Product and

Service Design
Module 4

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Product design
- the combination of
manufacturing capabilities
with product and business
knowledge to convert ideas
into physical and
usable objects.
Service design
- the coordination and
combination of people,
communication, and material
components to create quality
service.
Strategic importance of product
and service design:
Organizations that have well-
designed products or services
are more likely to realize their
goals than those with poorly
designed products or services.
Strategic importance of product and
service design:
Product or service design should
be closely tied to an organization’s
strategy.
It is a major factor in cost, quality,
time-to-market, customer
satisfaction, and competitive
advantage.
Strategic importance of product
and service design:
Demand forecasts and
projected costs are important,
as is the expected impact on the
supply chain.
Strategic importance of product
and service design:
A significant cause of
operations failures can be
traced to faulty design.
Designs that have not been well
thought out, or are incorrectly
implemented, or instructions for
assembly or usage that are wrong
or unclear, can be the cause of
product and service failures,
leading to lawsuits, injuries and
deaths, product recalls, and
damaged reputations.
What Does Product and Service Design Do?
1. Translate customer wants
and needs into product and
service requirements.
2. Refine existing products and
services.
3. Develop new products and/or
services.
What Does Product and Service Design Do?
4. Formulate quality goals.
5. Formulate cost targets.
6. Construct and test prototypes.
7. Document specifications.
8. Translate product and service
specifications into process
specifications.
Objectives of Product and Service
Design:
 Primary consideration -
Customer satisfaction
Secondary considerations - Cost
or profit, quality, ability to
produce a product or provide a
service, ethics/safety, and
sustainability.
Questions/Issues to Take Into
Account:
1. Is there demand for it?
2. Can we do it?
3. What level of quality is
appropriate?
4. Does it make sense from an
economic standpoint?
Reasons for Product and Service
Design or Redesign:
• Economic
• Social and demographic
• Political, liability, or legal
• Competitive
• Cost or availability
• Technological
IDEA GENERATION (Main sources of
design ideas):
1. Competitors’ products and
services - by studying a
competitor’s products or services
and how the competitor operates
an organization can glean many
ideas.
IDEA GENERATION (Main sources of
design ideas):
Reverse engineering -
dismantling and inspecting a
competitor’s product to
discover product improvement;
or even come up with a product
better than the competitor’s.
IDEA GENERATION (Main sources of
design ideas):
2. Research and development
(R&D) - organized efforts to
increase scientific knowledge
or product innovation.
Basic research has the objective of
advancing the state of knowledge
about a subject, without any near-term
expectation of commercial
applications.
 Applied research has the objective of
achieving commercial applications.
 Development converts the results of
applied research into useful
commercial applications.
LEGAL AND ETHICAL CONSIDERATIONS:
1. Product liability - the
responsibility of a manufacturer
for any injuries or damages
caused by a faulty product; a
product must be suitable for its
intended purpose.
HUMAN FACTORS:
1. Safety and liability are
two critical issues in many
instances, and they must be
carefully considered.
2. Creeping featurism seeking a
competitive edge by adding new
features.
CULTURAL FACTORS:
- any cultural differences of
different countries or regions
related to the product must
be taken into account; this can
result in different designs for
different countries or regions.
GLOBAL PRODUCT AND SERVICE
DESIGN:
- organizations that operate
globally uses the combined
efforts of a team of designers
who work in different countries
and even on different continents
engaging the best human
resources from around the world.
ENVIRONMENTAL FACTORS -
SUSTAINABILITY KEY ASPECTS:
1. Cradle-to-grave assessment - the
assessment of the environmental
impact of a product or service
throughout its useful life.
also known as life cycle analysis
focusing on such factors as global
warming.
ENVIRONMENTAL FACTORS -
SUSTAINABILITY KEY ASPECTS:
2. End-of-Life Programs - the purpose is
to reduce the dumping of products
that have reached the end of their
useful lives, in landfills or third-world
countries, or incineration which
converts materials into hazardous air
and water emissions and generates
toxic ash.
ENVIRONMENTAL FACTORS -
SUSTAINABILITY KEY ASPECTS:
3. The Three Rs: Reduce, Reuse, and
Recycle
 Reduce: Value Analysis -
Examination of the function of
parts and materials in an effort to
reduce cost and/or improve
product performance.
ENVIRONMENTAL FACTORS -
SUSTAINABILITY KEY ASPECTS:
Reuse: Remanufacturing -
refurbishing used products by
replacing worn-out or defective
components, and reselling the
products.
ENVIRONMENTAL FACTORS -
SUSTAINABILITY KEY ASPECTS:
 Recycle: recovering materials
for future use.
Reasons for recycling:
1. Cost savings
2. Environment concerns
3. Environmental regulation
Phases in product design and
development:
1. Launching (introduction)
- it may be treated as a
curiosity item; many potential
buyers may suspect that all the
bugs haven’t been worked out and
that the price may drop after the
introductory period.
1. Launching (introduction)
- companies must carefully
weigh the trade-offs in getting
all the bugs out versus getting
a leap on the competition, as
well as getting to market at an
advantageous time.
1. Launching (introduction)
- it is important to have a
reasonable forecast of initial
demand so an adequate
supply of product or an
adequate service capacity is in
place.
2. Growth phase
- design improvements and
increasing demand yield
higher reliability and lower
costs, leading the growth in
demand.
2. Growth phase
- it is important to obtain
accurate projections of the
demand growth rate and how
long that will persist, and then
to ensure that capacity
increases coincide with
increasing demand.
