1 Chris Schrage OPS 5 1 Design of Goods and Services Operations Management Chapter 5 2 Chris Schrage OPS 5 3 Chris Schrage OPS 5 1 st of the ten OM strategy decisions Products TANGIBLE INTANGIBLE Product offerings exploit core competencies Technology Customization
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Design of Goods and Services - University of Northern …schragec/present 5.pdf1 Chris Schrage OPS 5 1 Design of Goods and Services Operations Management Chapter 5 Chris Schrage OPS
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� Ranking of products based on dollar contribution to company� Individual product
contribution� Total annual contribution
� Focuses the strategic direction for products
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New product opportunities
� Understanding the customer� Economic change� Sociological and demographic
change� Technological change� Political/legal change� Other
� Market practice� Professional standards� Suppliers� Distributors
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New Product Impact
� Generally first mover will acquire major market square
� Hamilton Sundstrand� 1 in 10 projects result in successful product
� Concept to market 15 to 20 years� Millions of dollars of investment per project
� Thousands of new projects every year� Only a fraction gain market acceptance or
enough market share to be profitable
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Product Development� Concepts come from a variety of sources
� Internal� External
� Must be evaluated every step of the processIdeasFirm’s abilities or competenciesCustomer requirementsFunctional specificationsProduct specificationsDesign reviewTest marketIntroductionEvaluation
Scope of product
develop
ment team
Scope of design and engineering teams
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QFD- Quality Function Deployment
� Determining what the customer wants� Translating the customers desires into the design� Seven steps to “House of Quality”
� Identify customer Wants� Determine how the “product” will satisfy –
� Characteristics, features, aesthetics, attributes� Relate the Wants to Hows� Relate to the firm’s Hows� Develop importance ratings� Evaluate competing products� Consider technical attributes