Product Design & Process Selection MBA 8452 Systems and Operations Management Product Design & Process Selection — Manufacturing

Introduction to Operations Management/ Operations Strategy Process Analysis and Design Project Management Planning for Production Process Control and Improvement Process Analysis Capacity Management Quality Management Aggregate Planning Job Design Statistical Process Control Just in Time Scheduling Manufacturing Layout/ Assembly Line Balancing Inventory Control Supply Chain Management Services Waiting Line Analysis

Objective: Manufacturing Design Describe the Manufacturing Process Categories Explain The Product-Process Matrix Describe the Changes in Process Design Calculate Break-Even Analysis

Product Design Process Concept Development Product Planning Detailed Engineering Engineering Release (Sign-Off)

Improving Product Design: Concurrent Engineering Definition cross-functional coordination, integration, and simultaneous development of product Benefits reducing time to market decreasing cost improving quality and reliability

Traditional Design vs. Concurrent Design Traditional design: walls between functional areas customers Marketing Design Engineers Manuf. Production Product concept Performance specs Design specs Manaufacturing specs Concurrent design: break down the walls between functional areas

Improving Product Design: Quality Function Deployment Translate the “voice of the customer” into technical design requirements Use interfunctional teams from marketing, engineering, and manufacturing Basic tool--House of Quality

6. Technical assessment and House Of Quality 6. Technical assessment and target values 1. Customer requirements 4. Relationship matrix 3. Product characteristics Importance 2. Competitive assessment 5. Tradeoff Matrix

5 3 2 1 4 6 House of Quality: An Example Correlation: * Strong positive Positive Negative Strong negative * House of Quality: An Example 5 Engineering Characteristics Energy needed to close door Check force on level ground to open door Water resistance Door seal resistance Accoust. Trans. Window Competitive evaluation X = Us A = Comp. A B = Comp. B (5 is best) 1 2 3 4 5 X AB X AB XAB A X B X A B 3 Importance to Cust. Customer Requirements Easy to close Stays open on a hill Easy to open Doesn’t leak in rain No road noise 7 5 3 2 Relationships: Strong = 9 Medium = 3 Small = 1 2 1 4 Technical evaluation (5 is best) 5 4 3 2 1 B A X BA BXA Target values Importance weighting 10 6 9 Reduce energy level to 7.5 ft/lb Reduce force to 9 lb. to 7.5 ft/lb. current level Maintain 6

Improving Product Design: Design for Manufacture & Assembly Value Analysis/Value Engineering (VA/VE) focus on the ratio of value to cost Guidelines Simplification (fewer parts) Standardization (more standard parts) Modular design (combining parts)

Types of Processes Assembly line Continuous process Project Job shop/Batch production Continuous process Assembly line

Product - Process Matrix Product Characteristics One-of-a Low Vol Multiple Limited Products High Volume Kind Low Std Products High Volume High Demand Movie production High flexibility & unit cost Type of Process Project Job Shop Batch Assembly Line Continuous Printing shop Fast food restaurant Auto assembly Oil, sugar refinery Low flexibility & unit cost

Process Selection Break-even Analysis Single Process--Adopt it or not? Break-even point: Profit=0 ------> demandBE=? Two Processes--Which one is better? Cross-over point: Profit1=Profit2 ------> demandCO=?

Break-even Analysis Example--I Tom Smith, a recent graduate of GSU, has just formed a company called the New Age Surf to provide high speed internet access with a competitive price of $20 per month. The fixed cost each month is estimated to be $60,000. Unit cost for each customer is approximately $10 per month. How many customers must be attracted in order to break even?

Break-even Analysis Example--II Suppose now Tom is given another option. Instead of purchasing equipments, he can rent them from other companies. This will reduce the monthly fixed cost to $20,000. But unit cost for each customer will be $15 per month. What option should Tom adopt?