Product Design

© 2008 Prentice Hall, Inc. 5 – 1

Operations ManagementOperations ManagementChapter 5 – Chapter 5 – Design of Goods Design of Goods and Servicesand Services

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Learning ObjectivesLearning Objectives

1.1. Define product life cycleDefine product life cycle

2.2. Describe a product development systemDescribe a product development system

3.3. Describe how time-based competition is Describe how time-based competition is implementedimplemented

4. 4. Describe how products and services are Describe how products and services are defineddefined

5. Prepare the documents needed for 5. Prepare the documents needed for productionproduction

When you complete this chapter you should When you complete this chapter you should be able to :be able to :


The good or service the The good or service the organization provides societyorganization provides society

Top organizations typically focus on Top organizations typically focus on core productscore products

Customers buy satisfaction, not just Customers buy satisfaction, not just a physical good or particular servicea physical good or particular service

Fundamental to an organization's Fundamental to an organization's strategy with implications strategy with implications throughout the operations functionthroughout the operations function

Product DecisionProduct Decision


Product Strategy OptionsProduct Strategy Options

DifferentiationDifferentiation Shouldice HospitalShouldice Hospital

Low costLow cost Taco BellTaco Bell

Rapid responseRapid response ToyotaToyota


Product Life CyclesProduct Life Cycles

May be any length from a few May be any length from a few hours to decadeshours to decades

The operations function must The operations function must be able to introduce new be able to introduce new products successfullyproducts successfully


Product Life CyclesProduct Life Cycles

Negative cash flow

IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline

Sal

es,

cost

, an

d c

ash

flo

wS

ales

, co

st,

and

cas

h f

low Cost of development and productionCost of development and production

Cash Cash flowflow

Net revenue (profit)Net revenue (profit)

Sales revenueSales revenue

LossLoss

Figure 5.1Figure 5.1


Product Life CycleProduct Life Cycle

IntroductionIntroduction

Fine tuning may warrant Fine tuning may warrant unusual expenses forunusual expenses for ResearchResearch

Product developmentProduct development

Process modification and Process modification and enhancementenhancement

Supplier developmentSupplier development



GrowthGrowth

Product design begins to Product design begins to stabilizestabilize

Effective forecasting of Effective forecasting of capacity becomes necessarycapacity becomes necessary

Adding or enhancing capacity Adding or enhancing capacity may be necessarymay be necessary



MaturityMaturity

Competitors now establishedCompetitors now established

High volume, innovative High volume, innovative production may be neededproduction may be needed

Improved cost control, Improved cost control, reduction in options, paring reduction in options, paring down of product linedown of product line



DeclineDecline

Unless product makes a Unless product makes a special contribution to the special contribution to the organization, must plan to organization, must plan to terminate offeringterminate offering


Product-by-Value AnalysisProduct-by-Value Analysis

Lists products in descending Lists products in descending order of their individual dollar order of their individual dollar contribution to the firmcontribution to the firm

Lists the total annual dollar Lists the total annual dollar contribution of the productcontribution of the product

Helps management evaluate Helps management evaluate alternative strategiesalternative strategies


Product-by-Value AnalysisProduct-by-Value Analysis

Individual Contribution ($)

Total Annual Contribution ($)

Love Seat $102 $36,720

Arm Chair $87 $51,765

Foot Stool $12 $6,240

Recliner $136 $51,000

Sam’s Furniture FactorySam’s Furniture Factory


New Product OpportunitiesNew Product Opportunities

1.1. Understanding the Understanding the customercustomer

2.2. Economic changeEconomic change

3.3. Sociological and Sociological and demographic changedemographic change

4.4. Technological changeTechnological change

5.5. Political/legal changePolitical/legal change

6.6. Market practice, professional Market practice, professional standards, suppliers, distributorsstandards, suppliers, distributors

Brainstorming

is a useful tool


Importance of New ProductsImportance of New Products

Industry Industry leaderleader

Top Top thirdthird

Middle Middle thirdthird

Bottom Bottom thirdthird


Percentage of Sales from New ProductsPercentage of Sales from New Products50%

40%

30%

20%

10%

Position of Firm in Its IndustryPosition of Firm in Its Industry


Organizing for Product Organizing for Product DevelopmentDevelopment

Historically – distinct departmentsHistorically – distinct departments Duties and responsibilities are definedDuties and responsibilities are defined

