8/19/2019 Goods & Services Design
1/30
5 - 1© 2014 Pearson Education
Goods & ServicesDesign
PowerPoint presentation to accompany
Heizer and Render
Operations Management, Global Edition, Elevent EditionPrinciples o! Operations Management, Global Edition, "int Edition
PowerPoint slides by #e!! Heyl
22
© 2014 Pearson Education
8/19/2019 Goods & Services Design
2/30
5 - 2© 2014 Pearson Education
$earning Ob%ectives
' De!ine product life cycle
(' )*ild a house of quality
+' Eplain how time-based competition isimplemented by O
-' Eplain how the customer participates inthe desi!n and deli"ery of ser"ices
8/19/2019 Goods & Services Design
3/30
5 - #© 2014 Pearson Education
► Or!ani$ations e%ist to pro"ide !oods orser"ices to society
► &reat products are the 'ey to success
► (op or!ani$ations typically focus on coreproducts
► )ustomers buy satisfaction* not +ust a
physical !ood or particular ser"ice► ,undamental to an or!ani$ations
strate!y with implications throu!hout theoperations function
Goods and Services Selection
http.//fortunecom/fortune500/wal-mart-stores-inc-1/
http://fortune.com/fortune500/wal-mart-stores-inc-1/http://fortune.com/fortune500/wal-mart-stores-inc-1/
8/19/2019 Goods & Services Design
4/30
5 - 4© 2014 Pearson Education
► &oods or ser"ices arethe basis for anor!ani$ationse%istence
► imited and predicablelife cycles requiresconstantly loo'in! for*desi!nin!* and
de"elopin! newproducts
► ew products !eneratesubstantial re"enue
Goods and Services Selection
(he hi!her thepercenta!e of salesfrom the last 5 years*the more li'ely the firmis to be a leader
503
403
#03
203
103
03
ndustryleader
(opthird
iddlethird
6ottomthird
Position o! !irm in its ind*stry
P e r c e n t o ! s a l e s ! r o m
n e w
p r o d * c
t s
8/19/2019 Goods & Services Design
5/30
5 - 5© 2014 Pearson Education
(he ob+ecti"e of the product decision:
Develop and implement a prod*ct strategy that meets the demands o! te mar.etplace with a competitive advantage
Prod*ct Decision
Prod*ct Strategy Options S*pport /ompetitive
0dvantage
► 7ifferentiation► ow cost► 8apid response.
fle%ibility* reliability* quic'ness
8/19/2019 Goods & Services Design
6/30
5 - 9© 2014 Pearson Education
Prod*ct $i!e /ycle
e!ati"ecash flow
ntroduction &rowth aturity 7ecline
: a l e s * c o s t * a n d
c a s h f l o w
)ost of de"elopment and production
)ashflow
et re"enue ;profit<
:ales re"enue
oss
,i!ure 52
► ay be any len!th from a few days to decades► (he operations function must be able to introduce new products successfully
8/19/2019 Goods & Services Design
7/30
5 - =© 2014 Pearson Education
$i!e /ycle and Strategy
1ntrod*ctory Pase► ,ine tunin! may
warrant unusuale%penses for
1 8esearch
2 Productde"elopment
# Processmodification andenhancement
4 :upplierde"elopment
Growt Pase► Product desi!n be!ins
to stabili$e
► Effecti"e forecastin! of
capacity becomesnecessary
► >ddin!/ enhancin!capacity may be
necessary
to accommodate theincrease in productdemand
8/19/2019 Goods & Services Design
8/30
5 - ?© 2014 Pearson Education
Mat*rity Pase► )ompetitors now
established
► @i!h "olume* inno"ati"e
production may beneeded
► mpro"ed cost control*reduction in options*
parin! down of productline
for profitability and mar'et share
$i!e /ycle and Strategy
Decline Pase► Anless product
