design of goods and services

Boeing, flying high once again?

Posted on by Dom

After 15 months and millions of dollars spent, the Boeing 787 Dreamliner has resumed commercial flights. The groundbreaking jet, introduced in July 2003 was dubbed as the next generation airplane that would revolutionize the way air travel operated. Soon after preliminary flights, major aircraft corporations began to notice technical and mechanical issues that affected the reliability of the jet. These problems resulted in flights being delayed and cancelled. In January, two 787s owned by Japanese airlines experienced burning batteries that would later ground all 787s.

Prior to the grounding, delivered 787s logged a reliability rating of 97.7% (23 delays/cancellations out of 1000 flights). This result was comparable to the long tested and proven 777 that that 787 aims to replace. As technology expands, systems become more intricate and coincide with higher rates of failure. The 787 is an example of new age lithium-ion batteries, electrical systems, and computer systems that alter service requirements. This plane alone requires 10 times more power during startup than traditional Boeing planes, computer and electrical systems to be turned on three hours before each flight, and scheduled maintenance in between each flight.

During this downtime Boeing continuously has been mass producing these airplanes to fill the 800+ orders that have been filed from 50+ customers. By April 2013, 50 planes have been built and delivered to their respective companies. However, this plane does retain more positives than negatives, thus accounting for the 800+ orders. With this new technology, the planes will be able to be serviced in as little as 45 minutes. This will allow for companies to keep their planes in the air instead of on the ground. In addition, new light weight materials have been used and new fuel efficient engines fitted on the wings that allow for longer distance flights without using more fuel.

Aboard the new computer system, Boeing has also included a transmitter that will upload the airplane’s data to a world-wide network managed by Boeing’s facilities near Seattle. This system will track each jet’s information, making it easier for mechanics to fix any issues that may have occurred during a flight. This system will also allow for Boeing to monitor necessary maintenance updates as well as be able to ground any planes that it deems unsafe to fly.

Years behind schedule and plagued with problems, the Boeing 787 did not have a successful start. Boeing executives believe that in the future years to come, this plane will be more reliable than the 777 and project a reliability rating of 99+%. The 787 is a key example of problems during the operations strategy of a company and their ability to overcome difficult situations that result in millions of dollars of losses. At this point the 787 is operational, but if similar problems occur in the future, Boeing may lose potential orders.

With so many problems occurring with the 787, do you believe that its main competitor (Airbus) may be regarded as a safer investment?

What do you believe lies in the future for the 787? Will it continue to experience more problems or will it beat the projected 99+% reliability?

Works Cited
Ostrower, Jon, and Andy Pasztor. “Dreamliner’s Other Issues Draw Attention; Boeing and Airlines Try to Improve More Systems After Fixing Battery Flaws.” Wall Street Journal (Online): n/a. May 20 2013. ProQuest. Web. 22 May 2013.

Can Quality be Bought?

Posted on by spr1332umoroz

best-of-baselworld-2013-gear-patrol-lead-full

BaselWorld Video

BaselWorld is a prestigious watch show, where the world’s top watchmakers and designers present their newest models. Most of these watches, naturally, cost more than my DePaul tuition. This brings a question to my mind; does a higher price guarantee better quality? It depends how you view quality.

Most of these watches displayed in the video are designed by huge names such as Hermes, Hamilton, Bentley, and Omega. The dimension of quality that is most appropriate for these brands is the Transcendent definition. This definition means excellence. In class we discussed this in detail, stating that many people assume a certain product is of better quality just because of the name that is associated with it.

The man in this video says that the American watch brand, Hamilton, got their big break when Elvis Presley wore it. From then on they became a popular watch, which let them charge hefty prices. A standard Hamilton watch is over $1400! Now, the watch presented in the video, from the Jazzmaster collection, is special for one reason: it has a two-in-one feature, two watches that you can flip over in one overall watch. The point of this is to let the wearer match the watch to his or her mood. Does this make it a better quality watch? Not necessarily, but they are taking into consideration what some of their customers might want.

The next watch the video talked about was one made by Hermes. This was very brief because Hermes is mostly known for their scarves and handbags, but not their watches. There is nothing that distinguishes them from other cheaper watches, such as Fossil or Michael Kors, buts its name. It had a sleek finish so that it would not weigh down on the wearer’s wrist. Omega is another brand that was named which had a watch that was made of “senda” which is just another name for rose gold. The Swatch group, a company known for their quality watches, but with a more affordable price tag, developed this term.

