PRODUCTIONS AND OPERATIONS MANAGEMENT

1
Product and Service Design

Module 003 | Product and Service Design

When planning on producing a new product and/or service, the key factor is
the product and service design. Successful designs come down to these basic
principles: translate customers' wants and needs, refine existing products and
services, develop new products and services, formulate quality goals,
formulate cost targets, construct and test prototypes, document specifications,
and translate products and service specification into process specifications.
The process of design has certain steps that include motivation, ideas for
improvement, organizational capabilities, and forecasting. In the product
process innovations, research and development play a significant role.
Because of the influence a product and service design can have on an
organization, the design process is encouraged to be tied in with the
organization's strategy and take into account some key considerations.

Technological changes, the competitive market, and economic and

demographic changes are some market opportunities and threats that all
organizations must be aware of when planning a product and service design.
Computer-aided design (CAD) and Computer-aided manufacturing (CAM) are
important tools in the design process because they can anticipate what the
design will look like, as well as allow for better manufacturing. Businesses also
must take in account environmental and legal concerns when designing a new
product. Most importantly, the manufacturing process must ensure the
product's safety.

Objectives:

1. Understand the basic principles of Product and Design.

2. Know the influence a product and service design can have on an
organization.

Product Design

Product design as a verb is to create a new product to be sold by a business to

its customers. A very broad concept, it is essentially the efficient and effective
generation and development of ideas through a process that leads to new
products.
Due to the absence of a consensually accepted definition that reflects the
breadth of the topic sufficiently, two discrete, yet interdependent, definitions
are needed: one that explicitly defines product design in reference to the
Course Module
 artifact, the other that defines the product design process in relation to this
artifact.
Product design as a noun: the set of properties of an artifact, consisting of the
discrete properties of the form (i.e., the aesthetics of the tangible good and/or
service) and the function (i.e., its capabilities) together with the holistic
properties of the integrated form and function.
Product design process: the set of strategic and tactical activities, from idea
generation to commercialization, used to create a product design. In a
systematic approach, product designers conceptualize and evaluate ideas,
turning them into tangible inventions and products. The product designer's
role is to combine art, science, and technology to create new products that
people can use. Their evolving role has been facilitated by digital tools that
now allow designers to communicate, visualize, analyze and actually produce
tangible ideas in a way that would have taken greater manpower in the past.
Product design is sometimes confused with (and certainly overlaps with)
industrial design, and has recently become a broad term inclusive of service,
software, and physical product design. Industrial design is concerned with
bringing artistic form and usability, usually associated with craft design and
ergonomics, together in order to mass-produce goods. Other aspects of
product design include engineering design, particularly when matters of
functionality or utility (e.g. problem-solving) are at issue, though such
boundaries are not always clear.

Product Design Process

There are various product design processes and many focus on different
aspects. The process shown below, for example, is "The Seven Universal Stages
of Creative Problem-Solving," outlined by Don Koberg and Jim Bagnell. It helps
designers formulate their product from ideas. This process is usually
completed by a group of people, i.e. industrial designers, field experts (e.g.
prospective users), engineers, etc. depending upon the products involved. The
process focuses on figuring out what is required, brainstorming possible ideas,
creating mock prototypes, and then generating the product. However, that is
not the end of the process. At this point, product designers would still need to
execute the idea, making it into an actual product and then evaluate its success
by seeing if any improvements are necessary.
The product design process has experienced huge leaps in evolution over the
last few years with the rise and adoption of 3D printing. New consumer-
friendly 3D printers can produce dimensional objects and print upwards with
a plastic like substance opposed to traditional printers that spread ink across
a page.
The design process follows a guideline involving three main sections:
1. Analysis
2. Concept
3. Synthesis
The latter two sections are often revisited, depending on how often the design
needs touch-ups, to improve or to better fit the criteria. This is a continuous
 PRODUCTIONS AND OPERATIONS MANAGEMENT
3
Product and Service Design