ma'es a specialcontribution to theor!ani$ation/ canbe sold withunusually hi!hcontribution
Production should beterminated
8/19/2019 Goods & Services Design
9/30
5 - B© 2014 Pearson Education
Prod*ct2by23al*e 0nalysis
► ists products in descending order of theirindi"idual dollar contribution to the firm
► ists the total annual dollar contribution ofthe product
CClow contribution on a per-unit basis by a product may loo'substantially different if it represent a lar!e portion of thecompanyDs sales
► @elps mana!ement e"aluate alternati"e
strate!ies ;increase cash flow* mar'etin!penetration or reducin! cost<
8/19/2019 Goods & Services Design
10/30
5 - 10© 2014 Pearson Education
Generating "ew Prod*cts
1 Anderstandin! the customer
2 Economic chan!e
# :ociolo!ical and demo!raphicchan!e
4 (echnolo!ical chan!e
5 Political and le!al chan!e
9 )han!er brou!ht about throu!hmar'et practice* professionalstandards* suppliers* distributors
8/19/2019 Goods & Services Design
11/30
8/19/2019 Goods & Services Design
12/30
5 - 12© 2014 Pearson Education
45D Ho*se o! 4*ality
8elationshipmatri%
(echnicale"aluation
(ar!et "alues
Ghat thecustomer
wants
)ustomerimportance
ratin!s
Our importance ratin!s
Gei!htedratin!
8/19/2019 Goods & Services Design
13/30
5 - 1#© 2014 Pearson Education
Ho*se o! 4*ality Eample
Hour team has been char!ed withdesi!nin! a new camera for &reat
)ameras* nc(he first action is to construct a@ouse of Iuality
8/19/2019 Goods & Services Design
14/30
5 - 14© 2014 Pearson Education
Ho*se o! 4*ality Eample
o w e l e c t r i c i t y r e q u i r e m e n t s
> l u m i n u m c o
m p o n e n t s
> u t o f o c u s
> u t o e % p o s u r e
@ i ! h n u m b e r
o f p i % e l s
E r ! o n o m i c d
e s i ! n
@ow to :atisfy
)ustomer Gants6at te
/*stomer 6ants
Relationsip
Matri
7ecnical
0ttrib*tes and
Eval*ation
How to Satis!y
/*stomer 6ants
1nterrelationsips
0 n a l y s i s o !
/ o m
p e t i t o r s
8/19/2019 Goods & Services Design
15/30
5 - 15© 2014 Pearson Education
Ho*se o! 4*ality Eample
)ustomer importance
ratin!;5 J hi!hest<
i!htwei!ht #
Easy to use 4
8eliable 5Easy to hold steady 2
@i!h resolution 1
Ghat thecustomer wants
6at te
/*stomer
6ants
Relationsip
Matri
7ecnical
0ttrib*tes and
Eval*ation
How to Satis!y
/*stomer 6ants
1nterrelationsips
0 n a l y s i s o !
/ o m p e t i t o r s
8/19/2019 Goods & Services Design
16/30
5 - 19© 2014 Pearson Education
i!htwei!ht #
Easy to use 4
8eliable 5
Easy to hold steady 2
@i!h resolution 1
Ho*se o! 4*ality Eample
@i!h relationship
edium relationship
ow relationship
8elationship matri%
6at te
/*stomer
6ants
Relationsip
Matri
7ecnical
0ttrib*tes and
Eval*ation
How to Satis!y
/*stomer 6ants
1nterrelationsips
0 n a l y s i s o !
/ o m p e t i t o r s
@ow well what we do meets the customerDs want
8/19/2019 Goods & Services Design
17/30
8/19/2019 Goods & Services Design
18/30
5 - 1?© 2014 Pearson Education
Ho*se o! 4*ality Eample
Gei!hted ratin!
i!htwei!ht #
Easy to use 4
8eliable 5
Easy to hold steady 2
@i!h resolution 1
Our importance ratin!s 22 B 2= 2= #2 25
@i!h relationship J 5
edium relationship J #
ow relationship J 1
6at te
/*stomer
6ants
Relationsip
Matri
7ecnical
0ttrib*tes and
Eval*ation
How to Satis!y
/*stomer 6ants
1nterrelationsips
0 n a l y s i s o !
