provide a service Product bundle- The combination of goods and services provided to a customer Service package- The physical resources needed to perform the service Service typically includes direct interaction with the customer Increased opportunity for customization Reduced productivity Cost and quality are still determined at the design stage Reduce customer interaction, often through automation 31-Mar-20 22 Instructor Aleel (MBA)

23. (c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating Service Design 31-Mar-20 23 (a) Customer participation in design such as pre-arranged funeral services or cosmetic surgery (b) Customer participation in delivery such as stress test for cardiac exam or delivery of a baby Instructor Aleel (MBA)

24. Designing Services Service Characteristics Pure services Quasi-Manufacturing Mixed services Service Package The physical goods The sensual benefits The psychological benefits Differing designs Substitute technology for people Get customer involved High customer attention 31-Mar-20 24 Instructor Aleel (MBA)

25. Service Design Process Service concept purpose of a service; it defines target market and customer experience. It also defines how our service is different from others and how it will compete in the marketplace. Sometimes services are successful because their service concept fills a previously unoccupied one or differs from the generally accepted mode of operation 2) Service package From the service concept, a service package is created to meet customer needs It is mixture of physical items, sensual benefits, and psychological benefits For a restaurant: the physical items consist of the facility, food, drinks, tableware, napkins, and other touchable commodities. The sensual benefits include the taste and aroma (smell or quality) of the food and the sights and sounds of the people. Psychological benefits are rest and relaxation, comfort, status, and a sense of w ell-being . 31-Mar-20 25 Instructor Aleel (MBA)

26. Example: A fast-food restaurant promises nourishment with speed. The customer is served quickly and is expected to consume the food quickly. Thus, the tables, chairs, and booths are not designed to be comfortable, nor does their arrangement encourage lengthy or personal conversations. The service package is consistent. 3 . Service specifications From the service package, service specifications are developed for performance, design, and delivery. I) Performance specifications - outline expectations and requirements for general and specific customers. Performance specifications are converted into design specifications and, finally, delivery specifications ii) Design specifications - must describe the service in sufficient detail for the desired service experience The specifications typically consist of activities to be performed, skill requirements and guidelines for service providers, and cost and time estimates. Facility size, location, and layout, as well as equipment needs, are also included. iii) Delivery specifications - Outline the steps required in the work process, including the work schedule, deliverable s, and the locations at which the work is to be performed. 31-Mar-20 26 Instructor Aleel (MBA)

27. Phases in Service Design Conceptualize Identify service package components Determine performance specifications Translate performance specifications into design specifications Translate design specifications into delivery specifications 31-Mar-20 27 Service Blueprinting Service blueprinting A method used in service design to describe and analyze a proposed service A useful tool for conceptualizing a service delivery system Major Steps in Service Blueprinting Establish boundaries Identify steps involved Prepare a flowchart Identify potential failure points Establish a time frame Analyze profitability Instructor Aleel (MBA)

28. Characteristics of Well Designed Service Systems Consistent with the organization mission User friendly Robust (strongly constructed) Easy to sustain Cost effective Value to customers Effective linkages between back operations Ensure reliability and high quality 31-Mar-20 28 Challenges of Service Design Variable requirements Difficult to describe High customer contact Service – customer encounter Instructor Aleel (MBA)

29. 3.2. PROCESS SELECTION A process is a group of related tasks with specific inputs and outputs. Processes exist to create value for the customer, the shareholder, or society. Process design defines what tasks need to be done and how they are to be coordinated among functions, people, and organizations. Planning , analyzing, and improving processes are the essence of operations management. Processes are planned, analyzed, and redesigned as required by changes in strategy and emerging technology. Process strategy is an organization’s overall approach for physically producing goods and providing services. Process decisions should reflect how the firm has chosen to compete in the marketplace, reinforce product decisions, and facilitate the achievement of corporate goals. A firm’s process strategy defines its: Vertical integration: The extent to which the firm will produce the inputs and control the outputs of each stage of the production process. 31-Mar-20 29 Instructor Aleel (MBA)

