Product Strategy and Life Cycles

Product Decision

• Organizations need to create a product strategy that meets market needs and anticipates trends for differentiation.Differentiation (e.g., Shouldice Hospital)
• Low cost (e.g., Taco Bell)
• Rapid response (e.g., Toyota)

Product Life Cycles

• Can range from a few days to decades.
• Operations must successfully introduce new products.

Life Cycle and Strategy

Introductory Phase

• Fine-tuning may require unusual expenses.
• Research, product development, process modification, and supplier development are important.

Growth Phase

• Product design stabilizes.
• Effective capacity forecasting is necessary.
• Capacity enhancement/addition may be needed.

Maturity Phase

• Competitors are well-established.
• High volume and innovative production may be needed.

Decline Phase

• If a product doesn't contribute significantly to the organization, a plan to terminate the offering must be made.
• Cost control, reduced options, and paring down of the product line are possible actions.

Product-By-Value Analysis

• Lists products in descending order of their individual dollar contribution.
• Lists the total annual dollar contribution of the product.
• Helps management evaluate alternative strategies.

Generating New Products

• Understanding customer needs and trends in the market (Economic, Sociological and Demographic, Technological, Political and Legal, and Market practices).
• Customer feedback, supplier, distributor insights are important.

Quality Function Deployment (QFD)

• Aims to ascertain customer desires and translate them into product designs.
• Use of a planning matrix (House of quality) connects customer requirements with the firm's capabilities.

Organizing for Product Development

• Traditional approach: departments with defined roles and responsibilities.
• Difficult to foster forward-thinking in a traditional approach.
• A champion: A product manager driving the product through development process, involving related organizations.
• Team approach: Cross-functional teams representing all disciplines, product development teams, design for manufacturability teams, and value-engineering teams.
• Japanese approach: Whole organizational approach—no organizational divisions; product development teams, market requirements, cross-functional teams.

Benefits: Robust Design

• Reduced product complexity
• Reduction of environmental impact
• Additional standardization of components
• Improved job design and job safety
• Improved product maintainability
• Typically results in lower cost and higher quality.

Issues for Product Design

• Robust design: Product design to withstand small variations in production and assembly.
• Modular Design: Products designed in easily segmented components.
• Computer-aided design (CAD): Using computers for product design and documentation. Improved accuracy, reduced development cycles, and deployment of info worldwide.
• Computer aided manufacturing (CAM): Utilizing specialized computers and programs. Often driven by the CAD system.
• Virtual reality tech: Enables an interactive, three-dimensional model of a product before a physical model. Effective in large-scale designs.

Value Analysis

• Focuses on design improvement during production, leading to products manufactured more economically, while reducing environmental impact.

Sustainability and Life Cycle Assessment (LCA)

• Meeting present needs without compromising the future.
• Formal evaluation of environmental impact.

Extensions of CAD

• 3-D object modeling; Small prototype development; Design for Manufacturing and Assembly (DFMA), CAD through the internet, International data exchange (STEP), 3-D printing.

Benefits of CAD/CAM

• Product quality improvement.
• Shorter design time.
• Reduced production costs.
• Database availability (access to designs).
• New range of product capabilities available.

Product Development Continuum

• Product development is evolutionary and continuous,
• Products transition from design to production in a timely manner.
• Ensuring successful production through considerations of tooling, quality control, and training are essential.
• Products transition through their lifecycle with management responsibilities adjusting throughout

Managing Quality Supports

• Differentiation, low cost, and response strategies.
• Helps firms increase sales and reduce costs.

Building a quality organization is a demanding task.

Defining Quality

• An operations manager's objective is to build a total quality management (TQM) system identifying and satisfying customer needs.

Different Views of Quality

• User-based (better performance and features).
• Manufacturing-based (conformance to standards).
• Product-based (specific and measurable attributes).

Implications of Quality

• Company reputation.
• Perception of new products.
• Employment practices.
• Supplier relations.
• Product liability and risks.
• Global implications and competitive advantage.

ISO 9000 International Quality Standards

• International recognition.
• Encourages quality procedures, detailed documentation.
• 2015 revision emphasizes risk-based thinking.