loop, where feedback is the main component. To break it down even more, the
seven stages specify how the process works. Analysis consists of two stages,
concept is only one stage, and synthesis encompasses the other four.
Analysis
• Accept Situation: Here, the designers decide on committing to the project
and finding a solution to the problem. They pool their resources into
figuring out how to solve the task most efficiently.
• Analyze: In this stage, everyone in the team begins research. They gather
general and specific materials which will help to figure out how their
problem might be solved. This can range from statistics, questionnaires,
and articles, among many other sources.
Concept
• Define: This is where the key issue of the matter is defined. The conditions
of the problem become objectives, and restraints on the situation become
the parameters within which the new design must be constructed.
Synthesis
• Ideate: The designers here brainstorm different ideas, solutions for their
design problem. The ideal brainstorming session does not involve any bias
or judgment, but instead builds on original ideas.
• Select: By now, the designers have narrowed down their ideas to a select
few, which can be guaranteed successes and from there they can outline
their plan to make the product.
• Implement: This is where the prototypes are built, the plan outlined in the
previous step is realized and the product starts to become an actual object.
• Evaluate: In the last stage, the product is tested, and from there,
improvements are made. Although this is the last stage, it does not mean
that the process is over. The finished prototype may not work as well as
hoped so new ideas need to be brainstormed.

Demand-pull innovation and invention-push innovation

Most product designs fall under one of two categories: demand-pull
innovation or invention-push innovation.
Demand-pull happens when there is an opportunity in the market to be
explored by the design of a product. This product design attempts to solve a
design problem. The design solution may be the development of a new product
or developing a product that's already on the market, such as developing an
existing invention for another purpose.

Course Module
Invention-push innovation happens when there is an advancement in
intelligence. This can occur through research or it can occur when the product
designer comes up with a new product design idea.

Product Design Expression

Design expression comes from the combined effect of all elements in a product.
Color tone, shape and size should direct a person's thoughts towards buying
the product. Therefore, it is in the product designer's best interest to consider
the audiences who are most likely to be the product's end consumers. Keeping
in mind how consumers will perceive the product during the design process
will direct towards the product’s success in the market. However, even within
a specific audience, it is challenging to cater to each possible personality within
that group.
The solution to that is to create a product that, in its designed appearance and
function, expresses a personality or tells a story. Products that carry such
attributes are more likely to give off a stronger expression that will attract
more consumers. On that note it is important to keep in mind that design
expression does not only concern the appearance of a product, but also its
function. For example, as humans our appearance as well as our actions are
subject to people's judgment when they are making a first impression of us.
People usually do not appreciate a rude person even if they are good looking.
Similarly, a product can have an attractive appearance but if its function does
not follow through it will most likely drop in regards to consumer interest. In
this sense, designers are like communicators, they use the language of
different elements in the product to express something.

Product design considerations

Product design is not an easy task. The stakeholders involved all demand
something different from the product designer and from the design process.
• The manufacturer is concerned with production cost; in the end, the
manufacturer wants an economically produced product.
• The purchaser looks at price, appearance, and prestige value.
• The end user is concerned with usability and functionality of the final
product.
• The maintenance and repair department focuses on how well the final
product can be maintained: is the product easily reassembled,
disassembled, diagnosed, and serviced?
Stakeholders' needs vary from one another and it is the product designer's job
to incorporate those needs into their design.

Trends in product design

Product designers need to consider all of the details: the ways people use and
abuse objects, faulty products, errors made in the design process, and the
desirable ways in which people wish they could use objects. Many new designs
will fail and many won't even make it to market. Some designs eventually
 PRODUCTIONS AND OPERATIONS MANAGEMENT
5
Product and Service Design

become obsolete. The design process itself can be quite frustrating usually
taking 5 or 6 tries to get the product design right. A product that fails in the
marketplace the first time may be re-introduced to the market 2 more times.
If it continues to fail, the product is then considered to be dead because the
market believes it to be a failure. Most new products fail, even if it's a great
idea. All types of product design are clearly linked to the economic health of
manufacturing sectors. Innovation provides much of the competitive impetus
for the development of new products, with new technology often requiring a
new design interpretation. It only takes one manufacturer to create a new
product paradigm to force the rest of the industry to catch up - fueling further
innovation. Products designed to benefit people of all ages and abilities—
without penalty to any group—accommodate our swelling aging population
by extending independence and supporting the changing physical and sensory
needs we all encounter as we grow older.

