PRODUCT AND SERVICE DESIGN

What does product and service design do?

1. Translate customer wants and needs into product and service requirements (marketing,
operations)
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 prototypes
7. Document specifications

Product and service design have typically had strategic implications for the success and prosperity of an
organization. The 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:

a. Economic (low demand, excessive warranty claims, the need to reduce costs)
b. Social and demographic (aging baby boomers, population shifts)
c. Political, liability, or legal (government changes, safety issues, new regulations)
d. Competitive (new or changed products or services, new advertising and promotions)
e. Cost or availability (raw materials, components, labor)
f. Technological (product components, processes)

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 the products.

Overview of value analysis

1. Select an item that has a high annual dollar volume. This can be material, a purchased item or a
service
2. Identify the function of the item.
3. Obtain answers to these kinds of questions:
a. Is the item necessary; does it have a relative value; can it be eliminated/
b. Are there alternative sources for the item?
c. Can the item be provided internally?
d. What are the advantages and disadvantages of the present arrangement?
e. Could another material, part, or service be used instead?
f. Can specifications be less stringent to save cost of time?
g. Can two or more parts be combined?
h. Can more/less processing be done on the item to save cost or time?
i. Do suppliers/providers have suggestions for improvements?
j. Do employees have suggestions for improvements?
k. Can packaging be improved or made less costly?
4. Analyze the answers obtained as well as answers to other questions that arise, and make
recommendations.
 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,
more immediate measures come into play. These typically include development time and cost, the
product and service cost, and the resulting product or service quality. Quality is typically high on the
list of priorities on product and service design. At one time, having high quality was enough for a
product and service to standout; now it is the norm, and product and services that fall below this
norm are the ones that stand out.

For many electronic products, high tech appearance is a design factor. Secondary focuses in product
and service design relate to function, cost and potential profit, quality, appearance, forecasted
volume, ease of production, ease of assembly, and ease of maintenance or service. It is crucial for
designer to take into account the operations capabilities of the organization in order to achieve
designs that fit with those capabilities. This sometimes referred to as designing for operations.

Designing for operations is taking into account the capabilities of the organization in designing goods
and services.

Product liability is the responsibility of the manufacturer for any injuries or damages caused by a
faulty product. It happens because of poor workmanship or design.

It is extremely important to design products that are reasonably free of hazards. When hazards do
exist, it is necessary to install safety guards or other devices for reducing accident potential, and to
provide adequate warning notices of risks. Consumer groups, business firms, and various
government agencies often work together to develop industry-wide standards that help avoid some
of the hazards.

Organizations generally want designers to adhere to guidelines such as the following:

1. Product 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.
2. Give customers the value they expect.
3. Make health and safety a primary concern
4. Consider potential to harm the environment

Other issues in product and service design

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

Life cycles. Many new products and services go through a life cycle in terms of demand.

Life cycle – incubation, growth, maturity and decline

Standardization is the extent to which there is absence of variety in a product, service or process.

-Standardized products are made in large quantities of identical items; calculators, computers, and non-
fat milk are examples.

-Standardized services imply that every customer or item processed receives essentially the same
service.

Advantages:

 Fewer parts to deal with in inventory and manufacturing

 Reduced training cost 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:

 Difficult to develop a product that must satisfy the need of many different customers.
 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 is a strategy of producing basically standardized goods, but incorporating some
degree of customization. Several tactics made it possible

a. Delayed differentiation 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.
b. Modular design is a form of standardization. Modules represent groupings of component parts
into subassemblies, usually to the point where the individual parts lose their separate identity.

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. The importance of reliability underscored by its
use of prospective buyers in comparing alternatives and by sellers as one determinant of price.
Reliability also can have an impact on repeat sales, reflect on the product’s image ad if it is too low,
create legal implications.

Failure is a situation in which a product, part or system does not perform as intended.

Normal Operating Conditions is the set of conditions under which an item’s reliability is specified.

Potential ways to improve reliability

1. Improve component design

2. Improve production and/or assembly techniques
3. Improve testing
4. Use backups
 5. Improve preventive maintenance procedures
6. Improve user education
7. Improve system design

Robust design results in products or services that can function over a broad range of conditions.

THE DEGREE OF NEWNESS

Product or service design change from modification of an existing product or service to an entirely new
product or service.

1. Modification of an existing product or service

2. Expansion of an existing product line or service offering
3. Clone of competitor’s product or services
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.