The only watch that was really worth its expensive price tag was the Type 22. The prices weren’t listed, but this watch had chrome finishes, real Italian leather, and a special feature. In each watch there is a pendulum that swings about 28,000 times a minute, which makes its time 72 times more accurate.

I think many watches especially Hamilton, Omega and Rolex are able to have such steep price tags because their reputation, primarily, performance, service and performance, which are all important dimensions of product quality.

Based on all this information, are these watches better quality than something cheaper? If yes, is it because of the name of the maker or is it because of some features? If no, why not?

 

 

Photo source: http://gearpatrol.com/2013/05/02/best-of-baselworld-2013/

Video Source:http://live.wsj.com/video/what-makes-a-luxury-watch-worth-its-price-tag/2EBED16E-ED6F-491C-A174-5A5DAABE0F4E.html?mod=WSJ_article_outbrain&obref=obnetwork#!2EBED16E-ED6F-491C-A174-5A5DAABE0F4E

More Money & Less Features, Does Not Make Sense!

Posted on by f1222sghatila

More Money & Less Features, Does Not Make Sense!

 

Any flight feels long because time wasted in traveling is just time wasted. Airlines are trying to figure out how to cut time and provide the best service. According to American Airlines and cutting time in placing the carry on baggage is too much trouble. They believe that due to the small compartments over the seat, there is typically not enough space and trying to accommodate carry on space has created many delays. The article says that the carry on spaces are always over booked due to people bringing a lot of access luggage. American Airline thinks by allowing only a small baggage like a purse that can be places under the seat is the way to do and people can check in everything else.

 

They are trying to do quality control for the time of luggage delays. Even though it only eliminates 2 minutes of the delay time, they think it will add up in the long run. In addition, there are cost savings because the luggage industry has created revenue in billions. I do not think this is a good strategy. The airline prices are continuously increasing due to the gas price and they are taking out amenities. I know when I travel I like doing it on Southwest because it’s cheap and allows luggage, other airlines  are more expensive and we have to pay additional for baggage. Even though it will eliminate some time in the flight, but that can be made up in other ways, such as boarding early. I think many people only carry a small luggage for a small distance and retrieving it in the luggage area would increase the traveler’s time. Also the issue to luggage getting lost is a big deal people have their carry on as their safety net and taking that away is a big deal.

 

Before American Airline makes this huge transition and purchasing, new aircraft they should construct many surveys to determine is this is worth it. Travelers want to get from point A to point B in as little hassle as possible and I believe this is just creating an unnecessary hassle. The airline will need to employ more people to put the baggage away and there is a change of loss baggage just to eliminate a 2 minute deplays. They should invest in creating a flow chart and figuring out where the problem is and eliminating or supplementing that feature. Quality control is improving quality overall not just making one area better and adding on problems in other areas.

 

What do you think are eliminating carry on luggage a good thing for American Airline to have? What would you prefer as a traveler?

 

http://www.businessweek.com/articles/2013-05-17/american-airlines-doesnt-want-your-bags-in-the-cabin#r=hpt-lst

 

Has Starbucks Met its Match?

Posted on by izzydelly

 

 

The popular coffee franchise has made a statement in a number of different markets, but has it met its match against Vietnam? The Seattle based coffee chain put its first location in Ho Chi Minh City in February. This country is known to have a very specific way of making coffee; nothing like what Starbucks has in the U.S.

The main concern here is if Starbucks will thrive in this new country, or become a complete failure. I believe The Critical Decisions of Operations Management should be highly considered.  One of the points is based on the design of goods and services. Starbucks has made a point to please the locals by making a special drink called the Asian Dolce Latte to appeal to local palates. By doing this Starbucks has a better chance to win over the locals that are so keen to stick to their original tastes.  When taking a domestic product abroad, I believe having differentiation in the good or service is also extremely important. Since Starbucks has a flavor of coffee unlike anything the Vietnamese are used to, this differentiation can potentially give them the competitive advantage they need in order to succeed. Starbucks CEO Howard Shultz quotes, “The environment that we create, the store design, the experience…they all add up to a much different position to anything that anyone in Vietnam currently occupies.”