Difficult to foster forward thinkingDifficult to foster forward thinking

A ChampionA Champion Product manager drives the product Product manager drives the product

through the product development through the product development system and related organizations system and related organizations


Organizing for Product Organizing for Product DevelopmentDevelopment

Team approachTeam approach Cross functional – representatives Cross functional – representatives

from all disciplines or functionsfrom all disciplines or functions

Product development teams, design Product development teams, design for manufacturability teams, value for manufacturability teams, value engineering teamsengineering teams

Japanese “whole organization” Japanese “whole organization” approachapproach No organizational divisionsNo organizational divisions


Manufacturability andManufacturability and Value Engineering Value Engineering

Benefits:Benefits:

1.1. Reduced complexity of productsReduced complexity of products

2.2. Additional standardization of productsAdditional standardization of products

3.3. Improved functional aspects of productImproved functional aspects of product

4.4. Improved job design and job safetyImproved job design and job safety

5.5. Improved maintainability (serviceability) Improved maintainability (serviceability) of the productof the product

6.6. Robust designRobust design


Cost Reduction of a Bracket Cost Reduction of a Bracket via Value Engineeringvia Value Engineering



Issues for Product Issues for Product DevelopmentDevelopment

Robust designRobust design

Modular designModular design

Computer-aided design (CAD)Computer-aided design (CAD)

Computer-aided manufacturing (CAM)Computer-aided manufacturing (CAM)

Virtual reality technologyVirtual reality technology

Value analysisValue analysis

Environmentally friendly designEnvironmentally friendly design


Robust DesignRobust Design

Product is designed so that small Product is designed so that small variations in production or variations in production or assembly do not adversely affect assembly do not adversely affect the productthe product

Typically results in lower cost and Typically results in lower cost and higher qualityhigher quality


Modular DesignModular Design

Products designed in easily Products designed in easily segmented componentssegmented components

Adds flexibility to both production Adds flexibility to both production and marketingand marketing

Improved ability to satisfy customer Improved ability to satisfy customer requirementsrequirements


Using computers to Using computers to design products and design products and prepare engineering prepare engineering documentationdocumentation

Shorter development Shorter development cycles, improved cycles, improved accuracy, lower costaccuracy, lower cost

Information and Information and designs can be designs can be deployed worldwidedeployed worldwide

Computer Aided Design Computer Aided Design (CAD)(CAD)


Computer-Aided Computer-Aided Manufacturing (CAM)Manufacturing (CAM)

Utilizing specialized computers Utilizing specialized computers and program to control and program to control manufacturing equipmentmanufacturing equipment

Often driven by the CAD system Often driven by the CAD system (CAD/CAM)(CAD/CAM)


1.1. Product qualityProduct quality

2.2. Shorter design timeShorter design time

3.3. Production cost reductionsProduction cost reductions

4.4. Database availabilityDatabase availability

5.5. New range of capabilitiesNew range of capabilities

Benefits of CAD/CAMBenefits of CAD/CAM


Virtual Reality TechnologyVirtual Reality Technology

Computer technology used to Computer technology used to develop an interactive, 3-D model of develop an interactive, 3-D model of a product from the basic CAD dataa product from the basic CAD data

Allows people to ‘see’ the finished Allows people to ‘see’ the finished design before a physical model is design before a physical model is builtbuilt

Very effective in large-scale designs Very effective in large-scale designs such as plant layoutsuch as plant layout


Value AnalysisValue Analysis

Focuses on design improvement Focuses on design improvement during productionduring production

Seeks improvements leading either Seeks improvements leading either to a better product or a product to a better product or a product which can be produced more which can be produced more economicallyeconomically


Legal and Industry Legal and Industry StandardsStandards

For Design …For Design …

Federal Drug AdministrationFederal Drug Administration

Consumer Products Safety CommissionConsumer Products Safety Commission

National Highway Safety AdministrationNational Highway Safety Administration

Children’s Product Safety ActChildren’s Product Safety Act



For Manufacture/Assembly …For Manufacture/Assembly …

Occupational Safety and Health Occupational Safety and Health AdministrationAdministration

Environmental Protection AgencyEnvironmental Protection Agency

Professional ergonomic standardsProfessional ergonomic standards

State and local laws dealing with State and local laws dealing with employment standards, discrimination, etc.employment standards, discrimination, etc.



