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ATW223 Operations Management - Canon EOS: Quantitative & Qualitative Analysis on Product & Services
Citation preview
Quantitative &Qualitative Analysis on Products & Services
By
Chuah Wen Xu 107675 012-497 7355Goh Chong Mun 107686 016-428 5055Khoo Khay Xiang 107698 016-491 1665Zhang Haibo 109609 012-589 2486
http://atw223om-canon.blogspot.com
Outlines1. Introduction2. Statement of Problems3. Product Design4. Quality Management & International
Standard5. Location Decisions6. Forecasting Demand7. Conclusion
1.0 Introduction
1.1 Corporate Profile1.2 Canon’s Corporate Philosophy of Kyosei1.3 Canon’s Business1.4 Corporate Activities1.5 Canon: Efforts for Tomorrow1.6 Canon Technology
1.1 Corporate ProfileInfo Description
Company Name Canon Inc.
Founded August 10, 1937
Headquarters 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan.
Phone (81) 3-3758-2111
Chairman & CEO Fujio Mitarai
President & COO Tsuneji Uchida
Common Stock 174, 762 million yen (As of December 31, 2009)
Number of Employees 25, 683 (As of December 31, 2009)
1.1 Corporate ProfileInfo Description
Net SalesNon-Consolidated 2, 025, 546 million yen (2009)
Consolidated 3, 209, 201 million yen (2009)
Net IncomeNon-Consolidated 80, 778 million yen (2009)
Consolidated 131, 647 million yen (2009)
Ordinary Profit 142, 684 million yen (2009)
1.2 Philosophy of Kyosei• Concise definition:-
“Living and working together for the common good.”
• Canon’s definition:-“All people, regardless of race religion or culture, harmoniously living and working together into the future.”
1.2 Philosophy of Kyosei• Canon’s Goal:-
To contribute to global prosperity and the well-being of mankind, which will lead to continuing growth and bring the world closer to achieving kyosei.
1.3 Canon’s Business
Canon’s Business
Consumer Business Unit
Office Business Unit
Industry and Others Business
Unit
1.3 Canon’s Business
• DSLR• Compact Digital Cameras• Lens for DSLR• Digital Camcorders• Multifunction Inkjet Printers• Inkjet Printers• Compact Photo Printers• LCD Projectors• Image Scanners• Network Cameras• Broadcast Equipment
Consumer Business Unit
1.3 Canon’s Business
• Office Network Multifunction Devices• Laser Printers• Laser Multifunction Devices• Solutions Software• Toner Cartridges• Digital Production Systems• Large-Format Inkjet Printers
Office Business Unit
1.3 Canon’s Business
Industry & Others Business Unit
• LCD Lithography Systems• Semiconductor lithography Systems• Ophthalmic Equipment• Digital Radiography Systems• Document Scanners• Handy Terminals• Color Label / Card Printers• Personal Information Products• Components• Die Bonders• Vacuum Thin-Film Deposition Equipment• Organic LED Panel Manufacturing Equipment
1.4 Corporate ActivitiesCorporate Activities
Research, Development & Design
Procurement, Production, Distribution
Sales & Marketing, Post-Purchase Services
Environment, Quality
Social and Cultural Support Activities
1.5 Canon: Efforts for Tomorrow
Canon: Efforts for Tomorrow
Image-RUNNER
ADVANCE
WWF-Canon Polar
Bear Tracker
Printing Solutions
IT Reforms
Green Volunteer
Action
1.6 Canon Technology
2.0 Statement of Problems
2.0 Statement of Problems• Inaccuracy of the forecasting sales demand.• The responsibility to improve the quality of the
products and customer services.• The ability to compete of Canon on quality
management control need to be enhance.• The expending in the demand allowed Canon to
expand the current distribution center. Hence, the location strategies will be another problem faced currently.
3.0 Product Design
3.1 Goods and Services Selection3.2 Generating New Products3.3 Defining A Product3.4 Service Design3.5 Decision Tree
3.1 Goods and Services Selection• Focuses on product design in term of its function
and layout.• Low cost strategy with high quality and gain
profit.• Keeping up with the trends and the latest
technology & innovations.