Service Design
Service design is the activity of planning and organizing people, infrastructure,
communication and material components of a service in order to improve its
quality and the interaction between the service provider and its customers.
Service design may function as a way to inform changes to an existing service
or create a new service entirely. The purpose of service design methodologies
is to establish best practices for designing services according to both the needs
of customers and the competencies and capabilities of service providers. If a
successful method of service design is employed, the service will be user-
friendly and relevant to the customers, while being sustainable and
competitive for the service provider. For this purpose, service design uses
methods and tools derived from different disciplines, ranging from
ethnography (Segelström et al., Ylirisku and Buur, 2007, Buur, Binder et al.
2000; Buur and Soendergaard 2000) to information and management science
(Morelli, 2006) to interaction design (Holmlid, 2007, Parker and Heapy, 2006).
Service design concepts and ideas are typically portrayed visually, using
different representation techniques according to the culture, skill and level of
understanding of the stakeholders involved in the service processes (Krucken
and Meroni, 2006, Morelli and Tollestrup, 2007).

History of Service Design

In early contributions to service design (Shostack 1982; Shostack 1984), the
activity of designing service was considered to be part of the domain of
marketing and management disciplines. For instance, Shostack (1982),
proposed the integration of the design of material components (products) and
immaterial components (services). This design process, according to Shostack,
can be documented and codified using a “service blueprint” to map the

Course Module
sequence of events in a service and its essential functions in an objective and
explicit manner.
In 1991, service design was first introduced as a design discipline by Prof. Dr.
Michael Erlhoff at Köln International School of Design (KISD). In 2001,
Livework, the first Service Design and Innovation consultancy, opened for
business in London. In 2003 Engine, initially founded in 2000 as an Ideation
company, positioned themselves as a Service Design consultancy. In 2004, the
Service Design Network was launched by Köln International School of Design,
Carnegie Mellon University, Linköpings Universitet, Politecnico di Milano and
Domus Academy in order to create an international network for service design
academics and professionals. Several authors (Eiglier 1979; Normann 2000;
Morelli 2002) emphasize that services come to existence at the same moment
they are being provided and used. In contrast, products are created and "exist"
before being purchased and used. While a designer can prescribe the exact
configuration of a product, s/he cannot prescribe in the same way the result
of the interaction between customers and service providers (Holmlid, 2007),
nor can s/he prescribe the form and characteristics of any emotional value
produced by the service.
In the first joint manifest of the network, the concept of service design was
described in the following manner:
• Service design is an emerging discipline and an existing body of
knowledge, which can dramatically improve the productivity and quality
of services.
• Service design provides a systematic and creative approach to:
o meeting the needs of service organizations so that they may be
competitive
o meeting the rising expectations of customers regarding choice and
quality
o making use of the technological revolution, which has vastly
expanded the possibilities for creating, delivering and consuming
services
o addressing the pressing environmental, social and economic
challenges of sustainability
o fostering innovative social models and behaviors
o sharing knowledge and learning
• The service design approach is uniquely oriented to service specific design
needs and is rooted in the design culture. Thus, the service designer
contributes crucial competencies. The Service Designer can:
o visualize, express and choreograph what other people can’t see, and
envisage solutions that do not yet exist
o transform observed and interpreted needs and behaviors into
service possibilities
o express and evaluate the quality of design in the language of
experiences
Service design:
• aims to create services that are useful, usable, desirable, efficient and
effective
 PRODUCTIONS AND OPERATIONS MANAGEMENT
7
Product and Service Design