For Disassembly/Disposal …For Disassembly/Disposal …

Vehicle Recycling PartnershipVehicle Recycling Partnership

Increasingly rigid laws worldwideIncreasingly rigid laws worldwide


Acquiring TechnologyAcquiring Technology

By Purchasing a FirmBy Purchasing a Firm Speeds developmentSpeeds development

Issues concern the fit between the acquired Issues concern the fit between the acquired organization and product and the hostorganization and product and the host

Through Joint VenturesThrough Joint Ventures Both organizations learnBoth organizations learn

Risks are sharedRisks are shared

Through AlliancesThrough Alliances Cooperative agreements between Cooperative agreements between

independent organizationsindependent organizations


Defining The ProductDefining The Product

First definition is in terms of First definition is in terms of functionsfunctions

Rigorous specifications are Rigorous specifications are developed during the design phasedeveloped during the design phase

Manufactured products will have an Manufactured products will have an engineering drawingengineering drawing

Bill of material (BOM) lists the Bill of material (BOM) lists the components of a productcomponents of a product


Engineering drawingEngineering drawing

Shows dimensions, tolerances, and Shows dimensions, tolerances, and materialsmaterials

Shows codes for Group TechnologyShows codes for Group Technology

Bill of Material Bill of Material

Lists components, quantities and Lists components, quantities and where usedwhere used

Shows product structureShows product structure

Product DocumentsProduct Documents


Monterey Jack CheeseMonterey Jack Cheese

(a) (a) U.S. grade AAU.S. grade AA. Monterey cheese shall conform to the . Monterey cheese shall conform to the following requirements:following requirements:

(1) (1) FlavorFlavor. Is fine and highly pleasing, free from undesirable . Is fine and highly pleasing, free from undesirable flavors and odors. May possess a very slight acid or feed flavors and odors. May possess a very slight acid or feed flavor.flavor.

(2) (2) Body and textureBody and texture. A plug drawn from the cheese shall be . A plug drawn from the cheese shall be reasonably firm. It shall have numerous small mechanical reasonably firm. It shall have numerous small mechanical openings evenly distributed throughout the plug. It shall not openings evenly distributed throughout the plug. It shall not possess sweet holes, yeast holes, or other gas holes.possess sweet holes, yeast holes, or other gas holes.

(3) (3) ColorColor. Shall have a natural, uniform, bright and attractive . Shall have a natural, uniform, bright and attractive appearance.appearance.

(4) (4) Finish and appearance - bandaged and paraffin-dippedFinish and appearance - bandaged and paraffin-dipped. . The rind shall be sound, firm, and smooth providing a good The rind shall be sound, firm, and smooth providing a good protection to the cheese.protection to the cheese.

Code of Federal Regulation, Parts 53 to 109, General Service Administration


Bills of MaterialBills of Material

Hard Rock Hard Rock Cafe’s Hickory Cafe’s Hickory BBQ Bacon BBQ Bacon CheeseburgerCheeseburger

DESCRIPTIONDESCRIPTION QTYQTY

BunBun 11Hamburger pattyHamburger patty 8 oz.8 oz.Cheddar cheeseCheddar cheese 2 slices2 slicesBaconBacon 2 strips2 stripsBBQ onionsBBQ onions 1/2 cup1/2 cupHickory BBQ sauceHickory BBQ sauce 1 oz.1 oz.Burger setBurger set LettuceLettuce 1 leaf1 leaf TomatoTomato 1 slice1 slice Red onionRed onion 4 rings4 rings PicklePickle 1 slice1 sliceFrench friesFrench fries 5 oz.5 oz.Seasoned saltSeasoned salt 1 tsp.1 tsp.11-inch plate11-inch plate 11HRC flagHRC flag 11

Figure 5.9 (b)Figure 5.9 (b)


Parts grouped into families with Parts grouped into families with similar characteristicssimilar characteristics

Coding system describes Coding system describes processing and physical processing and physical characteristicscharacteristics

Part families can be produced Part families can be produced in dedicated manufacturing cellsin dedicated manufacturing cells

Group TechnologyGroup Technology


1.1. Improved designImproved design

2.2. Reduced raw material and purchasesReduced raw material and purchases

3.3. Simplified production planning and Simplified production planning and controlcontrol

4.4. Improved layout, routing, and Improved layout, routing, and machine loadingmachine loading

5.5. Reduced tooling setup time, work-in-Reduced tooling setup time, work-in-process, and production timeprocess, and production time