3. Maturity
- the demand levels off; few, if
any, design changes are needed.
- generally, costs are low and
productivity is high; new uses for
products or services can extend
their life and increase the market
size.
4. Decline phase
- decisions must be made
about whether to discontinue a
product or service and replace it
with new ones or abandon the
market, or to attempt to find new
uses or new users for the existing
product or service.
Product life cycle management
(PLM)
- a systematic approach to
managing the series of
changes a product goes
through, from its conception
to its end-of-life.
Three phases of PLM
application:
• Beginning of life
• Middle of life
• End of life
Key issues in product or service design
1. Standardization - extent to
which a product, service, or
process lacks variety.
Standardization advantages:
1. Fewer parts to deal with in
inventory and in manufacturing.
2. Reduced training costs and time.
3. More routine purchasing,
handling, and inspection
procedures.
4. Orders fillable from inventory.
Standardization disadvantages:
1. Designs may be frozen with too
many imperfections remaining.
2. High cost of design changes
increases resistance to
improvements.
3. Decreased variety results in less
consumer appeal.
Key issues in product or service design
Companies like standardization
because it enables them to produce
high volumes of relatively low-cost
products, albeit products with little
variety.
Customers, on the other hand,
typically prefer more variety,
although they like the low cost.
Key issues in product or service design
The question for producers is
how to resolve these issues
without
 losing the benefits of
standardization, and
 incurring a host of problems
that are often linked to variety.
Key issues in product or service design
2. Mass Customization - a
strategy of producing basically
standardized goods, but
incorporating some degree of
customization in the final
product or service.
Mass Customization Techniques
Delayed differentiation
Modular design
Delayed differentiation
- a postponement tactic: the
process of producing, but not
quite completing, a product or
service, postponing completion
until customer preferences or
specifications are known.
Modular design
- A form of standardization
in which component parts
are grouped into modules
that are easily replaced or
interchanged.
Key issues in product or service design
3. Reliability - a measure of the
ability of a product, a part, a
service, or an entire system to
perform its intended function
under a prescribed set of
conditions.
Failure – is a situation in which a
product, part, or system does not
perform as intended.
Normal operating conditions -the set
of conditions under which an item’s
reliability is specified; if users do not
heed these conditions it often results
in premature failure of parts or
complete systems.
Key issues in product or service design
4. Robust Design – a design
that results in products or
services that can function over
a broad range of conditions.
Key issues in product or service design
5. Degree of Newness –
Modification of an existing product
or service
Expansion of an existing product
line or service offering
Clone of a competitor’s product or
service
New product or service
Key issues in product or service design
6. Quality function deployment (QFD)
- an approach that integrates the
“voice of the customer” into both
product and service development.
- the purpose is to ensure that
customer requirements are factored
into every aspect of the process.
PHASES IN PRODUCT DESIGN & DEVT
1. Feasibility analysis
2. Product specifications
3. Process specifications
4. Prototype development
5. Design review
6. Market test
7. Product introduction
8. Follow-up evaluation
1. Feasibility analysis - entails market
analysis (demand), economic analysis
(development cost and production
cost, profit potential), and technical
analysis (capacity requirements and
availability, and the skills needed).
- requires collaboration among
marketing, finance, accounting,
engineering, and operations.
2. Product specifications -
detailed descriptions of what is
needed to meet (or exceed)
customer wants, and requires
collaboration between legal,
marketing, and operations.
3. Process specifications –
determining the methods that will
be needed to produce the product.
- alternatives must be weighed
in terms of cost, availability of
resources, profit potential, and
quality; this involves collaboration
between accounting and operations.
4. Prototype development* - once
product and process specifications
are complete, one (or a few) units
are made to see if there are any
problems with the product or
process specifications.
* Sample or model
5. Design review - at this stage,
any necessary changes are made
or the project is abandoned.
- marketing, finance,
engineering, design, and
operations collaborate to
determine whether to proceed or
abandon.
6. Market test - used to determine
the extent of consumer
acceptance. If
unsuccessful, the product returns
to the design review phase.
- this phase is handled by
marketing.
7. Product introduction - the
new product is promoted.
- this phase is handled by
marketing guys people who
determine the type of
promotion that is suitable to
the product.
8. Follow-up evaluation -
Based on user feedback,
changes may be made or
forecasts refined.
- this phase is handled by
marketing.
Characteristics of well-designed
service system:
• Being consistent with the
organization’s mission.
• Being user-friendly.
• Being robust if variability is a
factor.
• Being easy to sustain.
 • Being cost-effective.
• Having value that is obvious to
customers.
• Having a single, unifying theme,
such as convenience or speed.
• Having design features and checks
that will ensure service that is
reliable and of high quality.
 • Having effective linkages between
back-of-the-house operations (i.e., no
contact with the customer) and
front-of-the-house operations (i.e.,
direct contact with customers).
- Front operations should focus
on customer service, while back
operations should focus on speed
and efficiency.
Guidelines for successful service designs:
1. Define the service package in
detail. A service blueprint may be
helpful for this.
2. Focus on the operation from the
customer’s perspective. Consider
how customer expectations and
perceptions are managed during and
after the service.
3. Consider the image that the
service package will present both to
customers and to prospective
customers.
4. Recognize that designers’
familiarity with the system may give
them quite a different perspective
than that of the customer, and take
steps to overcome this.
 5. Make sure that managers are
involved and will support the
design once it is implemented.
6. Define quality for both
tangibles and intangibles.
Intangible standards are more
difficult to define, but they must
be addressed.