Biddy's Bakery

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CHAPTER

Product Design and Process Selection
Before studying this chapter you should know or, if necessary, review 1. 2. 3. Differences between manufacturing and service organizations, Chapter 1, pp. 5 – 7. Differences between strategic and tactical decisions, Chapter 1, pp. 00 – 00. Competitive priorities, Chapter 2, pp. 36 – 39.

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LEARNING OBJECTIVES After completing this chapter you should be able to 1 2 3 4 5 6 7 8

Define product design and explain its strategic impact on the organization. Describe the steps used to develop a product design. Use break-even analysis as a tool in deciding between alternative products. Identify different types of processes and explain their characteristics. Understand how to use a process flowchart. Understand how to use process performance metrics. Understand current technological advancements and how they impact process and product design. Understand issues of designing service operations.

CHAPTER OUTLINE

Product Design 55 The Product Design Process 56 Links to Practice: IBM Corporation 57 Factors Impacting Product Design 61 Process Selection 64 Designing Processes 68 Process Performance Metrics 71 Linking Product Design and Process Selection Links to Practice: The Babcock & Wilcox Company 75

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Technology Decisions 78 Links to Practice: Using GPS Technology in Product Advertising 79 Links to Practice: Performing Robotic Surgery 81 Designing Services 83 OM Across the Organization 88 Inside OM 88 Case: Biddy’s Bakery (BB) 94 Case: Creature Care Animal Clinic (B) 94

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54 • CHAPTER 3

PRODUCT DESIGN AND PROCESS SELECTION

ave you ever been with a group of friends and decided to order pizzas? One person wants pizza from Pizza Hut because he likes the taste of stuffed-crust pizza made with cheese in the crust. Someone else wants Donatos pizza because she likes the unique crispy-thin crust. A third wants pizza from Spagio’s because of the woodgrilled oven taste. Even a simple product like a pizza can have different features unique to its producer. Different customers have different tastes, preferences, and product needs. The variety of product designs on the market appeal to the preferences of a particular customer group. Also, the different product designs have different processing requirements. This is what product design and process selection are all about. We can all relate to the product design of a pizza just from everyday life. Now consider the complexities involved in designing more sophisticated products. For example, Palm, Inc. (www.palm.com) is a leading provider of handheld computers whose slogan is “different people, different needs, different handhelds.” The company designs different products with differing capabilities, such as personal information management, wireless Internet access, and games, intended for different types of customers. The company also has to decide on the best process to produce the different types of handhelds. The challenge of product design can also be illustrated by an example of the Alza Corporation. Alza is a leader in designing new ways that pharmaceutical drugs can be administered to different types of patients. One of their product designs is an under the skin implant for pharmaceutical drugs that previously could only be administered by injection. The product design had to include time release of the drug, as well as the best material and shape of the implant. In addition to the product design, a process had to be designed to produce the unique product. These examples illustrate that a product design that meets customer needs, although challenging, can have a large impact on a company’s success. In fact, product design is so important that leading edge companies routinely invest in product designs well into the future. For example, Daimler Chrysler has been conducting research to design intelligent technologies for their vehicles that would have pedestrian and street sign recognition systems. This type of...
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