Operations Management CustomerFocused Principles

1
Operations ManagementCustomer-Focused Principles

• Product/Process Design for Quality

2
Overview

• Designing Quality Into the Product
• Design, Simplicity, Costs
• Research Development
• Teaming Up in the Design Process
• Quality Function Deployment
• Design for Operations
• Reliability Planning
• Design Review Appraisal

3
Designing Quality Into the Product/Service

• Lost American Competitiveness
• Recall dimensions of competitiveness
• Differentiation
• Flexibility
• Quality
• Delivery time
• Cost (price)
• Traditionally
• Focus on product (new technology, etc.)
• Neglect of process

4
Designing Quality Into the Product/Service

• Conventional Design Process
• Silo approach
• Each group isolated in its own silo
• Toss the design over the wall when done
• Ripple effect bad design led to troubles in the
  transformation process (operations)
• Quality was assumed to rest with operations
• Public sector and not-for-profit sector also have
  been guilty
• Regulators/legislators create laws
• Others implement/enforce

5
Weaknesses of Conventional Design
Slow See Exhibit 4-4
Myopic Process ignored
Staffed Off Design by the elite
Unfocused Form follows function
4-2
6
Designing Quality Into the Product/Service

• Design The First Step to Quality
• Quality action cycle (Exhibit 4-2)
• Two major targets
• Product/service
• Transformation process
• New features stem from market feedback
• Model for the design process (Exhibit 4-5)

7
Exhibit4-2
Quality Action Cycle
5.
1.
Carry Out Process Improvement
Projects

Design Quality In

2.
Perform Self-Inspection Correction
4.
Collect Analyze Process Data
3.
Find Defects in next process in next
company by final consumer
4-1
8
Exhibit 4-5
Comprehensive Design Program
CompetitiveEnvironment
Design Strategy
Multi-FunctionalDesign Team
Customer Needs,Competitor's Capabilities

• OM Principles 1 4

Design Objectives
Measures of DesignEffectiveness
4-4
9
Design, Simplicity, Costs

• Simplicity is of Major Importance
• Two pronged approach
• Style
• Assembly
• Has substantial influence on costs
• Hidden Costs Affected by Design
• Operations
• Warranty
• Redesign

10
Research Development

• RD A Predictor of Success
• Definitions
• Research pushes bounds of knowledge
• Basic (knowledge oriented)
• Applied (problem oriented)
• Development translates into tools/outputs
• Appropriate amounts vary by industry (Exhibit
  4-3)
• Traditional RD Weaknesses
• Slow process
• First-to-market concept (time-based competition)
• See Exhibit 4-4
• Contrast with old IBM strategy
• Neglect of process design (DFO)

11
Exhibit 4-4
Cost of Arriving Late to Market
If a Company is late to market by
Gross profit potential is reduced by
6 months
33
5 months
25
4 months
18
3 months
13
2 months
7
1 month
3
4-3
12
Teaming Up in the Design Process

• Overcomes Traditional Weakness
• Providers benefit
• Customers benefit
• Involves
• Concept development
• Concurrent design
• Environmental awareness

13
Teaming Up in the Design Process

• Concept Development
• From idea to concept requires determination of
• Form specification (i.e., physical
  characteristics)
• Enabling technology
• Benefit (value to customer)
• Concept generation
• Transforms customer needs into concepts
• Appeal
• Fit
• Competitive analysis is involved (benchmark)
• Buy product/service and take notes
• Reverse engineering
• Production and delivery systems

14
Teaming Up in the Design Process

• Concurrent Design
• Also known as simultaneous engineering
• Opposite of the silo approach
• Note teams, not gangs!
• Especially, getting together those involved in
• Design
• Operations
• Maintenance
• Accommodates shrinking product life cycles
• Service example training/orientation programs

15
Teaming Up in the Design Process

• Environmental (Physical) Awareness
• All organizations have social responsibilities
• Is nature a stakeholder?
• Consider student organizations
• Flyers and inserts
• Meeting announcements
• DFD / recycle / reuse
• Imagination can lead to cash generation!
• Corrugated paper
• Gold in the trash barrel
• Ben Jerry?!?

16
QFD A Model for the Design Process

• Provides Structure for Integrating Product and
  Process Design
• Multiple Matrix Representation (House of Quality)
• See Exhibit 4-6
• Components
• Walls customer requirements (whats)
  competitive evaluation
• Ceiling operating requirements (hows)
• Interior correlation between whats and hows
• Roof correlation among hows
• Basement target values for hows
• Foundation competitive evaluation of hows

17
Exhibit4-6
"House of Quality" Dry Cleaners
Correlation Strong positive
Positive Negative Strong negative
X

Competitive evaluation
Operatingrequirements
Good training
Clean DC solvent
Clean DC filters
No rust in SP lines
X UsA Comp.AB Comp.B (5 is best)
Good equip maint.
Firm press pads
Importance to Customer
Customerrequirements
Completely cleanPerfect pressNo delays at
counterQuick turn-aroundFriendly service
12534
X
AB
X
B A
A
X
B
X
A
B
X
AB
Importance weighting
15
9
9
9
9
19
Relationships Strong 9 Medium
3 Small 1
Target values
4-hr formal 2-wk OJT
Change monthly
Visual daily, clean monthly
Visual daily
Visual daily
Monthly, plus as needed
54321
X
B
B
A
X
X
A
X
B
B
A
Technical evaluation
X
X
A
A
B
B
A
4-5
18
QFD A Model for the Design Process

