BU121 Lecture Notes - Critical Success Factor, Mass Customization, Product Design

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19 Mar 2013
Operations (sustainability)
Wednesday, March 13, 2013
2:02 PM
Critical Success Factor
Providing quality products and services
Logistics, distribution, employee commitment and R&D - how
everything links together
3 Decisions at 3 Stages
Planning- starts with product design
Production types and processes (mass production vs. mass
Choice of location and facility layout (link between type of
production, process used, and layout)
Resource planning and supply chain management (product
birth to disposal)
Make or buy? - outsourcing
Inventory management- liquidity
Routing and scheduling (logistics)
Quality and cost control
Harley-Davidson- productivity- quality connection
Application of technology
Service vs. Manufacturing
Both transform "raw material" into finished good, but service:
Raw material is person with unsatisfied need or possession that
requires care
Service is performed NOT produced (not tangible)
Focus on process as well as outcome-> judged on quality of
work AND service
Characteristics are different
Intangible- experience is key, customized, can't be stored
Customer is part of process
Extent of contact contact affects operations
Impacts capacity
Integration of marketing and operations (demand/capacity
Think about demand forecast and set up operations
capacity to meet demand- capacity limit vs. demand (the two affect
each other)
General rule: set capacity slightly ahead of demand
Expensive to add/ sit idle (in inventory)
In short term, turn away customers or outsource at
lower margins
Seasonality- shift demand and capacity requirements by
pricing, price incentives (tell retailers if you buy now it'll be cheaper)
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