B370 Operations Management

1. B370 Operations Management Group 2 Tutorial 4 C.S. Lai July 2012 B370 Operations Management

2. Agenda Q & A 15 mins. Process Selection – Mfg. 30 mins. Service System Design 30 mins. Poke-yoke in Services 30 mins. Q & A 15 mins. B370 Operations Management

3. Activity • How would you design your production process for the following products? Why? • Large Aircraft (e.g. Airbus A340) • Luxury Vehicle (e.g. Lamborghini Sports Car) • Mass produced Vehicle (e.g. BMW X1) • Bread, Glass bottles…etc. B370 Operations Management

4. Process Flow Structures • Job shop (e.g. Aircraft) • Job shop (e.g. racing car) • Batch shop (eg. Pharmaceutical) • Assembly Line (eg. Model –T, 100+ years old!) • Continuous Flow (eg. Bread, Glass Bottles) B370 Operations Management

5. Few Major Products, Higher Volume High Volume, High Standard- ization Low Volume, One of a Kind Multiple Products, Low Volume Flexibility (High) Unit Cost (High) I. Job Shop Commercial Printer French Restaurant II. Batch Heavy Equipment Coffee Shop III. Assembly Line Automobile Assembly Burger King IV. Continuous Flow Sugar Refinery Flexibility (Low) Unit Cost (Low) B370 Operations Management

6. Product Design B370 Operations Management

7. Typical Phases of Product Development • Planning • Concept Development • System-Level design • Design Detail • Testing and Refinement • Production Ramp-up B370 Operations Management

8. House of Quality Quality Function Deployment Value Analysis/ Value Engineering Designing for the Customer Ideal Customer Product B370 Operations Management

9. Designing for the Customer: Quality Function Deployment • Interfunctional teams from marketing, design engineering, and manufacturing • Voice of the customer • House of Quality B370 Operations Management

10. Designing for the Customer: The House of Quality Customer requirements information forms the basis for this matrix, used to translate them into operating or engineering goals. • The McGraw-Hill Companies, Inc., 2004

11. Designing for the Customer: Value Analysis/Value Engineering • Achieve equivalent or better performance at a lower cost while maintaining all functional requirements defined by the customer • Does the item have any design features that are not necessary? • Can two or more parts be combined into one? • How can we cut down the weight? • Are there nonstandard parts that can be eliminated? B370 Operations Management

12. Concurrent EngineeringDefined • Concurrent engineering can be defined as the simultaneous development of project design functions, with open and interactive communication existing among all team members for the purposes of reducing time to market, decreasing cost, and improving quality and reliability. B370 Operations Management

13. Design for Manufacturability • Traditional Approach • “We design it, you build it” or “Over the wall” • Concurrent Engineering • “Let’s work together simultaneously” B370 Operations Management

14. Design for Manufacturing and Assembly • Greatest improvements related to DFMA arise from simplification of the product by reducing the number of separate parts: • During the operation of the product, does the part move relative to all other parts already assembled? • Must the part be of a different material or be isolated from other parts already assembled? • Must the part be separate from all other parts to allow the disassembly of the product for adjustment or maintenance? B370 Operations Management

15. Measuring Product Development Performance Measures Performance Dimension • Freq. Of new products introduced • Time to market introduction • Number stated and number completed • Actual versus plan • Percentage of sales from new products Time-to-market • Engineering hours per project • Cost of materials and tooling per project • Actual versus plan Productivity • Conformance-reliability in use • Design-performance and customer satisfaction • Yield-factory and field Quality B370 Operations Management

16. Services B370 Operations Management

17. Service Generalizations 1. Everyone is an expert on services. 2. Services are idiosyncratic. 3. Quality of work is not quality of service. 4. Most services contain a mix of tangible and intangible attributes. B370 Operations Management

18. Service Generalizations (Continued) 5. High-contact services are experienced, whereas goods are consumed. 6. Effective management of services requires an understanding of marketing and personnel, as well as operations. 7. Services often take the form of cycles of encounters involving face-to-face, phone, internet, electromechanical, and/or mail interactions. B370 Operations Management

19. Service Businesses • Facilities-based services • Field-based services B370 Operations Management

20. The Service Strategy The Customer The Systems The People The Service Triangle B370 Operations Management

21. Service Strategy: Focus and AdvantagePerformance Priorities • Treatment of the customer • Speed and convenience of service delivery • Price • Variety • Quality of the tangible goods • Unique skills that constitute the service offering B370 Operations Management

22. Service-System Design Matrix Degree of customer/server contact Buffered Permeable Reactive High core (none) system (some) system (much) Low Face-to-face total customization Face-to-face loose specs Sales Opportunity Production Efficiency Face-to-face tight specs Phone Contact Internet & on-site technology Mail contact Low High B370 Operations Management

23. Example of Service Blueprinting B370 Operations Management

24. Task Treatment Tangibles Service Fail-safingPoka-Yokes (A Proactive Approach) • Keeping a mistake from becoming a service defect. • How can we fail-safe the three Ts? B370 Operations Management

25. Three Contrasting Service Designs • The production line approach • The self-service approach • The personal attention approach B370 Operations Management

26. Characteristics of a Well-Designed Service System 1. Each element of the service system is consistent with the operating focusof the firm. 2. It is user-friendly. 3. It is robust. 4. It is structured so that consistent performanceby its people and systems is easily maintained. B370 Operations Management

27. Characteristics of a Well-Designed Service System (Continued) 5. It provides effective links between the back office and the front office so that nothing falls between the cracks. 6. It manages the evidenceof service quality in such a way that customers see the value of the service provided. 7. It is cost-effective. B370 Operations Management

28. Applying Behavioral Science to Service Encounters • The front-end and back-end of the encounter are not created equal • Segment the pleasure, combine the pain • Let the customer control the process • Pay attention to norms and rituals • People are easier to blame than systems • Let the punishment fit the crime in service recovery B370 Operations Management

29. Service Guarantees as Design Drivers • Recent research suggests: • Any guarantee is better than no guarantee • Involve the customer as well as employees in the design • Avoid complexity or legalistic language • Do not quibble or wriggle when a customer invokes a guarantee • Make it clear that you are happy for customers to invoke the guarantee B370 Operations Management

30. To download this presentation:http://alumni.cuhk.edu.hk/~cslai Enjoy the course…and…Good LuckSee you next time B370 Operations Management