/ o m p e t i t o r s
8/19/2019 Goods & Services Design
19/30
5 - 1B© 2014 Pearson Education
Ho*se o! 4*ality Eample
)
o m p a n y >
)
o m p a n y 6
& P
& P
, &
& P
P P
i!htwei!ht #
Easy to use 4
8eliable 5
Easy to hold steady 2
@i!h resolution 1
Our importance ratin!s 22 5
@ow well do competin! products meet
customer wants&J!ood * ,Jfair * PJpoor
6at te
/*stomer 6ants
Relationsip
Matri
7ecnical
0ttrib*tes and
Eval*ation
How to Satis!y
/*stomer 6ants
1nterrelationsips
0
n a l y s i s o !
/ o
m p e t i t o r s
8/19/2019 Goods & Services Design
20/30
5 - 20© 2014 Pearson Education
Ho*se o! 4*ality Eample
(ar!et "alues;(echnicalattributes<
(echnicale"aluation
)ompany > 0= 903 yes 1 o' &
)ompany 6 09 503 yes 2 o' ,
As 05 =53 yes 2 o' &
2 c i r c u i t s
, a i l u r e 1 p e r 1 0 * 0
0 0
P a n e l r a n ' i n
!
0 5
>
= 5 3
2 D t o K
6at te
/*stomer
6ants
Relationsip
Matri
7ecnical
0ttrib*tes and
Eval*ation
How to Satis!y
/*stomer 6ants
1nterrelationsips
0 n
a l y s i s o !
/ o
m p e t i t o r s
8/19/2019 Goods & Services Design
21/30
5 - 21© 2014 Pearson Education
Ho*se o! 4*ality Eample
)ompleted
@ouse of Iuality
o w e l e c t r i c i t y r e q u
i r e m e n t s
> l u m i n u m c
o m p o n e n t s
> u t o f o c u s
> u t o e % p o s u r e
@ i ! h n u m b e r o f p i %
e l s
E r ! o n o m i c d e s i ! n
) o m p a n y >
) o m p a n y 6
i!htwei!ht #
Easy to use 4
8eliable 5
Easy to hold steady 2
@i!h resolution 1
Our importance ratin!s
& P
& P
, &
& P
P P
(ar!et "alues;(echnicalattributes<
(echnical
e"aluation
)ompany > 0= 903 yes 1 o' &
)ompany 6 09 503 yes 2 o' ,
As 05 =53 yes 2 o' &
0 5
>
= 5 3
2 D t o K
2 c i r c u i t s
, a i l u r e 1 p e r 1 0 *
0 0 0
P a n e l r a n ' i n !
22 B 2= 2= #2 25
8/19/2019 Goods & Services Design
22/30
5 - 22© 2014 Pearson Education
Ho*se o! 4*ality Se8*ence
,i!ure 54
7eployin! resources throu!h the or!ani$ation inresponse to customer requirements:how how quality effort will be deployed
satisfied by satisfied by satisfied by
7esi!n
characteristics
Iuality
plan
Production
process
:pecific
component
8/19/2019 Goods & Services Design
23/30
5 - 2#© 2014 Pearson Education
Organizing !or Prod*ct Development
► (raditionally with distinct departments► ,i%ed duties and responsibilities are defined► 7ifficult to foster forward thin'in!
► > )hampion► Product mana!er dri"es the product throu!h the product
de"elopment system and related or!ani$ations
► (eam approach► )ross functional representati"es from all disciplines or
functions► 1 product de"elopment teams
2 desi!n for manufacturability teams
# "alue en!ineerin! teams► Lapanese Mwhole or!ani$ationN approach► o or!ani$ational di"isions ;not subdi"idin! or!ani$ation into different
departments<
►8F7research►
En!ineerD!
desi!n►nfctr en!nrD!►Productionproduce
;concurrent en!ineerin!
speedier product de"elopment<
8/19/2019 Goods & Services Design
24/30
5 - 24© 2014 Pearson Education
Prod*ct Development /ontin**m
► Product life cycles are becomin! shorter and therate of technolo!ical chan!e is increasin!