3.1 Goods and Services Selection• Life cycle – Introduction– Growth– Maturity– Declines
3.1 Goods and Services SelectionSa
les,
Cos
t & P
rofit
.
Introduction Maturity DeclineGrowth
Cost ofDevelopment
& ManufactureSales Revenue
Time
Cash flowLoss
Profit
3.2 Generating New Products• Economic change• Sociological and demographic chart• Technological change• Changes in– Market practice– Professional standards– Suppliers and distributors
3.3 Defining A Product
Entry Level Cameras
Semi-Professional Cameras Premium Cameras Professional
Cameras
EOS 300D EOS D30 EOS 7D EOS-1DEOS 350D EOS D60 EOS 5D EOS-1DsEOS 400D EOS 10D EOS 5D Mark II EOS-1D Mark IIEOS 450D EOS 20D EOS-1Ds Mark IIEOS 500D EOS 20Da EOS-1D Mark II NEOS 550D EOS 40D EOS-1D Mark IIIEOS 600D EOS 50D EOS-1Ds Mark III
EOS 1000D EOS 60D EOS-1D Mark IVEOS 1100D
List of the Canon EOS Production
3.3 Defining A Product
List of the Canon EOS Lens
3.3 Defining A Product
3.4 Product Design• 4 techniques to reduce costs and enhance the
service offering:-– Delaying customization– Modularizing– Automating– Designing for the ‘Moment of Truth’.
3.4 Product Design• To provide a better solution for customer, Canon
provides:-– Customer Service website– Hotline Services– Company Website
3.5 Decision Tree• A Decision Trees consists of 3 types of nodes:-– Decision nodes – commonly represented by squares– Chance nodes – represented by circles– End nodes – represented by triangles
• In order to focus on single production to maintain for the sales, we decide to cut off some of the current product lines. To choose whether which product will be remains in the market, we choose to calculate the profit via decision trees.
3.5 Decision Tree• Fixed cost: RM1,000,000
(RM)
Selling UnitsSelling Price Manufacturing Cost
EOS 450D 1,500 1,000 10,000EOS 550D 2,500 1,800 10,000
Probability
High Sales Low SalesEOS 450D 0.07 0.93EOS 550D 0.84 0.16
3.5 Decision Tree
EOS 450D
High Sales0.07
0.93Low Sales
EOS 550DHigh Sales
0.84
Low Sales0.16
Selling Units: 700unitsRevenues RM 1,050,000Mgf Cost RM 700,000Fixed Cost RM 1,000,000
-RM 650,000
Selling Units: 9,300unitsRevenues RM 13,950,000Mgf Cost RM 9,300,000Fixed Cost RM 1,000,000
RM 3,650,000
Selling Units: 8,400unitsRevenues RM 21,000,000Mgf Cost RM 15,120,000Fixed Cost RM 1,000,000
RM 4,880,000
Selling Units: 1,600unitsRevenues RM 4,000,000Mgf Cost RM 2,880,000Fixed Cost RM 1,000,000
RM 120,000
RM 5,000,000
RM 3,000,000
3.5 Decision Tree• Profit from EOS 550D: RM5, 000, 000.• Profit from EOS 450D: RM3, 000, 000.• Therefore, the production of EOS 450D will stop and
more effort will be put on EOS 550D.
4.0 Quality Management & International Standard
4.1 Quality and Strategy4.2 International Quality Standards4.3 Total Quality Management
4.1 Quality and Strategy• Quality: -– The ability of a product or service to meet customer
needs and it affects the entire organization from supplier to customer and from product design to maintenance.
4.1 Quality and Strategy• Canon’s Training Plans:-
– Foundation & Professional Development and service skills.– Management and Leadership Program to enhance qualities and
management skills of supervisory and managerial staff.– Technical Training Program to enhance technical and service
skills.– Product and System Training Program to build up product
knowledge of the sales, marketing and support staff.