30. Capital intensity: The mix of capital (i.e., equipment, automation) and labor resources used in the production process. Process flexibility: The ease with which resources can be adjusted in response to changes in demand, technology, products or services, and resource availability. Customer involvement: The role of the customer in the production process . Process planning determines how a product will be produced or a service provided. It decides which components will be made in-house and which will be purchased from a supplier, selects processes, and develops and documents the specifications for manufacture and delivery. Types of production Processes Production processes can be classified into Job-Shop Production, batch production, mass production, and continuous production. 31-Mar-20 30 Instructor Aleel (MBA)

31. 2. Job-Shop Production Job-shop productions are characterized by manufacturing one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. The distinguishing feature of this is low volume and high variety of products. A job-shop comprises of general-purpose machines arranged into different departments. Each job demands unique technological requirements, demands processing on machines in a certain sequence . Job-shop Production is characterized by: High variety of products and low volume. Use of general purpose machines and facilities. Highly skilled operators who can take up each job as a challenge because of uniqueness. 31-Mar-20 31 Instructor Aleel (MBA)

32. Large inventory of materials, tools, parts. Detailed planning is essential for sequencing the requirements of each product, capacities for each work center and order priorities . 3. Batch Production Batch productions are used to produce small quantities of products in groups or batches based on customer orders or product specifications. They are also known as job shops. The volumes of each product produced are still small, and there can still be a high degree of customization. Examples can be seen in bakeries, education, and printing shops furniture making. The classes you are taking at the university use a batch process. Batch production processes many different jobs through the production system at the same time in groups or batches. Products are typically made to customer order, volume (in terms of customer order size) is low, and demand fluctuates. 31-Mar-20 32 Instructor Aleel (MBA)

33. Batch Production is characterized by: Shorter production runs. Plant and machinery are flexible. Plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch. Manufacturing lead-time and cost are lower as compared to job order production. 4. Mass Production These are designed to produce a large volume of a standardized product for mass production. They are also known as flow shops, flow lines, or assembly lines. With line processes the product that is produced is made in high volume with little or no customization. Think of a typical assembly line that produces everything from cars, computers, television sets, shoes, candy bars, even food items. The machines are arranged in a line or product layout. Product and process standardization exists and all outputs follow the same path. Product demand is stable, and product volume is high. 31-Mar-20 33 Instructor Aleel (MBA)

34. Goods that are mass produced include automobiles, televisions, personal computers, fast food, and most consumer goods. Mass Production is characterized by: Standardization of product and process sequence. Dedicated special purpose machines having higher production capacities and output rates. Large volume of products. Shorter cycle time of production. Lower in process inventory. Flow of materials, components and parts is continuous and without any back tracking. Production planning and control is easy. Material handling can be completely automatic. 31-Mar-20 34 Instructor Aleel (MBA)

35. 5. Continuous processes Continuous production operates continually to produce very high volume of fully standardized commodity products. The system is highly automated and is typically in operation continuously 24 hours a day. Examples include oil refineries, water treatment plants, and certain paint facilities. The products produced by continuous processes are usually in continual rather than discrete units, such as liquid or gas. They usually have a single input and a limited number of outputs. Also, these facilities are usually highly capital intensive and automated. Continuous processes are more extreme cases of high volume and product standardization than are line processes. Continuous production is characterized by: Dedicated plant and equipment with zero flexibility. Material handling is fully automated. Process follows a predetermined sequence of operations. Component materials cannot be readily identified with final product. Planning and scheduling is a routine action. 31-Mar-20 35 Instructor Aleel (MBA)

36. Product-Process Matrix 6- 36 31-Mar-20 Instructor Aleel (MBA)

37. Process Analysis Systematic study of all aspects of a process make it faster (how long it will take to produce or deliver?) more efficient (how many pdts /customers per hour?) less costly (how much does the process cost?) more responsive (the amount of time it takes to produce or process?) Basic tools: process flowcharts, diagrams and maps Building a Flowchart Determine objectives Define process boundaries Define units of flow Choose type of chart Observe process and collect data Map out process Validate chart 6- 37 31-Mar-20 Instructor Aleel (MBA)

38. 31-Mar-20 38 Process Flowchart Symbols Operation Inspection Transportation Delay Storage Instructor Aleel CH-3 Design of operations system