• is a human-centered approach that focuses on customer experience and

the quality of services rendered as the key value for success.
• is a holistic approach, considering the integrated way of strategic,
systematic, process-oriented and touchpoint design decisions.
• is a systematic and iterative process that integrates user-oriented, team-
based, and interdisciplinary approaches and methods in ever-learning
cycles.
While foundational, many of these definitions have since been developed and
advanced.
Characteristics of Service Design
Service design is the specification and construction of processes that delivers
valuable capacities for action to a particular customer. Capacity for action in
Information Services has the basic form of assertions. In Health Services, it has
the basic form of diagnostic assessments and prescriptions (commands). In
Educational Services, it has the form of a promise to produce a new capacity
for the customer to make new promises.
Service design can be both tangible and intangible. It can involve artifacts or
other elements such as communication, environment and behaviors.
Several authors (Eiglier 1979; Normann 2000; Morelli 2002) emphasize that
services come to existence at the same moment they are being provided and
used. In contrast, products are created and "exist" before being purchased and
used. While a designer can prescribe the exact configuration of a product, s/he
cannot prescribe in the same way the result of the interaction between
customers and service providers (Holmlid, 2007), nor can s/he prescribe the
form and characteristics of any emotional value produced by the service.
Consequently, service design is an activity that, among other things, suggests
behavioral patterns or “scripts” to the actors interacting in the service.
Understanding how these patterns interweave and support each other are
important aspects of the character of design and service (Holmlid, 2012). This
allows greater customer freedom, and better provider adaptability to the
customers’ behavior.
Service design methodology
Together with the most traditional methods used for product design, service
design requires methods and tools to control new elements of the design
process, such as the time and the interaction between actors. An overview of
the methodologies for designing services is proposed by (Morelli 2006), who
proposes three main directions:
Identification of the actors involved in the definition of the service by means
of appropriate analytical tools

Course Module
Definition of possible service scenarios, verifying use cases, and sequences of
actions and actors’ roles in order to define the requirements for the service
and its logical and organizational structure
Representation of the service by means of techniques that illustrate all the
components of the service, including physical elements, interactions, logical
links and temporal sequences
Analytical tools refer to anthropology, social studies, ethnography and social
construction of technology. Appropriate elaborations of those tools have been
proposed with video-ethnography (Buur, Binder et al. 2000; Buur and
Soendergaard 2000) and different observation techniques to gather data
about users’ behavior (Kumar 2004). Other methods, such as cultural probes,
have been developed in the design discipline, which aim to capture
information on customers in their context of use (Gaver, Dunne et al. 1999;
Lindsay and Rocchi 2003).
Design tools aim at producing a blueprint of the service, which describes the
nature and characteristics of the interaction in the service. Design tools
include service scenarios (which describe the interaction) and use cases
(which illustrate the detail of time sequences in a service encounter). Both
techniques are already used in software and systems engineering to capture
the functional requirements of a system. However, when used in service
design, they have been adequately adapted to include more information
concerning material and immaterial components of a service, as well as time
sequences and physical flows (Morelli 2006). Other techniques, such as IDEF0,
just in time and Total quality management are used to produce functional
models of the service system and to control its processes. However, it is
important to note that such tools may prove too rigid to describe services in
which customers are supposed to have an active role, because of the high level
of uncertainty related to the customer’s behavior.
Because of the need for communication between inner mechanisms of services
and actors (such as final users), representation techniques are critical in
service design. For this reason, storyboards are often used to illustrate the
interaction of the front office. Other representation techniques have been used
to illustrate the system of interactions or a “platform” in a service (Manzini,
Collina et al. 2004). Recently, video sketching (Jegou 2009, Keitsch et al. 2010)
and prototypes (Blomkvist 2014) have also been used to produce quick and
effective tools to stimulate customers’ participation in the development of the
service and their involvement in the value production process.
Service design in the public sector
Due to new investments in hospitals, schools, cultural institutions and security
infrastructures in the last few years, the public sector has expanded. The
number of jobs in public services has also grown; such growth can be
associated with the large and rapid social change that is calling for a
reorganization of the welfare state. In this context, governments are
considering service design for a reorganization of public services.
Some recent documents from the British government (United Kingdom Prime
Minister Strategy Unit 2007; Public Administration Select Committee, 2008)
explore the concept of "user-driven public services" and scenarios of highly
personalized public services. The documents propose a new view on the role
 PRODUCTIONS AND OPERATIONS MANAGEMENT
9
Product and Service Design

