PRODUCT AND SERVICE DESIGN

The essence of any organization is the products or services it offers. There is an

obvious link between the design of those products or services and the success of the
organization. Organizations that have well-designed products or services are more
likely to realize their goals than those with poorly designed products or services.
Hence, organizations have a vital stake in achieving good product or service design.

Product design refers to designing a product in such a way that it can fulfill those needs of
consumers for which it is consumed. It includes generating new ideas for product
development and manufacturing those products to improve upon current designs.
The goal of all these activities is to develop such a product or service that can satisfy
the customers to maximum extent.

Product or service design majorly affects consumer satisfaction, quality and

production cost.

Consumer Satisfaction:
Product design is linked to consumer satisfaction for obvious reasons. Customers are
linked to an organization for obtaining and using their products or services. They do
not know much details about the operations being performed in the factory therefore
they judge an organization by the type and quality of products they produce.
Therefore, if the product design can fulfill their expectations, they will be more
satisfied with the organization.

Quality:
Quality concept in product design is twofold. One, it refers the material and design
of the product. Secondly, the extent to which the product fulfills (or exceed) those
expectations of customers, better than other products, for which it is used . Which
means, if the design is serving the same purpose that it was intended to serve?

It is achieved if the company have necessary knowledge, skills, equipment, capability

and capacity to produce such a good or service. In goods business, it is known as
manufacturability and in servicing, it is known as serviceability.

Manufacturability: The capability of an organization to produce an item at an acceptable profit.

Serviceability: The capability of organization to provide a service at an acceptable cost of profit.
 
Production Cost:
Production cost is also determined by the materials suggested by design, its process,
the equipment and the labor used for manufacturing. For example, for a high quality
design, if imported material are used on technologically advanced equipment by
highly skilled labor, the production cost will rise.

REASONS FOR PRODUCT OR SERVICE DESIGN

Why organizations have to give a lot of importance to product design? Organizations
become involved in product/service design for variety of reasons. An obvious one is
to be competitive by offering new products or services. If other firms are coming up
with new designs very often, your organization also have to invest time and money
in developing new products to compete with them. Another reason is to make the
business grow and increase profits by adding new products in their production line.
They may also expand the number of customers for an organization leading to an
increased overall market share for the organization.

Furthermore, the best organizations try to develop new products or services as an

alternative to downsizing. When productivity gains results in the need for fewer
workers, the company have two options, either to lay off extra workers, or to make
use of them by creating new jobs. Laying off or downsizing can have negative impact
on employee motivation and commitment. And Developing new products or
services can mean adding jobs. Therefore, organizations can use product
development as an alternative to downsizing.

Sometimes product or service design is actually redesign. Which means that the
already designed product has to be designed again (redesign) to remove any
customer complains. The desire to achieve cost reduction in labor or material can also
be a motivating factor for changing product design. For example, bringing
standardization in product design lowers its costs.

WHY IS PRODUCT DESIGN SO IMPORTANT?

The objective of good design, whether of products or services is to satisfy customers
by meeting their actual or anticipated needs and expectations. This, in turn, enhances
the competitiveness of the organization. Product and service design, therefore, can be
seen as starting and ending with the customer. So the design activity has one
overriding objective: to provide products, services and processes which will satisfy
the operation’s customers.

Product designers try to achieve aesthetically pleasing designs which meet or exceed
customers’ expectations. They also try to design a product which performs well and
is reliable during its lifetime. Further, they should design the product so that it can be
manufactured easily and quickly.

