1. A Report in Production and Operations Management
By: Ulysses Maniago
2.
3. ► Organizations exist to provide goods or services
to society
► Great products are the key to success
► Top organizations typically focus on core
products
► Customers buy satisfaction, not just a physical
good or particular service
► Fundamental to an organization's strategy with
implications throughout the operations function
4. ► Goods or services are the basis for an
organization's existence
► Limited and predicable life cycles requires
constantly looking for, designing, and
developing new products
► New products generate substantial revenue
5. The objective of the product decision is to develop
and implement a product strategy that meets the
demands of the marketplace with a competitive
advantage
6. ► May be any length from a few days to decades
► The operations function must be able to
introduce new products successfully
8. Introductory Phase
► Fine tuning may warrant unusual
expenses for
1. Research
2. Product development
3. Process modification and enhancement
4. Supplier development
9. Growth Phase
► Product design begins to stabilize
► Effective forecasting of capacity becomes
necessary
► Adding or enhancing capacity may be necessary
10. Maturity Phase
► Competitors now established
► High volume, innovative production may be
needed
► Improved cost control, reduction in options,
paring down of product line
11. Decline Phase
Unless product makes a special contribution to
the organization, must plan to terminate offering
12. Negative
cash flow
Introduction Growth Maturity Decline
Sales,
cost,
and
cash
flow
Cost of development and production
Cash
flow
Net revenue (profit)
Sales revenue
Loss
Figure 5.2
13. ► Lists products in descending order of their
individual dollar contribution to the firm
► Lists the total annual profit contribution of the
product
► Helps management evaluate alternative
strategies
14. 1. Understanding the customer
2. Economic change
3. Sociological and demographic change
4. Technological change
5. Political and legal change
6. Market practice, professional standards, suppliers,
distributors
15. The creation of products with new or different
characteristics that offer new or additional benefits
to the customer.
Product development may involve modification of
an existing product or its presentation, or
formulation of an entirely new product that
satisfies a newly defined customer want or market
niche.
17. Products are designed so that they may be
manufactured uniformly and consistently despite
adverse manufacturing and environmental
conditions.
18. Product life cycles are becoming shorter.
∴ Faster developers of new products gain on
slower developers and obtain a competitive
advantage
19. Products designed in easily segmented
components known as modular designs
Adds flexibility to both production and marketing
Examples:
◦ Airbus – wings
◦ Fast food – buns, vegetables, etc.
◦ Computers
21. Benefits of CAD
◦ Shorter design time
◦ Database availability
◦ New capabilities
◦ Improved product quality
◦ Reduced production costs
Extensions
◦ Design for Manufacturing and Assembly (DFMA)
◦ 3-D Object Modeling
◦ CAD info is translated into machine control instructions
(CAM)
22. Computer technology used to develop an
interactive, 3-D model of a product
Especially helpful in design of layouts (e.g. factory,
store, home, office, etc.)
[video] AutoCAD 3D Printing
Source: http://www.youtube.com/watch?v=9XXBLoVwRCA
23. Focuses on design improvement during production
Seeks improvements leading either to a better
product or a product which can be more
economically produced
24. Benefits
◦ Safe and environmentally sound products
◦ Minimum raw material and energy waste
◦ Product differentiation
◦ Environmental liability reduction
◦ Cost-effective compliance with environmental
regulations
◦ Recognition as good corporate citizen
25. Make products recyclable
Use recycled materials
Use less harmful ingredients
Use lighter components
Use less energy
Use less material
