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Lecture 3

GMS 401 Lecture Notes - Lecture 3: Service Recovery, Overselling, Concurrent Engineering

Global Management Studies
Course Code
GMS 401
Wally Whistance- Smith

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GMS401 – Lecture 3 – 9/22/2015
Product decision
- Objective is to develop and implement a product strategy that meets the demand of the
marketplace with a competitive advantage
- Goods/services the organization provides society
- Usually organizations focus on core products
- Customers buy satisfaction, not just a good or service
- PD is fundamental to organizational strategy
- Affects:
oProduction/delivery costs
oCustomer satisfaction
Product development:
- Process to generate concepts, designs and plans for service and goods that an organization can
provide to its customers
- Searching for new product ideas:
1. Listening to market complains
2. Gaps in the market
3. Exploring new niches
4. Using new technology
5. Creating new market space
Product/service design and development are:
- Source of product innovation
- Developing new products/services
- Getting them to market
- Improving current product/services
- Ease of production
- Quality
- Developing new services
- Sources:
oCustomers, managers, marketing, operations, engineering, and R&D (basic and applied
Steps in developing new products:
1. Technical and economic feasibility studies
oDetermine the advisability of making a project for developing
oIf studies are good, engineers prepare a design
2. Prototype design
oDesign should show basic forms, fits and functions of final product
3. Performance testing
oTesting and redesign of product continues until they create a satisfactory performing
4. Market and economic evaluation
oDemonstration to potential customers, market test, or market surveys
oIf favourable: they estimate production volume, cost and profits
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oIf economic favourable: they enter production stage
5. Design
oWill not be the final design, but the model will evolve
6. Performance testing and economic evaluation
Low cost
Good performance
Ability to produce in quantity and equipment
7. Continuous modification of model
oProduction designs are modified
Adapt to changing market conditions
Adapt to changing production technology
Allow for manufacturing improvements
Managing product development projects
- 5% of product ideas go to production and 10% are successful
- Should cancel ideas early if not promising
- Boards should be in placed to review the product frequently
Improving design of existing products
- Focusing is improving performance, quality and costs
- Objective to maintain or improve market share
- Continuous small improvements can be beneficial
- Value analysis is practiced
oDesign features are examined in terms of their cost/benefit (value)
Designing for ease of production
- Specifications: precise information about the characteristics of the product
- Tolerances: min and max limits on item function
- Standardization: reduced variety among parts/production
- Simplification: reduce/eliminate complexity of product
Product/service quality:
- Old idea: high quality products must be made in small quantities
- New idea: high quality products can be made through mass production
- Automated machines can produce products uniformity
- Choice of design of production is affected by the need for quality
Quality function development
- Approach that integrates the “voice of the customer” into the production and service development
- Voice of customer
- House of quality
oCustomer requirements and design requirements
- Reverse engineering: the dismantling and inspecting of a competitor’s product to discover
product improvements
Research and development (R&D)
- Efforts to increase scientific knowledge or product innovations
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