opman Flashcards
what are the 3 functions of business organization
finance, operations and marketing
what is operations management with TQM?
- more on theoretical side
- strategy and production
- business do cater sa mga needs, demands, wants of costumers and satisfy them
production and operations management talks about
what to do to produce goods and services
what is production?
- creation of goods or services
- scientific process which involves transformation of raw materials into desired product
- raw materials - input ; goods/services - output
types of production // categories of production
seperation, modification/improvement, assembling
what is seperation in production
extraction from raw materials/ growth materials
what is modification/improvement in production
involves change in chemical or mechanical parameters of raw materilas without altering the physical atributes of the raw materials
example of assembly in production
phone, cars, computers, ballpen
what is operations management?
is a set of activities that creates value in the
form of goods or services by transforming inputs into outputs.
what are the essential things that should be identified in business?
1) Identify customers’ needs. Connect
that particular need into a specific
product.
2) Based on that product requirement,
you need to work backward.
what is the difference on the OUTPUT of production and operations
production management deals with
manufacturing of products;
operations management deals products and
services
what is the difference on the USAGE of production and operations
PM - product can be used over a period of time;
OM - consummated immediately (service)
what is the difference on the CLASSIFICATION of production and operations
PM - capital equipment and less labor;
OM- requires more labor and lesser equipment
what is the difference on the CUSTOMER CONTACT of production and operations
PM - no participation
of customer
OM - more contact and
involvement of
customers
needed
what is production and operations management
- through application of business concept
- for the business to employ resources to produce
goods/services that will fit the market - can maximize the use of resources
functions that should be included in POM
marketing, production/operations, finance/accounting
what is marketing in POM
- generate demands
- take order from
products/services - useless kapag walang sales
what is production/operation in POM
- creation of products/services
- incorporate many tasks
what is finance/accounting in POM
- tracks how well organization is
doing in terms of finances - can collect receivables
tasks of POM
product, plant, processes programmes, people
what is Product in task of POM
- must ensure that they can meet
the needs of customers and
satisfy them - kumusta ang performance ng
product? - quality? aesthetics?
- is it reliable?
- quantity?
- production cost?
- delivery dates?
what is Plant in task of POM
- compromise the cost of fix
assets - what’s the future demand?
- design & layout of
factory/equipment? - productivity & reliability of
equipment? - need for maintenance
- health & safety particularly
operation of equipment - environmental issue (creation
of waste products; proper
disposal)
what is Processes in task of POM
- management must choose the
best process - available capacity?
- available skills?
- type of production?
- layout of the equipment?
- safety
- production cost
- maintenance requirement
what is Programmes in Task of POM
- concerns about the day & time
the products would be
produced and supplied to
customers - purchasing pattern
- cash flow (money to sustain
production) - need for availability of storage
- transportation
what is People in Task of POM
- wages & salaries
- unionization (to protect rights of
employees) - safety and training
- communication
- leadership & motiva
what is the scope of POM
facility location,
plant layouts & material handling,
product design,
process design,
production and planning control,
quality control,
materials management,
maintenance management
what operations manager do?
planning
organizing
staffing
directing
control
10 critical decisions
1) Design of goods and services
2) Managing quality
3) Process & capacity design
4) Location strategy
5) Supply chain management
6) Layout strategy
7) Human resource & job design
8) Inventory, material requirements
planning & JIT (Just-in-Time)
9) Intermediate & short term scheduling
10) Maintenance
new challeneges in OM
FROM
- Local or national focus
- Batch shipments
- Low bid purchasing
- Lengthy product development
- Standard products
- Job specialization
TO
- Global focus
- Just-in-time
- Supply chain partnering
- Rapid product development,
alliances
- Mass customization
- Empowered employees, teams
characteristics of goods
- Tangible product
- Consistent product definition
- Production usually separate from
consumption - Can be inventoried
- Low customer interaction
characterisitcs of services
- Intangible product
- Produced and consumed at the
same time - Often unique
- High customer interaction
- Inconsistent product definition
- Often knowledge-based
- Frequently dispersed
attributes of goods
- can be resold
- can be inventoried
- some aspects of quality
measurable - selling is distinct from
production - product is transportable
- site of facility important for cost
- often easy to automate
- revenue generated primarily
from tangible product
attributes of services
- Reselling unusual
- Difficult to inventory
- quality difficult to measure
- selling is part of service
- provider, not product, is often
transportable - site of facility important for
customer contact - often difficult to automate
- revenue generated primarily
from the intangible service
Product Life Cycle
a. Describes the stage a new product goes through from beginning to end
b. A tool used by marketing professional to understand the market, and plan the marketing mix
early stages of product life cycle
a. introduction
b. growth
later stages of product life cycle
c. maturity
d. decline
what is product launch/ market introduction
- An expensive phase
- High costs are associated with design, manufacturing, promotional activities, and inventory to meet anticipated demand
- Other costs include new packaging, labelling and market research
- Who buys new products?
