Page 59 - DMGT501_OPERATIONS_MANAGEMENT

Unit 2: Product and Service Design

Augmentation Notes

CAD opens up the possibility to make slight improvements on new product designs instantly.
While this can be of great benefit in the design of a new product it can also be extremely useful
for investigating possible improvements to existing products – or even reverse engineering and
augmenting the products of competitors.

Market Testing

Through designing new products using CAD it becomes possible to begin the process of market
testing much earlier than in the past. Focus groups can be presented with virtual mock-ups of
new products more quickly than would be possible with physical prototypes, and alterations
can be made based on their feedback almost instantly. Since modifications can be made simply
by entering new data into the CAD software, updated virtual mock-ups can be presented to the
same audience for further feedback during the same session.

Case Study Designing Maruti 800

his note was given by the General Manager of Maruti Udyog Ltd. to its Vice
Chairman, as a basis for selection of the product that needed to be selected for
Tmanufacture. The nationalization of Maruti in 1981 created an opportunity for the
government to revamp the Automotive Industry in the country. The challenge of revamping
the Automotive Industry could be met if Maruti could manufacture quality products at
competitive prices. The most important decision before the new company was the selection
of the right product and product mix, as many projects falter due to the choice of
inappropriate technology or product mix at the start of the project.
The positioning of Maruti Udyog was reflected in the key words: modern and
contemporary; lower operating costs; commercially viable products; modern process
technology. Its objectives were:
1. To offer vehicles which are modern and contemporary in design so as to raise the
level of automotive technology within the country;

2. To manufacture these vehicles with operating costs comparable to world standards
and lower than that of existing vehicles, for improved consumer values;
3. To generate economies of scale and thereby create commercially viable products,
introducing modern process technology in the engineering industry.
The price difference between a passenger car and scooter/motor-cycle was over 60,000
per unit. There was an extremely large market of scooter/motor-cycle owners, who could
be developed into car owners. No manufacturer had been able to service this market. In
case, this market could be serviced, it would create a totally new demand segment and
would be independent of conventional demand for passenger cars, which had been
stationary for quite some time. The new demand would generate primarily from the
high-income group owners of two wheelers.
To capitalize on this market segment, the traditional concept of cars would need to be
abandoned and the approach to the passenger car would have to be unique and
revolutionary. I have looked at compacts and noticed the following points:
1. Have superior performance characteristics, compared to existing cars manufactured
in India.
Contd...

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