Another critical decision is location strategy. Now, Shultz did not just wake up one morning and decide he wanted a new location in Vietnam. There are currently over 3,000 locations in Asia alone. Starbucks in fact purchases a large quantity of Arabica coffee from Vietnam, thus building a location in Vietnam makes a lot of sense. If they can move closer to the supply, this could greatly reduce exporting costs. To be even more specific, Starbucks purposely located their café in the capital’s higher-end neighborhood, District 1. Here, those that live in the area can afford the expensive taste that Starbucks has. Starbucks essentially nailed it on the head when it comes to this aspect: they are now near raw materials, and they are near to their target customers.

Going global has given Starbucks a vast amount of knowledge on how to succeed. However, they also face some cultural issues as well. As I stated before, the type of coffee served at Starbucks in the U.S. is much different than what the Vietnamese are used to. They enjoy a more bitter and higher caffeinated drink, and in order for Starbucks to do well, they must adjust to the new scene and roll with it. They have also brought a roast-duck wrap and a French baguette to the menu to achieve this goal.

Overall, I believe Starbucks has done an amazing job going global, and if they review and understand the critical decisions of operations management, they will continue to strive to new levels.

Thoughts for discussion:

Will Starbucks succeed in their takeover of Vietnam? Why or why not?
What does this mean for local coffee shops?

Sources:

http://online.wsj.com/article/SB10001424127887323582904578487192544295444.html 

http://travel.cnn.com/can-starbucks-make-it-coffee-mad-vietnam-921956

 

Mercedes’ Management pulling in Wealthy Chinese again

Posted on by spr1322tgutheil

After Daimler’s CEO Dieter Zetsche sat in the Mercedes S-Class, he realized it would not recline as far as a seat in an airplane did, and therefore not give the same amount of comfort that the wealthy individuals that would buy this car are accustomed to. This was especially an issue in China where the car-owner sits in the back a lot of the time as they have chauffeurs. Zetsche had his designers recline to 43.5 degrees to make it more comfortable and luxurious and therefore more appealing to the wealthy Chinese. When the backseat reclines, the front seat automatically moves forward a bit to give more legroom, and the seats even have a massage feature for ultimate comfort.

Mercedes Revamps the S-Class to Lure China's Wealthy Buyers

To be able to realize that this is necessary is very impressive forecasting while also looking at the past sales and realizing that something is wrong. For the CEO to go out and try the features of the Mercedes S-Class and help come up with solutions shows the dedication he has to the company, and shows good management as well. It is rare that you hear that a chief executive officer figures out the issue a company has and makes it a point to fix it.

Chinese buyers account for more than half of all the sales of the S-Class, which makes improving the sales even more important. With Mercedes operating profit margin down in comparison to BMW and Audi, it is important that the sales of the S-Class are improving again because the profit margin is 25% for these cars. Zetsche was also smart

in realizing that innovating and improving this car is important to the bottom line of making more money, as it is the most profitable.

China is a huge market as the sales of luxury cars are projected to go up 12 percent annually up through the year 2020. Clearly the operations management of Mercedes is of highest quality, because being able to put together all of the factors I have talked about and realizing that perfecting the S-Class is essential is rather impressive.

A Mercedes S-Class can cost as much as 486,000 dollars in China due to very heavy import levies. Due to the halo effect, Mercedes is able to generally charge more for its other cars as well. Mercedes sold about 20,000 more of their luxury cars than BMW and a little over 40,000 more than Audi’s luxury car, so clearly Mercedes is the best at perceiving an image of luxury and highest of quality. With this fact in mind, Mercedes’ management needs to realize that they need to improve the sales of their other cars to become the most profitable company in overall again in comparison to their biggest rivals of BMW and Audi.

What do you think Mercedes can do to improve their sales and become the most profitable company again? Are you impressed by the improved S-Class moves?

Choo Choo Paradise ?

Posted on by spr1312jlin

The red line trains are going to be shut down south of Roosevelt! The red line is one of the main train lines in Chicago. The red line will be running on Green Line tracks for a couple months or until the construction has been finished. What will we do? Well, the Chicago Transit Authority (CTA) has finally upgraded the bus/train tracker because of this major shutdown.