what is PLC push and pull
- Push
a. Marketers focus on the product placement and obtaining preferential shelf and floor space. - Pull
a. Create advertisements that create a BUSS for the product
b. Many use samples, coupons and other promotional techniques
characteristics of product launch (PLC)
- High investment – low profit
- Minimal competition
- Company tries to create acceptance and gain initial distribution
- Company needs both push and pull promotions
- Targeted towards customers to increase awareness and demand product
- Targeted towards channel to increase confidence in the product
what is growth
- Once the early adapters find and use a new product, other consumers likely to follow.
- The product is visible, either in daily life or in media, and consumers see neighbours and friends using it.
- Viral marketing is important (word of mouth)
other meaning for growth
- Most crucial stage for marketers as a product will either catch up or fail
- If a product is removed from market before it has recovered the costs, it is called “bust”
growth characteristics
- Product is successfully launched
- Demand and distribution increase
- Competition intensify
- Company might introduce secondary products or support services
- Better revenue generation and ROI
what is maturity
- Period during which sales of product increase more slowly, if at all.
- Marketers keep the name of their brand in front of consumers and reminds them of the product’s features and lasting power.
maturity characteristics
- Competition is great
- Product is established and promotion expenditures are less.
- Little growth potential for the product
- Penetration pricing, and lower profit margin
- The major focus is towards extending the life cycle and maintaining market share
- Converting customers product to your own is a major challenge in maturity stage.
what is decline
- Unable to find new customers for a given product or service, that product is in decline stage
- A temporary decline may be reversed by changing the price or a new advertising campaign
- If efforts are unsuccessful, the company can look to redesign, repackage, or reformulate their marketing efforts.
other meaning of decline
decision point stage
other meaning of decline
decision point stage
options in decline
Options
1. Maintain the product in hopes that the competitors will exit.
2. Reducing the marketing support and cost along until no more profit can be made
3. Discontinue the product when no more profit can be made or there is a successor product
4. Modify the product and prelaunch it as new and improved.
cause of new product’s failure
a. Overestimation of market size
b. Product design problems
c. Product incorrectly positioned, price or advertised
d. Costs of product development
e. Competitive actions
f. To create successful new products, the company must:
- Understand it’s customers, markets and competitors
- Develop products that deliver superior value to customers
Product analysis – Why so important?
- Design modifications are more expensive at a later stage of product life
- Design modifications are unwelcome, once the product is launched
- Design modifications at a later stage also delay the launch of new product
what is product analysis
- It has to be manufactured and assembled minimum and ease
- Product has to work
- It has to sell
- It must be profitable
what is service
. refers to an act, something that is done for the customers
service delivery system
. The facilities, processes; and skills needed to provide a service.
product bundle
The combination of goods and services provided to a customer
service package
. The physical resources needed to perform the service, the accompanying goods, and the explicit and implicit services needed.
service design
begins with the choice of a service strategy, which determines and focus on the service , and the target market.
differences between service design and product design
- Products are generally tangible; services are generally intangible.
- Oftentimes services can be created and at the same time delivered. (haircut; carwash)
- Services cannot be inventoried.
- Services are highly visible to the customers and must be designed with that in mind. (spa)
- Some services have low barriers to entry and exit.
- Location is often important to service design with convenience as a major factor.
- Service system range from those with little or no customer contact to those that have a very high degree of customer contact.
- Demand variability alternately creates waiting lines, or idle service resources.
phases in the service design process
- Service blue printing- a method used in a service design to describe and analyse a proposed service.
- Characteristics of well-designed service system
being consistent with the organization mission. Being user friendly.
Being robust of variability is a factor.
Being easy to sustain
Being cost- effective. - Challenges of service design- service design presents some special challenges that are less likely to be encountered in product design, in part, because service design also involves design of the delivery system.
guidelines for successful service design
- Define the service package in detail.
- Focus on the operation from the customer perspective.
- Consider the image that the service package will present.
- Recognize the designer familiarity with the system.
- Make sure that managers are involved and will support the design once it is implemented.
- Define quality for both tangible and intangibles.
- Make sure that recruitment, training and reward policies are consistent with service expectations.