Phases in product design and development

1. Idea Generation. Product development begins with idea generation. Ideas can come from a
variety of sources.
2. Feasibility analysis. It entails market analysis (demand), economic analysis (development cost
and production cost, profit potential) and technical analysis. 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. This involves detailed descriptions of what is needed to meet customer
wants, and requires collaboration between legal, marketing, and operations.
4. Process specifications. Once product has 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 changed, 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 the design review phase. This phase is handled by marketing.
8. Product introduction. Promote the product. This is handled by marketing.
9. Follow up evaluation. It determines if changes are needed and refine forecasts. This is handled
by marketing.
IDEA GENERATION

Ideas can come from various sources:

1. Supply-chain based
2. Competitor based
3. Research based

A supply chain can be rich source 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.

One of the strongest motivators for new and improved products or services is competitor’s product and
services.

Reverse engineering. Dismantling and inspecting a competitor’s product to discover product

improvements.

Research is another source of ideas for new or improved products or services.

Research and development (R &D) refer to organized efforts that are directed toward increasing
scientific knowledge and product or process innovation.

R & D efforts may involve basic research, applied research and development.

Basic research has the objective of advancing the state of knowledge about a subject without any near-
term expectation of commercial applications. Applied research has the objective of achieving
commercial application.

Development converts the results of applied research into useful commercial applications.

DESIGNING FOR MANUFACTURING

1. Concurrent engineering. Bringing engineering design and manufacturing personnel together

early in the design phase. To attain smoother transition from product design to production and
to decrease product development time, many companies are using simultaneous development
or concurrent engineering.
2. Computer Aided Design (CAD) uses computer graphics for product design. The designer can
modify an existing designing or create new one on a monitor by means of a light pen, a
keyboard, a joystick or a similar device.

Production requirements

Designers must take into account production capabilities. Design needs to clearly understand the
capabilities of production.

Manufacturability is a key concern for manufactured goods; ease of fabrication and/or assembly is
important for cost, productivity and quality.
Design for Manufacturing (DFM) is used to indicate the designing of products that are compatible with
an organization’s capabilities.

Design for Assembly (DFA) is a design that focuses on reducing the number of parts in a product and on
assembly methods and sequence.

Recycling means recovering materials for future use.

Companies recycle for various reasons;

1. Cost savings
2. Environment concerns
3. Environmental regulations.

Design for Recycling (DFR) is a design that facilitates the recovery materials and components in uses
products for reuse.

Remanufacturing is refurbishing used products by replacing worn-out or defective components.

SERVICE DESIGN

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

Service delivery system includes the facilities, processes and skills needed to provide the service.

Product bundle is the combination of goods and services provide to a customer.

Service package is the physical resources needed to perform the service, the accompanying goods, and
the explicit and implicit included.

System design involves development or refinement of the service package:

1. The physical resources needed

2. The accompanying goods that are purchased or consumed by the customer, or provided with
service.
3. Explicit services (the essential/core features of a service, such as tax preparation)
4. Implicit services (extra features such as friendliness and courtesy0

Difference between service design and product design.

Service operations must contend with issues that may be insignificant or nonexistent for mangers in
production setting. These include the following:

1. Products are generally tangible; services are generally intangible. Consequently, service design
often focuses more on intangible factors than does product design.
2. In many instances, services are created and delivered at the same time (haircut, carwash). In
such instances there is less latitude in finding and correcting errors before the customer has a
chance to discover them. Training, process design, and customer relations are particularly
important.
3. Services cannot be inventoried. This poses restrictions on flexibility and makes capacity issue
very important.
 4. Services are highly visible to customers and must be designed with that in mind; this adds an
extra dimension to process design, one that usually is not present on 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.

PHASES IN THE SERVICE DESIGN PROCESS

1. Conceptualize – idea generation, assessment of customer wants and needs, assessment of

demand potential
2. Identify service package components needed
3. Determine performance specifications
4. Translate performance specifications into design specifications
5. Translate design specifications into delivery specifications.

Service blueprint is a useful tool for conceptualizing a service delivery system. A method for describing
and analyzing a service process. A service blueprint is much like an architectural drawing, but instead of
showing building dimensions and other construction features, a service blueprint shows the basic
customer and service actions involved in a service operation.

Steps in service blueprinting:

1. Establish boundaries for the service and decide on the level of detail needed.
2. Identify and determine the sequence of customer and service actions and interactions. A
flowchart can be useful tool.
3. Develop time estimates for each phase for 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 a well-designed service system

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 linkages between back-of-the-house operations (no contact with customers)
and front-of-the-house (direct contact with customers). Front operations should focus on
customer service, while back operations should focus on speed and efficiency.
8. Having design features and checks that will ensure service that is reliable and of high quality.