Chapter 4

Product and Service

Design

Rebecca Q. Lising, MAED, MBA

Professor
Customer Satisfaction begins with product and
service design. Moreover, decisions are made in
this area impact operations and the
organization’s overall success.
 Process selection and capacity planning impact
the ability of the product system to deform and
to satisfy customers.
 Flexibility, Production time, and cost are key
considerations in process design.
 Process selection and layout are closely related.
 Layout decisions are influenced by decisions
made in product and service design.
Work design focuses on the human element in production
systems.
Increasingly, managers are realizing that workers are a
valuable asset and can contribute greatly to the
organization’s success.
Strategic planning is beginning to incorporate employee
participation to help improve production systems.
Design decisions have strategic significance for business
organizations.
Many of these decisions are not made by the operations
manager. Nonetheless, because of the important links
between operations and each strategic area
• It is essential to the success of the organizations
to involve all of the functional area of the
organization in design decisions.
WHAT DOES PRODUCT AND
SERVICE DESIGN DO?
• The various activities and responsibilities of product and service
design include the following(functional interactions are shown in
parenthesis)
1. Translate customer wants and needs, into product and service
requirements.(marketing, operation)
2. Refine existing product and services.(marketing)
3. Develop new product and/or services.(marketing. Operations)
4. formulate quality goods(marketing, operation)
5. Formulate cost targets (accounting, finance, operations)
6. Construct and test prototypes (operations, marketing,
engineering)
7. Document specifications.
8. Translate product and service specifications into process
specifications ( engineering, operations)
REASONS FOR PRODUCT AND SERVICE
DESIGN OR REDESIGN
• Product and service design has typically had strategic
implications for the success and prosperity of an organization.
• Furthermore, it has an impact on future activities.
Consequently, decisions in this area are some of the most
fundamental that managers must make.
• Organizations become involved in product and service design
or redesign for a variety of reasons.
• The main forces that initiate design or redesign are market
opportunities and threats.
• The factors that give rise to market opportunities and threats
can be one or more changes in:
 ECONOMIC (low demand; excessive warranty claim; the need
to reduce cost)
 SOCIAL AND DEMOGRAPHIC (aging baby bloomers;
population shifts)
 POLITICAL, LIABILITY OR LEGAL (government changes; safety
issues; new regulations)
 COMPETITIVE (new or changed products or services; new
advertising/promotion)
 COST OR AVAILABILITY (of raw materials; components; labor)
 TECHNOLOGICAL (in product component processes)While
each of these factors may seem obvious, in technological part
a need to create an faster, smaller microprocessor that spawns
a new generation of personal digital assistants or cellphones.
Advances may require altering existing products.
EXAMPLE OF A NEW PRODUCT DESIGN
Dutch Boy Paint Containers from a classic old container to a new
twist and pour container.
 Idea Generation
• One of the strongest motivators for new and improved
products or services is the competitors’ products and services.

REVERSE ENGINEERING – dismantling and inspecting a

competitors’ product to discover product improvement.
The Ford Motor Company used this tactic in developing its
highly successful Taurus Model
It examines competitors’ automobiles, searching for best-in
class components (e.g. best hood release, best dashboard
display, best door handle)
Idea Generation
• Research is another source of ideas for new or improved
products or services.
Research & Development (R&D)
 refers to organized efforts that are directed toward increasing
scientific knowledge and product or process 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.
 OBJECTIVES OF PRODUCT AND
SERVICE DESIGN
• The main focus of product and service design is customer satisfaction.
Hence, it is essential for designers to understand what the customer
wants and design with that in mind.
• Marketing is the primary source of this information. It is important to
note that although profit is generally the overall measure of design
effectiveness, because the time interval between the design phase
and profit realization is often considerable.
• These typically include development time and cost, and the resulting
product or service quality.
• Quality, is high on the list of priorities in product and service design,
having high quality was enough for a product or service to stand out;
now it is the norm, and product and service that fall below this norm
are the ones that stand out.
• For many electronic product, “high tech” appearance is a design
factor.
 LEGAL, ETHICAL AND
ENVIRONMENTAL ISSUES
• Designers must be careful to take into account a wide array of
legal and ethical considerations.
• Moreover, if there is a potential to harm the environment,
then those issues become important.
• Most organizations have numerous government agencies that
regulate them.
• Among the more familiar federal agencies are the Bureau of
Food and Drug, the Occupational Health and Safety
Administrations, the Environmental Protection agency, and
various local agencies and NGOs.
Legal and Ethical Considerations
• Product Liability
 can be a strong incentive for product improvement.
Is the responsibility of the manufacturer for any injuries or
damages caused by a faulty product because of poor
workmanship or design
• Uniform Commercial Code
Says that products carry an implication of merchantability and
fitness; that is, a product must be usable for its intended purposes.