of service providers and users in the development of new and highly

customized public services.
This view has been explored through an initiative in the UK. Under the
influence of the European Union, the possibilities of service design for the
public sector are being researched, picked up, and promoted in countries such
as Belgium.
Clinical service redesign is an approach to improving quality and productivity
in health. A redesign is clinically led and involves all stakeholders (e.g. primary
and secondary care clinicians, senior management, patients, commissioners
etc.) to ensure national and local clinical standards are set and communicated
across the care settings. By following the patient's journey or pathway, the
team can focus on improving both the patient experience and the outcomes of
care.
A practical example of service design thinking can be found at the Myyrmanni
shopping mall in Vantaa, Finland. The management attempted to improve the
customer flow to the second floor as there were queues at the landscape lifts
and the KONE steel car lifts were ignored. To improve customer flow to the
second floor of the mall (2010) Kone Lifts implemented their 'People Flow'
Service Design Thinking by turning the Elevators into a Hall of Fame for the
'Incredibles' comic strip characters. Making their Elevators more attractive to
the public solved the people flow problem. This case of service design thinking
by Kone Elevator Company is used in literature as an example of extending
products into services.

Product and Service Design

Companies choose various ways to design their products and the type of
services they provide. Which include: standardization, mass customization,
delayed differentiation, modular design, and robust design. Deciding which
method to use is very important along with deciding the company's target
market. Deciding the right method, establishes good productivity and efficient
way of operations.

Service design is an activity of organizing and planning people, communication

and material components in order to improve service quality. It is the
interaction between the service provider and customers and the customers'
experience. A service is anything that is done to or for a client and is created
and delivered simultaneously. The two most important issues in service
design are the degree of variation in requirements and the degree of customer
contact in which determines how standardized the service can be. The greater
the degree of customer contact, the greater the opportunity for selling. In
addition, concepts and ideas generated are captured in sketches or in service
Course Module
 prototypes. The strong visual element, combined with the opportunity to test
and rapidly change services and interfaces, delivers real value in today's
competitive markets.

Product Design combines ergonomics with product and business knowledge

to generate ideas and concepts and convert them into physical and usable
objects or services. The discipline covers the entire range of activities from
concept, manufacturing, testing to product launch. Product Designers
conceptualize and evaluate ideas and themes they find profitable. The
designers make these ideas tangible through products using a systematic
approach.

Difference between service design and product design: Service design is an

intangible aspect while product design is tangible. Services are generally
created and delivered at the same time and cannot be held in inventory like
actual products. Also, services (especially quality one) are highly visible to
customers.

Product and Service Life Cycle

During their useful life, many services and products go through four stages.
Since the demand can vary for each of these 4 stages, different strategies
should be applied to achieve optimum product/service performance during
each stage.

The Four stages are:

1. Introduction: During the first stage, the product is introduced into the
market. Proper research and forecasting should be done to ensure the
product/service is adequate for a specific market and for a specific time. It
is crucial to have a proper amount of supply that can meet the expected
demand for the product/service.
2. Growth: The second stage involves the increase in demand for the
product/service. Reputation for the product grows and an accurate
forecast of demand is needed to determine the length of time the
product/service will remain in the market. Enhancements and
improvements are common in this stage.
3. Maturity: This third stage deals with the product reaching a steady
demand. Few or no improvements or product changes are needed at this
stage. Forecasting should provide an estimate of how long it will be before
the market dies down, causing the product to die out.
4. Decline: The last stage involves choosing to discontinue the
product/service, replacing the product with a new product, or finding new
uses for the product.

Standardization may be great for a company creating products like mops

because there are not many things you can do to make them unique and keep
the price down. Standardization products have interchangeable parts, which
increases productivity and lowers the costs of production. Standardization has
 PRODUCTIONS AND OPERATIONS MANAGEMENT
11
Product and Service Design

many important benefits and certain disadvantages. Some advantages are the
design costs for standardization products are low. The scheduling of work
inventory handling, purchasing, and accounting activities are routine, making
the quality more consistent. The disadvantages with standardization are that
they decrease variety offered to consumers leading to less of an appeal. Also,
the high cost of design change makes it relentless to improve.

Mass customization is a strategy that some companies can use to incorporate

customization while practicing standardization. This strategy keeps costs low
while adding variety to a product. The two tactics that make mass
customization possible is delayed differentiation and modular design. Some
companies may consider delayed differentiation if the company chooses to not
finish a product due to unknown customer preferences. However, another
tactic of modular design is a form of standardization in which components'
parts are grouped into modules to allow easy replacement or
interchangeability. Producing a computer is an example of modular design.

