Operations Management
Lecture No. 6
Design of Goods & Services
BITS Pilani
Pilani Campus
PB Venkataraman
Mechanical Engineering
Learning Outcomes
Compare and contrast the various phases in product life cycle and
interpret their impact on business and strategies
Select the appropriate strategy using product-by-value analysis
Explain various design approaches in achieving business
effectiveness
BITS Pilani, Pilani Campus
Module Outline
Introduction
PLC
Impact on
business
Product
Strategy
Video Cases
Product-ByValue
Design
Approaches
Methods
3
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BITS Pilani
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Product Life Cycle
BITS Pilani, Pilani Campus
PLC Impact on Business Metrics
Revenue
Availability-Cost-Profit
Pre-launch
-Still to be born
-Marketing seeds
-Engineering conceives
-Others support
-Spends 1% of life
-Errors are costly
-Diagnosis must
-No revenue
Time (NTS)
Introduction
-Stress, anxiety
-Crucial first weeks
-Watchful of performance
-Common sickness
-Continue to invest
-Still with design
-Marketing supports
-Revenue starts
Growth
-Marketing takes-over
-Least intervention of engg.
-Critical? Engg. In
-Invest in outfits
-Revenue grows
-Investment is high
Matured
-Stable revenue
-Stay hygienic
-Stay competitive
-Least investment
-Time to procreate
-Grow wealthy
Decline
-Limited freedom
-Earn on savings
-Least exertion
-No adventures
-Stay calm
-Gracefully exit
Qualis Case
Ambassodor Case
-Stay healthy
-Bad habits impact rest of
Tata Bolt Case
Apple Early Sales Case
life
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BITS Pilani
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Product-By-Value Analysis
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Strategy Development Exercise
Model
Sales (units)
Sales (mINR)
Contribution
(mINR)
Unit Contribution
(mINR)
Alto
164,110
49,889
8,980
0.05
Omni
42,100
10,483
1,782
0.04
Wagon R
129,520
52,456
9,967
0.08
Swift
143,530
70,043
17,511
0.12
Dzire
172,650
1,08,770
27,192
0.16
Ertiga
43,060
27,558
6,063
0.14
Total
694,970
319,198
71,495
7
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Contribut
ion
(mINR)
Model
Strategy Development Exercise
32000
Unit
Contributi
on (mINR)
Alto
8,980
0.05
Omni
1,782
0.04
Wagon R
9,967
0.08
Swift
17,511
0.12
Dzire
27,192
0.16
Ertiga
6,063
0.14
Total Contribution (mINR)
Dzire
28000
24000
Swift
20000
16000
Wagon R
Alto
12000
Ertiga
8000
Omni
4000
0.0
0.02
0.04
0.06
0.08
0.10
0.12
Unit Contribution (mINR)
0.14
0.16
0.18
0.20
8
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Steve Jobs Style
Courtesy: Steve Jobs by Walter Isaacson
After a few weeks Jobs finally had enough. Stop he shouted at
one big product strategy session. This is crazy. He grabbed a
magic marker, padded to a white board, and drew a horizontal
and a vertical line to make a four quadrant chart. Here is what
we need, . Atop the two columns he wrote Consumer and
Pro; he labelled the two rows Desktop and Portable. Their
job was, he said, to make four great products, one for each
quadrant
Pro
Desktop
Consumer
Portable
The product review revealed how unfocused Apple had become.
The company was churning out multiple versions of each
product. Jobs asked, which ones do I tell my friends buy. When
he couldnt get simple answers, he slashed 70% of the products,
which resulted in massive layoffs.
For professional desktop quadrant they worked on Power
Macintosh G3. For professional portable Power Book G3. For
consumer desktop, iMac. And for consumer portable, iBook
9
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Module Outline
Introduction
Product
Strategy
PLC
Analogy
Impact on
business
Video Cases
Product-ByValue
Design
Strategy
Methods
10
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BITS Pilani
Pilani Campus
End of Lecture
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