4.2 International Quality Standards
4.2 International Quality Standards• ISO 14001 is a series of environmental
management standards that contain 5 core elements:-– Environmental management– Auditing– Performance– Evaluation– Labeling– Life cycle assessment
4.2 International Quality Standards• Advantages of ISO 14001:-– Positive public image and reduced exposure to
liability;– Good systematic approach to pollution prevention
through the minimization of ecological impact of products and activities;
– Compliance with regulatory requirements and opportunities for competitive advantages;
– Reduction in need for multiple audits.
4.2 International Quality Standards
4.2 International Quality Standards• ISO 9000 indicate that the product and service
are high quality and competitive.• Certify that Canon is international oriented
company.• Supported by national standards bodies from
more than 150 countries.
4.2 International Quality Standards
4.2 International Quality Standards• Canon was awarded the winner for “The 3rd Asia
Pacific Super Excellent Brand-ELITE AWARD” for being a top leadership branding.
4.3 Total Quality Management• An integrative philosophy of management for a
quality emphasis that encompasses the entire company, from supplier to customer.
• Canon committed through continuous improvement in the availability and distribution of the products and services.
• Canon implemented Continuous Improvement Process (CPI) to enhance its products,services or processes.
4.3 Total Quality Management• Canon believes that communicating with
employees will positively affects job satisfaction and benefits the bottom line.
• Canon meets customers’ needs and expectations by applying total staff management.
• 3 major types of teams that applied:-– Steering Committees;– Problem-Solving Teams;– Self-Managed Teams.
5.0 Location Decisions
5.1 Factors That Affect Location Decisions5.2 Methods of Evaluation Location Alternatives5.3 Service Location Strategy
5.1 Factors That Affect The Location Decisions
Country
• Political View• Economical
Factor• Cultural• Labor• Flexibility
Region / Community
• Corporate Desires
• Attractiveness of Region
• Labor Availability of Region
• Cost of Utilities• Land Cost
Site
• Site Size and Cost
• Transportation System
• Zoning Restriction
5.1 Factors That Affect The Location Decisions• Labor productivity• Exchange Rates and Currency Risks• Cost – Intangible Costs & Tangible Costs• Political Risk, Values & Culture• Proximity– Markets– Distribution Centre– Suppliers
5.2 Methods of Evaluation Location Alternatives
Factor Rating Method
• Factors that will be use in the evaluation:-– Availability of Skilled Labor;– Availability of Raw Materials;– Availability of Transportation;– Proximity To The Firm’s Markets.
5.2 Methods of Evaluation Location Alternatives
Factor Rating Method
Key Success Factor Weight
Scores Weighted Scores
WM - NR
WM - CR
WM – SR EM WM -
NRWM -
CRWM -
SR EM
Availability of skilled labor 0.35 80 80 75 60 28.00 28.00 26.25 21.00
Availability of raw materials 0.15 70 75 70 50 10.50 11.25 10.50 7.50
Availability of transportation 0.25 55 60 55 70 13.75 15.00 13.75 17.50
Proximity to the firm's markets 0.25 70 70 65 45 17.50 17.50 16.25 11.25
Totals 1.00 69.75 71.75 66.75 57.25
5.2 Methods of Evaluation Location Alternatives
Factor Rating Method
• WM – NR : West Malaysia – Northern Region• WM – CR : West Malaysia – Central Region• WM – SR : West Malaysia – South Region• EM : East Malaysia
5.2 Methods of Evaluation Location Alternatives
Break-Even Analysis
• Used to determine how much sales volume of the business needs to start making a profit.
• Fixed Costs: costs that are same regardless of how many items those business sell.
• Variable Costs: recurring costs that absorb with each unit that sell.
