opm topic 2 design

Operations Management

Operations & Production Management (OPM)Dr. Muhammad WasifVisiting Faculty, IBA.

Product and Service Design2 Dr. Muhammad Wasif Operations & Production Management7

Introduction to Product & Service DesignSection 2.1

3 Dr. Muhammad Wasif Operations & Production Management7

Major factors in design strategy Dr. Muhammad Wasif Operations & Production Management10CostQualityTime-to-marketCustomer satisfactionCompetitive advantageProduct and service design or redesign should be closely tied to an organizations strategy

Product or Service Design Activities Dr. Muhammad Wasif Operations & Production Management10Translate customer wants and needs into product and service requirementsRefine existing products and servicesDevelop new products and servicesFormulate quality goalsFormulate cost targetsConstruct and test prototypesDocument specifications

Reasons for Product or Service Design Dr. Muhammad Wasif Operations & Production Management10ReasonsExamplesEconomicLow price grocery shop (Imtiaz supermarket)Low maintenance products (disposable items) Social & demographicHigh cost of fuel (Hybrid cars)People believe in charity & religion (Chipa, Edhi, Alamgir welfares)Political, liability, or legalRelate politics with charity to win people (KKF, Alkhidmat, SKH)Have ISO certification for export goods (Llyods, SGS, BVQI)CompetitiveWomen are willing to use cosmetics (different brands of shampoo)People want easy and cheap communication (ufone, telenore etc.) Cost or availabilityIslamic Banking

TechnologicalHigh speed internet (DSL, 4G, LTE)

Objectives of Product and Service Design Dr. Muhammad Wasif Operations & Production Management14Main focusCustomer satisfactionUnderstand what the customer wantsSecondary focusFunction of product/serviceCost/profitQualityAppearanceEase of production/assemblyEase of maintenance/service

Product Life Cycles Dr. Muhammad Wasif Operations & Production Management15May be any length from a few hours to decadesThe operations function must be able to introduce new products successfullyProduct Life CyclesHoursWeekMonthsYearsFoodsMagazinesFashion apparelMedia tapesNewspapersStationary itemsTech. ServicesPlayers

Product Life Cycles Dr. Muhammad Wasif Operations & Production Management15

Negative cash flow

IntroductionGrowthMaturityDeclineSales, cost, and cash flow

Cost of development and production

Cash flow

Net revenue (profit)

Sales revenue

Loss

Product Development System Dr. Muhammad Wasif Operations & Production Management15

Scope of product development team

Scope for design and engineering teams

Evaluation

Introduction

Test Market

Functional Specifications

Design Review

Product Specifications

Customer Requirements

Ability

Ideas

Issues for Product Development Dr. Muhammad Wasif Operations & Production Management15Robust design small change in design do not disturb whole product.Modular design segmented components (E.g. subway buger)Computer-aided design (CAD) PC used as tool for faster design.Computer-aided manufacturing (CAM) Virtual reality technology simulations and analysis without prototypes, e.g. (Witness software, Plant Simulation).Value analysis design improvement during production.Environmentally friendly design

Product Development Continuum Dr. Muhammad Wasif Operations & Production Management15External Development StrategiesAlliancesJoint venturesPurchase technology or expertiseby acquiring the developerInternal Development StrategiesMigrations of existing productsEnhancements to existing productsNew internally developed productsInternalCost of product development SharedLengthySpeed of product developmentRapid and/or ExistingHighRisk of product developmentShared

Acquiring Technology Dr. Muhammad Wasif Operations & Production Management15By Purchasing a FirmSpeeds developmentIssues concern the fit between the acquired organization and product and the hostThrough Joint VenturesBoth organizations learnRisks are sharedThrough AlliancesCooperative agreements between independent organizations

Product Documents Dr. Muhammad Wasif Operations & Production Management15Engineering drawingShows dimensions, tolerances, and materialsShows codes for Group TechnologyBill of Material Lists components, quantities and where usedShows product structure

Documents for Production Dr. Muhammad Wasif Operations & Production Management15Assembly drawingAssembly chartRoute sheetWork orderEngineering change notices (ECNs)

Assembly drawingAssembly chart

Route sheet

Work order

Quality Function DeploymentSection 2.216 Dr. Muhammad Wasif Operations & Production Management33

Quality Function Deployment (QFD) Dr. Muhammad Wasif Operations & Production Management15House of Quality is an approach that integrates the voice of the customer into the product and service development process.

Relationshipmatrix

How to satisfycustomer wants

Interrelationships

Competitive assessment

Technicalevaluation Target values

What the customerwants

Customer importance ratings

Weighted ratingIdentify customer wantsIdentify how the good/service will satisfy customer wantsRelate customer wants to product howsIdentify relationships between the firms howsDevelop importance ratingsEvaluate competing productsCompare performance to desirable technical attributes

House of Quality Example Dr. Muhammad Wasif Operations & Production Management15Your team has been charged with designing a new camera for Great Cameras, Inc.The first action is to construct a House of Quality

House of Quality Example Dr. Muhammad Wasif Operations & Production Management15Customerimportancerating(5 = highest)

Lightweight 3Easy to use 4Reliable5Easy to hold steady 2Color correction1 (1) What the customer wants

