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Case Studies

Operations Management
6/4/2013 Jahanzeb Aamir Saad Ali Khan Hassan Amir Khan Waleed Baig

Section C

Case Studies Solutions: Design of goods and services. Process Strategy

DE MARS PRODUCT STRATEGY


1) What is De Mar product? Identify the tangible parts of this product and its service components.
De Mars product is primarily service. There is a tangible product (air conditioners and plumbing componentspipe, valves, faucets, blowers, ductwork, etc.), but the distinguishing product is service. Tangible: physical parts of repairs and installations Service components: same day service 24/7; only one tariff no extra charges; one year guarantee.

2) How should other areas of De Mar (marketing, finance, personnel) support its product strategy?
Marketing needs to support the product by selling a special, reliable, quality service. Finance needs to support the product by providing friendly, easily obtained nancing. Personnel needs to be careful to convey the service and attitude that goes with a premium service and price. Particularly because of the service nature of much of the product, all functional areas must help develop and deliver the product.

3) Even though De Mars product is primarily a service product, how should each of the 10 OM decision in the text be managed to ensure that the product is successful?
Quality: Must permeate all of the product/service activities Design of the Good and Service: Both the product and service components must be selected and designed to fulfils high quality aspects of the mission. Some aspects of this design will have customer input.
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Case Studies Solutions: Design of goods and services. Process Strategy

Process Strategy: How the product is prepared and delivered will impact customer satisfaction. In addition to installation and/or repair issues like packaging, neatness, and cleanup will all be part of the process. Location: May not be critical at De Mar, because the product is delivered. Layout: Warehouse layout may impact efciency and speed of delivery for those emergency calls. Human Resources: Are very important, because of the customer contact inherent in the product/service and the critical element of estimating that must be done very accurately. Supply Chain: The quality of the equipment chosen for initial installation and parts will make substantial difference in the product/service delivered. Consequently, the relationship between De Mar and its suppliers is very important. Inventory: The proper inventory and the accurate documentation and locations of that inventory are also important. Scheduling: These clients will expect effective schedulinghaving the right part and personnel available as needed and then meeting the established delivery/repair schedule. Maintenance: Repair and maintenance of trucks and test equipment may be the most critical elements here.

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Case Studies Solutions: Design of goods and services. Process Strategy

ROCHESTER MANUFACTURING CORPORATION


1) As a production manager for RMC what do you recommend? Why?
As production manager, you believe that the inherent advantages of an FMS should tilt the scales in favor of FMS. Your management task should be easier and therefore better. Your task will be easier and better because those parts of your workday that are related to scheduling, manpower, maintenance, and housekeeping should require less direction and be easier to control. You would be inclined to ask the numbers people to be sure they included all of these relatively minor shop oor issues in the decision.

2) Prepare a case by a conservative plant manager for maintaining the status quo until the returns are more obvious.
A conservative plant manager may well be the individual in the decision-making process who is asked about the return on investment. ROI may be largely the plant managers responsibility. If the numbers do not support change, then dont do it. Additionally, the trauma of change in layout, training, and acceptance by workers contains numerous hidden costs. Consequently, the plant manager may have a strong case for the status quo.

3) Prepare the case for an optimistic sales manager who suggests that you should move ahead with the FMS now.
The optimistic sales managers case is that improved delivery time (i.e., improved throughput) and improved quality may well yield a higher market share, which, if the company is already above breakeven, is great for portability, and hence ROI will be higher than projected (sales growth is not typically included in ROI computations). Additionally, the management task is easier (i.e., fewer machines to maintain, fewer people to supervise), and additional oor space will be available when needed.

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