I.

Date:
January 10, 2019
II. Objective:
 Discuss the activities, reasons, objectives and issue in product and service
design
 Briefly describe the phases in product design and development
 Explain various topics in service design such as phases of the process,
characteristics, challenges and some guidelines.

III. Discussion:

Introduction

What does Product and Service Design do?

The various activities of product and service design includes (1) Translate
customer wants and needs into product and service requirements, (2) refine existing
products and services, (3) develop new products and/or services, (4) formulate quality
goals, (5) formulate cost targets, (6) construct and test prototype, (7) determine
specification.

Reasons for Product and Service Design or Redesign?

Product and Service Design has a strategic implications that has an impact to
future activities for the success and prosperity of an organization. The main reason why
organization undergo product and service design or redesign are market opportunities
and threats. The factors that give rise to market opportunities and threats are: (1)
economic, in terms of supply and demand, excessive warranty claims, and the needs to
reduce cost, (2) social and demographic which includes those baby boomers and
population shift that cause some opportunities and threats, (3) political, liability, or legal
whenever there are some government changes, safety issues, and even new
regulations, (4) competitive, whenever there is new or changed products or services,
new advertising or promotions, (5) cost or availability for example of raw materials,
components, and labor, and lastly is (6) technological in product components and
processes. Technological changes can create a need in product and services design. A
new technology can directly and indirectly affect the product and services design in
terms of application. Direct when an invention is being made and indirectly when an
advancement required altering the existing design.

Value Analysis
Value Analysis refers to an examination of the function of parts and materials in
an effort to reduce the cost and/or improve the performance of a product. Some
questions to be asked in value analysis will be could be a cheaper material be used, is
this part necessary, can this 2 or more parts can be replaced by a single part, can this
part be simplified or substituted, what will happen if a standard part replaced by a non
standard part, etc.

Objectives of Product and Service Design

The main focus of product and service design is customer satisfaction and in
order to achieve this focus is getting the needs and wants of customer and by getting
this information, marketing is the primary source.
Profit is not only the measure of design effectiveness it also include development
time and cost, product or service cost and quality. Quality is in the highest priorities of
the firm. When the quality is good, it is enough for the product to stand out alone. The
second one relates to function, cost, and potential profit, appearance, assemble, etc. It
is often called as designing for operations. It is crucial to management to take account
in operation capabilities in organization to achieve design that will fit those capabilities.
Failure to take these considerations will lead to reduced quality and productivity and
increased cost.
Organizations generally want designers to adhere to guidelines such as the following:
· Produce designs that are consistent with the goals of the organization. For instance,
if the company has a goal of high quality, don't cut corners to save cost, even in
areas where it won't be apparent to the customer.
· Give customers the value they expect
· Make health and safety a primary concern. At risk are employees who will produce
goods or deliver services, workers who will transport the products, customer who will
use the product or receive the services, and the general public, which might be
endangered by the product or services.
· Consider potential to harm the environment.

Other Issues in Product and Service Design

Aside from legal, environmental, and other ethical issues, designers must also
take into account product or service life cycle, how much standardization to incorporate,
product or service reliability, and the range of operating conditions under which a
product or service must function.
1. Life Cycle

Many new products and services go through a life cycle in terms of demand. When a
product is introduced, it may or will be treated as a curiosity. Demand is low because
potential buyers are not yet familiar with the product. Buyers are hoping that the price
may drop after the introductory period. Capacity and processing are designed for low
volume. After a certain time, design improvements usually create a more reliable and
less costly output. Demand grows because of the improvements of the product. At the
next stage in the life cycle, the product or service reaches maturity: there are few design
changes, and demand levels off. Eventually, the market becomes saturated, which
leads to a decline in demand. In the last stage of a life cycle, some firms adopt a
defensive research posture whereby they attempt to prolong the useful life of a product
or service by improving its reliability, reducing costs, redesigning it , or changing the
packaging. In some instances, firms may seek alternative uses of their products.

