4

Product and
Service Design

McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
 Product and Service Design

▪ Major factors in design strategy

▪ Cost
▪ Quality
▪ Time-to-market
▪ Customer satisfaction
▪ Competitive advantage

Product and service design – or redesign – should be

closely tied to an organization’s strategy

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Product or Service Design Activities
1. Translate customer wants and needs
into product and service requirements
2. Refine existing products and services
3. Develop new products and services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications

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 Reasons for Product or Service
Design

▪ Economic
▪ Social and demographic
▪ Political, liability, or legal
▪ Competitive
▪ Cost or availability
▪ Technological

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 Objectives of Product and
Service Design
▪ Main focus
▪ Customer satisfaction
▪ Understand what the customer wants
▪ Secondary focus
▪ Function of product/service
▪ Cost/profit
▪ Quality
▪ Appearance
▪ Ease of production/assembly
▪ Ease of maintenance/service

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 Other Issues in Product and
Service Design
▪ Product/service life cycles
▪ How much standardization
▪ Mass customization
▪ Product/service reliability
▪ Robust design
▪ Degree of newness
▪ Cultural differences

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 Life Cycles of Products or Services
Figure 4.1

Saturation

Maturity
Deman

Decline
Growth
d

Introduction

Time

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

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 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
▪ Quality is more consistent

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 Advantages of Standardization
(Cont’d)

▪ 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.

See “paring parts to pump profits”

article
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 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.

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 Mass Customization

• Mass customization:
▪ A strategy of producing standardized
goods or services, but incorporating some
degree of customization.
▪ Mass customization is a concept where
customers are provided unique custom-
made products at the mass production
prices.

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 Advantages of Mass Customization

1. Happy and satisfied customers.

2. Enhanced reputation of the company.
3. Increased revenue.
4. Your workforce gets to showcase their creativity.
5. Lower inventory and unsold goods.
6. less wastage of raw material
7. Less or zero chances of cancellation.
8. Fast and efficient production process.
9. Get to know your customer better.

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 Disadvantages of Mass Customization

1. Tiring process of figuring out what customer wants.

2. The constant process of thinking about creative and
innovative ideas to please customers.
3. Keeping and maintaining stock of the variety of material.
4. Tiring process of convincing customers for the higher price
charged.
5. Difficult to get the estimate for product demand.
6. Need for highly flexible production technology and
machinery.
7. Expenses of maintaining direct customer relationship.

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 Delayed Differentiation
• Delayed differentiation or Postponement is
a concept where the manufacturing process
starts by making a generic or family product
that is later differentiated into a specific end-
product.
▪ Producing but not quite completing a
product or service until customer
preferences or specifications are known.

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▪ For example, you offer an item in red, orange,
green, black, and white. If you're using delayed
differentiation, you can, instead of ordering 100
items of each color to keep in your inventory, order
only white ones to keep in stock.

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 Modular Design

Modular design is a form of standardization

in which component parts are subdivided
into modules that are easily replaced or
interchanged. This allows designs to be
customized, upgraded, repaired and for
parts to be reused.It allows:
▪ easier diagnosis and remedy of failures
▪ easier repair and replacement
▪ simplification of manufacturing and assembly

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 Modular Design
▪ A computer is one of the best examples of
modular design. Typical modules include
power supply units, processors, mainboards,
graphics cards, hard drives, and optical
drives. All of these parts should be easily
interchangeable as long as the user uses
parts that support the same standard
interface.

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 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

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 Improving Reliability

• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design

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 Robust Design

Robust Design: Design that results in products or

services that can function over a broad range of
conditions.

In order to meet customer expectations, companies

often engage in robust product design which is
the process of trying to reduce variations in
finished products. In other words, it is the process
of making sure that finished products maintain their
consistency even when factors interfere with the
production process

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Robust design

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 Phases in product design and
development
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development evaluation
6. Design review
7. Market test
8. Product introduction
9. Follow-up
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 Service Design

▪ Service is an act
▪ Service delivery system
▪ Facilities
▪ Processes
▪ Skills
▪ Many services are bundled with products

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 Service Design
▪ Service
▪ Something that is done to or for a customer
▪ 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
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 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
▪ Range of service systems
▪ Demand variability
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 Phases in service design
process
1. Conceptualize.
▪ Idea generation
▪ Assessment of customer wants/needs (marketing)
▪ Assessment of demand potential (marketing)
2. Identify service package components needed (operations
and marketing).
3. Determine performance specifications (operations and
marketing).
4. Translate performance specifications into design
specifications.
5. Translate design specifications into delivery specifications.

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 Service Blueprinting

▪ Service blueprinting
▪ A method used in service design to describe
and analyze a proposed service
▪ A useful tool for conceptualizing a service
delivery system

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 Service Mapping/Blueprinting
▪ A tool for simultaneously depicting the
service process, the points of customer
contact, and the evidence of service from the
customer’s point of view.
Process

Service Points of Contact

Mapping
Evidence

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 Express Mail Delivery Service
Truck Truck
Packaging Packaging
Forms Forms
EVIDENCE
CONTACT PERSON CUSTOME PHYSICAL

Hand-held Hand-held
Computer Computer
Uniform Uniform

Customer Customer Receive

Calls Gives Package
Package
(Back Stage) (On Stage) R

Driver
Picks Deliver
Up Pkg. Package

Customer
Service
Order

Airport Fly to
Dispatch Unload Load
Driver
Receives Sort Fly to
& On
& Loads Center Destinatio Sort Truck
SUPPORT
PROCESS

Load on
Airplane
n

Sort
Packages

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 Building a Service Blueprint

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

Identify the Identify the Map the Map Link Add

process to customer process contact customer evidence
be blue- or from the employee and contact of service
printed. customer customer’s actions, person at each
segment. point of onstage activities to customer
view. and back- needed action
stage. support step.
functions.

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