Operations
Management
Chapter 6 –
Design of Goods and Services
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e
Products in Various Stages of Life
Cycle
Sales
Growth
Introduction
Roller
Blades
Maturity
Decline
Jet Ski
Boeing
727
Virtual
Reality
Time
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-4
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Traditional Approach To Designing
Product Service Bundles
 Over-the-wall approach



set of sequentially related tasks
each task represented by different function
each function works in isolation from others
 Trends that challenge the traditional approach

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
globalization of business
rapid technological change
shortening product life cycles
e-commerce
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-7
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Product Development - Sequential
Period 1
Period 2
Period 3
Period 4
Period 5
Period 6
Period 7
Sequential Product Development
Sales and
Marketing
Product
Engineering
Production
Engineering
Production
Accounting
Finance
Human
Resources
Product
Ready
5-8
Concurrent Engineering
Concurrent Engineering Product Development
Sales and
Marketing
Product
Engineering
Production
Engineering
Production
Accounting
Finance
Human
Resources
Concur on product design and decide
on individual function assignments
Period 1
Period 2
Period 3
Period 4
Sales and
Marketing
Product
Engineering
Production
Engineering
Product
Ready
Production
Accounting
Finance
Human
Resources
5-9
Period 5
Period 6
Period 7
Concurrent Engineering Instead Of
Sequential Engineering
 Concerns of more than one function are
considered simultaneously
 Concurrent Engineering Strategies/Methods:

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
Design for Manufacturing (DFM)
Taguchi Methods
Design for Disassembly
Design for procurement
Design for environment
Life cycle analysis
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-10
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Quality Function Deployment
Identify customer wants
Identify how the good/service will satisfy
customer wants
Relate customer wants to product hows
Identify relationships between the firm’s hows
Develop importance ratings
Evaluate competing products
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-11
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
House of Quality Example
You’ve been assigned
temporarily to a QFD team.
The goal of the team is to
develop a new camera
design. Build a House of
Quality.
© 1984-1994 T/Maker Co.
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-12
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
QFD House of Quaoity
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-13
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Manufacturability and
Value Engineering
Benefits:
reduced complexity of products
 additional standardization of products
 improved functional aspects of product
 improved job design and job safety
 improved maintainability of the product
 robust design

PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-14
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Issues for Product Development
Robust design – design can accommodate small
variations
Modular design – designed in easily segmented
components
Computer-aided design/Competer-aided
manufacturing (CAD/CAM)
Value analysis – incremental design
improvements
Environmentally friendly design
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-15
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458
Make-or-Buy Decisions
Decide whether or not you want (or
need) to produce an item
May be able to purchase the item as a
“standard item” from another
manufacturer (outsource)
PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 5e, and Operations
Management, 7e
5-16
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458