Legal, Ethical, and Environmental Issues

Designers must take into account in the wide range of legal and ethical issues. If
there is a potential harm in the environment, the issues is important too. In some
countries, there are government agencies who regulate them. They are responsible for
national health and safety, food and drugs, and environmental protection.
Product liability is the responsibility of a manufacturer for any damages and
injuries because of poor workmanship or design. It can be an incentive for design
improvements. Manufacturer are also faced with implied warranties. Merchantability and
fitness is an implication that a product must carry It means product must be usable for
its intended purpose.
It is extremely important to design a product that are reasonably free of hazard.
When hazard exists, it is important to install safety guards to reduce potential accidents.
Managers also need to take considerations of ethical standards. Designers are
often pressured by speed up process and to cut costs. Sometimes, the pressure
requires the to make trade-off decisions that will involve ethical considerations.

Standardization
Standardization is the absence of variety in product, process, and services.
Standardized products are made in large quantities of identical product. Standardization
has also benefits and disadvantages. One if it is easily available to customers. It has
lower cost but higher level of productivity. Design costs are generally lower. Another
benefit is that it reduces time and costs to train employees and reduced time to design
jobs.
Standardization has also disadvantages. One is it lacks variety. Customers have
limited choices. They accept the product because they do not have more choices. It
creates competitors advantage in introducing new product and variations. Another
disadvantage is manufacturers may freeze design prematurely and once it becomes
frozen, it may find compelling reasons for design modification.
 Designing for Mass Customization
Companies like standardization because it enables them to produce high
volumes of relatively low-cost products, albeit products with little variety. Customer, on
the other hand, typically prefer more variety, although they like the low cost. In this
issue, the answer, at least for some companies is mass customization, a strategy of
producing standardized good or services, but incorporating some degree of
customization in the final product or service. Several tactics make this possible.
1. Delayed differentiation
It is a postponement tactic, the process of producing, but not quite
completing, a product or service, postponing completion until customer
preferences or specifications are known.
2. Modular design
It is a form of standardization.Modules represent groupings of component
parts into sub-assemblies, usually to the point where the individual parts lose
their separate identity.
Advantages:
 Failures are often easier to diagnose and remedy because there
are fewer pieces to investigate.
 Ease of repair and replacement; the faulty module is conveniently
removed and replaced with a good one.
Disadvantages:
 The number of possible configurations of modules is much less
than the number of possible configurations based on individual
components.
 The inability to disassemble a module in order to replace a faulty
part;the entire module must be scrapped--usually at a higher cost
.
Reliability
It is a measure of the ability of a product, a part, a service, or an entire system to
perform its intended function under prescribed set of conditions. It also can have impact
on repeat sales, reflect on the product’s image, and, if it is too low, create legal
implications.
The term failure is used to describe a situation in which a product, part, or
system does not perform as intended. This includes the instances in which the item’s
performance is substandard or its functions in a way not intended.
Reliabilities are always specified with respect to certain conditions, called normal
operating conditions. These can include load, temperature, and humidity ranges as
well as operating procedures and maintenance schedules Failure of users to heed
these conditions often results in premature failure of parts or complete systems.

Potential ways to improve reliability

 Improve component design
 Improve production and/or assembly techniques
 Improve testing
 Use backups
 Improve preventive maintenance procedures
 Improve user education
 Improve system design

Robust Design
Some products or services will function as designed only within a narrow range
of conditions, while others will perform as designed over a much broader range of
conditions. The latter have robust design. The more robust a product or service, the
less likely it will fail due to a change in the environment in which it is used or in which it
is performed.
Japanese engineer Genichi Taguchi’s approach is based on the concept of
robust design. His premise is that it is often easier to design a product that is insensitive
to environmental factors. Either in manufacturing or in use, than to control the
environmental factors.

The Degree of Newness

Product or service design change can range from:
1. Modification of an existing product or service.
2. Expansion of an existing product line or service offering.
3. Clone of a competitor's product or service.
4. New product or service.
Cultural Differences
Product designers in companies that operate globally also must take into account
any cultural differences of different countries or regions related to the product. This can
result in different designs for different countries or regions.

Global Product Design

Original Equipment Manufacturer (OEM)- company that designs and builds
product based on its own specifica-tions, then sell it to another company for
branding and distribution.
Original Design Manufacturer (ODM)- company designs and manufactures a
product according to the purchaser's specifications and brand.
Original Brand Manufacturer (OBM)- company which sells an entire product or
component that is manufactured by a second company under its own brand
label.

