Professional Documents
Culture Documents
and Services
Chapter 6
Differentiation
Shouldice Hospital
Low cost
Taco Bell
Rapid response
Toyota
Sales revenue
Net revenue (profit)
Cash
flow
Negative
cash flow Loss
80 –
Percent of total cost
60 – Costs incurred
40 –
20 – Ease of change
0–
Concept Detailed Manufacturing Distribution,
design design service,
prototype and disposal
© 2008 Prentice Hall, Inc. 5–5
Product-by-Value Analysis
Sam’s Furniture Factory
Customer Requirements
Functional Specifications
Introduction
Evaluation
© 2008 Prentice Hall, Inc. 5–8
Quality Function
Deployment
Identify customer wants
Identify how the good/service will satisfy
customer wants
Relate customer wants to product hows
Identify relationships between the firm’s hows
Develop importance ratings
Evaluate competing products
Compare performance to desirable technical
attributes
© 2008 Prentice Hall, Inc. 5–9
QFD House of Quality
Interrelationships
Customer
importance
How to satisfy
ratings
customer wants
Competitive
assessment
What the Relationship
customer matrix
wants
Aluminum components
Ergonomic design
Auto exposure
Company A
Company B
Paint pallet
Auto focus
Completed
House of
Lightweight 3 G P
Easy to use 4 G P
Quality Reliable 5
Easy to hold steady 2
F G
G P
Color correction 1 P P
Our importance ratings 22 9 27 27 32 25
Panel ranking
(Technical
attributes)
2 circuits
2’ to ∞
0.5 A
Company A 0.7 60% yes75% 1 ok G
Technical
evaluation Company B 0.6 50% yes 2 ok F
Us 0.5 75% yes 2 ok G
© 2008 Prentice Hall, Inc. 5 – 12
House of Quality Sequence
Deploying resources through the
organization in response to
customer requirements
Quality
plan
Production
process
Production
Specific
House
process
components
components
House 4
Specific
Design
characteristics
characteristics
3
House
Design
2
requirements
Customer
House
1
Figure 5.4
Figure 5.5
© 2008 Prentice Hall, Inc. 5 – 17
Issues for Product
Development
Robust design
Modular design
Computer-aided design (CAD)
Computer-aided manufacturing (CAM)
Virtual reality technology
Value analysis
Environmentally friendly design
1. Product quality
2. Shorter design time
3. Production cost reductions
4. Database availability
5. New range of capabilities
Design
Production
Destruction
For Design …
For Manufacture/Assembly …
Occupational Safety and Health
Administration
Environmental Protection Agency
Professional ergonomic standards
State and local laws dealing with
employment standards, discrimination, etc.
© 2008 Prentice Hall, Inc. 5 – 32
Legal and Industry
Standards
For Disassembly/Disposal …
Figure 5.8
Figure 5.10
Assembly drawing
Assembly chart
Route sheet
Work order
Engineering change notices (ECNs)
Shows exploded
view of product
Details relative
locations to
show how to
assemble the
product
Work Order
Item Quantity Start Date Due Date
157C 125 5/2/08 5/4/08
Production Delivery
Dept Location
F32 Dept K11
(.4)
High sales
(.6)
Low sales
Do nothing
Figure 5.14
© 2008 Prentice Hall, Inc. 5 – 59
Decision Tree Example
$2,500,000 Revenue
(.4) - 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD - 500,000 CAD cost
High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales - 320,000 Mfg cost ($40 x 8,000)
- 500,000 CAD cost
Hire and train engineers - $20,000 Net loss
(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(- $20,000)
(.6)
Low sales
Do nothing
Figure 5.14
© 2008 Prentice Hall, Inc. 5 – 60
Decision Tree Example
$2,500,000 Revenue
(.4) - 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD - 500,000 CAD cost
$388,000 High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales - 320,000 Mfg cost ($40 x 8,000)
- 500,000 CAD cost
Hire and train engineers - $20,000 Net loss
(.4)
High sales
EMV (purchase CAD system) = (.4)($1,000,000) + (.6)(- $20,000)
= $388,000
(.6)
Low sales
Do nothing
Figure 5.14
© 2008 Prentice Hall, Inc. 5 – 61
Decision Tree Example
$2,500,000 Revenue
(.4) - 1,000,000 Mfg cost ($40 x 25,000)
Purchase CAD - 500,000 CAD cost
$388,000 High sales
$1,000,000 Net
$800,000 Revenue
(.6) Low sales - 320,000 Mfg cost ($40 x 8,000)
- 500,000 CAD cost
Hire and train engineers - $20,000 Net loss
$365,000
$2,500,000 Revenue
(.4) - 1,250,000 Mfg cost ($50 x 25,000)
- 375,000 Hire and train cost
High sales
$875,000 Net
$800,000 Revenue
(.6) - 400,000 Mfg cost ($50 x 8,000)
- 375,000 Hire and train cost
Low sales
Do nothing $0 $25,000 Net