► 7e"elopin! new products faster can result in a
competitive advantage► 7ime2)ased /ompetition9
► competition based on time
► rapidly de"elopin! products and mo"in! them to
mar'et
►;so do theris' F e%pense<
8/19/2019 Goods & Services Design
25/30
5 - 25© 2014 Pearson Education
Prod*ct Development :PD; /ontin**m
1nternal Cost of PD Sared
$engty Speed of PD Rapid andlliances
Loint "entures
P*rcase technolo!y or e%pertiseby acquirin! the de"eloper
Internal Development Strategies
i!rations of eisting products
Enhancements to eisting products
ew internally de"eloped products
Size,color,features
Fitting issue:tech.,culture vs mission
8/19/2019 Goods & Services Design
26/30
5 - 29© 2014 Pearson Education
Prod*ct Development /ontin**m► 0lliances
Ased when new product are central to mission* butreso*rces are ac8*ired and si$able ris. is present )ooperati"e a!reements between independent or!ani$ations Aseful when technolo!y is de"elopin! 8educes ris's
► #oint 3ent*res 6oth or!ani$ations learn 8is's are shared; +oint ownership< E%ploitin! specific product opportunities that may not be
central to the firmDs mission► P*rcasing tecnology by ac8*iring a !irm
:peeds de"elopment ssues concern the fit between the acquired or!ani$ation and
product and the host
;"alue between the acquired or! and purchased or!<
8/19/2019 Goods & Services Design
27/30
5 - 2=© 2014 Pearson Education
Service Design
► :er"ice typically includes direct interaction withthe customer
► Process-chain-networ' ;P)< analysisfocuses on the ways in which processes can bedesi!ned to optimize interaction betweenfirms and their customers
8/19/2019 Goods & Services Design
28/30
5 - 2?© 2014 Pearson Education
Process2/ain2"etwor. :P/"; 0nalysis
,i!ure 512
8/19/2019 Goods & Services Design
29/30
5 - 2B© 2014 Pearson Education
Process2/ain2"etwor. :P/"; 0nalysis
▶ Direct interaction region includes process steps that
in"ol"e interaction between participants
▶ (he s*rrogate :s*bstit*te; interaction region includesprocess steps in which one participant is acting on anotherparticipantDs resources
▶ (he independent processing region includes steps inwhich the supplier and/or the customer is acting on resourceswhere each has maximum control
▶ >ll three re!ions ha"e similar operatin! issues but theappropriate way of handlin! the issues differs across re!ions
▶ :er"ice operations e%ist only within the area of direct andsurrogate interaction
▶ P) analysis pro"ides insi!ht to aid in positioning anddesigning processes that can achie"e strategic objectives
8/19/2019 Goods & Services Design
30/30
5 - #0© 2014 Pearson Education
0dding Service E!!iciency:er"ice producti"ity is notoriously low partially because of customer
in"ol"ement in the design or delivery of the ser"ice* or both (hiscomplicates the product desi!n challen!e
Gays to increase ser"ice efficiency
▶oment of truth. )ritical moments between the customer and theor!ani$ation that determine customer satisfaction
▶ Crucial relationship between the customer and the organization
▶imit the options▶ Pro"ide options to reduce ambiguity ▶ mpro"es efficiency and ability to meet customer e%pectations
▶7elay customi$ation ;hair salon* restaurant operate<
▶odulari$ation▶ Eases customi$ation of a ser"ice
▶ >utomation▶ 8educes cost* increases customer ser"ice
;tic'etless ser"ice "ia 'ios's*chec'-cashin! acti"ity "ia >(