5.2 Methods of Evaluation Location Alternatives
Break-Even AnalysisFixed Costs for:-
West Malaysia – Northern Region : RM 80,000West Malaysia – Central Region : RM 100,000West Malaysia – Southern Region : RM 90,000East Malaysia : RM 70,000
Variable Costs per units for:-
West Malaysia – Northern Region : RM 8West Malaysia – Central Region : RM 5West Malaysia – Southern Region : RM 10East Malaysia : RM 20
5.2 Methods of Evaluation Location Alternatives
Break-Even Analysis
RM
Fixed Cost
Variable Cost / units
Total Cost / 1000 units
Total Cost / 2000 Units
Total Cost / 3000 units
WM – NR 80,000 7 87,000 94,000 101,000
WM – CR 82,000 5 87,000 92,000 97,000
WM – SR 90,000 6 96,000 102,000 108,000
EM 65,000 13 78,000 91,000 104,000
5.2 Methods of Evaluation Location Alternatives
Break-Even Analysis
0 1,000 2,000 3,00060,00065,00070,00075,00080,00085,00090,00095,000
100,000105,000110,000
Break-Even Analysis
WM - NR WM - CR WM - SR EM
5.2 Methods of Evaluation Location Alternatives
Break-Even AnalysisFor WM – NR, M (Gradient) = 7.Y = 7X + 80,000 - (1) For WM – CR, M (Gradient) = 5.Y = 5X + 82,000 - (2) For WM – SR, M (Gradient) = 6.Y = 6X + 90,000 - (3) For EM, M (Gradient) = 13.Y = 13X + 65,000 - (4)
For intercept (1) & (2),7X + 80,000 = 5X + 82,0002X = 2,000X = 1,000 For intercept (1) & (4),7X + 80,000 = 13X + 65,0006X = 15,000X = 2,500 For intercept (2) & (4),5X + 82,000 = 13X + 65,0008X = 17,000X = 2,125
5.2 Methods of Evaluation Location Alternatives
Break-Even Analysis
• Therefore, for the most suitable location for the production less than 1,000 units, the best location is East Malaysia;
• For the most suitable location for the production more than 2,000 units, the best location is West Malaysia – Central Region.
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
• Used to determine the location of a single distribution center that will minimize distribution costs.
• Due to Canon planned to move to another distribution center. We are looking for a more suitable location.
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
Name Weighted, QCoordinate
N E
Canon Distribution Centre 3.084336 101.576608
Penang Branch 800 5.416233 100.320864
Ipoh Branch 1000 4.607197 101.081756
Melacca Branch 700 2.184842 102.259439
Johor Bahru Branch 850 1.529233 103.792886
Kuantan Branch 600 3.828050 103.336161
Kuching Branch 700 1.550897 110.356019
Kota Kinabalu Branch 700 5.985331 116.077981
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
Name Weighted, QCoordinate
N E
KLCC Concept Store 600 3.158108 101.712664
Mid Valley Megamall Concept Store 650 3.119428 101.677400
Sunway Pyramid Concept Store 750 3.072150 101.608956
Pavilion Concept Store 650 3.148308 101.713056
1 Utama Concept Store 800 3.149603 101.615539
e @ Curve Concept Store 500 3.158576 101.610695
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
• Center of Gravity (3.41006307, 103.568322) • We had created a map for Canon Distribution Center,
Branches & Concept Stores at http://bit.ly/canonmmap.
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
Current Locations of Canon Distribution, Branch Offices & Lifestyle Concept Stores in Malaysia.
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
Current Locations of Canon Distribution, Branch Offices & Lifestyle Concept Stores in West-Malaysia.
5.2 Methods of Evaluation Location Alternatives
Center-of-Gravity Method
Current Locations of Canon Distribution, Branch Offices & Lifestyle Concept Stores in West-Malaysia Central Region.
5.3 Service Location Strategy• Sites selection:-– Revenue focus
• Volume and Revenue• Physical Quality• Cost Determinants
– Technique• Factor Rating Method• Center-of-Gravity Method
– Assumption• The call center service
6.0 Forecasting Demand
6.1 Introduction of Forecasting6.2 Forecasting Approaches (Quantitative Methods)
6.2.1 Moving Averages6.2.2 Exponential Smoothing with
Trend Adjustment6.2.3 Linear Regression
6.1 Introduction of Forecasting• The art and science of predicting future events or
the process of making statement about events whose actual outcomes that have not yet been obtained.