What the CustomerWants

RelationshipMatrix

TechnicalAttributes andEvaluation

How to SatisfyCustomer Wants

Interrelationships

Analysis ofCompetitors

House of Quality Example Dr. Muhammad Wasif Operations & Production Management15


RelationshipMatrix



Interrelationships


Low electricity requirementsAluminum componentsAuto focusAuto exposurePaint palletErgonomic design

(2) How to SatisfyCustomer Wants


Lightweight 3Easy to use 4Reliable5Easy to hold steady 2Color corrections1


RelationshipMatrix



Interrelationships


High relationshipMedium relationshipLow relationship

(3)Relationship matrix



RelationshipMatrix



Interrelationships


Low electricity requirementsAluminum componentsAuto focusAuto exposurePaint palletErgonomic design

(4) Relationships between the things we can do

House of Quality Example Dr. Muhammad Wasif Operations & Production Management15 (5) Weighted rating=3x1+4x1+5x3=22


RelationshipMatrix



Interrelationships



Our importance ratings22927273225

High relationship (5)Medium relationship (3)Low relationship (1)

113


Company ACompany BGPGPFGGPPP


Our importance ratings225

(6) How well do competing products meet customer wants


RelationshipMatrix



Interrelationships




RelationshipMatrix



Interrelationships


Target values(Technical attributes)Technical evaluationCompany A0.760%yes1okGCompany B0.650%yes2okFUs0.575%yes2okG0.5 A75%2 to 2 circuitsFailure 1 per 10,000Panel ranking

(7) Compare performance to desirable technical attributes

House of Quality Example Dr. Muhammad Wasif Operations & Production Management15Completed House of Quality

Lightweight3Easy to use4Reliable5Easy to hold steady2Color correction1Our importance ratings

Low electricity requirementsAluminum componentsAuto focusAuto exposurePaint palletErgonomic designCompany ACompany B

GPGPFGGPPP

Target values(Technical attributes)Technical evaluationCompany A0.760%yes1okGCompany B0.650%yes2okFUs0.575%yes2okG0.5 A75%2 to 2 circuitsFailure 1 per 10,000Panel ranking

22 9 27 27 32 25

House of Quality Sequence Dr. Muhammad Wasif Operations & Production Management15Deploying resources through the organization in response to customer requirements

Design characteristicsSpecific componentsHouse 2

Customer requirementsDesign characteristicsHouse 1

Specific componentsProduction processHouse 3

Production processQuality planHouse 4

Decision TreeSection 2.328 Dr. Muhammad Wasif Operations & Production Management42

Application of Decision Trees Dr. Muhammad Wasif Operations & Production Management15Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes

Procedure

Include all possible alternatives and states of nature - including doing nothingEnter payoffs at end of branchDetermine the expected value of each branch and prune the tree to find the alternative with the best expected value

Application of Decision Trees Dr. Muhammad Wasif Operations & Production Management15

(.6)Low sales

(.4)High sales

(.6) Low sales

(.4)High sales

Purchase CAD$388,000

Hire and train engineers$365,000

Do nothing $0$0 Net

$800,000Revenue- 400,000Mfg cost ($50 x 8,000)- 375,000Hire and train cost$25,000Net

$2,500,000Revenue- 1,250,000Mfg cost ($50 x 25,000)- 375,000Hire and train cost$875,000Net

$2,500,000Revenue- 1,000,000Mfg cost ($40 x 25,000)- 500,000CAD cost$1,000,000Net

$800,000Revenue- 320,000Mfg cost ($40 x 8,000)- 500,000CAD cost- $20,000Net loss

Service DesignSection 2.431 Dr. Muhammad Wasif Operations & Production Management42

Service Design Dr. Muhammad Wasif Operations & Production Management15Service is an actService delivery systemFacilitiesProcessesSkillsMany services are bundled with products

Service Design Dr. Muhammad Wasif Operations & Production Management15Service typically includes direct interaction with the customerIncreased opportunity for customizationReduced productivityCost and quality are still determined at the design stageDelay customizationModularizationReduce customer interaction, often through automation

Service Design Dr. Muhammad Wasif Operations & Production Management15Service typically includes direct interaction with the customerIncreased opportunity for customizationReduced productivityCost and quality are still determined at the design stageDelay customizationModularizationReduce customer interaction, often through automation

(c) Customer participation in design and delivery such as counseling, college education, financial management of personal affairs, or interior decorating

(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

Service Systems Dr. Muhammad Wasif Operations & Production Management15Service systems range from those with little or no customer contact to very high degree of customer contact such as:Insulated technical core (software development)Production line (automatic car wash)Personalized service (hair cut, medical service)Consumer participation (diet program)Self service (supermarket)

Characteristics of Well Designed Service Systems Dr. Muhammad Wasif Operations & Production Management15Consistent with the organization missionUser friendlyRobustEasy to sustainCost effectiveValue to customersEffective linkages between back operationsSingle unifying themeEnsure reliability and high quality

Challenges of Service Design Dr. Muhammad Wasif Operations & Production Management15Variable requirementsDifficult to describeHigh customer contactService customer encounter

Dr. Muhammad Wasif Operations & Production Management59ReferencesOperations Management, 10th Ed., by J. Heizer & B. RenderOperations Management, William J. Stevenson.Operations Management, 7th Ed., N. Slack, A.B. Jones, R. Johnston.Cases in Operations Management, S. Chambers, C. Harland, A. Harison, N. Slack.