Group Technology BenefitsGroup Technology Benefits


Documents for ProductionDocuments for Production

Assembly drawingAssembly drawing

Assembly chartAssembly chart

Route sheetRoute sheet

Work orderWork order

Engineering change notices (ECNs)Engineering change notices (ECNs)


Assembly DrawingAssembly Drawing

Shows exploded Shows exploded view of productview of product

Details relative Details relative locations to locations to show how to show how to assemble the assemble the productproduct

Figure 5.11 (a)Figure 5.11 (a)


Assembly ChartAssembly Chart

1

2

3

4

5

6

7

8

9

10

11

R 209 AngleR 209 Angle


Bolts w/nuts (2)Bolts w/nuts (2)



Bolt w/nutBolt w/nut

R 404 RollerR 404 Roller

Lock washerLock washer

Part number tagPart number tag

Box w/packing materialBox w/packing material

Bolts w/nuts (2)Bolts w/nuts (2)

SA1

SA2

A1

A2

A3

A4

A5

LeftLeftbracketbracket

assemblyassembly

RightRightbracketbracket

assemblyassembly

Poka-yoke Poka-yoke inspectioninspection

Figure 5.11 (b)Figure 5.11 (b)

Identifies the point Identifies the point of production of production where components where components flow into flow into subassemblies and subassemblies and ultimately into the ultimately into the final productfinal product


Route SheetRoute Sheet

Lists the operations and times required Lists the operations and times required to produce a componentto produce a component

Setup OperationProcess Machine Operations Time Time/Unit

1 Auto Insert 2 Insert Component 1.5 .4 Set 562 Manual Insert Component .5 2.3

Insert 1 Set 12C3 Wave Solder Solder all 1.5 4.1

components to board

4 Test 4 Circuit integrity .25 .5test 4GY


Work OrderWork Order

Instructions to produce a given quantity Instructions to produce a given quantity of a particular item, usually to a scheduleof a particular item, usually to a schedule

Work Order

Item Quantity Start Date Due Date

Production DeliveryDept Location

157C 125 5/2/08 5/4/08

F32 Dept K11


Engineering Change Notice Engineering Change Notice (ECN)(ECN)

A correction or modification to a A correction or modification to a product’s definition or product’s definition or documentationdocumentation Engineering drawingsEngineering drawings

Bill of materialBill of material

Quite common with long product life cycles, long manufacturing lead times, or

rapidly changing technologies


Service DesignService Design

Service typically includes direct Service typically includes direct interaction with the customerinteraction with the customer Increased opportunity for customizationIncreased opportunity for customization

Reduced productivityReduced productivity

Cost and quality are still determined at Cost and quality are still determined at the design stagethe design stage Delay customizationDelay customization

ModularizationModularization

Reduce customer interaction, often Reduce customer interaction, often through automationthrough automation


Moments of TruthMoments of Truth

Concept created by Jan Carlzon of Concept created by Jan Carlzon of Scandinavian AirwaysScandinavian Airways

Critical moments between the Critical moments between the customer and the organization that customer and the organization that determine customer satisfactiondetermine customer satisfaction

There may be many of these momentsThere may be many of these moments

These are opportunities to gain or These are opportunities to gain or lose businesslose business


Transition to ProductionTransition to Production

Know when to move to productionKnow when to move to production Product development can be viewed as Product development can be viewed as

evolutionary and never completeevolutionary and never complete

Product must move from design to Product must move from design to production in a timely mannerproduction in a timely manner

Most products have a trial production Most products have a trial production period to insure producibilityperiod to insure producibility Develop tooling, quality control, trainingDevelop tooling, quality control, training

Ensures successful productionEnsures successful production


Transition to ProductionTransition to Production

Responsibility must also transition as the Responsibility must also transition as the product moves through its life cycleproduct moves through its life cycle Line management takes over from designLine management takes over from design

Three common approaches to managing Three common approaches to managing transitiontransition Project managersProject managers

Product development teamsProduct development teams

Integrate product development and Integrate product development and manufacturing organizationsmanufacturing organizations


Operations ManagementOperations ManagementChapter 6 – Chapter 6 – Managing QualityManaging Quality

PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer/Render Heizer/Render Principles of Operations Management, 7ePrinciples of Operations Management, 7eOperations Management, 9e Operations Management, 9e


Learning ObjectivesLearning Objectives

When you complete this chapter you When you complete this chapter you should be able to:should be able to:

