OM 300 1st Edition Lecture 5 Outline of Last Lecture I SWOT Analysis II Strategic Planning and Core Competencies III 4 Global Operations Strategy Options IV G S Selection V Product Life Cycle Outline of Current Lecture End Chapter 5 and begin Ch 5 Supplement 1 ECN Decision Trees Chapter 5 2 Sustainability 3 Triple Bottom Line 4 Design for Disassembly 5 Life Cycle Ownership Costs Current Lecture Engineering Change Notice ECN A correction or modification to a product s definition or documentation o Engineering Drawings o Bill of Material Service Design Figure 5 12 Service typically includes direct interaction with the customer Process chain network PCN analysis focuses on the ways in which processes can be designed to optimize interaction between firms and their customers Adding Service Efficiency Service productivity is notoriously low partially because of customer involvement in the design or delivery of the service or both Complicates product design Limit the options o Improves efficiency and ability to meet customer expectations Delay customization Modularization o Eases customization of a service Automation o Reduces cost increases customer service Moment of truth These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Critical moments between the customer and the organization that determine customer satisfaction Documents for Services High levels of customer interaction necessitates different documentation Often explicit job instructions Scripts and storyboards are other techniques Application of Decision Trees to Product Design Figure 5 13 Particularly useful when there are a series of decisions and outcomes which lead to other decisions and outcomes PROCEDURE o Include all possible alternatives and states of nature including doing nothing o Enter payoffs at end of branch o Determine the expected value of each branch and prune the tree to find the alternative with the best expected value CHAPTER 5 SUPPLEMENT Corporate Social Responsibility How products and services affect people and the environment Stakeholders have strong opinion about environmental social and ethical issues Doing what s right can be beneficial to all stakeholders Corporate social responsibility CSR Sustainability Meeting the needs of the present without compromising the ability of future generations to meet their needs More than going green it s social everything around us Includes employees customers community and company reputation Systems View Looking at a product s life from design to disposal including all the resources required The product or service itself is a small part of much larger social economic and environmental systems Understanding systems allows more informed judgments regarding sustainability Commons Inputs to a production system held by the public Common resources often misallocated Possible Solutions Include o Moving some of the common to private property o Allocation of rights o Regulation Triple Bottom Line Consider the systems necessary to support the three P s people planet and profit Figure S5 1 Decisions affect people Globalization and outsourcing complicate the task Supplier selection and performance criteria are important Materials must be safe and environmentally responsible The planet s environment Look for ways to reduce the environmental impact of operations Overarching objective is to conserve scarce resources Carbon footprint and greenhouse gas emissions GHG Figure S5 2 Frito Lay Social and environmental sustainability do not exist without economic sustainability Staying in business requires making a profit Alternate measures of success include risk profile intellectual property employee morale and company valuation Social Accounting Wal Mart s Objectives Improving livelihoods through the creation of productive healthy and safe workplaces Building strong communities through access to affordable high quality services Preventing exposure to substances that are considered harmful or toxic Promoting health and wellness Design and Production for Sustainability Life cycle assessment valuates the environmental impact of a product from raw material and energy inputs all the way to the disposal of the product at its end of life The goal is to make decision that help reduce the environmental impact of a product throughout its entire life The 3 R s reduce reuse and recycle Product Design Design decisions affect materials quality cost processes related packaging and logistics and how the product will be processed when discarded Incorporate systems view to lower environmental impact Alternative materials Design for Disassembly Production Process Reduce the amount of resources in the production process o Energy o Water o Environmental contamination Reduce cost and environmental concerns Logistics Reduce cost by achieving efficient route and delivery networks o Getting shipments to customers promptly o Keeping trucks busy o Buying inexpensive fuel Management analytics can help Evaluate equipment alternatives Life Cycle ownership costs LIFE CYCLE OWNERSHIHP COSTS