• QFD Facilitates
• Comparisons to competitors
• Setting target values for operating requirements
• Principally for Product Planning (See Exhibit 4-7)

19
Exhibit 4-7
QFD Overview

Customer requirements
Product planning

Design requirements
Product design
Part/ item characteristics

Process planning

Process operations
Process control
Operations requirements
4-6
20
Guidelines for DFO

• Design Objectives (Recall Exhibit 4-5)
• Design for operations
• Outgrowth of DFM
• Also incorporates DFE and DFD
• Design for reliability and serviceability
• Note OM Principles
• OM5 DFO2
• OM10 DFO3
• OM8 Solved Problem 2 (several DFO guidelines)

21
Exhibit 4-5
Comprehensive Design Program
CompetitiveEnvironment
Design Strategy
Multi-FunctionalDesign Team
Customer Needs,Competitor's Capabilities

• OM Principles 1 4

Design Objectives
Measures of DesignEffectiveness
4-4
22
Exhibit 4-8
Design for Operations Guidelines
General Guidelines 1. Design to target markets
and target costs. 2. Minimize number of parts
and number of operations. Quality
Guidelines 3. Ensure that customer requirements
are known and design to those
requirements. 4. Ensure that process
capabilities are known (those in your firm and
of your suppliers) and design to those
capabilities. 5. Use standard procedures,
materials, and processes with already known
and proven quality.
4-7
23
Exhibit 4-8
Design for Operations Guidelines (cont.)
Operability guidelines 6. Design
multifunctional / multiuse components and
service elements and modules. 7. Design for ease
of joining, separating, rejoining (goods) and
ease of coupling/uncoupling (services). 8.
Design for one-way assembly, one-way travel
(avoid backtracking and return visits). 9.
Avoid special fasteners and connectors (goods)
and off-line or misfit service elements. 10.
Avoid fragile designs requiring extraordinary
effort or attentiveness -- or that otherwise
tempt substandard or unsafe performance.
4-8
24
Reliability, Serviceability, and Availability

• Recall Garvins 8 Dimensions of Quality
• See Exhibit 3-1
• Include these related attributes (often
  synonymous with quality)
• Reliability
• Durability
• Serviceability
• How Do We Determine These?
• Data analysis
• Probability and statistics concepts

25
Exhibit 3-1
Dimensions of Quality
1. Garvins Eight Dimensions of Quality
Performance -- primary operating
characteristics Features -- little
extras Reliability -- probability of successful
operation (nonfailure) within a given
time span Conformance -- meeting preestablished
standards Durability -- length of usefulness,
economically and technically Serviceability --
speed, courtesy, competence, and ease of
repair Aesthetics -- pleasing to the
senses Perceived quality -- indirect evaluations
of quality (e.g., reputation)
3-3
26
Reliability, Serviceability, and Availability

• Determining Quality Levels
• Definitions and notation
• Formulae (assume exponentially distributed TBF)
• Example 4-1
• Reliability curves whats the best alternative?
• Improving reliability through redundancy
• An exercise in joint probability determination
• Assumes independence of failure events

27
Design for Reliability
Failure rate (l ) -- lambda Avg. number of
failures per time period Mean time between
failures (MTBF or m) m 1 /l (inverse of
failure rate Mean time to repair (MTTR) Often a
measure of serviceability Availability (A)
MTBF MTBF MTTR
A
4-9
28
Calculating Reliability
Redundant units
n
R reliability of item A
A
R 1 - (1 - R )
xy A
n number of redundant units of A
4-10
29
Example 4-1 Battery Reliability
4-11
30
Example 4-1 Battery Reliability (cont.)
Solution
Failure Rates Standard l 1/10 0.10 Deluxe
l 1/20 0.05 Sample Reliability
Calculations (3 hour) Standard R e
.74 Deluxe R e .86
Reliability Time (hours) 1 2 3
4 5 6 Standard 0.90
0.82 0.74 0.67 0.61 0.55 Deluxe
0.95 0.90 0.86 0.82 0.78 0.74
- 0.10 (3)
- 0.05 (3)
4-12
31
Exhibit 4-11
Battery Reliability Curves
1.00.80.60.40.20
A. Standard versus deluxe batteries
Deluxe
Standard
Reliability
0
1
2
3
4
5
6
Operating time (hours)
B. Standard batteries with hourly
replacement
1.00.80.60.40.20
Standard
Reliability
0
1
2
3
4
5
6
Operating time (hours)
4-13
32
Exhibit 4-12
Reliability through Redundancy
Suppose R .90
A. Single Component
A
A
X
Y
B. Two Components in Parallel
A
Y
X
A
C. Three Identical Components in
Parallel
3
R 1 - (1- .9) .999
A
xy
A
X
Y
A
4-14
33
Design Review Appraisal

• Review
• Before product goes to market
• Hence, avoid external failure cost
• Design Team Performance
• Measure
• Tracked over time
• Control
• Needs measure of effectiveness
• Example breakeven time (HP)

34
Contrasts to Note

• Design Approaches (See Page 96)
• Over-the-wall design
• Not so typical in small organizations
• Typical with long product life cycles
• Multiple costly rounds of degugging
• Concurrent design
• Illustrates Demings Point 9
• Becomes essential with time-based competition
• Avoids problems and rework

35
Product/Process Design for Quality

• Summary of Topics Addressed
• Designing Quality Into the Product
• Design, Simplicity, Costs
• Research Development
• Teaming Up in the Design Process
• Quality Function Deployment
• Design for Operations
• Reliability Planning
• Design Review Appraisal