Costs of Quality

• Prevention costs (reduce potential defects).
• Appraisal costs (evaluate products/services).
• Internal failure costs (defective parts/services before delivery).
• External failure costs (defects post-delivery).

Process-Chain Network (PCN) Analysis

• Identifies direct and indirect interactions.
• Focuses on interactions between firms and clients to optimize operations.

Adding Service Efficiency

• Improves service productivity.
• Complicates product design, limits choices, and increases efficiency.
• Improves ability to meet customer expectations, delay customization, and enhance modularization.
• Streamlines service automation, reducing costs, and increases customer service.

Moment of Truth

• Critical organizational moments impacting customer satisfaction.

Documents for Services

• High volume of customer interaction necessitates distinct details.
• Scripts and storyboards utilized.

Procedure for Product Decisions

• Consider all alternatives.
• Calculate expected values of alternatives.
• Prune the tree to select the best alternative based on expected values.

Process Definition (Chain-Network):

• Focuses on optimizing process interaction.
• Steps that directly involve participants, substitute interactions, and independent processing.

Seven Concepts of TQ M

• Continuous improvement (never-ending).
• Covers people, equipment, suppliers, procedures.
• Every operation, including parts and components, can be improved.
• Kaizen (ongoing process improvement).
• Six Sigma (process improvement, zero defects).

Statistical Process Control

• Uses statistics and control charts to identify corrections.
• Drives process improvement, involves measurements and when indicated, finding assignable causes for deviations and initiating corrections

Tools of TQM

• Check sheets: Record data systematically.
• Scatter diagrams.
• Cause-and-effect diagrams (fishbone diagrams): Identify causes for effects.
• Pareto charts: Prioritize problems based on frequency.
• Flowchart (process diagram).
• Histogram.
• Statistical Process Control Chart.

Quality Circles

• Groups of employees working together to solve problems.
• Trained in planning, problem-solving, and statistical methods.
• Facilitation can improve effectiveness.

Best Practices for Resolving Customer Complaints

• Make complaints easy.
• Respond quickly.
• Resolve complaints on the first contact.
• Use computers to manage complaints.
• Recruit customer-focused staff.

Internal Benchmarking

• Used when organizations are large enough to gain insights, allowing data access for improvement.

Flow Charts

• Graphical representation of steps and procedures for tasks, often relevant to quality processes.

Statistical Process Control (SPC) Charts

• Use of statistical tools (charts) in conjunction with process measurements for corrective action and improvement.

Control Charts

• Graphical tool for process control using data to monitor variations.

Inspection

• Item examination to verify quality meets standards.
• Detecting defective items.
• Identifying process or product deficiencies.

When and Where to Inspect

• Supplier's plant during production.
• Upon receipt of goods.
• Before costly irreversible processes.
• During phases of production or service.
• Before customer delivery.
• When customer contact occurs.

Service Industry Inspection

• Organizations examine characteristics (e.g., speed of service, product accuracy, etc.).
• Standardized metrics are used to assess performance and customer interactions.

Attributes Versus Variables

• Attributes: Categories or qualities (good/bad, acceptable/unacceptable).
• Variables: Specific measurable values (e.g., weight, speed, dimension).

Service Quality

• Intangible differences between products.
• Customers expect intangible service experiences.
• Service processes are crucial.
• Service is evaluated against customer expectations.

Determinants of Service Quality

• Reliability.
• Responsiveness.
• Competence, access.
• Courtesy.
• Communication.
• Credibility.
• Security/freedom from doubt.
• Understanding customers' needs.
• Tangibles.

Service Recovery Strategy

• Plan for handling service failures.
• Example: Marriott's Learn routine.

Benchmarking (selecting best practices for performance)

• What to benchmark.
• Forming benchmark teams.
• Identifying and analyzing benchmarking info.

This quiz covers the various strategies involved in product development, including differentiation and cost management. It also explores the different phases of the product life cycle, from introduction to decline, and the operational challenges at each stage. Test your understanding of how to effectively manage product strategies to maintain a competitive edge.