Operations Management - Chapter 5: Goods and Service Design

Flashcards for Operations Management Chapter 5 Lecture on Goods and Service Design

Customer Purchase Decisions

Customers make purchase decisions based on their expectations of attributes such as price, quality, value, and design.

Design Strategy

A key component of business strategy where companies use product design to meet customer demand for new and/or improved goods and services.

Goods Innovation Examples

Lowering shipping costs through the decrease of volume and weight of goods and using recyclable containers that are returned, cleaned, and reused.

Steps 1 and 2 of Goods and Service Design

Strategic mission, analysis, and competitive priorities.

Step 3 of Goods and Service Design

Customer Benefit Package (CBP) design and configuration.

Step 4 of Goods and Service Design

Detailed goods, services, and process design, which usually includes prototype testing.

Prototype Testing

The process by which a model is constructed to test a product’s performance under actual operating conditions, as well as consumer reactions to the prototypes.

Step 5 of Goods and Service Design

Market introduction/deployment, where the CBP is advertised, marketed, and offered to customers.

Step 6 of Goods and Service Design

A final step that evaluates how well the goods and services are selling and customers’ reactions to them.

Customer-Focused Design

Guides the design, creation, and marketing of goods and services by integrating the voice of the customer into all decisions.

Voice of the Customer

The customer’s requirements as expressed in the customer’s own words.

Quality Function Deployment (QFD)

The design process that translates the voice of the customer into specific technical features that characterize the design and provide the blueprint for manufacturing or service delivery.

House of Quality

A matrix used to initiate the QFD process, often called the House of Quality.

Nominal Specification

The target dimension in design specifications.

Tolerance

A range of permissible variation in design specifications.

Tolerance Design

Determining the acceptable tolerance in design.

Taguchi Loss Function

Measures quality as the variation from the target value of a design specification and translates that variation into an economic loss function.

Reliability

The probability that a manufactured good, piece of equipment, or system performs its intended function for a stated period of time under specified operating conditions.

Series System Reliability

An n-component system that fails if at least one component fails.

Parallel System Reliability

An n-component system that fails only if all components fail.

Design for Manufacturability (DFM)

Process of designing a product for efficient production at the highest level of quality.

Product Simplification

The process of trying to simplify designs to reduce complexity and costs.

Design for Environment (DfE)

The explicit consideration of environmental concerns in the design of goods, services, and processes.

Service-Delivery System Design components

Includes facility location and layout, the servicescape, service process and job design, and technology and information support systems.

Servicescape

All the physical evidence a customer might use to form an impression of a service.

Service-Encounter Design

Focuses on the points of contact, direct or indirect, between the service provider and customers.

Customer Contact

The physical or virtual presence of customers in the service delivery system during a service experience.

Customer-Contact Requirements

Measurable performance levels that define the quality of customer contact with representatives of an organization.

Empowerment

Giving people the authority to make decisions, have control over their work, take risks, and promote change.

Service Upset

A problem – real or perceived – that a customer faces with the service delivery system.

Service Guarantee

A promise to reward and compensate a customer if a service upset occurs during the service experience.

Service Recovery

The process of correcting a service upset and satisfying customers.