TRENDS IN PRODUCT AND SERVICE DESIGN:

Product and service designing has undergone different trends over the course of
history due to changes in technology and other environmental factors. At present,
following are the recent trends;

1. Increased emphasis on customer satisfaction and increased pressure to be

competitive.
2. Increased emphasis on reducing the time needed to introduce new product or
service.
3. Increased emphasis on reducing the time needed to produce a product or provide
service. Reduced production time usually results in reduced cost and higher
quality.
4. Greater attention to the capabilities of the organization to produce or deliver the
items.
5. Greater attention to environmental concerns. including waste minimization,
Recycling parts, disposal of worn out products and packaging.
6. Increased emphasis on designing products and services that are user friendly.
 OBJECTIVES OF PRODUCT AND SERVICE DESIGN
The objectives of product design and service design differ somewhat, but not as
much as you might imagine. The overall objective for both is to satisfy the customers
while making a reasonable profit. Beyond that, it is crucial for designers to lake into
account the capabilities of the organization to produce a given product or service. In
manufacturing it is referred to as Design for manufacturing (DFM). A more general
term that is used for both manufacturing and servicing is Design for Operations
(DFO).

The operations people must be involved early in the design process to ensure that
design will be compatible with the organizational capabilities. The may also provide
their help to prevent problem before they actually happen. Likewise, it is important
to involve marketing to ensure that customer requirements will be achieved.

In Sum, we can say that the objective of product and service design is to design a product or
service by taking into account the expectations of customers, cost within budget and
capabilities of the organization.

SOME CONSIDERATIONS IN PRODUCT & SERVICE DESIGN

1. Product Life Cycle Strategies.
Most, but not all. products and services go through a series of stages over their useful
life, sometimes referred to as product life cycle as shown in the figure below.

Demand usually varies by phase. Different phases call for different strategies. There
are four phases in total; Introduction, Growth, Maturity and Decline.

Introduction: At this stage, product is new, there is lesser awareness about the
product. Potential buyers expect that the prices will decrease after introductory
phase therefore they do not buy it that much, which results in decreased sales.
Moreover, product design is not changed very often to elevate awareness of same
design. Design is changed only if there are bugs in previous product. Therefore, very
little design changes happen at this stage.
Growth: Overtime, product design is improved by eliminating the bugs and by
improving product performances. Demand grows and product starts production in
bulk which also brings in economies of scale which reduces costs in return. Once
other companies learn that product is being successful, they start producing new
product in different designs. There are lots of design changes at this stage.

Maturity: Gradually, the demand is at its peak and product is said to be at maturity
stage. There are very few design changes at this stage. At this stage, companies try to
establish themselves as a service provider to repair and installation of older products.
Decline: At this stage, no time or money is dedicated to design because product
demand will not grow as a result. Therefore, organizations go for defensive
strategies. However, if a firm wants to rebuild a product, it will have to go through
major changes in design.

Forecasts are necessary at each stage to estimate how long each stage will last so that
production can be matched with the demand.

Length of life cycle is different for different products. Some products go through all
the phases in short time while other take a long time from introduction to decline. It
depends on the basic need and on the rate of technological change. Products that
fulfill basic needs have longer life cycle, on the other hand, if the technology changes
are rapid, life cycle will tend to be short.

For Example; paper clips, knives, spoons, glasses etc have long life cycles whereas
technology gadgets have very short life cycles. E.g. Kindle.

Consider products in various stages of life cycle in music industry, Digital Stores are
in introductory phase, Gadgets are in growth stage, CD and DVDs are in maturity
stage, Cassettes are on a declining stage.

2. Degree of Standardization:
It is the extent to which a product, service or process lacks variety or customization.

Standardization have certain benefits. Standardized products are identical and are
made in large quantities. Which also means they are low cost, their operational
productivity is higher and they are quickly available. They consist of interchangeable
parts (parts that are so precisely made that they do not need custom-fitting). Example of
standardized products are calculators, pencils etc. on the other hand, dry cleaning
are examples of standardized services. Clothes are dry cleaned equally no matter
how dirty they are.

Another benefit of standardization is reduced time and cost to train employees, and
automation of certain tasks or jobs. Like scheduling, job design, inventory handling
become so much routine jobs that they can be automated.

Lack of standardization sometimes leads to certain challenges specially when

different systems are not compatible. For example, PAL and NTSC in television.

Other disadvantages include higher cost due to customization. Secondly, they are
not as customized as unit production system therefore may have lesser appeal to
customers. And Third, manufacturer may freeze (standardize) a design prematurely,
and once frozen, they resist new modifications (customizations).

