Embed Size (px)
Citation preview
MAN 3504 - Chapter 2 1
Chapter 2. Customers, Products, and OM: StrategyOutline
Product Characteristics and the Customer Corporate and Operations Strategy Hierarchy of strategies Order Winners and Qualifiers Operations Strategy: Service vs.
Manufacturing Operations Strategy: Product Life Cycle Product Design/Redesign Process/ QFD
MAN 3504 - Chapter 2 2
Product Characteristics and the Customer
Customer are classified by their product characteristic preferences. Done through surveys and focus groups
Product Characteristics:
Aesthetics CostQuality Variety/CustomizationSpeed of Service/Delivery
Warranties/GuaranteesBundled Services
MAN 3504 - Chapter 2 3
Corporate and Operations Strategy
One product can seldom satisfy all customer types
Companies recognize they must design products for a specific market segment, leading to strategies
Strategy is a plan of attack (including which customers will be “attacked”)
From the corporate strategy, functional strategies are derived
MAN 3504 - Chapter 2 4
Hierarchy of Strategies
Functional Strategies drive decision making at multiple levels: Strategic DM Tactical DM Operational/
Day-to-day DM
MARKETINGSTRATEGY
Strategic Decision Making
MARKET
OPERATIONSSTRATEGY
CORPORATESTRATEGY
ProductsOperation Priorities
FINANCESTRATEGY
Tactical Decision Making
Operational Decision Making
Training ProgramsTechnologyFacilitiesProceduresQuality Programs
People and equipment schedulesDay-to-day inventory management
MAN 3504 - Chapter 2 5
Order Winners and Order Qualifiers
Order Qualifier: The level of a product characteristic(s) that allow a product to be considered for selection
Order Winner: The level of a product characteristic(s) that drive the customer decision to select a product
Order winners/qualifiers are dynamic Changes as customer requirements change Changes as competitive products change
MAN 3504 - Chapter 2 6
Order Winners and Order Qualifiers
Order winners become drivers for operations strategy COST Operations Efficiency QUALOITY/RELIABILITY Quality at Design/Zero Defects VARIETY/CUSTOMIZATION Recognition of
customer needs SPEED OF SERVICE/DELIVERY Supply Chain
CoordinationFocused Operations - few order winning
characteristicsOperations as a driver for corporate strategy
MAN 3504 - Chapter 2 7
Operations Strategy: Services vs. Manufacturing
Operational Strategies differ in implementation Cost Strategy: Cost may be reduced in materials or
manufacturing locations versus in services is based on process standardization and the level of resources
Manufacturing: tangible product, versus Service: “it falls on your foot and it does not hurt”
Difficult to differentiate between services and products as products are bundled with services
MAN 3504 - Chapter 2 8
Operations Strategy: Product Life Cycles
The life cycle of a product has an effect on the operations strategy Birth Stage: Product Design Growth Stage: Capacity Management Mature Stage: Increasing Efficiency and
Quality Decline Stage: Cost minimization and
resource relocation
MAN 3504 - Chapter 2 9
Product Design/ Redesign Process
Product Design is critical
Must match critical customer requirements
Design Steps
Determine Customer Requirements
Idea Generation/Solutions
Initial Design/Prototypes
Design Review
Complete Functional Specifications
Initial Production and Market Test
Full Production
marketing
engineering design
production/manufacturing/supply chain/
quality
MAN 3504 - Chapter 2 10
Product Design/ Redesign Process
Past: “Over the wall design” vs. Today: Concurrent Engineering - multi functional teams
Value Analysis: Analyzing process and products to eliminate waste and simply products
Evaluating Designs: Quality Functional Deployment
MAN 3504 - Chapter 2 11
Quality Functional Deployment
Used extensively at NASA (simple version)
The House of Quality
Variety in the Menu 6 M T DC
On time Service 4 M DC T
Food Taste 4 T DC M
Aesthetic Pleasing 3 T M DC
Competitive Price 5 T DC M
Cooking Staff Skills/Recipes Used
Kitchen Space and Equipm
ent
Serving Equipment
Pleasant Service 2 DC M T
Transportation Equipm
ent
Number and Training
and Serving Staff
DC= Distinct CateringT= To your door CateringM = Mama’s food Catering
1 10
Rank by Local Customers(10=Best)
Importance Weighting 35 33 28 27 24Modified Weighting 17 33 19 27 21
Strong Positive Relationship
Positive Relationship
Negative Relationship
CUSTOMER REQUIREMENTS
PRODUCT ATTRIBUTES
COMPETITIVE EVALUATION
MAN 3504 - Chapter 2 12
Next Chapter
How to forecast product demand
