Professional Documents
Culture Documents
Davis
Janelle Heineke
OPERATIONS MANAGEMENT
INTEGRATING MANUFACTURING AND SERVICES
FIFTH EDITION
PowerPoint Presentation by
Charlie Cook, The University of West Alabama
Copyright 2005, The McGraw-Hill Companies, Inc.
CHAPTER
CHAPTER OBJECTIVES
Illustrate the importance of developing new products and
services to a firms competitiveness.
Identify the types of new products that companies
develop.
Introduce the new product design process and the
concept of a products life cycle.
Demonstrate the necessity of concurrent product and
process design as a new product or service is developed.
Present a framework for understanding how new services
are developed and introduced into the marketplace.
Copyright 2005 The McGraw-Hill
McGraw-Hill/Irwin
Managerial Issues
Competition in globalized markets
Pursuing a product differentiation strategy.
McGraw-Hill/Irwin
Continued Emphasis on
New Goods and Services
Increased Competition
Improved worldwide telecommunications
Better logistics; faster transportation of goods
Lower trade barriers (import duties and tariffs)
and the creation of trade organizations (NAFTA
and European Union)
Advances in Technology
Products are becoming obsolete faster.
Improved manufacturing processes: CAD, CAM,
industrial robots, and rapid prototyping.
Copyright 2005 The McGraw-Hill
McGraw-Hill/Irwin
Price Premiums
Ability to initially charge more for new products.
McGraw-Hill/Irwin
Exhibit 6.1a
McGraw-Hill/Irwin
Exhibit 6.1b
McGraw-Hill/Irwin
Exhibit 6.1c
McGraw-Hill/Irwin
McGraw-Hill/Irwin
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster Adult
Publishing Group, from Fast Cycle Time: How to Align Purpose, Strategy, and Structure for
Speed by Christopher Meyer. Copyright 1993 by Christopher Meyer. All rights reserved.
Exhibit 6.2
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Exhibit 6.3
McGraw-Hill/Irwin
Concept Development
Initial product design developed and tested.
Analysis of the market and customer requirements.
Copyright 2005 The McGraw-Hill
McGraw-Hill/Irwin
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Completed
House of
Quality Matrix
for a Car Door
Exhibit 6.4
McGraw-Hill/Irwin
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Source: Adapted from Navi Radjou, Deconstruction of the Supply Chain, Supply Chain Management
Review, November/December 2000, pp. 3038. Copyright 2000, Reed Business Information. Used
with permission.
Exhibit 6.5
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Source: Bart Huthwaite. Managing at the Starting Line: How to Design Competitive
Products, Workshop at the University of Southern CaliforniaLos Angeles, January 14,
1991, p. 7.
Exhibit 6.6
McGraw-Hill/Irwin
Intermittent process
Process that produces products in small lot sizes (e.g., job and
batch operations).
Line-flow process
Continuous process that produces high volume, highly
standardized products (e.g., assembly-line and continuous
operations).
McGraw-Hill/Irwin
Types of Processes
Exhibit 6.7
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Source: Adapted from Robert Hayes and Steven Wheelwright, Restoring Our Competitive Edge:
Competing through Manufacturing (New York: John Wiley & Sons, 1984). Copyright 1984,
John Wiley & Sons, Inc. This material is used by permission of John Wiley & Sons, Inc.
Exhibit 6.8
McGraw-Hill/Irwin
Exhibit 6.9
McGraw-Hill/Irwin
Exhibit 6.10
McGraw-Hill/Irwin
Service improvements
New services in which features have changed relative to
existing services.
Style changes
Modest forms of new services that change only the appearance
of the service.
McGraw-Hill/Irwin
Start-up services
New services in established markets already served by existing
services.
McGraw-Hill/Irwin
Exhibit 6.11
McGraw-Hill/Irwin
Content Change
Window Dressing
Breadth of Offering
Revolutionary
Channel Development
McGraw-Hill/Irwin
Design
Analysis
Development
Full launch
McGraw-Hill/Irwin
Activity
Design
Analysis
Development
Full Launch
McGraw-Hill/Irwin
Extent of Contact
The percent of time the customer is involved
relative to the time required to deliver the
service.
McGraw-Hill/Irwin
High
HighDegree
Degree
of
ofCustomer
Customer
Contact
Contact
High
Low
LowDegree
Degree
of
ofCustomer
Customer
Contact
Contact
Low
McGraw-Hill/Irwin
Exhibit 6.12
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Service shop
Low degree of labor intensity; a higher degree of
customer interaction and customization.
Mass service
A high degree of labor intensity; has a relatively low
degree of customer interaction.
Professional service
A high degree of labor intensity and a high degree of
customer interaction and customization.
Copyright 2005 The McGraw-Hill
McGraw-Hill/Irwin
Source: Roger W. Schmenner, How Can Service Businesses Survive and Prosper?
Sloan Management Review 27, no. 3 (Spring 1986), pp. 2132, by permission of
publisher. Copyright 1986 by Massachusetts Institute of Technology. All rights reserved.
Exhibit 6.13
McGraw-Hill/Irwin
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Exhibit 6.14
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Internal services
Provide services for other internal organizational units.
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Common Characteristics of
Well-Designed Service Systems
1. Each element of the service system is consistent with
the operating focus of the firm.
2. It is user-friendlycustomers can interact easily.
3. It is robustcapable of coping with variations in
demand and resources availability
4. It is structured so that consistent performance by its
people and systems is easily maintained.
5. It provides effective links between the back office and
the front office so that nothing falls between the cracks.
Copyright 2005 The McGraw-Hill
McGraw-Hill/Irwin
Common Characteristics of
Well-Designed Service Systems (contd)
6. It manages the evidence of service quality in such a
way that customers see the value of the service
provided.
7. It is cost-effectivethere is a minimum waste of time
and resources in delivering the service.
McGraw-Hill/Irwin