The upgrades that they have are as follows:

  • CTA riders can now know the duration of their trip from where they are now to their destination.
  • People can now search for stops that are near them. This will help if you are lost. Once you get on a CTA train, it is almost impossible to get lost once you get back to the loop or somewhere you are familiar with.
  • You can now type in your stop instead of having to scroll down the long list that was available. I remember when I was trying to look for the Adams and Wabash stop for the orange line and I was looking under the A’s, and it was not there. I had to scroll down the list about three times just to spot it.
  • People can now watch the trains move from their stop on their desktops when they are tracking their train to see where the train is at at that current time.
  • There will be “better schedule information: This will help riders who travel during off-peak hours and start their trips near the end of lines.”

Of course, the customers can still know when the train or bus will be coming to their stops once they check. CTA tried to make it more convenient for their customers.To be honest, I do not think the upgrade for watching the trains on the desktop was really necessary. That idea sounds really cool, but if I want to track the bus or train, I just really want to know what time it will get to the stop so I can start walking to the train station and get there in time.

I really like the upgrade for knowing the whole duration time for a certain trip. I just wonder if this duration time includes transfer time. For example, I want to go to O’hare airport. I have to take the orange line and transfer to the blue line, will this tracker help me determine my overall duration for this trip including my transfer time to the blue line?

Questions: If you do use the CTA bus tracker, what other upgrades would you like to have made available to you? Do you find the upgrade in the CTA bus/train tracker be more useful and convenient? Are there any of the new upgrades that you found to be unnecessary?

Sources:

http://www.chicagotribune.com/news/redeye-cta-to-unveil-new-train-tracker-feature-20130514,0,4380558.story

How Will Consumer’s Transparency Influence Google “Glass” Demand?

Posted on by spr1323rsenatore

 

 

Since 1998, Google has had a mission “to organize the world’s information and make it universally accessible and useful”. Over the years many would say this goal has been accomplished. Therefore, it is no surprise that Google has “earned their keep” among internet users and has become the face of many home internet search engines around the world. Now Google is stemming off the confines of their internet browser and will be showing the world an entirely new meaning of their mission with Google Glass. With Glass, there are people who think Google will literally be the face of the world for years to come.

 

In my opinion, the idea behind Google Glass is not as ground-breaking of a product as many have made it out to be. The idea for a wearable recording product has been introduced to the market already through Oakley Video camera glasses X300, and the Go Pro Head Video Camera. Also, we have seen wearable headsets for talking on the phone introduced already with technology such as Bluetooth headsets, etc.

 

However, I think Google’s innovation lies in their ability to incorporate and capitalize on their already previously established products using Glass. With features such as their voice command technology being synced with “Google Translate”, their digital voice assistant (“Google Now “) being incorporated to help keep track of your daily habits, “Google Maps” being the products GPS system, and even the Google search engine being at the consumers disposal to use when seeking information from their Glass device. Also, Glass will be able to meet the modern day needs of the cell phone for consumers with technology that lets you record and take pictures instantly. To me the idea behind the quality function deployment of this product is brilliant because it meets the modern day needs for cell phone consumers, and also meets the needs for Google’s consumers and translates all of this into one “grand-daddy” product.

 

But what do you think about the target design of the product? How do you feel about people wearing a live streaming, recordable device on their face? One parent commented, “As a parent, the thought of Google Glasses being anywhere near a place where my small children exposed themselves in the open like a restroom scares the heck out of me”. I think this parents concern is valid and so does Google.

Google has been working a way to tackle this issue of privacy through releasing their product to Google’s developers, journalists and a few other early adopters to test. While there still hasn’t been any release of       information about Google deciding a technological way to fix this, there have been suggestions of adapting etiquette techniques of when and where to take them off.

 

To me it seems unrealistic that everyone will obey “Glass Etiquette.” Also, adapting etiquette techniques could take away the sense of “freedom” Glass truly offers for consumers. If certain restaurants, bars, coffee shops, etc, don’t allow the device to be worn, it seems owning one would be more of a hassle. Thus, this issue of privacy could dramatically impact the demand for their product and Glass’s competitive advantage in the technological industry.

