Product and Service Design

Introduction

 Product and service design pays a strategic role in the degree to which an organization is able to
achieve its goals.

 It is a major factor in customer satisfaction, quality and production costs.

 Basis for judging the organization.

 Quality is clearly affected not only by design but also, during production, by the degree to which
production conforms to the intent of design. A key factor in the production of goods is
manufacturability, which refers to the ease with which design features can be achieved by
production.

 Similarly, design affects costs – the cost of materials specified by design, and labor and equipment
costs.

 Production development involves nearly every functional area of an organization to some extent.
However, three functions have major involvement here: marketing, design, and operations.

 It is an Iterative Process. (Iterative Process is a process for calculating a desired result by means of
a repeated cycle of operations)

 Competitive advantage. (competitive advantage is what makes an entity's goods or services

superior to all of a customer's other choices)

 Deploy resources effectively and increase the effectiveness of output.

Major factors in design strategy

 Cost

 Quality

 Time-to-market (Length of time taken in product development process from product idea
to the finished product)

 Customer satisfaction

 Competitive advantage

Product and service design – or redesign – should be closely tied to an organization’s strategy

Product or Service Design Activities

 Translate customer wants and needs into product and service requirements

 Refine existing products and services

 Develop new products and services

 Formulate quality goals

 Formulate cost targets

 Construct and test prototypes

 Document specifications

Reasons for Product or Service Design

 Organizations become involved in product or service design for a variety of reasons. An obvious
one is to be competitive by offering new products or services. Another one is to make the business
grow and increase profits. Furthermore, the best organizations try to develop new products or
services as an alternative to downsizing. (Downsizing is the permanent reduction of a company's
labor force through the elimination of unproductive workers or divisions. Downsizing is a common
 organizational practice, usually associated with economic downturns and failing businesses.)
When productivity gains result in the need for fewer workers, developing new products or services
can mean adding jobs and retaining people instead of letting them go.

 Sometimes product or service design is actually redesign. This, too, occurs, for a number of reasons
such as customer complaints, accidents or injuries, excessive warranty claims, or low demand. The
desire to achieve cost reductions in labor or materials can also be a motivating factor.

 Economic (oil price increase, result in small cars)

 Social and demographic

 Political, liability, or legal

 Competitive threats

 Technological

Trends in product and service design

Over the last few years, the designing of products and services has increased emphasis on a number of
aspects of design. Some of these are strictly related to product design, while others are related to both
product and service design. Among them are the following:

 Increased emphasis on customer satisfaction and increased pressure to be competitive. Total

quality management programs, which have customer satisfaction as their primary focus,
contribute to this.

 Increased emphasis on reducing the time needed to introduce a new product or services.

 Increased emphasis on reducing the time needed to produce a product or provide a service.
Reduced production time usually results in lower cost and higher quality.

 Greater attention to the capabilities of the organization to produce or deliver the item.

 Greater attention to environmental concerns, including waste minimization, recycling parts,

and disposal of worn-out products.

 Increased emphasis on designing products and services that are user-friendly.

Objectives of Product and Service Design

 Main focus

 Customer satisfaction

 Secondary focus

 Function of product/service

 Cost/profit

 Quality

 Appearance

 Ease of production/assembly

 Ease of maintenance/service

Designing For Operations

 Taking into account the capabilities of the organization in designing goods and services

Designers Adhere to Guidelines

 Produce designs that are consistent with the goals of the company
  Give customers the value they expect

 Make health and safety a primary concern

 Consider potential harm to the environment

Legal, Ethical, and Environmental Issues

 Legal

 FDA (Food and Drug Administration) - responsible for the safety of foods and cosmetics,
and safety and efficacy of medicinal drugs and devices. FDA reviews new drug
applications, implements standards, and regulates the sale of restricted drugs.

 OSHA (Occupational Safety Health Agency) - responsible for maintaining standards of

health and safety in workplaces

 IRS (Internal Revenue Services) - bureau of the Department of Treasury that is tasked with
the enforcement of income tax laws and oversees the collection of federal income taxes

 Regulations & Legal Considerations

 Product Liability - A manufacturer is liable for any injuries or damages caused by a faulty
product.

 Uniform Commercial Code - Products carry an implication of merchantability and fitness

 Ethical

 Releasing products with defects

 Environmental

 EPA (Environmental Protection Agency)

Other Issues in Product and Service Design

 Product/service life cycles

 How much standardization

 Product/service reliability

 Range of operating conditions

Life Cycles of Products or Services

Product life cycles

Many new products go through a product life cycle in term of demand. When an item is first introduced,
it may be treated as a curiosity. Demand is generally low because potential buyers are not yet familiar
with the item. Many potential buyers recognize that all of the bugs have probably not been worked out
and that the price may drop after the introductory period. With the passage of time, production and
design improvements usually create a more reliable and less costly product. Demand then grows for
these reasons and because of increasing awareness of the product or service. At the next stage in the
life cycle, the product reaches maturity: there are few, if any design changes, and demand levels off.
Eventually, the market becomes saturated which leads to a decline in demand.

