Operations Management

Chapter 3 Jaime Mualim

Product design is the process of defining all of the product's characteristics, such as its appearance, the materials it is made of, its dimensions and tolerances, and its performance standards. Service design is the process of establishing all the characteristics of the service, including physical, sensual, and psychological benefits. There are four steps in product design: 1.Idea Development, 2.Product Screening, 3. Preliminary Design and testing, and 4.Final Design. Break-even analysis is a technique used to compute the amount of goods we would have to sell just to cover our cost. Production Processes can be divided into two broad categories: intermittent and continuous operations. Intermittent operations are used when products with different characteristics are being produced in smaller volumes. Continuous operations are used when one or a few similar products are produced in high volumes. Intermittent operations provide great flexibility but have a high material handling costs and challenges scheduling resources. Continuous operations are highly efficient but inflexible. Product design and process selection decisions are linked. The type of operation a company has in place is defined by the product the company produces. The type of operation then affects other organizational decisions. A process flowchart is used for viewing the flow of the processes involved in producing the product. It is a very useful tool for seeing to totality of the operation and for identifying potential problem areas. Different types of technologies can significantly enhance product and process design. These include automation, computer aided design, numerically controlled equipment etc. Designing services has a few more complexities then manufacturing, because services produce an intangible product and typically have a high degree of customer contact. Different service designs include substituting technology for people, getting the customer involved, and the high customer attention approach.