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A Report in Production and Operations ManagementBy: Ulysses Maniago
► Organizations exist to provide goods or services to society
► Great products are the key to success► Top organizations typically focus on core
products► Customers buy satisfaction, not just a physical
good or particular service► Fundamental to an organization's strategy with
implications throughout the operations function
► Goods or services are the basis for an organization's existence
► Limited and predicable life cycles requires constantly looking for, designing, and developing new products
► New products generate substantial revenue
The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage
► May be any length from a few days to decades
► The operations function must be able to introduce new products successfully
Introduction Growth Maturity Decline
Introductory Phase► Fine tuning may warrant unusual expenses for
1. Research
2. Product development
3. Process modification and enhancement
4. 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
Negative cash flow
Introduction Growth Maturity Decline
Sale
s, c
ost
, and c
ash
flow Cost of development and production
Cash flow
Net revenue (profit)
Sales revenue
Loss
Figure 5.2
► Lists products in descending order of their individual dollar contribution to the firm
► Lists the total annual profit contribution of the product
► Helps management evaluate alternative strategies
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
The creation of products with new or different characteristics that offer new or additional benefits to the customer.
Product development may involve modification of an existing product or its presentation, or formulation of an entirely new product that satisfies a newly defined customer want or market niche.
Robust design Time-based competition Modular design Computer-aided design Value analysis Environmentally friendly design “Green” manufacturing
Products are designed so that they may be manufactured uniformly and consistently despite adverse manufacturing and environmental conditions.
Product life cycles are becoming shorter.
Faster developers of new products gain on slower developers and obtain a competitive advantage
Products designed in easily segmented components known as modular designs
Adds flexibility to both production and marketing
Examples:◦ Airbus – wings◦ Fast food – buns, vegetables, etc.◦ Computers
Designing products at a computer terminal or work station◦Design engineer
develops rough sketch of product
◦Uses computer to draw product
Often used with CAM (Computer Aided Manufacturing)
© 1995 Corel Corp.
Benefits of CAD◦ Shorter design time◦ Database availability◦ New capabilities ◦ Improved product quality◦ Reduced production costs
Extensions◦ Design for Manufacturing and Assembly (DFMA)◦ 3-D Object Modeling◦ CAD info is translated into machine control
instructions (CAM)
Computer technology used to develop an interactive, 3-D model of a product
Especially helpful in design of layouts (e.g. factory, store, home, office, etc.)
[video] AutoCAD 3D Printing Source: http://www.youtube.com/watch?v=9XXBLoVwRCA
Focuses on design improvement during production
Seeks improvements leading either to a better product or a product which can be more economically produced
Benefits◦ Safe and environmentally sound products◦ Minimum raw material and energy waste◦ Product differentiation◦ Environmental liability reduction◦ Cost-effective compliance with environmental
regulations◦ Recognition as good corporate citizen
Make products recyclable Use recycled materials Use less harmful ingredients Use lighter components Use less energy Use less material
Scope for design and engineering
teams
Evaluation
Introduction
Test Market
Functional Specifications
Design Review
Product Specifications
Customer Requirements
Feasibility
Concept
Thank you!