Consider the products in various stages of the life cycle in the music industry: Digital audio tapes are in
the introductory stage, compact disks are in the growth stage, cassettes are moving from the maturity
saturation stage into the decline stage.

Some products do not exhibit life cycles: wooden pencils, paper clips, nails, knives, forks, and spoons,
drinking glasses, and similar items. However, most new products do.

Wide variations exist in the amount of time a particular product takes to pass through a given phase of its
life cycle: some products pass through various stages in a relatively short period; others take considerably
longer. Often it is a matter of the basic need for the item and the rate of technological change. Some
toys, novelty items and style items have a life cycle of less than one year, whereas other, more useful
items, such as clothes washers and dryers, may last for many years before yielding to technological
change.

Standardization

 Standardization - Extent to which there is an absence of variety in a product, service or process

 Standardized products are immediately available to customers

Advantages of Standardization

 Fewer parts to deal with in inventory & manufacturing

 Design costs are generally lower

 Reduced training costs and time

 More routine purchasing, handling, and inspection procedures

 Orders fillable from inventory

 Opportunities for long production runs and automation

 Need for fewer parts justifies increased expenditures on perfecting designs and improving quality
control procedures.

Disadvantages of Standardization

 Designs may be frozen with too many imperfections remaining.

 High cost of design changes increases resistance to improvements.

 Decreased variety results in less consumer appeal.

Mass Customization

 A strategy of producing standardized goods or services, but incorporating some degree of

customization

 Delayed differentiation

 Modular design
Delayed Differentiation

Delayed differentiation is a postponement tactic

 Producing but not quite completing a product or service until customer preferences or
specifications are known

Modular Design

Modular design is a form of standardization in which component parts are subdivided into modules that
are easily replaced or interchanged. It allows:

 easier diagnosis and remedy of failures

 easier repair and replacement

 simplification of manufacturing and assembly

Reliability

 Reliability: The ability of a product, part, or system to perform its intended function under a
prescribed set of conditions

 Failure: 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

Improving Reliability

• Component design

• Production/assembly techniques

• Testing

• Redundancy/backup

• Preventive maintenance procedures

• User education

• System design

Product Design

 Product Life Cycles

 Robust Design

 Concurrent Engineering

 Computer-Aided Design

 Modular Design

Manufacturing Design

The term design for manufacturing (DFM) is also used to indicate the designing of products that are
compatible with an organization’s capabilities. A related concept in manufacturing is design for
assembly (DFA). A good design must take into account not only how a product will be fabricated, but
also how it will be assembled. Design for assembly focuses on reducing the number of parts in an
assembly, as well as the assembly methods and sequence that will be employed.

Environmental regulations and recycling have given rise to another concern for designers, design for
recycling (DFA) (paper, plastic, etc). Here the focus is on designing products to allow for dis-assembly of
used products for the purpose of recovering components and materials for reuse. (e.g. Pepsi, Coca cola,
etc)

Remanufacturing

An emerging concept in manufacturing is to remanufacture products. Remanufacturing refers to

removing some of the components of old products and reusing them in new products. This can be done
by the original manufacturer, or another company. Among the products that have remanufactured
components are automobiles, printers, copies, cameras, computers, and telephones.

There are a number of important reasons for doing this. One is that a remanufactured product can be
sold for about 50% of the cost of a new product. Another is that the process requires mostly unskilled and
semi-skilled workers.

Designing products so that they can be more easily taken apart has given rise to yet another design
consideration: making it easier to take apart used products.

Robust Design

Robust Design: Design that results in products or services that can function over a broad range of
conditions

 Some products will perform as designed only within a narrow range of conditions, while other
products will perform as designed over a much broader range of conditions. The latter have
robust design.

 The more robust a product (or services), the less likely it will fail due to a change in the
environment in which it is used or in which it is performed. Hence, the more designers can build
robustness into the product or service, the better it should hold up, resulting in a higher level of
customer satisfaction.

 Environmental factors can have a negative effect on the quality of product or service. The
more resistant a design is to those influences, the less likely is the negative effect.

Degree of Newness

1. Modification of an existing product/service

2. Expansion of an existing product/service

3. Clone of a competitor’s product/service

4. New product/service

Phases in Product Development Process

1. Idea generation

2. Feasibility analysis

3. Product specifications

4. Process specifications

5. Prototype development

6. Design review

7. Market test

8. Product introduction

9. Follow-up evaluation
Idea Generation

------------------------- Supply chain based (the sequence of

processes involved in the production and distribution of a

IDEAS commodity)

------------------------- Competitor based

------------------------- Research based

Reverse Engineering

Reverse engineering is the dismantling and inspecting of a competitor’s product to discover product
improvements.

Research & Development (R&D)

 Organized efforts to increase scientific knowledge or product innovation & may involve:

 Basic Research advances knowledge about a subject without near-term expectations of

commercial applications.