3. Designing for Mass Customization:

Mass   Customization   is   a   process   of   making   basically   standardized   goods   in   large  
numbers   but   incorporating   some   degree   of   customization.   The   costs   for   this   system   is  
high  and  production  systems  become  more  complicated.  (Car  manufacturers)  
 
Mass  Production  (producing  large  quantities)  and  Customization  (producing  customized  
products)  were  thought  to  be  opposites  of  each  other.  It  is  near  to  impossible  to  produce  
customized   products   in   large   quantities   cost   efficiently,   but   following   tactics   made   it  
possible.    
 
Delayed  Differentiation:    
The   process   of   producing,   but   not   quite   completing,   a   product   or   service   until  
customer  preferences  are  known.  
 
Modular  design:  
Is  a  design  approach  that  subdivides  a  system  into  smaller  parts  called  modules  or  
skids,  that  can  be  independently  created  and  then  used  in  different  systems.    

Computers are an example of modular design, they are made up of lots of

components and customers can choose the specifications of their own choice for
each computer. Yet they are produced in large numbers.

Advantage of modular design is that it is easier to detect an fault in such

products, and disadvantages are higher cost of design and sometimes, in order
to replace one part, the complete system has to be disassembled.

4. Robust Design:
Designing  such  a  product  that  can  work  in  different  environmental  conditions.    

The more robust a product or service is, less likely is it to fail due to change in
environmental conditions. These products become easier to use and handle. For
example: leather boots can not be used in rain, mud or in sports. One the other hand,
rubber boots can be used in rain, mud and for sports therefore it is a robust design.
These are also easier to use and to clean as compared to leather boots.

Taguchi’s Approach to design products or services is based on Robust design.

Genichi Taguchi was a Japanese designer who believed that it is often easier to
design a product that is insensitive to environmental factors than to control the
environmental factors.

5. Degree of Newness:
It refers to, to what extent the product or service possess new ness to the organization
or to the market.

For organizations, low level of newness means that the organization will be able to
quickly and easily shift its production mechanisms to produce new products.
For markets, low level of newness means that acceptability of product in the market
will be higher as compared to those products which are completely different from
previous products. (Insert Slides Table Here)

6. Human Factor:
Product and service designers must consider human factor while designing their
products or service. It refers to how much safety and liability is there in consuming
the products.

These days, Government regulations force the organizations to take these issues
seriously for the safety of consumers and have developed certain legal
considerations in this regard.

For example; Product Liability - A manufacturer is liable for any injuries or damages
caused by a faulty product. On the other hand, car manufacturers have to go through
certain Uniform Commercial Codes to test their vehicles for crashes before making
them available in the market.

7. 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.

WHAT IS DESIGNED IN A PRODUCT OR SERVICE

(Concept, Package, Process)
All products and services can be considered as having three aspects (think of it as
core product, actual product and augmented product)

o A concept, which is the understanding use and value of the product and how
it will fulfill customer need.
o A package consists of actual tangible product, or mixture of services that is
offered to customers to fulfill that specific need.
o The process defines the way in which the component products and services
will be created and delivered by the organization.

For example, for designing a restaurant, the concept is to provide an exotic dinning
experience to people aged between 40 to 60. To do this, they will set up an exotic
theme (table, chairs, walls and interior design). The menu will contain likely items of
food suitable for such people in such environment, This will the package they are
offering. Finally, they way all that food is prepared in the kitchen and training of the
staff and waiters to prepare and serve this food is the process.
 PHASES IN PRODUCT DESIGN AND DEVELOPMENT
Product design and development generally proceeds in a series of phases.

1. Idea Generation:
Product development begins with idea generation. Ideas can come from a variety of
sources. They can be;
i. Customer based.
ii. Competitor Based
iii. Staff Based
iv. Research & Development Based

Customers being the users of the product or service, can come up with something
new to help improve the product. Similarly, other entities of supply chain and
Employees & Staff can also provide valuable insights for new product development
because of their experience in the field with the product.