 

If there were restrictions implemented to where Glass can be use, would you as the consumer feel like the product has met your satisfaction? How will this issue of privacy effect the product life cycle of Glass? Why do you foresee a long product life cycle or a short product life cycle?

 

 

 http://www.nbcnews.com/technology/wear-it-well-time-establish-google-glass-etiquette-6C9780067

http://timesofindia.indiatimes.com/tech/slideshow/googleglass/Google-Glass-7-cool-features/Google-Glass-7-cool-features/itslideshow/18609271.cms

http://www.zdnet.com/google-glass-privacy-concerns-come-to-the-head-7000014431/

 http://www.google.com/about/company/

 

Can the all-electric car reach mass market appeal?

Posted on by spr1331tasafuadjaye

Who killed the electric car is a term you sometimes hear when referring to motor vehicles that run exclusively on electricity. With the environment issues being a big concern for our society today, many car manufacturing companies have developed hybrid vehicles. Hybrid Car being a vehicle that uses two different power sources to move the car, most commonly the internal combustion engine which uses gas fuel and an electric motor that uses.  The hybrid cars have gained popularity among consumers, especially the Toyota Prius, this has resulted in many car manufacturers developing hybrid vehicles to gain some market share.

However some come car manufacturers such as Honda, Nissan, Toyota, and Tesla to name a few have taken it a step further by producing purely electric vehicles that run only on electricity.  Electric cars are nothing new, being created in the late 1800’s and early 1900’s,  however gasoline fueled cars gained increased popularity and have captured the market ever since.

So what will it take for the Electric Car to reach mass market appeal? What do the managers at these huge car companies have to do. Many executives believe the electric car has to gain trust amongst car consumers. For now many consumers foresee a future with the hybrid car because of its driving range which drives a certain amount of miles on electric power then gasoline power takes over, which is fuel efficient.  Compared with the limited driving range of the electric vehicles.  There are a few factors which  limit electric cars from reaching mass market appeal. First the limited Driving Range of some of the electric vehicles and niche battery powered cohorts is a main factor  stopping consumers from buying into the technology. Another factor is the high initial price of many of the Electric Vehicles, many times being more costly than gasoline powered vehicles. One more huge factor is the unavailability of electric charging stations compared to gas stations. Going to a gas station is very convenient for consumers and that is what they are used to.

Nevertheless there is much advancement taking place with the electric vehicle technology and the availability of electric charging stations. John O’dell, and Edmund’s analyst predict the following would constitute an electric vehicle that could be mainstream: an electric car with a driving range of 150 miles that could be completely recharged in about 10 minutes or and electric car with a driving range  of 300 miles that could be completely recharged in 30 minutes. The price of these vehicles should be in the range $25,000 to $30,000, so it could somewhat affordable to middle-lower income comsumers. Also it was suggested that there be a good national network of electric vehicle charging stations so that it could be convenient to charge your car anywhere.

These are all great suggestions to making the electric car more appealing to the mass market and I definitely know I plan on getting one in the future, being a big environmental guy myself. However what would make you switch from Gasoline powered vehicle to purely Electric powered?

 

http://business.time.com/2013/01/29/what-would-make-an-all-electric-car-appeal-to-the-masses/

http://inventors.about.com/od/estartinventions/a/History-Of-Electric-Vehicles.htm

High-Speed Internet: Is it Still High-Speed?

Posted on by spr1311pfudala

This past week Google announced that they are expanding Google Fiber to Austin, Texas. Google Fiber is Google’s version of high-speed Internet, which can download at up to 1000 Mb per second, and digital cable television service. This is 100 times faster than any other Internet provider. Google Fiber also gives you one terabyte of storage, which can be used to record up to eight HD TV shows simultaneously. Google provides you with a brand new Nexus 7, that you use as a remote to control your TV.

