Operations Strategy - Product & Service and Organisation

Information about Operations Strategy - Product & Service and Organisation

Published on July 22, 2014

Author: sujith5989

Source: authorstream.com

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Operations Strategy 7: Operations Strategy 7 Product & Service Development and Organization Ch 7 Slack & Lewis Points to consider for product and service development strategy: Points to consider for product and service development strategy Speed of new introductions time to market is shortening everyday frequency of new introductions has increased Product and process technology are changing at a fast pace Product and service designs are closely related to the manufacturing processes and process technologies Product and process change should be considered together Why product and service design is strategically important: Why product and service design is strategically important International competition has become intense Small improvements in product/service specifications have a significant impact on competitiveness Customers are demanding more in terms of their choice of products Introduction of new products and services – way to gain advantage over competitors Product lifecycle is short in Fashion & Entertainment , even in other areas frequent product introductions is the trend This puts pressure on operations resources to create new products and services Why product and service design is strategically important: Why product and service design is strategically important Rapid technology changes and advancements in internet based technologies has brought immense possibilities in product and service developments All functions of the business are now responsible and an integral part of an organization’s ability to develop effective product and services Businesses now leverage their capabilities in the market place through development of new products and services PowerPoint Presentation: The increasing strategic importance of product and service development Increased international competition Rapid technology change Shortened life cycles Fragmented markets – requiring companies to follow niche markets Means of building capabilities Involves all parts of the business OPERATIONS RESOURCES MARKET REQUIREMENTS Product and service development New products and services Develop new products and services Developing products and services and developing processes: Developing products and services and developing processes Product and service development and process development are interrelated Product and service development must consider constraints and capabilities of processes Similarly, process changes owing to advancements in technologies or emergence of new technology, have an immense impact on product and service development in the future Degree of product or service change: Degree of product or service change The four levels of change, depending on internal or external characteristics are Modification Adding a second HDD in the computer Extension Configuring the computer to run CAD program Development From i3 to i5 to i7 Pioneer ?? PowerPoint Presentation: The link between product/service and process development can be closer in service industries ‘Pioneer’ process Developments to process Extension to processes Modifications to process Modification to p roduct/ s ervice Extension to p roduct/ s ervice Development of p roduct/ s ervice ‘Pioneer’ p roduct/ s ervice Degree of p rocess c hange Research and a dvanced d evelopment Internet banking service Call cent er banking service Branch banking service Increasing difficulty Increasing difficulty Degree of p ro duct/service c hange PowerPoint Presentation: Development of the service Development of the process Development of the product Development of the process In most service operations the overlap between service and process development is implicit in the nature of service In manufacturing operations overlapping the activities of product and process development is beneficial PowerPoint Presentation: Products and services should be developed in such a way that they can be created effectively Processes should be developed in such a way that they can create all products and services which the operation is likely to introduce Decisions taken during the development of the product or service will have an impact on the decisions taken during the development of the process which produces the product or service or vice versa Developing the product or service Developing the process which produces the product or service The development of products/services and processes are interrelated and should be treated together Managing overlap between product and process development: Managing overlap between product and process development Design of products has a major effect on the cost of producing it Decisions taken during the development of the products – choice of material, process of conversion, defines the cost of making the product Evaluate product design choices in terms of manufacturing processes Well managed overlap improves the efficiency of the development process - reduces the time to market Early involvement of supplier in product development Modular design and Mass customization: Modular design and Mass customization Modularity in product and service design and mass customisation have made an impact on product and service development Mass customization involves modular units and standardized components to increase variety while reducing production costs Standardization of components eliminates much of the work in design and tooling. New designs could be developed using components already standardized PowerPoint Presentation: Decision areas Capacity Supply network Market competitiveness Process technology Resource usage Operations Strategy Analysis for product and service development Development and Organisation (Product and service development, and organisation) Issues include, Related product and process development. Managing product/service development as a process. Meeting market requirements for new products and services. Managing product/services development resources Quality : Error free designs Performance objectives Dependability : Delivered in time Speed : Fast development Flexibility : Latest ideas Cost : Less costly Operations Strategy Analysis for product and service development: Operations Strategy Analysis for product and service development Performance objectives Quality, speed, dependability, flexibility and cost can be used to define the new, modified products and services in the market place. Decision Areas Capacity - Amount of development resource matched to demand over time Supply network – Relationships with outside sources of knowledge development Process technology – Technology provisions of design technology (CAD) Development and organization – Organization of development resources and improvement strategy All decision areas are of some relevance to companies’ development efforts Stages of product and service development: Stages of product and service development Different organisations adopt different processes in product or service development Development process moves through a series of stages In the initial stages collects ideas and generates product and service concepts In the later stages specifies the details of the product or service Number of design options reduces until there is one final design Making the changes at the end of the process can be more expensive than making them at the beginning PowerPoint Presentation: Concept generation Concept screening Preliminary design Design evaluation and improvement Prototyping and final design Developing the operations process A typical ‘stage model’ of the product and service development process Product and service development process: Product and service development process Concept generation : Customer needs, new technology, market research Concept screening : Does the proposed concept is attractive to market? Does the product exploit existing operations resource capabilities? Is the investment feasible and has potential to give acceptable ROI? Preliminary design Defining what will go into the product Product and service development process: Design evaluation and improvement Costing of the product or service and indentify areas of cost improvement Checking the technical characteristics of product or service Systematically examining what each part of the product or service is intended to contribute to its overall value Prototyping and final design Developing the prototype for testing Developing the operations process All the above stages are done concurrently wherever possible. Product and service development process PowerPoint Presentation: Third stage in the design activity Third stage in the design activity First stage in the design activity Second stage in the design activity Fourth stage in the design activity (a) First stage in the design activity (b) Second stage in the design activity Fourth stage in the design activity Communication between stages Development time compression (a) Sequential arrangement of the stages in the development activity (b) Simultaneous arrangement of the stages in the development activity Product and service development: Quality of product and service development Use the distinction between market requirements quality and operations resources quality Speed of product and service development Early market launch Starting development late Frequent market stimulation More opportunities for innovation Product and service development Product and service development: Dependability of product and service development Fast development processes which can not be relied upon is not fast at all Flexibility of product and service development Ability of a development process to cope with external or internal changes Product and service development PowerPoint Presentation: Delays in ‘Time to Market’ usually delay the financial break-even point far more than the delay in the Time to Market Delay in financial break-even Delay in time to market Development costs Development costs of delayed project Time Cash Sales revenue Delayed sales revenue Cash flow Delayed cash flow PowerPoint Presentation: The ‘vicious cycle’ of under resourcing development capacity Confirmed development need only in the short-term Reluctant to invest in long-term development resources So in the short-term the project runs into problems Lose business opportunities PowerPoint Presentation: Organisation structures for development processes Increasing project orientation Pure functional organisation FM FM FM Pure project organisation P.M. PM PM PM P.M. PM PM PM FM FM FM Balanced matrix organisation FM = Functional manager PM = Project manager There is no clear winner amongst the alternative organization structures Functional organization and Project team, both have their merits and demerits

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