MODULE 2 – PRODUCT AND SERVICE DESIGN

Module Objectives
1. Discuss the objectives of product and service design.
2. Explain the phases of product and service design.

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

Reasons for Product or Service Design

 Economic
 Social Demographic
 Political, liability, or legal
 Competitive
 Cost or availability
 Technological

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
OTHER ISSUES IN PRODUCT AND SERVICE DESIGN

1. Life Cycles of Products or Services

2. Degree of Standardization
 Standardization
 Extent to which there is an absence of variety in a product, service,
or process
 Standardized products are immediately available to customers

3. Mass Customization
 A strategy of producing standardized goods or services, but incorporating
some degree of customization
 Delayed differentiation – the process of producing but not quite
completing, a product or service until customer preferences are known.
 Modular design – a form of standardization in which component parts are
grouped into modules that are easily replaced or interchanged.
 easier diagnosis and remedy of failures
 easier repair and replacement
 simplification of manufacturing and assembly

4. Product/Service 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
Improving Reliability
 Component design
 Production/assembly techniques
 Testing
 Redundancy/backup
 Preventive maintenance procedures
 User education
 System design

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

6. Degree of Newness
1. Modification of an existing product/service
2. Expansion of an existing product/service
3. Clone of a competitor’s product/service
4. New product/service

7. Cultural Differences
 Multinational companies must take into account cultural differences
related to the product design.

8. Global Product Design

 Virtual teams
 Uses combined efforts of a team of designers working in different
countries
 Provides a range of comparative advantages over traditional teams
such as:
 Engaging the best human resources around the world
 Possibly operating on a 24-hr basis
 Global customer needs assessment
 Global design can increase marketability
1. Original Equipment Manufacturer (OEM)
 Designs and manufactures a product based on its own specifications and
sells to another company for branding and distribution
 2. Original Design Manufacturer (ODM)
 Designs and manufactures a product according to purchaser’s
specifications
3. Original Brand Manufacturer (OBM)
 Sells an entire product that is manufactured by a second company under
its own brand

Phases in Product Development Process

1. Idea Generation
 Ideas for new or redesigned products or services can come from variety of
sources, including customers, the supply chain, competitors, employees
and research.
2. Feasibility analysis
 Entails market analysis (demand), economic analysis (development and
production cost, profit potential), and technical analysis (capacity
requirements and availability, and skills needed).
3. Product Specification
 This involved detailed descriptions of what is needed to meet (or exceed)
customer wants, and requires collaboration between legal, marketing, and
operations.
4. Process Specifications
 The process that will be needed to produce to the product or deliver the
service. Alternatives must be weight in terms of cost, availability or
resources, profit potential, and quality. This involves accounting ang
operations.
5. Prototype Development
 One (or a few) units are made to see if there are any problems with the
product or process specifications.
6. Design Review
 At this stage, any changes are made, or the project is abandoned.
Marketing, finance, engineering, design, and operations collaborate to
determine whether to proceed or abandon.
7. Market Test
 Used to determine the consumer acceptance. If unsuccessful, the product
returns to the design review phase. This phase is handled by marketing.

8. Product Introduction
 The new product is promoted. This phase is handled by marketing.
9. Follow-up evaluation
  Abased on user feedback, changes may be made, or forecasts refined.
This phase is handled by marketing.

Learning Activity/Formative Assessment:

Group activity:
A group maximum of five members will be formed. The group will
conceptualize and decide, what product or service are they going to
introduce in preparation for their midterm/final output.