Define quality and TQMDefine quality and TQM

Explain Six SigmaExplain Six Sigma

Explain how benchmarking is used Explain how benchmarking is used

Explain quality robust products and Explain quality robust products and Taguchi conceptsTaguchi concepts


Two Ways Quality Two Ways Quality Improves ProfitabilityImproves Profitability

Improved Improved QualityQuality

Increased Increased ProfitsProfits

Increased productivity

Lower rework and scrap costs

Lower warranty costs

Reduced Costs via

Improved response

Flexible pricing

Improved reputation

Sales Gains via



Defining QualityDefining Quality

The totality of features and The totality of features and characteristics of a product or characteristics of a product or

service that bears on its ability to service that bears on its ability to satisfy stated or implied needssatisfy stated or implied needs

American Society for QualityAmerican Society for Quality


Different ViewsDifferent Views

User-based – better performance, User-based – better performance, more featuresmore features

Manufacturing-based – Manufacturing-based – conformance to standards, conformance to standards, making it right the first timemaking it right the first time

Product-based – specific and Product-based – specific and measurable attributes of the measurable attributes of the product product


Key Dimensions of QualityKey Dimensions of QualityKey Dimensions of QualityKey Dimensions of Quality

PerformancePerformance

FeaturesFeatures

ReliabilityReliability

ConformanceConformance

DurabilityDurability

ServiceabilityServiceability

AestheticsAesthetics

Perceived qualityPerceived quality

ValueValue


TakumiTakumi

A Japanese character A Japanese character that symbolizes a that symbolizes a broader dimension broader dimension than quality, a deeper than quality, a deeper process than process than education, and a more education, and a more perfect method than perfect method than persistencepersistence


Costs of QualityCosts of Quality

Prevention costs - reducing the Prevention costs - reducing the potential for defectspotential for defects

Appraisal costs - evaluating Appraisal costs - evaluating products, parts, and servicesproducts, parts, and services

Internal failure - producing defective Internal failure - producing defective parts or service before deliveryparts or service before delivery

External costs - defects discovered External costs - defects discovered after deliveryafter delivery


TQMTQM

Encompasses entire organization, Encompasses entire organization, from supplier to customerfrom supplier to customer

Stresses a commitment by Stresses a commitment by management to have a continuing, management to have a continuing,

companywide drive toward companywide drive toward excellence in all aspects of products excellence in all aspects of products and services that are important to the and services that are important to the

customercustomer


Seven Concepts of TQMSeven Concepts of TQM

Continuous improvementContinuous improvement

Six SigmaSix Sigma

Employee empowermentEmployee empowerment

BenchmarkingBenchmarking

Just-in-time (JIT)Just-in-time (JIT)

Taguchi conceptsTaguchi concepts

Knowledge of TQM toolsKnowledge of TQM tools


Continuous ImprovementContinuous Improvement

Represents continual Represents continual improvement of all processes improvement of all processes

Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, People, Equipment, Materials,

ProceduresProcedures


Six SigmaSix Sigma

Two meaningsTwo meanings Statistical definition of a process that Statistical definition of a process that

is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)

A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction


Two meaningsTwo meanings Statistical definition of a process that Statistical definition of a process that

is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)

A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction

Six SigmaSix Sigma

Mean

Lower limits Upper limits

3.4 defects/million

±6

2,700 defects/million

±3

Figure 6.4


Six SigmaSix Sigma

1.1. Define critical outputs Define critical outputs and identify gaps for and identify gaps for improvementimprovement

2.2. Measure the work and Measure the work and collect process datacollect process data

3.3. Analyze the dataAnalyze the data

4.4. Improve the processImprove the process

5.5. Control the new process to Control the new process to make sure new performance make sure new performance is maintainedis maintained

DMAIC ApproachDMAIC Approach


Use internal

benchmarking

if you’re big

enough

BenchmarkingBenchmarking

Selecting best practices to use as a Selecting best practices to use as a standard for performancestandard for performance

Determine what to Determine what to benchmarkbenchmark

Form a benchmark teamForm a benchmark team Identify benchmarking partnersIdentify benchmarking partners Collect and analyze benchmarking Collect and analyze benchmarking

informationinformation Take action to match or exceed the Take action to match or exceed the

benchmarkbenchmark


Just-in-Time (JIT)Just-in-Time (JIT)