Phases in Product Design & Development

1. Idea generation
Product development begin with idea generation. Ideas can come from a variety
of sources.
a. Supply chain – A supply chain can be rich of ideas. Customers, Suppliers,
Distributors, employees, and maintenance and repair personnel can provide
valuable insights. Customer input can be obtained from surveys, focus groups,
complaints and unsolicited suggestions for improvement. Input from suppliers,
distributors, employees and maintenance or repair personnel might come from
interviews, direct or indirect suggestions, or complaints.
b. Competitor based – One of the strongest motivators for new and improved
product or services is competitors’ products and services. By studying a
competitor’s products or services and how the competitor operates (Pricing
policies, Return policies, warranties, location strategies, etc.), an organization
can glean many ideas. Some companies purchase a competitor’s product then
carefully dismantle and inspect it, searching for ways to improve their own
product. This is called reverse engineering.
c. Research based – Research and Development refers to organized efforts
that are directed toward increasing scientific knowledge and product or
process innovation. The benefits of R&D can be tremendous. Some research
leads to patents, with the potential of licensing and royalties.
 Reverse Engineering
Some companies purchasde a competitor's product and carefully
dismantle and inspect it, searching for ways to improve their own product
 Research And Development (R&D)
Refers to organized efforts that are directed toward increasing scientific
knowledge and product or process innovation.
2. 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).
3. Product specifications
This involves detailed description of what is needed to meet (exceed) customers
want, and requires collaboration between legal, marketing and operation.
4. Process specifications
Once product specifications have been set, attention turns to specifications for
the process 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.
5. Prototype development
With product and process specifications complete, one (or a few) units are made
to see if there are any problems with the product or process specifications.
6. Design review
Make any necessary changes, or abandon. Involves collaboration among
marketing, finance, engineering, design and operations.
7. Market test
A market test is used to determine the extent of consumer acceptance. If
unsuccessful, return to design review phase. The phase is handled by marketing.
8. Product Introduction
Promote the product. This phase is handled by marketing.
9. Follow-up Evaluation
Determine if changes are needed and refined forecast.

Designing for Manufacturing

Concurrent engineering
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. 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.

Computer-Aided Design
CAD uses computer graphics for product design. The designer 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 design.

Production Requirement.It helps in choosing design that match the capabilities.

  Design for Manufacturing (DFM)- designing of products that are
compatible with an organization's capabilities.
 Design for Assembly (DFA)- design that focuses on reducing the
number of parts in a product and on assembly methods and sequence.
 Manufacturability- ease of fabrication and/or assembly.
Recycling is sometimes an important consideration for designers. Recycling
means recovering materials for future use. This applies not only to
manufactured parts, but also to materials used during production, such as
lubricants and solvents. Companies recycle for a variety of reasons, including:
1.) Cost Savings
2.) Environmental Concerns
3.) Environmental Regulations
The pressure to recycle has given rise to the term Design for Recycling (DFR),
referring to product design that takes into account the ability to disassemble a used
product to recover the recyclable parts.
An emerging concept in manufacturing is the remanufacturing of products.
Remanufacturing refers to refurbishing used products by replacing worn-out or defective
parts, and reselling the products. This can be done by the original manufacturer or
another company. Among the products that have remanufactured components are
automobiles, printers, copiers, cameras, computers and telephones.
There are a number of reasons for doing this. One is that remanufactured
product can be sold for about 50 percent of the cost of a new product. Another is that
the process requires mostly unskilled ad semiskilled workers.
Design for Disassembly (DFD) includes using fewer parts and less material,
and using snap-fits where possible instead of screws or nuts and bolts.
Value Analysis refers to an examination of the function of parts and materials in
an effort to reduce the cost and/or improve the performance of a product.
Companies often have multiple products or services to offer customers. Often,
these products or services have a high degree of similarity of features and components.
Component Commonality refers to a situation in which a component is common to
more than one item.
Quality function deployment (QFD) is a structured approach for integrating the
“voice of the customer” into the product or service deployment process. Listening to and
understanding the customer is the central feature of QFD.

The structure of QFD is based on a set of matrices. The main matrix relates
customer requirements (what) and their corresponding technical requirements (how).

