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82 Cards in this Set
- Front
- Back
The New Service Development (NSD) Process
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1. Design
2. Analysis 3. Development 4. Full Launch |
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Design
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Formulating the objectives and strategy of the new service
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Analysis
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-considering the financial implications of the new service.
-examining supply chain issues for delivery of service |
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Development
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testing the service design, training personnel, conducting pilot runs
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Full Launch
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releasing the service to the market place
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Managerial Issues
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-competition in globalized markets
-product life cycles becoming shorter -increasing demand for services |
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Competition in globalized markets
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pursuing a product differentiation strategy
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Product life cycles becoming shorter
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-engaging in continuous product development as new products become a majority of sales and profits
-having **flexibility in manufacturing processes** |
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Increasing demand for services
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-increasing the efficiency and reducing the costs of delivering services
-effectively using the internet to deliver extend current services and offer new services |
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Reduction of parts is...
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usually a good thing!
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Project Process
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process that focuses on making one-of-a-kind products
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Intermittent process
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process that produces products in small lot sizes
(e.g. job and batch operations) |
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Line-flow process
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(PRODUCT FOCUS --> LINE)
continuous process that produces high volume, highly standardized products (e.g. assembly line and continuous operations) |
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Greater Market Share
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early entry captures large initial market share
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Price Premiums
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Ability to initially charge more for new products
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Quick Reaction to Competition
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rapid response to competitor's new products
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Set Industry Standards
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initial product sets market/industry standards
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New Product Development Process
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the method by which new products evolve from conceptualization through engineering to manufacturing and marketing
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Market Success Depends on NPD
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-continuously generate new product ideas
-convert ideas to reliable functional designs -ensure that the designs are readily producible -select the processes most compatible with customer needs |
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Concurrent engineering
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the simultaneous and coordinated efforts at all functional areas which accelerates the time to market for new products
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Idea Generation
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-Market pull: the "voice of the customer" in providing feedback to determine product specifications
-Technology push: a product developed by the firm's R&D is measured into the market |
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Concept development
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-initial product design developed end test
-analysis of the market and customer requirement |
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Quality Function Development
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-The process for trashing customer requirements into a product's design
-customer feedback is used in the QFD process to determine product specifications -->customer attributes ~~~> product needs ~~~> product preferences |
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House of Quality
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-the part of the QFD process that uses customer feedback for product design criteria
-use of QFD terms -->identify important customer attributes -->design superior product -->shorten product design line -->facilitate intentional cooperation |
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New Product Planning
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-building models at new product
-test new elements and components -conduct detailed investment and financial analysis get product's anticipated life cycle -get project/program approved by management |
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Early Design Collaboration
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benefits of partnering with suppliers and customer
-reduced engineering costs of product design -reduced cost for later engineering changes -increased efficiencies in choosing most effective production procceses |
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Design for Manufacturability (DFM)
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-choosing manufacturing methods and materials
-minimizing the number of individual parts: -->reduces assembly line -->increases reliability -setting product specification -->output from the design activity that states all criteria for building a product |
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Customer contact
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the presence of the customer in system
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Extent of contact
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the percent of time the customer is involved relative to the time required to deliver the service
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Creation of the service
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the work process involving in provided the service
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Materials
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any commodities used directly or indirectly in producing a product or service
-raw materials, component parts, assemblies, and supplies |
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Supply Chain
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the way materials flow through different organizations from the raw material supplier to the finished goods consumer
Definition: the long-term relationship between a firm and its suppliers to ensure the timely delivery of goods and services that are competitively priced. --Advantage to have more than 1 supplier |
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Supply chain management
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includes all management functions related to the flow of materials from the company's direct suppliers to its direct customers
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Supply chain management includes:
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purchasing, traffic, production control, inventory control, warehousing and shipping
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2 alternative names for supply chain management
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Materials management & logistics management
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Purchasing
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managers very powerful. handle budgets
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Factors increasing the importance of purchasing today:
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1. tremendous impact of material costs on profit
2. popularity of JIT manufacturing--supply deliveries must be exact in timing, quantity, and quality 3. increasing global competition--more competition for scarce resources, and geographically stretched-out supply chain |
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Material supplier
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***60-70% of sales dollar
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Farm/agricultural
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65%
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Food processing
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70%
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Oil Refinery
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80%
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Mission of purchasing
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develop purchasing plans for each major product or service consistent with operations strategies
-low production costs -fast and on-time deliveries -high quality products and services -flexibility (volume) |
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Purchasing Management
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1. maintain data base of available, qualified suppliers
2. select suppliers to supply each material (price, quality, delivery) 3. Negotiate contracts with suppliers (crate charges, standards, payment terms) 4. Act as interface between company and suppliers 5. Provide training to suppliers on latest technologies |
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Advantages of Centralized purchasing
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-buy in large quantities-->better prices
-more "clout" with suppliers-->greater supply continuity -larger purchasing department-->buyer specialization -combine small orders-->less order cost duplication -combine shipments-->lower transportation costs -better overall control |
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Purchasing Process
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Material Requisition
Request for Quotation Select Best supplier Purchase order Receive and Inspect Goods |
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Buyers' Duties
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1. know the market for their commodities
2. understand the laws...tax, contract, patent... 3. process purchase requisitions and quotation requests 4. make supplier selections 5. negotiate prices and conditions of sale 6. place and follow-up on purchase orders 7. maintain ethical behavior |
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JIT Purchasing
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1. cooperate, not adversarial relationships
2. longer-term relationships, fewer suppliers 3. delivery and quality enters into selecting a supplier 4. JIT in supplier's operation 5. suppliers nearby 6. shipments delivered directly to production line 7. deliveries in small, standard-size, returnable containers 8. minimum of paperwork |
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Logistics
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management of:
1. the movement of materials within the factory 2. the shipment of incoming materials from suppliers 3. the shipment of outgoing products to customers |
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Make-or-Buy analysis
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Lower cost--purchasing or production?
