week4(2) purchasing & info technology

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WEEK 4 PURCHASING’S ROLE IN NEW PRODUCT DEVELOPMENT

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Page 1: Week4(2)   Purchasing & Info Technology

WEEK 4

PURCHASING’S ROLE IN NEW PRODUCT DEVELOPMENT

Page 2: Week4(2)   Purchasing & Info Technology

EARLY PURCHASING & SUPPLIER INVOLVEMENT

The design of new product is conducted by a team representing a

number of functional areas.

Product planning, design engineering, reliability engineering, purchasing, manufacturing engineering, quality finance, field support, marketing and carefully

selected supplier and customer.

Page 3: Week4(2)   Purchasing & Info Technology

EARLY PURCHASING & SUPPLIER INVOLVEMENT

3 KEY ISSUES IN DEVELOPMENT OF NEW PRODUCT

TIME QUALITY COST

Page 4: Week4(2)   Purchasing & Info Technology

3 KEY ISSUES IN DEVELOPMENT OF NEW PRODUCT

TIME QUALITY COST

The lack of effective, cooperative teamwork among the groups noted frequently has been accompanied by quality problems, cost overruns, forgone all in cost saving, major scheduling problems and new products which are late to

enter the market place.

Page 5: Week4(2)   Purchasing & Info Technology

THE DESIGN PROCESS

Design is the progression of an abstract notion to something having function and fixed form.

The desired levels of quality and reliability must be “engineered in” during the design phase of the new product.

Page 6: Week4(2)   Purchasing & Info Technology

THE DESIGN PROCESS (cont)

Suppliers must have access to product design as early as humanly possible in the design process to ensure optimum use of any special skills .

The design stage is also the optimum point at which the vast majority of the cost of making an item can be reduced or controlled.

Page 7: Week4(2)   Purchasing & Info Technology

THE DESIGN PROCESS (cont)

The changing competitive environment forces much on planning, coordination, and review to take place during the design and development process than previously was the case.

Page 8: Week4(2)   Purchasing & Info Technology

THE DIFFERENCES BETWEEN INNOVATION AND KAIZEN

Effort processResultsRecognition

Individual or small teamCorporate activityInvolvement

LowHighRisks

ContinuousSpontaneousResults

Small incremental stepsDramatic breakthroughsProgress

Relatively modest investmentSubstantial investment in equipment and technology

Capital requirements

Design, production and marketingScientific or technological discovery or invention

Sources

Conventional know-howLeading edge breakthroughExpertise

Small, frequent, gradual improvements over a long time

Large, short-term, radical changes in products

Focus

KaizenInnovationCharacteristics

Table 8.1 Differences between innovation and kaizen

Page 9: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 10: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 11: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 12: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 13: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 14: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 15: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 16: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 17: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 18: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 19: Week4(2)   Purchasing & Info Technology

Purchasing – product innovation, supplier involvement and development

Initial concept

Feasibility studies

Preliminary design

Prototype testing

Finalised product

Piloting of product and production

Release for commercial manufacturing

Stages of New Product Development

Page 20: Week4(2)   Purchasing & Info Technology

DESIGN OF PRODUCTS

1

2

3

4 8

7

6

5

Purchasing – product innovation, supplier involvement and development

Design of Products –Special Consideration Given to:

Increased efficiency and economy in use of materials, energy and other resources

Minimisation of pollution

Reducing long-term harm to environment

Ensuring planned life of product is appropriate

Take full account of end disposal

Recycled packaging

Minimising nuisances such as noise or odour

Safety hazards

Page 21: Week4(2)   Purchasing & Info Technology

THE DESIGN PROCESS (cont)

• Concern for overall product design• Concern for JIT delivery and supplier relationship

• Selection of materials• Cost elimination of materials

• Conceptual abstraction of product quality

• General view of product

• Close or near perfect parameters, specifications, features and tolerances

• Practical and economical parameters, specification, features and tolerances

• Limited regard for availability• High regard for availability

• Limited concern for cost• Lowest ultimate cost

• Use of ideal materials• Use of adequate materials

• Wide margins of quality, safety and performance

• Minimum acceptable margin of quality, safety and performance

Design OrientationPurchasing Orientation

Page 22: Week4(2)   Purchasing & Info Technology

THE DESIGN PROCESS (cont)

Purchasing in the Future

Purchasing – product innovation, supplier involvement and development

AccountabilityInterchange of Knowledge

TeamworkJoint problem solving

Ownership of IPRSAccess to new technology

Decision makingLower development costs

Cost and pricing sharingEnhanced quality

Technology sharingImproved specifications

Release of confidential business informationReduced development time

ProblemsAdvantages

Page 23: Week4(2)   Purchasing & Info Technology

THE DESIGN PROCESS (cont)

The Kaizen method of continuous incremental improvements is an originally Japanese management concept for incremental (gradual, continuous) change (improvement). K. is actually a way of life philosophy, assuming that every aspect of our life deserves to be constantly improved. The Kaizen philosophy lies behind many Japanese management concepts such as Total Quality Control, Quality Control circles, small group activities, labor relations. Key elements of Kaizen are quality, effort, involvement of all employees, willingness to change, and communication.