Additional features are usually added to the basic matrix to broaden the scope of
analysis. Typical additional features include importance weightings and competitive
evaluations. A correlational matrix is usually constructed for technical requirements.
Target values for technical requirements are added. With these additional features, it is
often referred to as the house of quality because of its house like appearance.
 The data relate to a commercial printer (customer) and the company that
supplies the paper. To start, a key part is the list of customer requirements on the left
side of the figure. Next, note the technical requirements, listed vertically near the top.
The key relationships and their degree of importance are shown in the center of the
figure. The circle with a dot indicates the strongest positive relationship; that is, it
denotes the most important technical requirement for satisfying the customer
requirement. Designers will take into account the importance values and the strength of
relationship in determining where to focus the greatest effort.
Next, consider the correlation matrix at the top of the “house”. Designers will
have to find some way to overcome that or make a trade-off decision. On the right side
of the figure is a competitive evaluation comparing the company’s performance on the
customer requirements with each of the two competitors.
Across the bottom are importance weightings, target values, and technical
evaluations. The technical evaluations can be interpreted in a manner similar to that of
the competitive evaluations. The target values typically contain technical specifications
that are the result of the QFD process. The importance weightings are the sums of
values assigned to the relationships times importance to customer. The importance
weightings and technical and competitive evaluations help designers focus on desired
target values.
 The house of quality approach involves a sequence of “houses”, beginning with
design characteristics, which leads to specific components, then production processes,
and finally, a quality plan. It provides a conceptual understanding of the progression
involved.

The Kano model breaks down the customer requirements into three categories:
“must have” characteristics, “expected” characteristics, and “excitement” characteristics.
The “must have” characteristics are those that yield a basic level of satisfaction, but do
not have the potential for increasing customer satisfaction beyond a certain level. In
contrast, the “expected” characteristics in a design will yield a steady increase in
customer satisfaction. However, the greatest yield comes from “excitement”
characteristics, perhaps evoking a “wow” from customers. These characteristics
generate a disproportionate increase in customer satisfaction.

Service Design
There are many similarities between product and service design, but there also
differences as well. One major difference is that unlike in manufacturing, where
production and delivery are usually separated in time, services are usually created and
delivered simultaneously.
Service refers to an act, something that is done to for a customer. It is provided
by a service delivery system, which includes the facilities, processes and skills needed
to provide the service. Many services are not pure services, but part of product
bundle- combination of goods and services provided to a customer. The ability to
create and deliver reliable customer-oriented service is often the key competitive
differentiator.
System design involves development or refinement of the overall service
package:
1. The physical resources needed.
2. The accompanying goods that are purchased or consumed by the customer, or
provided with the service.
3. Explicit services
4. Implicit services
Service design begins with a choice of service strategy, which determines the
focus and nature of the service and the target market. This requires an assessment by
the top management of the potential market and profitability of a particular service and
an assessment of the organization to provide the service.
• Two key issues in service design:
1. The degree of variation in service requirements.
2. The degree of customer contact and customer involvement in the delivery
system.
These two have an impact on the degree of service standardization or the
service can be customized. The lower the degree of customer contact and service
requirement variability, the more standardized the service can be. Service design that
has no contact and little or no processing variability is very much like product design.
High variability and high customer contact generally mean the service must be highly
customized.

Difference between Service Design and Product Design

1. Products are generally tangible; service is generally intangible. Service design
often focuses more on intangible factors that product design.
2. Services are created and delivered at the same time. Consequently, training,
process design and customer relations are particularly important.
3. Services cannot be inventoried. Since it’s a tangible thing given to the customers
this poses restriction on flexibility and make capacity issues very important.
4. Services are highly visible to consumers and must be designed with that in mind.
This adds extra dimension which is not present in product design.
5. Some services have low barriers to entry and exit. This places additional
pressure on service design to be innovative and cost-effective.
6. Location is often important to service design, with convenience as a major factor.
7. Service system range from those with little or no customer contact to those that
have a very high degree of customer contact.
8. Demand variability alternately creates waiting lines or idle service resources.
When demand variability is a factor, designers may approach service design
from one of the two perspectives namely:
 1. Cost and efficiency perspective- essentially a “product design approach” to
service design. Customer participation makes both quality and demand
variability more difficult to manage, designers tend to limit the customer
participation in the process.
• Risk of negatively altering the customers’ perception of quality
1. Reducing consumer choices make service more efficient but it also be both
frustrating and irritating for the customer.
2. Standardizing or simplifying certain elements of service.
3. Incorporating flexibility in capacity management.
2. Customer perspective- this requires the understanding of the customer
experience and focusing on how to maintain control over service delivery to
achieve customer satisfaction. It also involves determining consumer wants and
needs in order to understand relationship between service delivery and
perceived quality.

