Chapter 19 Product Planning and Production Management 1 Chapter 19 Product Planning and Production Management ©2008 Thomson/South-Western

Chapter 19 Product Planning and Production Management 2 Lesson 19.1 Developing New Products Goals Describe the steps in new-product development. Describe the differences between alternative manufacturing processes.

Chapter 19 Product Planning and Production Management 3 Steps in Product Development 1. Develop an idea for a new product that customers want to buy. 2. Turn the idea into a workable product design. 3. Be able to produce the product and make it available to consumers at a price they are willing to pay.

Chapter 19 Product Planning and Production Management 4 Creating Product Ideas Consumer research Product research – Pure research — research done without a specific product in mind – Applied research — research that studies existing product problems or possible design improvements for current products

Chapter 19 Product Planning and Production Management 5 Manufacturing Processes Mass production Continuous processing Repetitive production Intermittent processing Custom manufacturing

Chapter 19 Product Planning and Production Management 6 Lesson 19.2 Planning a Manufacturing Business Goals Discuss the important considerations in locating a manufacturing business. Describe the factors that influence the organizing and production process.

Chapter 19 Product Planning and Production Management 7 Locating the Business Availability of raw materials Transportation methods Supply and cost of energy and water Land and building costs Labor supply Location of customers Economic and legal factors

Chapter 19 Product Planning and Production Management 8 Production Planning Production planning activities: – Inventory management – Human resource planning – Production scheduling Building layout Improving production processes – Quality management – Computer-integrated manufacturing

Chapter 19 Product Planning and Production Management 9 Total Quality Management Four pillars of TQM: Focus on continuous process improvement by measuring repeatable processes. Produce quality above and beyond what the consumer expects. Link product users to improvements in products. Expand management focus to the whole quality system and not just the immediate project.

Chapter 19 Product Planning and Production Management 10 Lesson 19.3 Service Businesses Goals Identify the characteristics of services that make them different from products. Describe the ways businesses maintain product and service quality.

Chapter 19 Product Planning and Production Management 11 Differences Between Products and Services Products Tangible Available whenever the purchaser wants them Quality depends on manufacturing process but should not vary significantly among batches Can be stored for later use Services Intangible Available only from the person providing them Quality depends on the skill of the provider and may vary from provider to provider Cannot be stored

Chapter 19 Product Planning and Production Management 12 Measuring Service Quality SERVQUAL survey — measures five factors that customers rank as important to service quality: Tangibles Reliability Responsiveness Assurance Empathy