 Applied Research achieves commercial applications.

 Development converts results of applied research into commercial applications.

Manufacturability

 Manufacturability is the ease of fabrication and/or assembly which is important for:

 Cost

 Productivity

 Quality

Concurrent Engineering

Concurrent engineering is the bringing together of engineering design and manufacturing personnel
early in the design phase.

To achieve a smoother transition from product design to production, and to decrease product
development time, many companies are using simultaneous development, or concurrent engineering. In
its narrowest sense, concurrent engineering means bringing design and manufacturing engineering
people together early in the design phase to simultaneously develop the product and the processes for
creating the product. More recently, this concept has been enlarged to include manufacturing
personnel (e.g. materials specialists) and marketing and purchasing personnel in loosely integrated, cross
functional teams. In addition, the view of suppliers and customers are frequently sought. The purpose, of
course, is to achieve product designs that reflect customer wants as well as manufacturing capabilities.

Computer-Aided Design

 Computer-Aided Design (CAD) is product design using computer graphics.

 increases productivity of designers, 3 to 10 times

 creates a database for manufacturing information on product specifications

 provides possibility of engineering and cost analysis on proposed designs

Recycling

 Recycling: recovering materials for future use

 Recycling reasons

 Cost savings

 Environment concerns

 Environment regulations

Service Design

 Service is an act, something that is done to or for a customer

 Service delivery system - The facilities, processes, and skills needed to provide a service

 Service design involves

 The physical resources needed to perform the service

 The goods that are purchased or consumed by the customer

 Explicit services

 Implicit services

 Product bundle - The combination of goods and services provided to a customer

Differences between Product and Service Design

 Tangible – intangible

 Services created and delivered at the same time

 Services cannot be inventoried

 Services highly visible to customers

 Services have low barrier to entry

 Location important to service

Phases in Service Design

1. Conceptualize

2. Identify service package components

3. Determine performance specifications

4. Translate performance specifications into design specifications

5. Translate design specifications into delivery specifications

Service Blueprinting

 A method used in service design to describe and analyze a proposed service

 A useful tool for conceptualizing a service delivery system

Major Steps in Service Blueprinting

1. Establish boundaries

2. Identify steps involved

3. Prepare a flowchart
 4. Identify potential failure points

5. Establish a time frame

6. Analyze profitability

Characteristics of Well Designed Service Systems

1. Consistent with the organization mission

2. User friendly

3. Robust

4. Easy to sustain

5. Cost effective

6. Value to customers

7. Effective linkages between back operations

8. Single unifying theme

9. Ensure reliability and high quality

Challenges of Service Design

 Variable requirements

 Difficult to describe

 High customer contact

 Service – customer encounter

Quality Function Deployment

 Quality Function Deployment

 Voice of the customer

 House of quality

 QFD: An approach that integrates the “voice of the customer” into the product and service
development process.

 QFD is for Communication, Documentation, Analysis, Prioritization

Operations Strategy

1. Increase emphasis on component commonality

2. Package products and services

3. Use multiple-use platforms

4. Consider tactics for mass customization

5. Look for continual improvement

6. Shorten time to market

Shorten Time to Market

1. Use standardized components

2. Use technology
 3. Use concurrent engineering

Kano Model

The Kano model is a theory for product development and customer satisfaction developed in the 1980s
by Professor Noriaki Kano, which classifies customer preferences into five categories.

The Kano Model is a product or service development theory that helps you to determine which features
you may want to include in a product or service to improve customer satisfaction.

Kano Model’s 5 Categories

The model describes these 5 categories on a set of axis. The y-axis is degree of satisfaction of the
requirement; the x-axis is the level of fulfillment or execution of the requirement by the company. All 5
categories of requirements can be mapped on the axis:

Performance

Simply stated, these are the requirements the customers are able to articulate and are at the top of their
minds when evaluating options. They are the most visible of the model’s requirements and the better they
are performed, the more satisfaction they bring, conversely, the worse they are performed, the more
dissatisfaction they bring. The Professor originally called these “One-Dimensional” because the better you
execute these the more satisfaction from the customer you get.

Basic

Simply stated, these are the requirements that the customers expect and are taken for granted. When
done well, customers are just neutral, but when done poorly, customers are very dissatisfied. Kano
originally called these “Must-be’s” because they are the requirements that must be included and are the
price of entry into a market.

Excitement

Simply stated, these are the requirements that are unexpected and pleasant surprises or delights. These
are the innovations you bring into your offering. They delight the customer when there, but do not cause
any dissatisfaction when missing because the customer never expected them in the first place. Kano
originally called these “Attractive or Delighters” because that’s exactly what they do.

Indifferent

Simply stated, these are the requirements that the customers simply don’t care if they are present or
absent, their satisfaction remains neutral under either circumstance.

Reverse

Simply stated, these are the requirements that cause dissatisfaction when present and satisfaction when
absent. These are very rare but do happen occasionally.