- Established procedures to handle both predictable and unpredictable events.
- Establish systems to monitor, maintain and improve service
operation strategy
Product and service design is a futile area for achieving competitive satisfaction. Potential sources of such benefits include the following:
- Increasing emphasis on component commonality.
- Packaging products and ancillary service to increase sales.
- Using multiple-use platforms.
- Implementing tactics that will achieve the benefits of high volume while satisfying customer needs.
- Continually monitoring products and service for small improvements.
- Shorten the time it takes to get new or redesign goods and services to the markets.
stages of product development
idea generation
idea screening
concept development and testing
market strategy and development
feasibility study /market analysis
product design
test marketing
market entry/commercializationt
what is idea generation
continuous, systematic search for new product opportunities. It involves delineating sources of new ideas and methods for generating them.
* Ideas for new products can be obtained from basic research using SWOT analysis, market and consumer trends, company R&D department, competitors, focus groups, employees, salespeople, corporate spies.
idea screening
- The objective is to eliminate unsound concepts prior to devoting resources to them
- The screeners must ask these questions:
a. Will the customers in the target market benefit from the product?
b. What is the size and growth forecasts of the market segment/target market?
c. What is the current or expected competitive pressure for the product idea?
d. What are the industry sales and market trends the product idea is based on?
e. Is it Technically feasible to manufacture the product?
f. Will the product be profitable when manufactured and delivered to the customers at the target price?
what is concept development and testing
present the consumer with a proposed product and measure attitudes and intention at this early stage of development.
* Concept development and testing of prototypes can help avoid costly mistakes.
market strategy and development
- Includes development of three part strategy plan
a. Describe the market’s size, structure, and behaviour, the planned product positioning, and the sales, market share, and profit goals for first few years.
b. Outlines the planned price, distribution strategy, and marketing budget for the first year.
c. Describe the long-run sales and profit goals and marketing-mix strategy overtime.
feasibility study / market analysis
- Estimate likely selling price based upon competition and customer feedback
- Estimate sales volume based upon size of market
- Estimate profitability and breakeven point
product design
- Develop concept into physical product prototype
- Large jump in investment – “point of no return”
- Test and refine prototype until product passes consumer and legal scrutiny
test marketing
involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed market8ng plan.
market entry/commercialization
- Commercialization involves implementing a total marketing plan and full production
- Launch the product
- Produce and place advertisements and other promotions
- Fill the distribution pipeline with product
- Critical path analysis is most useful at this stage
What makes a successful product?
- AnalySis
- SolUtion
- ProCess
- ObjeCtive
- TEamwork
- ViSion
- SaleS
what is product? (product design and dev)
: refers to a physical product or service or any idea which a customer or consumer needs and for which he is ready to pay.
what is service (product design and dev)
are intangible products which are offered and purchased by consumers. Service may also include an innovative idea on any aspect of operation.
benefits of products and services
psychological, functional, social benefits
what is design
the human power to conceive, plan, and realize products that serve human beings, in the accomplishments of any individual or collective purpose.
what is development
in business and engineering, the new product development (NPD) is the complete process of bringing a new product to market.
what is a new product
- An old product introduced in a new market
- An old product marketed in a different way
- A product that adopts or replaces an existing product
- An old product packaged in a different way
- A product that significantly broadens the market for an existing product
- A product that opens an entirely new market.
type of new product
- Innovative product
- New product lines – to allow the firm to enter an existing market.
- Addition to product line – to supplement the firm’s existing product line.
- Improvements and revisions of existing product
- Repositioned products – existing product targets at new market.
- Cost reduction new product that provides similar performance at a lower cost.
type of new product
- Innovative product
- New product lines – to allow the firm to enter an existing market.
- Addition to product line – to supplement the firm’s existing product line.
- Improvements and revisions of existing product
- Repositioned products – existing product targets at new market.
- Cost reduction new product that provides similar performance at a lower cost.
new products can be used to
- Increase/defend market share by offering more choice or updating older products.
- Appeal to new segments
- Diversify into new markets
- Improve relationship with distributors
- Maintain the firm’s reputation a leading edge company
- Even out peaks and troughs in demand
- Make better use of the organization’s resources
why develop new products
- To create stars and cash cows for the future
- To replace declining product
- To take advantage of new technology
- To defeat rivals
- To maintain/increase market share
- To keep up with rivals
- To maintain competitive advantage
- To fill gap in the market
new product development
a process which is designed to design, develop, test (verification and validation) and consider the viability of products which are new to the market in order to ensure the growth or survival of the organization.
