operation management chapter 5

operation management chapter 5 - Operations Management...

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Unformatted text preview: Operations Management Chapter 5 Chapter 5 Design of Goods and Services Design of Goods and Services Part one Part one Outline Product Strategy to Create and Support Competitive Advantage Product Development System Quality Function Deployment (QFD) Product Life Cycles Life Cycle and Strategy Value Analysis Learning Objectives 1. 1. Define product life cycle Define product life cycle 2. 2. Describe a product development system Describe a product development system 3. 3. Build a house of quality Build a house of quality 4. 4. Describe how time-based competition is Describe how time-based competition is implemented implemented When you complete this chapter you should When you complete this chapter you should be able to : be able to : Customers buy satisfaction, not just a physical good or particular service Focus on core products / services Product Decision Product Strategy Options Differentiation Differentiation Shouldice Hospital Shouldice Hospital Low cost Low cost Taco Bell Taco Bell Rapid response Rapid response Toyota Toyota Product Life Cycles Negative cash flow Introduction Introduction Growth Growth Maturity Maturity Decline Decline Sales, cost, and cash flow Sales, cost, and cash flow Cost of development and production Cost of development and production Cash Cash flow flow Net revenue (profit) Net revenue (profit) Sales revenue Sales revenue Loss Loss Figure 5.1 Figure 5.1 Product Life Cycle Life Cycle expenses: Life Cycle expenses: Research Research Product development Product development Process modification and Process modification and enhancement enhancement Supplier development Supplier development Adding or enhancing capacity Adding or enhancing capacity may be necessary may be necessary Product Life Cycle Costs Costs incurred Costs incurred Costs committed Costs committed Ease of change Ease of change Concept Concept Detailed Detailed Manufacturing Manufacturing Distribution, Distribution, design design design design service, service, prototype prototype and disposal and disposal Percent of total cost Percent of total cost 100 100 80 80 60 60 40 40 20 20 0 0 Product Analysis by Value Lists products in descending order of their individual dollar contribution to the firm Lists the total annual dollar contribution of the product Helps management evaluate alternative strategies Product-by-Value Analysis Individual Contribution ($) Total Annual Contribution ($) Love Seat $102 $36,720 Arm Chair $87 $51,765 Foot Stool $12 $6,240 Sams Furniture Factory Sams Furniture Factory Importance of New Products Industry Industry leader leader Top Top third third Middle Middle third third Bottom Bottom third third Figure 5.2 Figure 5.2 Percentage of Sales from New Products Percentage of Sales from New Products 50% 40% 30% 20% 10% Position of Firm in Its Industry Position of Firm in Its Industry Scope of...
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operation management chapter 5 - Operations Management...

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