CHAPTER 3

1. Introduction to Operations Management

  • Course Overview: Management focus at UTM, specifically operations management.

  • Prepared by: Dr. Mohd Zulfabli Hasan.

2. Topics Covered

  • Goods and Services Selection

  • Generating New Products

  • Product Development

  • Issues for Product Design

  • Product Development Continuum

  • Defining a Product

  • Documents for Production

  • Service Design

  • Transition to Production

3. Learning Objectives

  1. Define product life cycle.

  2. Describe a product development system.

  3. Understand a house of quality.

  4. Explain time-based competition in operations management.

  5. Define products and services through operations management.

  6. Identify documents needed for production.

  7. Explain customer involvement in service design and delivery.

4. Importance of Goods and Services Selection

  • Organizations' Role: Provide goods and/or services to society.

  • Success Factor: Quality products are crucial for organizational success.

  • Focus: Top organizations often emphasize their core products (e.g., Honda on engines, Intel on microprocessors).

5. Effective Operations Management

  • Communication: Strong communication is necessary among customers, products, processes, and suppliers.

  • Customer Satisfaction: Customers seek satisfaction, not just physical goods or services.

  • Strategic Implications: Critical to an organization’s strategic planning and operations function.

6. Product Strategy Development

  • Objective: Develop and implement product strategies that align with market demands and foster competitive advantage.

  • Options:

    • Differentiation: Unique products (e.g., Safeskin Glove, Disney).

    • Low Cost: Competitive pricing (e.g., AirAsia, Walmart).

    • Rapid Response: Quick adaptability (e.g., Toyota).

7. Product Life Cycle Stages

  • Introduction Phase: May incur negative cash flow; substantial expenses in research, development, and modifications.

  • Growth Phase: Product design stabilizes; capacity forecasting becomes essential.

  • Maturity Phase: Increased competition; greater cost control required.

  • Decline Phase: Products must be evaluated for continuation or discontinuation.

8. Cost Considerations in Product Life Cycle

  • Encumbrances: Costs incurred during the lifecycle include development, production, and disposal.

  • Lifecycle Costs: Must be managed efficiently to enhance profitability.

9. Product-by-Value Analysis

  • Purpose: Evaluate products based on their dollar contribution to the organization.

  • Management Utility: Helps assess alternative strategies to boost cash flow and market penetration.

10. Generating New Products

  • Factors Influencing Development:

    • Customer Understanding: Insights into customer needs.

    • Economic Conditions: Fluctuations in disposable income and spending patterns.

    • Sociological Trends: Changes in social norms and demographics.

    • Technological Advances: Emerging and existing technologies.

    • Political Changes: Effects of new laws and regulations.

11. Product Development Stages

  • Steps Involved:

    • Scope definition for engineering teams.

    • Evaluation and feasibility assessment.

    • Customer requirement gathering and design review.

12. Quality Function Deployment (QFD)

  • Definition: Tool to translate customer desires into product specifications.

  • House of Quality: A graphic representation that aligns customer needs with technical requirements.

House of Quality Process Steps:

  1. Identify customer wants.

  2. Define how goods/services meet these wants.

  3. Relate customer wants to product features/characteristics.

  4. Assess relationships between firm’s capabilities and customer needs.

  5. Gauge customer importance ratings.

  6. Evaluate competitors' performance in meeting customer desires.

  7. Compare technical attributes against competitors.

13. Organizing for Product Development

  • Traditional Structure: Separate departments with specific functions.

  • Team Approach: Cross-functional teams are beneficial for innovation.

  • Champion/Manager Role: Drives the product development process.

14. Value Engineering and Manufacturability

  • Concept: Focus on improving design for cost efficiency and functionality.

  • Benefits:

    1. Reduced product complexity.

    2. Lower environmental impact.

    3. Enhanced product functionality.

    4. Improved maintainability.

15. Issues in Product Design

  • Considerations:

    • Robust Design: Minimize impacts from production variations.

    • Modular Design: Flexibility through segmented components.

    • CAD/CAM: Utilize technology for design and manufacturing efficiency.

16. Service Design Principles

  • Service Efficiency: Often complicated by customer involvement.

  • Strategies to Improve:

    • Limiting service options to enhance efficiency.

    • Modules for customizable offerings.

    • Emphasizing automation for cost reduction.

    • Identifying critical customer interaction moments for satisfaction.

17. Documentation for Production and Services

  • Types of Documentation:

    • Engineering Drawings: Detail design specifications.

    • Bills of Material (BOM): Lists components required for production.

    • Assembly Drawings and Routes: Provide instructions for assembly and production workflows.

    • Work Orders: Direct production based on scheduling.

    • Engineering Change Notices (ECNs): Manage product modifications.

18. Conclusion

  • Emphasizing the critical roles of effective operations management, product design, and service delivery to ensure organizational success in meeting customer needs.