Google Fiber is currently only being provided in Kansas City, KS and Kansas City, MO. Future cities that will have Google Fiber are Westwood, KS, Westwood Hills, KS, Mission Woods, KS, Kansas City North, MO, and Kansas City South, MO. Google offers three prices for Google Fiber:

Google Fiber Network Box
  • Gigabit + TV: $120/month ($300 construction fee waived)
  • Gigabit Internet: $70/month ($300 construction fee waived)
  • Free Internet (5 Mb): $0/month (for at least seven years) + $300 construction fee

These higher Internet speeds would eliminate those irritating YouTube buffers and would speed up downloading/uploading files. However, are the benefits of Google’s high-speed Internet worth the cost? It is estimated that it cost Google $11 billion to install Google Fiber nationwide, 20 million homes. That comes out to roughly $550 per home. With Google waiving the $300 construction fee, it would take five monthly payments of the highest-priced service, Gigabit + TV, to pay for the installation of Google Fiber to a home. Google would not start making a profit until five months after installing the service to a home. That is a long time to make a profit. This could prevent expansion to other cities.

In order to receive support from city politicians and residents, Google will install Google Fiber to public institutions for free. Hospitals, schools, community centers, and libraries will get Google Fiber installed for free. The rollout of Google Fiber also creates jobs in the Austin area and creates economic growth.

But is Google Fiber really necessary? The current U.S. average Internet speed is 7.2 Mb per second. While 7.2 Mb is not ultra-fast, it is still quite fast. Should Google not be focusing on expanding Internet access globally? Google should focus their Internet operations strategy on providing access to areas where it does not exist. We can wait for Google Fiber until everyone has access to the Internet first.

Should Google be waiving the $300 construction fee? Is this a smart way to gain customers or is Google only increasing its own expenses? Why is Google only expanding Google Fiber from town to town and not expanding nationally at one time? How are other Internet service providers going to compete with Google Fiber and its amazingly fast speed? What would you do with download speeds of up to 1000 Mb per second? Overall, does Google have good product strategy and project management in regards to the rollout of Google Fiber?

Sources

Analyst: Google Will Spend $84M Building Out KC’s Fiber Network To 149K Homes; $11B If It Went Nationwide: http://techcrunch.com/2013/04/08/google-fiber-cost-estimate/

Austin Next City for Ultra-fast Google Fiber: http://www.businessweek.com/ap/2013-04-09/austin-expected-to-be-next-stop-for-google-fiber

Google Fiber: https://fiber.google.com/about/

Google Fiber Expands TV, Internet to Austin, Texas: http://www.abcnews.go.com/blogs/technology/2013/04/google-fiber-expands-tv-internet-to-austin-texas

Residents and Businesses Excited for Possibilities Google Fiber Brings: http://www.kxan.com/dpp/news/local/austin/residents-excited-for-possibilities-google-fiber-brings

US Internet Speed Lags Behind S. Korea, Latvia: http://www.abc15.com/dpp/news/science_tech/us-internet-speed-lags-behind-s-korea-latvia

 

Is Apple losing its mojo?

Posted on by f1213nshah

Apple has been at the top of its game for over ten years now. Apple has had great success with its invention and especially with the Iphone. The Iphone was the top selling phone each year that it came out.  Even though it’s been the top selling phone for years, Google’s Android platform is starting to make its way up. According to recent polls and editorials, the Iphone is starting to slip away and more people are starting to prefer Google’s Android platform.

  • The Android platform now accounts for 75% of the smartphone market, which is up from its last quarter’s 68%. Apple’s Iphone dropped from being 17% of the market to 15%. This shows us that people are slowly starting to make the switch from an Iphone to phones with an Android operating system.
  • Apple is known for having loyal customers. Each year there newly innovative Iphone hits the top of consumers’ wish list. It seems like that is starting to change. According to Strategy Analytics 88% of U.S Iphone users said they would stay with the IOS for their next smartphone. That number has dropped from 93% from the previous year. In Europe the numbers dropped from 88% to 75%. This shows that people all around the world are starting to switch from IOS to another operating system.

There must be a reason why Apple fans are starting to slowly switch to Android phones. A big problem that Apple ran into was with the quality of its newest Iphone the Iphone 5. There were many complaints by consumers that there new Iphone 5 came out of the box with scratches or dents. Apple is known for making top quality products, and to produce thousands of Iphone 5 with quality defects is unacceptable. There were reports that this was due to the high demand and that they could not be made in time. It seems like Apple was choosing quantity over quality.

Is Apple starting to lose its touch? Do you think that Apple will be able to recover from the bad rep it got for the quality issues with the Iphone 5?

http://news.yahoo.com/4-signs-iphone-no-longer-smartphone-king-103200005.html