Competitor Based: A new idea may give a competitor an edge in the marketplace,
even if it is only a temporary one, then competing organizations will have to decide
whether to copy that idea, or alternatively to come up with a better or different idea.
Sometimes this involves reverse engineering, which is, purchasing a competitor’s
product and carefully disassemble and inspect it to find out the science behind the
design.

Research & Development is another source of ideas for new or improved products or
services. Research and development (R&D) refers to organized efforts that are
directed towards increasing scientific knowledge and product or process innovation.

2. Feasibility Analysis:
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). Also, it is necessary to
answer the question, Does it fit with the mission? It requires collaboration among
marketing, finance, accounting, engineering, and operations

3. Product Specifications:
The first task in this stage of design is to define exactly what will go into the product
or service: that is, specifying the components of the package. This will require the
collection of information about such things as the constituent component parts which
make up the product or service package and the component (or product) structure,
the order in which the component parts of the package have to be put together.

When a variety of products are produced, the operations become complex, which, in
turn, increases costs. Designers adopt a number of approaches to reducing the
inherent complexity in the design of their product or service range. This is where the
concept of Standardization and Mudular Design are helpful.

4. Process Specifications:
Once product specifications have been set, attention turns to specifications for the
process that will be needed to produce the product. At this stage, it is necessary to
examine how a process could put together various components to create the final
package (product or service).

It is important to understand is that processes should at least be examined in outline

well before any product or service design is finalized. Various alternative process
must be weighed in terms of cost, availability of resources, profit potential, and
quality.

5. Prototype development:
The objective of this stage is to specify the component products and services in the
package, and defining the processes to create the package that can be used and tested.
One (or a few) Units are made to experience the use of product or service and to
identify any problems in use. If there are any problems they are eliminated and an
improved prototype is developed. This process goes on until final product is formed.

6. Design review
The purpose of this stage in the design activity is to take the preliminary design and
see if it can be improved before the product or service is tested in the market.
Marketing, finance, engineering, design, and operations collaborate to determine
whether to proceed or abandon. (House of Quality is considered in this phase)

7. Market test:
The product is offered to a small number of customers. It is used to determine the
extent of consumer acceptance. If unsuccessful, operations managers return to the
design review phase to change the design according to customer expectations. This
phase is handled by marketing.

8. Product Introduction
This is the stage where product is launched for mass market through extensive
marketing efforts. This phase is handled by marketing to promote the product

9. Follow-up Evaluation
Based on user feedback operations managers determine if the product fulfilled
customers needs sufficiently? Are they satisfied? If changes are needed, they are
incorporated into future models of the product.

DIFFERENCES BETWEEN SERVICE DESIGN & PRODUCT DESIGN

Service operations managers different issues than the issues emerge in Product
operations designs. These include the following:
(Most of it has been covered in Ch1 while differentiating product and service operations)
1. Products are generally tangible; services are generally intangible. Consequently,
service design often focuses more on intangible factors (e.g., peace of mind,
mood, calmness) than does product design.
2. Mostly, services are created and delivered at the same time (e.g., a haircut, a car
wash). In such examples there is less chance of finding and correcting errors
before the customer has a chance to discover them. Therefore, training, process
design, and customer relations are particularly important.
3. Services cannot be inventoried. This poses restrictions on flexibility and makes
capacity issues very important.
4. Services are highly visible to consumers and must be designed with that in mind;
this adds an extra dimension to process design, one that usually is not present in
product design.
5. Some services have low barriers to entry and exit. This places additional
pressures on service design to be innovative and cost-effective.
6. Location is often important to service design, with convenience as a major factor.
Hence, design of services and choice of location are often closely linked.
7. Service systems range from those with little or no customer contact to those that
have a very high degree of customer contact. Here are some examples of those
different types: Insulated technical core; little or no customer contact (e.g.,
software development). Production line; little or no customer contact (e.g.,
automatic car wash). Personalized service (e.g., haircut, medical
service). Consumer participation (e.g., diet program, dance lessons). Self-service
(e.g., supermarket). If there is little or no customer contact, service system design
is like product system design.
8. Demand variability alternately creates waiting lines or idle service resources.
HOUSE
OF
QUALITY