PRODUCT AND

SERVICE
DESIGN
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.
 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; labour)
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 cell
phones. 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.
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 DENR and various
local agencies and NGOs.
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
1. Life cycles- is the stages through which a
product or its category bypass.
2. Standardization- the extent to which there is
absence of variety in a product, services or
process.
2.1. mass customization- a strategy of
producing standardized goods or services, but
incorporating some degree of customization in
the final product or services.
2.2. delayed differentiation- the process of
producing but not quite completing.
 2.3. modular design- modules represent
groupings of component parts into
subassemblies.
3. Reliability- is 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.
4. Robust design- also called the Taguchi
Method, greatly improves engineering
productivity. 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.
5. 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.
o Modification of an existing product or service.
o Expansion of an existing product line or
service offering.
o A clone of a competitor’s product or service.
o New product or service.
5. Cultural differences- products design in
companies that operate globally also must take
into account any cultural differences of different
countries or regions related to the product,
6. Global Product design- are development could
be a more sustainable solution; as a part of
Globalization.
PHASES IN PRODUCT DESIGN
AND DEVELOPMENT
1. Idea Generator- product development begins
with ideas.
2. 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), cn answer
the question “Does it fit with the mission?”
3. Product specifications- involves detailed
descriptions of what is needed to meet( or
exceed) customer wants, and requires
collaboration between legal, marketing and
operations.
4. Process specifications- alternatives must be
weighed in terms of cost, availability of
resources, profit potential, and quality.
5. Prototype development- units are made to see
if there are any problems with the product or
process specifications.
6. Design review- making any necessary
changes, or abandoning.
7. Market test- used to determine the extent of
consumer acceptance.
8. Production introduction- promoting the
product.
9. Follow-up evaluation- determining if changes
are needed, and refining forecasts.
SERVICE
DESIGN
Service. refers to an act, something that is done
for the customers.
Service delivery system. The facilities,
processes; and skills needed to provide a service.
Product bundle. The combination of goods and
services provided to a customer.
Service package. The physical resources needed
to perform the service, the accompanying goods,
and the explicit and implicit services needed.
 OVERVIEW OF SERVICE
DESIGN

Service design begins with the choice of a

service strategy, which determines and focus
on the service , and the target market.
DIFFERENCES BETWEEN
SERVICE DESIGN AND
PRODUCT DESIGN
Service operations managers must
contend with issues that may be
insignificant or non-existent for
managers in a production setting.
These includes the following:
1. Products are generally tangible; services are
generally intangible.
2. Oftentimes services can be created and at the
same time delivered. (haircut; carwash)
3. Services cannot be inventoried.
4. Services are highly visible to the customers
and must be designed with that in mind. (spa)
5. Some services have low barriers to entry and
exit.
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.
 PHASES IN THE
SERVICE DESIGN
PROCESS
1. Service blue printing- a method used in a
service design to describe and analyse a
proposed service.
2. Characteristics of well-designed service
system
 being consistent with the organization
mission.
Being user friendly.
Being robust of variability is a factor.
Being easy to sustain
Being cost- effective.
3. Challenges of service design- service design
presents some special challenges that are less
likely to be encountered in product design, in
part, because service design also involves design
of the delivery system.
 GUIDELINES FOR
SUCCESSFUL SERVICE
DESIGN
1. Define the service package in detail.
2. Focus on the operation from the customer
perspective.
3. Consider the image that the service package
will present.
4. Recognize the designer familiarity with the
system.
5. Make sure that managers are involved and
will support the design once it is
implemented.
6. Define quality for both tangible and
intangibles.
7. Make sure that recruitment, training and
reward policies are consistent with service
expectations.
8. Established procedures to handle both
predictable and unpredictable events.
9. Establish systems to monitor, maintain and
improve service
 OPERATION
STRATEGY
Product and service design is a futile area for
achieving competitive satisfaction. Potential
sources of such benefits include the
following:
1. Increasing emphasis on component
commonality.
2. Packaging products 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.
5. Continually monitoring products and service
for small improvements.
6. Shorten the time it takes to get new or
redesign goods and services to the markets.
 “No matter how different one
may be to another, the fact that we
all work out for the good of other,
can be the start of our similarity.”
 REFERENCE:
OPERATIONS MANAGEMENT
9TH EDITION ; pp. 123-157
BY WILLIAM J. STEVENSON
 PRESENTED BY:

FALCIS, MARY GRACE

L.
JOAQUIN, EUGENIA
JOSEPHINE J.
MEDINA, JERONE