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82 Cards in this Set

  • Front
  • Back
The New Service Development (NSD) Process
1. Design
2. Analysis
3. Development
4. Full Launch
Design
Formulating the objectives and strategy of the new service
Analysis
-considering the financial implications of the new service.
-examining supply chain issues for delivery of service
Development
testing the service design, training personnel, conducting pilot runs
Full Launch
releasing the service to the market place
Managerial Issues
-competition in globalized markets
-product life cycles becoming shorter
-increasing demand for services
Competition in globalized markets
pursuing a product differentiation strategy
Product life cycles becoming shorter
-engaging in continuous product development as new products become a majority of sales and profits
-having **flexibility in manufacturing processes**
Increasing demand for services
-increasing the efficiency and reducing the costs of delivering services
-effectively using the internet to deliver extend current services and offer new services
Reduction of parts is...
usually a good thing!
Project Process
process that focuses on making one-of-a-kind products
Intermittent process
process that produces products in small lot sizes
(e.g. job and batch operations)
Line-flow process
(PRODUCT FOCUS --> LINE)

continuous process that produces high volume, highly standardized products
(e.g. assembly line and continuous operations)
Greater Market Share
early entry captures large initial market share
Price Premiums
Ability to initially charge more for new products
Quick Reaction to Competition
rapid response to competitor's new products
Set Industry Standards
initial product sets market/industry standards
New Product Development Process
the method by which new products evolve from conceptualization through engineering to manufacturing and marketing
Market Success Depends on NPD
-continuously generate new product ideas
-convert ideas to reliable functional designs
-ensure that the designs are readily producible
-select the processes most compatible with customer needs
Concurrent engineering
the simultaneous and coordinated efforts at all functional areas which accelerates the time to market for new products
Idea Generation
-Market pull: the "voice of the customer" in providing feedback to determine product specifications
-Technology push: a product developed by the firm's R&D is measured into the market
Concept development
-initial product design developed end test
-analysis of the market and customer requirement
Quality Function Development
-The process for trashing customer requirements into a product's design
-customer feedback is used in the QFD process to determine product specifications
-->customer attributes
~~~> product needs
~~~> product preferences
House of Quality
-the part of the QFD process that uses customer feedback for product design criteria
-use of QFD terms
-->identify important customer attributes
-->design superior product
-->shorten product design line
-->facilitate intentional cooperation
New Product Planning
-building models at new product
-test new elements and components
-conduct detailed investment and financial analysis
get product's anticipated life cycle
-get project/program approved by management
Early Design Collaboration
benefits of partnering with suppliers and customer
-reduced engineering costs of product design
-reduced cost for later engineering changes
-increased efficiencies in choosing most effective production procceses
Design for Manufacturability (DFM)
-choosing manufacturing methods and materials
-minimizing the number of individual parts:
-->reduces assembly line
-->increases reliability
-setting product specification
-->output from the design activity that states all criteria for building a product
Customer contact
the presence of the customer in system
Extent of contact
the percent of time the customer is involved relative to the time required to deliver the service
Creation of the service
the work process involving in provided the service
Materials
any commodities used directly or indirectly in producing a product or service
-raw materials, component parts, assemblies, and supplies
Supply Chain
the way materials flow through different organizations from the raw material supplier to the finished goods consumer