Phases in the Service Design Process

As you can see, they are quite similar to the phases of product design except
that the delivery system also must be designed.
1. Conceptualized
Idea generation
Assessment of customers needs and wants (marketing)
Assessment of demand potential (marketing)
2. Identify service package components needed(operations and marketing)
3. Determined performance specifications(operations and marketing)
4. Translate performance specifications into design specifications
5. Translate design specifications into delivery specifications

Service Blueprinting
Service blueprinting is a useful tool for conceptualizing a service delivery system.
It is a method for describing and analyzing a service process. Like an architectural
drawing but instead of showing building dimensions it shows the basic customer and
service actions involved in service operations. It is a method used in service design to
describe and analyze a propose service.

Major steps in service blueprinting

1. Establish boundaries for the service and decide on the level of the detail needed.
2. Identify and determined the sequence of customer and service actions and
interaction. A flowchart can be a useful tool for this.
3. Develop time estimates for each phase of the process, as well as time variability.
4. Identify potential failure points and develop a plan to prevent or minimize them,
as well as a plan to respond to service errors.
Characteristics of Well- Designed Service Systems
1. Being consistent with the organization mission.
2. Being user friendly.
3. Being robust if variability is a factor.
4. Being easy to sustain.
5. Being cost- effective.
6. Having value that is obvious to customers.
7. Having effective linkage between back-of-the-house and front-of-the-house.
Front operations should focus on customer service, while back operations
should focus on speed efficiency.
8. Having a single unifying theme, such as convenience or speed.
9. Having design features and checks that will ensure service that is reliable and of
high quality.

Challenges of Services Design

1. There are variable requirements. This creates a need for a robust design that will
accommodate a range of inputs and perhaps a range of outputs.
2. Services can be difficult to describe. By their nature, verbal descriptions can be
somewhat imprecise.
3. Customer contact is usually much higher in services.
4. Service design must take into account the service-customer encounter. There
can be a relatively large number of variables to deal with in the service
customer encounter.

Guidelines for Successful Service Design

1. Define the service package in detail. A service blueprint may be helpful for this.
2. Focus on the operation for the customer perspective. Consider how customer
expectations and perceptions are manage during and after the service.
3. Consider the image that the service package will present both customers and
prospective customer.
4. Recognize the designer familiarity with the system may give them quite different
perspective than that of customer and take steps to overcome this
5. Make that the managers are involved and will support the design once it is
implemented.
6. Define quality for both tangibles and intangibles. Intangibles standards are more
difficult to define, but they must be addressed.
7. Make sure that recruitment, training and reward policies are consistent in service
expectations.
8. Establish procedures to handle both predictable and unpredictable events.
9. Establish systems to monitor, maintain, and improve service.

Operations Strategy
 Product and service design is a fertile area for achieving competItive advantage
and/or increasing customer satisfaction.
1. Increasing emphasis on component commonality.
2. Packaging prodicts and ancillary service to increase sales
3. Using multiple-use platforms
4. Implementing tactics that will achieve the benefits of high volume while satisfying
customer needs for variety such as mass communications
5. Continually monitoring products and services for small improvements rather than
the “big bang” approach.
6. Shortening the time it takes to get new or redesigned goods and services to the
market

A key competitive advantage of some companies is their ability to bring new

products to the market more quickly than their competitors.Companies using this “first-
to-market” approach are able to enter markets ahead of their competitors allowing
them to set higher selling prices than otherwise due to absence of competition. Such
strategy is also a defense against competition from cheaper “clones” because the
competitors always have to play “catch up”

From a design standpoint, reducing the time to market involves

1. Using standardized components to create new but reliable products
2. Using technology such as computer-aided design equipment to rapidly design new or
modified products
3. Concurrent engineering to shorten engineering time

IV. References:
Operations Management by William Stevenson