Relationship to quality:Relationship to quality:

JIT cuts the cost of qualityJIT cuts the cost of quality

JIT improves qualityJIT improves quality

Better quality means less Better quality means less inventory and better, easier-to-inventory and better, easier-to-employ JIT systememploy JIT system


Just-in-Time (JIT)Just-in-Time (JIT)

‘‘Pull’ system of production scheduling Pull’ system of production scheduling including supply managementincluding supply management Production only when signaledProduction only when signaled

Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process Inventory costs money and hides process

and material problemsand material problems

Encourages improved process and Encourages improved process and product qualityproduct quality


Taguchi ConceptsTaguchi Concepts

Engineering and experimental Engineering and experimental design methods to improve product design methods to improve product and process designand process design Identify key component and process Identify key component and process

variables affecting product variationvariables affecting product variation

Taguchi ConceptsTaguchi Concepts Quality robustnessQuality robustness

Quality loss functionQuality loss function

Target-oriented qualityTarget-oriented quality


Quality RobustnessQuality Robustness

Ability to produce products Ability to produce products uniformly in adverse manufacturing uniformly in adverse manufacturing and environmental conditionsand environmental conditions Remove the effects of adverse Remove the effects of adverse

conditionsconditions

Small variations in materials and Small variations in materials and process do not destroy product process do not destroy product qualityquality


Quality Loss FunctionQuality Loss Function Shows that costs increase as the Shows that costs increase as the

product moves away from what product moves away from what the customer wantsthe customer wants

Costs include customer Costs include customer dissatisfaction, warranty dissatisfaction, warranty and service, internal and service, internal scrap and repair, and costs to scrap and repair, and costs to societysociety

Traditional conformance Traditional conformance specifications are too simplisticspecifications are too simplistic

Target-Target-

oriented oriented

qualityquality


InspectionInspection

Involves examining items to see if Involves examining items to see if an item is good or defectivean item is good or defective

Detect a defective productDetect a defective product Does not correct deficiencies in Does not correct deficiencies in

process or productprocess or product It is expensiveIt is expensive

IssuesIssues When to inspectWhen to inspect Where in process to inspectWhere in process to inspect


When and Where to InspectWhen and Where to Inspect

1.1. At the supplier’s plant while the supplier is At the supplier’s plant while the supplier is producingproducing

2.2. At your facility upon receipt of goods from At your facility upon receipt of goods from the supplierthe supplier

3.3. Before costly or irreversible processesBefore costly or irreversible processes

4.4. During the step-by-step production During the step-by-step production processprocess

5.5. When production or service is completeWhen production or service is complete

6.6. Before delivery to your customerBefore delivery to your customer

7.7. At the point of customer contactAt the point of customer contact


InspectionInspection

Many problemsMany problems Worker fatigueWorker fatigue

Measurement errorMeasurement error

Process variabilityProcess variability

Cannot inspect quality into a Cannot inspect quality into a productproduct

Robust design, empowered Robust design, empowered employees, and sound processes employees, and sound processes are better solutionsare better solutions


TQM In ServicesTQM In Services

Service quality is more difficult to Service quality is more difficult to measure than the quality of goodsmeasure than the quality of goods

Service quality perceptions depend Service quality perceptions depend on on Intangible differences between Intangible differences between

productsproducts

Intangible expectations customers Intangible expectations customers have of those productshave of those products


Service QualityService Quality

The Operations Manager must The Operations Manager must recognize:recognize:

1.1. The tangible component of The tangible component of services is importantservices is important

2.2. The service process is importantThe service process is important

3.3. The service is judged against the The service is judged against the customer’s expectationscustomer’s expectations

4.4. Exceptions will occurExceptions will occur


ServiceServiceSpecificationsSpecifications

at UPSat UPS


Determinants of Service Determinants of Service QualityQuality

ReliabilityReliability

ResponsivenessResponsiveness

CompetenceCompetence

AccessAccess

CourtesyCourtesy

CommunicationCommunication

CredibilityCredibility

SecuritySecurity

Understanding/ Understanding/ knowing the knowing the customercustomer

TangiblesTangibles


Service Recovery StrategyService Recovery Strategy

Managers should have a plan for Managers should have a plan for when services failwhen services fail

Marriott’s LEARN routineMarriott’s LEARN routine ListenListen

EmpathizeEmpathize

ApologizeApologize

ReactReact

NotifyNotify

Product Design

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