Companies will also have to consider what their competitors are doing in
order to be successful. There are 3 ways of idea generation: supply based,
competitor based, and research based. Whichever a company chooses, they
must consider who is competing against them and what else is going on in the
marketplace. Product design is key to the success of the company.

Customer Satisfaction and Sustainability

Product and service design are very important factors to customer

satisfaction. Organizations need to continually satisfy their customers to be
successful in the marketplace. They are able to do this by improving current
products or by designing new ones. The design consists of the following:
research, design, production, life cycle, safety in use, reliability,
maintainability, regulatory and legal issues. Organizations also need to look at
"sustainability" when designing their product/service.

The four aspects of Sustainability are:

1. Life Cycle Assessment
2. Value Analysis
3. Remanufacturing
4. Recycling

Life cycle assessment focuses on the environmental impact the specific

product will have over the course of its life. Value analysis looks at the parts
within a product and seeks to minimize the cost. Remanufacturing has become

Course Module
 more important over the past few years and involves replacing worn-out and
defective products. This is common practice in high price machinery
industries. Recycling involves recovering older materials for future use. This
not only saves money, but satisfies environmental concerns. The Kano Model
includes three aspects: Basic quality, performance quality, and excitement
quality. Basic quality is the requirements placed on a product that do not lead
to customer satisfaction when present, but can lead to dissatisfaction if absent.
Performance quality is the middle ground and can either lead to satisfaction
or dissatisfaction depending on their usefulness. Excitement quality is the
notion that an unexpected feature can cause customer excitement.

Reliability

Reliability is a measure of the ability of a product, a part, or service, or an entire

system to perform its intended function under a prescribed set of conditions.
Reliability can have an impact on repeat sales and reflect positively on a
product’s image. However, if the product is faulty, it can create legal problems.
The term "failure" is used to describe a situation in which an item does not
perform as intended. Reliabilities are always specified with respect to certain
conditions, called normal operating conditions. These conditions can include
load, temperature, and humidity ranges in addition to operating procedures
and maintenance schedules. To improve reliability, manufacturers should
improve the reliability of individual components or use back up components.
A few other suggestions include improving testing, improving user education,
and improving system design. The optimal level of reliability is the point
where the incremental benefit received equals the incremental cost.

Legal and Ethical Consideration

Many organizations are regulated by governmental agencies and these

regulations are responsible for preventing harmful substances from being
used in product design. Harm caused by the product is the responsibility of the
manufacturers. Manufacturers are liable for any injury or damages caused by
their product due to its design or workmanship, also known as product
liability. When the product is defective and potentially causes harm,
manufacturers have several options to remedy the situation. They may have
to recall their products or fix the problem in the manufacturing stage. It is also
possible that they may face lawsuits if their products cause injury to
consumers. Managers must ask themselves if there is demand for their
organization’s product or service. If the company develops its products or
services according to the customers’ demands, their product will be successful.

Glossary
Computer-aided design (CAD): the use of computer technology for design
and design documentation.
Design: the creation of a plan or convention for the construction of an object,
system or measurable human interaction.
Trend: a general direction in which something is developing or changing.
 PRODUCTIONS AND OPERATIONS MANAGEMENT
13
Product and Service Design

References
Online Supplementary Reading Materials:
1. Product and Service Design;
https://ids355.wikispaces.com/Ch.+4+Product+and+Service+Design ;
April 11, 2017
2. Product and service design;
https://www.slideshare.net/midhimpsdan/product-and-service-
design-15680964; September 11, 2017
3. Chapter 5 Product and service design;
https://www.scribd.com/doc/24594032/Chapter-5-Product-and-
Service-Design; September 11, 2017
Online Instructional Video:
1. Product and Service Design;
https://www.youtube.com/watch?v=v7Y5Bl0oiU8 ; April 11, 2017
Books and Journals:
1. Jay Heizer & Barry Render (2011); Operations Management (10th
Edition); New Jersey; Prentice Hall PTR

Course Module