• Involve taking historical data and projecting them into the future.
• Planning for both the short run and long run.
6.1 Introduction of Forecasting• Short-range Forecast:
Generally less than 3 months• Medium-range Forecast:
3 months – 3 years• Long-range Forecast:
More than 3 years
6.2 Forecasting ApproachesMoving Average
Month Actual Demand (in thousands units) 3-Month Moving Average Absolute
Deviation
1 9.8 #N/A #N/A2 8.6 #N/A #N/A3 8.8 #N/A #N/A4 9.4 9.07 0.335 10.1 8.93 1.176 9.7 9.43 0.277 10.2 9.73 0.478 10.0 10.00 09 9.6 9.97 0.37
10 9.8 9.93 0.1311 9.9 9.80 0.1012 9.8 9.77 0.03
6.2 Forecasting ApproachesMoving Average
1 2 3 4 5 6 7 8 9 10 11 120
2
4
6
8
10
12
Moving Average
ActualForecast
Data Point
Valu
e
6.2 Forecasting ApproachesMoving Average
6.2 Forecasting ApproachesExponential Smoothing with Trend Adjustment
• Smoothing Constant:-α = 0.2β = 0.3
6.2 Forecasting ApproachesExponential Smoothing with Trend Adjustment
Month Actual Demand( in thousands units)
Smoothed Forecast,
Smoothed Trend,
Forecast Including Trend,
1 9.8 8.50 1.00 9.502 8.6 9.56 1.02 10.583 8.8 10.18 0.90 11.084 9.4 10.62 0.76 11.385 10.1 10.98 0.64 11.626 9.7 11.32 0.55 11.877 10.2 11.44 0.42 11.868 10.0 11.53 0.32 11.859 9.6 11.48 0.21 11.69
10 9.8 11.27 0.08 11.3511 9.9 11.04 0.00 11.0412 9.8 10.81 0.00 10.81
6.2 Forecasting ApproachesExponential Smoothing with Trend Adjustment
1 2 3 4 5 6 7 8 9 10 11 120
2
4
6
8
10
12
14
FIT Actual DemandMonth
Sal
es D
eman
d in
thou
sand
uni
ts
6.2 Forecasting ApproachesExponential Smoothing with Trend Adjustment
6.2 Forecasting ApproachesLinear Regression• To study the relationship between price of product
(independent variable) and sales (dependent variable). • The form of Linear Regression equation:-
• Wherey = value of the dependent variablea = y-axis interceptb = slope of the regression linex = independent variable
6.2 Forecasting ApproachesLinear Regression
The slope b is computed by:
The y-intercept a is founded by:
6.2 Forecasting ApproachesLinear Regression
6.2 Forecasting ApproachesLinear Regression
Price of Products(RM), x Sales(RM in millions), y xy
2300 5.9 5,290,000 13,570
2450 5 6,002,500 12,250
2600 3.98 6,760,000 10,348
2800 3.71 7,840,000 10,388
3200 3.26 10,240,000 10,432
3400 2.43 11,560,000 8,262
3500 2.14 12,250,000 7,390
3750 1.53 14,062,500 5,737
24,000 27.95 74,005,000 78,377
6.2 Forecasting ApproachesLinear Regression
Sales (in millions) = 11.29- 0.0026(price)
6.2 Forecasting ApproachesLinear Regression
2000 2200 2400 2600 2800 3000 3200 3400 3600 3800 40000
1
2
3
4
5
6
7
Relationship between Sales and Price of Product
Price(RM)
Sale
s(RM
in m
illio
ns)
7.0 Conclusion
7.0 Conclusion• Canon EOS has a various kind of products on the markets.• Once the product reach the declines in life cycle, new
product should be design and introduce.• Canon EOS has a good maintained-trend in terms of
quality for decades.• Getting a more suitable place for distribution center for
Canon allow the Canon to face the future increase in demand.
• Forecasting for sales allow the company predict for the demand in future.
THANK YOU!http://atw223om-canon.blogspot.com