Better quality--supplier or in-house? More reliable deliveries--supplier or in-house? What degree of vertical integration is desirable? Should distinctive competencies be outsourced? |
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Partnering
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-establishing a strategic alliance or partnership with a firm that specializes in transportation or logistics
-using a logistics partner to store finished goods at the logistics partner hub or distribution center |
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Disintermediation
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the trends to reduce many of the steps in the supply chain by reducing the number of intermediates in the:
-cross deck -direct to store shipment -reduce steps to reduce cost |
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New developments affecting logistics
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-all freight airports
-inter-model shipping -in-transit rates -consolidated shipments -air-freight & truck deregulation -advanced logistic software |
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Inbound logistics
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raw materials, component
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Outbound logistics
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finished goods
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Warehousing
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the management of materials while they are in storage
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Warehousing Activities
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-storing
-dispersing -ordering -accounting |
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Record keeping within warehousing
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requires a stock record for each item that is carried in inventories
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Stock-keeping unit (SKU)
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individual item
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Stock records
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running accounts that show:
-on-hand balance -receipts and expected receipts -disbursements, promises, and allocated |
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Expediting
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not good lost inventory
-uncertainty in production systems -customer demand -material delivery times -in-house processing times |
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Measuring the Performance Material managers
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-level & value of in-house inventories
-percentage of orders delivered on time -number of stock outs -annual cost of materials -annual cost of transportation -annual cost of warehouse -number of customer complaints |
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Supply Chain
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1. reduced number of suppliers
2. increased competition 3. shorter product life cycles 4. supplier managed inventory 5. consignment inventories 6. shared or reduced risk 7. advances in technology |
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Trend toward a global economy
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increased availability and quality of products
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Shorter product life cycles
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rapid commodization of products
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Product are now a bundle of benefits
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services in supports of its good has become a means of separating firms products
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Bundle of Benefits
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the overall product offering that includes goods and services
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Order Qualifiers
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the minimum characteristics of a firm or its products that a firm must have to be considered as a source of purchase
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Order Winners
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the characteristics of a firm that distinguish it from its competition so that is select as the source of purchase
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Service adds value (and profitability)
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service margins can be greater than associated product margins
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Embedded service
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self-diagonite test
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Comprehensive service
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financing provided
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integrated solutions
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cell phones
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Demonstration of knowledge and Expertise
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reassuring customers by allowing them to view the production process and to have access to production employees
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Improved Product Performance
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using technology to anticipate and correct problems before they occur or to reduce response time
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Customer Training
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providing product training to customers to build product loyalty and increased use of products
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Expanded capabilities
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providing services in the form of additional product capabilities that go beyond the primary function of the product itself
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Core capabilities
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-specific strengths that allow a company to achieve its competitive priorities
-the skill or set of skills that the operations management functions develops that allows the firm to differentiate itself from its competitors |
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Focusing is achieved by:
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-divesting non-critical activities
-sub contracting ancillary activities and services |
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The Internet
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-helps firms offer services that replace goods
-allows firms to offer 24x7 service while at the same time being cost effective -has reduced the cost of transmitting information while increasing the speed and the amount of data that can be sent between individuals |
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Fixed-position
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the product, because of its size/weight, remains in 1 location and processes are brought to it
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Increased competition
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-improved worldwide telecommunications
-better logistics; faster transportation of goods -lower trade barriers (import duties & tariffs) & the creation of trade organizations (NAFTA & European Union) |
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Advances in Technology
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(fast, immediate)
-products are becoming obsolete faster -improved manufacturing processes: CAD CAM, industrial robots, & rapit prototyping (RP) ex: painting cars in Mitsubishi |