The much anticipated Boeing 787 Dreamliner aircraft resumed flights

after being grounded for more than three months for a battery defect.
Aviation safety depends on well-maintained equipment and an expert
flight crew who can handle emergencies as they come up.
Environmental Factors: Sustainability
• Product and service design is a focal point in the quest for sustainability.
Cradle-to-Grave Assessment
The assessment of the environmental impact of a product or service
throughout its useful life.
Focusing on such factors as global warming (the amount of carbon dioxide
released into atmosphere) , oxygen depletion, and solid waste management
The goal is to choose products and services that have the least
environmental impact while still taking into account economic
considerations.
End-of-Life Programs (EOL)
Deal with products that have reached the end of their useful lives.
The purpose of this program is to reduce the dumping of products,
particularly electronic equipment, in landfills or third world countries, which
converts materials into hazardous air and water emissions and generates
toxic ash.
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.

 Reuse:
Remanufacturing – refers to refurbishing used products by
replacing worn-out or defective components, and reselling the
products.
Design for disassembly (DFD) – designing products so that they
can be more easily taken apart
 Recycle
Recovering materials for future use
• Organizations generally want designers to
adhere to guidelines such as the following:

Produce designs that are consistent with

the goals of organizations.
Give customers the value they expect.
Make health and safety a primary
concern.
Consider potential to harm the
environment.
 OTHER ISSUES IN PRODUCT AND
SERVICE DESIGN
Product Life Cycle Management
A systematic approach to managing the series of changes a
product goes through, from its conception to end of life

Life cycles- is the stages through which a product or its category

bypass.
DEGREE OF STANDARDIZATION
• Standardization- the extent to which there is absence of
variety in a product, services or process.

Standardized products are made in large quantities of identical

items such as calculators, computers, etc.

Standardized service implies that every customer or item

processed receives essentially the same service. Example:
carwash
 DEGREE OF STANDARDIZATION
• Mass customization
 a strategy of producing standardized goods or services, but
incorporating some degree of customization in the final product or
services.
• Delayed differentiation
 is a postponement tactic
 the process of producing but not quite completing, a product or
service until customer preferences are known
 Example: furniture makers can produce dining room sets, but
not apply stains allowing customers a choice of stain.
• Modular design
 component parts are grouped into modules that are easily replaced
or interchangeable.
 Example: Computers that have modular parts which can be replaced
if they become defective
KEY ISSUES IN PRODUCT OR SERVICE DESIGN

Reliability
• the ability of a product, a part, a service, or an
entire system to perform its intended function
under a prescribed set of conditions.

 Have impact on repeat sales

 Reflect on the product’s image
 If it is too low, create legal implications

The higher the reliability of a product, the fewer

the resources that will be needed to maintain it.
Failure
 Situation in which a product, part, or system does not perform as
intended
 Example: a smoke alarm might fail to respond to the presence of
smoke

Normal Operating Conditions

 The set of conditions under which an item’s reliability is specified
 Example: using a passenger car to tow heavy loads will cause excess
wear and tear on the drive train
 Robust design
 also called the Taguchi Method, greatly improves engineering
productivity.
 Design that results in products or services that can function over
a broad range of conditions.
 Consider a pair of fine leather boots – obviously not made for
trekking through mud or snow.
 By consciously considering the noise factors (environmental
variation during the product’s usage, manufacturing variation,
and component deterioration) and the cost of failure in the field
the Robust Design method helps ensure customer satisfaction.
 The Degree of Newness
products or service design change can range from the
modification of an existing product or service to an
entirely new product or service.

 Modification of an existing product or service.

 Expansion of an existing product line or service offering.
 A clone of a competitor’s product or service.
 New product or service.
PHASES IN PRODUCT DESIGN AND
DEVELOPMENT
 Feasibility analysis-
 entail market analysis(demand), economic analysis(development cost
and production cost, profit potential), and technical analysis(capacity
requirements and availability, and the skills needed), can answer the
question “Does it fit with the mission?”
 Product specifications-
 involves detailed descriptions of what is needed to meet( or exceed)
customer wants, and requires collaboration between legal, marketing
and operations.
Process specifications-
 alternatives must be weighed in terms of cost, availability of resources,
profit potential, and quality.
 Prototype development-
 units are made to see if there are any problems with the product or
process specifications.
PHASES IN PRODUCT DESIGN AND
DEVELOPMENT
Design review
 making any necessary changes, or abandoning.
 Market test-
 used to determine the extent of consumer acceptance.
Production introduction
 promoting the product.
Follow-up evaluation
 determining if changes are needed, and refining forecasts.
Designing for Production
Concurrent Engineering
Bringing engineering design and manufacturing personnel
together early in the design phase to simultaneously develop
the product and the processes for creating the product.
Computer-Aided Design (CAD)
Uses computer graphics for product design
Can modify an existing design or create a new one on a
monitor by means of a light pen, a keyboard, a joystick, or a
similar device
Production Requirements
Design for Manufacturing (DFM)
 The designing of products that are compatible with an
organizations capabilities
Design for Assembly (DFA)
 Design that focuses on reducing the number of parts in a product
and on assembly methods and sequence.
 A good design must take into account not only how a product
will be fabricated, but also how it will be assembled.
Manufacturability
 The capability of an organization to produce an item at an
acceptable point.
 Sometimes used when referring to the ease with which products
can be fabricated and/or assembled
Thank you for listening!