Definition: the long-term relationship between a firm and its suppliers to ensure the timely delivery of goods and services that are competitively priced.
--Advantage to have more than 1 supplier
Supply chain management
includes all management functions related to the flow of materials from the company's direct suppliers to its direct customers
Supply chain management includes:
purchasing, traffic, production control, inventory control, warehousing and shipping
2 alternative names for supply chain management
Materials management & logistics management
Purchasing
managers very powerful. handle budgets
Factors increasing the importance of purchasing today:
1. tremendous impact of material costs on profit
2. popularity of JIT manufacturing--supply deliveries must be exact in timing, quantity, and quality
3. increasing global competition--more competition for scarce resources, and geographically stretched-out supply chain
Material supplier
***60-70% of sales dollar
Farm/agricultural
65%
Food processing
70%
Oil Refinery
80%
Mission of purchasing
develop purchasing plans for each major product or service consistent with operations strategies
-low production costs
-fast and on-time deliveries
-high quality products and services
-flexibility (volume)
Purchasing Management
1. maintain data base of available, qualified suppliers
2. select suppliers to supply each material (price, quality, delivery)
3. Negotiate contracts with suppliers (crate charges, standards, payment terms)
4. Act as interface between company and suppliers
5. Provide training to suppliers on latest technologies
Advantages of Centralized purchasing
-buy in large quantities-->better prices
-more "clout" with suppliers-->greater supply continuity
-larger purchasing department-->buyer specialization
-combine small orders-->less order cost duplication
-combine shipments-->lower transportation costs
-better overall control
Purchasing Process
Material Requisition
Request for Quotation
Select Best supplier
Purchase order
Receive and Inspect Goods
Buyers' Duties
1. know the market for their commodities
2. understand the laws...tax, contract, patent...
3. process purchase requisitions and quotation requests
4. make supplier selections
5. negotiate prices and conditions of sale
6. place and follow-up on purchase orders
7. maintain ethical behavior
JIT Purchasing
1. cooperate, not adversarial relationships
2. longer-term relationships, fewer suppliers
3. delivery and quality enters into selecting a supplier
4. JIT in supplier's operation
5. suppliers nearby
6. shipments delivered directly to production line
7. deliveries in small, standard-size, returnable containers
8. minimum of paperwork
Logistics
management of:
1. the movement of materials within the factory
2. the shipment of incoming materials from suppliers
3. the shipment of outgoing products to customers
Make-or-Buy analysis
Lower cost--purchasing or production?
Better quality--supplier or in-house?
More reliable deliveries--supplier or in-house?
What degree of vertical integration is desirable?
Should distinctive competencies be outsourced?
Partnering
-establishing a strategic alliance or partnership with a firm that specializes in transportation or logistics
-using a logistics partner to store finished goods at the logistics partner hub or distribution center
Disintermediation
the trends to reduce many of the steps in the supply chain by reducing the number of intermediates in the:
-cross deck
-direct to store shipment
-reduce steps to reduce cost
New developments affecting logistics
-all freight airports
-inter-model shipping
-in-transit rates
-consolidated shipments
-air-freight & truck deregulation
-advanced logistic software
Inbound logistics
raw materials, component
Outbound logistics
finished goods
Warehousing
the management of materials while they are in storage
Warehousing Activities
-storing
-dispersing
-ordering
-accounting
Record keeping within warehousing
requires a stock record for each item that is carried in inventories
Stock-keeping unit (SKU)
individual item
Stock records
running accounts that show:
-on-hand balance
-receipts and expected receipts
-disbursements, promises, and allocated
Expediting
not good lost inventory
-uncertainty in production systems
-customer demand
-material delivery times
-in-house processing times
Measuring the Performance Material managers
-level & value of in-house inventories
-percentage of orders delivered on time
-number of stock outs
-annual cost of materials
-annual cost of transportation
-annual cost of warehouse
-number of customer complaints
Supply Chain
1. reduced number of suppliers
2. increased competition
3. shorter product life cycles
4. supplier managed inventory
5. consignment inventories
6. shared or reduced risk
7. advances in technology
Trend toward a global economy
increased availability and quality of products
Shorter product life cycles
rapid commodization of products
Product are now a bundle of benefits
services in supports of its good has become a means of separating firms products
Bundle of Benefits
the overall product offering that includes goods and services
Order Qualifiers
the minimum characteristics of a firm or its products that a firm must have to be considered as a source of purchase
Order Winners
the characteristics of a firm that distinguish it from its competition so that is select as the source of purchase
Service adds value (and profitability)
service margins can be greater than associated product margins
Embedded service
self-diagonite test
Comprehensive service
financing provided
integrated solutions
cell phones
Demonstration of knowledge and Expertise
reassuring customers by allowing them to view the production process and to have access to production employees
Improved Product Performance
using technology to anticipate and correct problems before they occur or to reduce response time
Customer Training
providing product training to customers to build product loyalty and increased use of products
Expanded capabilities
providing services in the form of additional product capabilities that go beyond the primary function of the product itself
Core capabilities
-specific strengths that allow a company to achieve its competitive priorities
-the skill or set of skills that the operations management functions develops that allows the firm to differentiate itself from its competitors
Focusing is achieved by:
-divesting non-critical activities
-sub contracting ancillary activities and services
The Internet
-helps firms offer services that replace goods
-allows firms to offer 24x7 service while at the same time being cost effective
-has reduced the cost of transmitting information while increasing the speed and the amount of data that can be sent between individuals
Fixed-position
the product, because of its size/weight, remains in 1 location and processes are brought to it
Increased competition
-improved worldwide telecommunications
-better logistics; faster transportation of goods
-lower trade barriers (import duties & tariffs) & the creation of trade organizations (NAFTA & European Union)
Advances in Technology
(fast, immediate)
-products are becoming obsolete faster
-improved manufacturing processes: CAD CAM, industrial robots, & rapit prototyping (RP)
ex: painting cars in Mitsubishi