Subway Example of Continuous Intermittent Batch
LESSON 3: SERVICE PROCESS DESIGN
1. Strategic Product and Service Design
The essence of a business organization is the products
and services it offers, and every aspect of the
organization and its supply chain are structured around
those products and services. Organizations that have
well-designed products or services are more likely to
realize their goals than those with poorly designed
products or services. Hence, organizations have a
strategic interest in product and service design. Pr o d u ct
o r ser v i ce d esi g n should be closely tied to an
organization's strategy. It is a major factor in cost,
q u al i ty , ti m e - to - m ark et , custo m er sati sfac ti o n , a n d
co m p et i ti v e ad v an tage. Co n s equ entl y, m arke t i n g ,
fi n an ce, o p erati o n s, acc o u n ti n g , IT, an d H R n ee d t o b e
in v o l v ed. Demand forecasts and projected costs are
important, as is the expected impact on the supply chain.
It is significant to note that an important cause of
operations failures can be traced to faulty design.
Designs that have not been well thought out, or
incorrectly implemented, or instructions for assembly or
usage that are wrong or unclear, can be the cause of
product and service failures, leading to lawsuits, injuries
and deaths, product recalls, and damaged reputations.
The introduction of new products or services, or changes
to product or service designs, can have impacts
throughout the organization and the entire supply chain.
Some processes may change very little, while others may
have to change considerably in terms of what they do or
how and when they do it. New processes may have to be
added, and some current ones may be eliminated. New
suppliers and distributors may need to be found and
integrated into the system, and some current suppliers
and distributors may no longer be an appropriate fit.
Moreover, it is necessary to take into account projected
impact on demand as well as financial, marketing, and
distribution implications. Because of the potential for
widespread effects, taking a "big picture" systems
approach early and throughout the design or redesign
process is imperative to reduce the chance of missing
some implications and costs, and to understand the time
it will take. Likewise, input from engineering, operations,
marketing, finance, accounting, and supply chains is
crucial.
This section discusses what product and service
designers do, the reasons for design (or redesign), and
key questions that management must address.
W h a t Does P r od u ct & Se r vic e De si g n Do?
The various activities and responsibilities of
product and service design include the following
(functional interactions are shown in
parentheses):
1. Translate customer wants and needs into
product and service requirements (marketing,
operations)
2. Refine existing products and services
(marketing)
3. Develop new products and/or services
(marketing, operations)
4. Formulate quality goals (marketing, operations)
5. Formulate cost targets (accounting, finance,
operations)
6. Construct and test prototypes (operations,
marketing, engineering)
7. Document specifications
8. Translate product and service specifications into
process specifications (engineering, operations)
Pro d u c t an d ser v i ce d e si g n in v o l v es o r affe cts n ea rl y
ev er y fu n cti o n al ar ea o f an o rg an i z ation. However,
marketing and operations have major involvement.
From a buyer's standpoint, most purchasing decisions
entail tw o fu n d a m ental c o n si d erati ons; one is c o st a n d
the other is qu al i t y o r p erf o r m ance. From the
organization's standpoint, the key questions are:
1. Is there demand for it? What is the potential size
of the market, and what is the expected demand
profile (will demand be long term or short term,
will it grow slowly or quickly)?
2. Can we do it? Do we have the necessary
knowledge, skills, equipment, capacity, and
supply chain capability? For products, this is
known as manufacturability; for services, this is
known as serviceability. Also, is outsourcing
some or all of the work an option?
3. What level of quality is appropriate? What do
customers expect? What level of quality do
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Source: https://www.studocu.com/ph/document/lyceum-of-the-philippines-university/operations-management/operations-management-lesson-3-4/18416198
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