Module: Operations & Supply Chain Management

Lesson: Product and Service Design

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Product and Service Design

Introduction

The purpose of this lesson is to consider the elements of good product and service design. As
we mentioned and discussed at the end of lesson 2, there are 5 key functions of good
operational performance. Although service was not one of them, it does go a long way. Think
about a time that you have received poor service from somebody and then gone back to use
that particular business again. We thought as much! Even now, you are probably thinking, why,
if I get poor service, would I use the business again? Of course, if it is a monopoly, you may
not have a choice, but if you do, then there could be plenty of other options out there for you to
consider.

By the end of this lesson, you will have a grasp on what it takes to make good operational
service, why it is important to consider, the stages in its design and how to evaluate it. For this
lesson, please see Chapter 5 of the Slack core text book.

Lesson Objectives

Discuss the importance of good service design

Consider & apply the stages of design - Concept generation / Concept screening /
Preliminary design

Evaluate 3 techniques for design evaluation & improvement - Taguchi methods, Value
Engineering (VE) and Quality Functional Development (QFD)

Reflections, REMINDER!

Before we progress, a quick reminder from us to ensure that you add your reflections to date
on the MyLearningSpace Blog. This will keep your thoughts up to date and help you track your
development from the previous lessons.

Introduction to Lesson 3 Video

Please now look through the narrated presentation which will give you an overview of what is
included within this lesson, as well as an overview of the content, theories and activities.

https://vimeo.com/226422639/d4c79dd3ac

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Transcript

Efficiency and Effectiveness Podcast

https://supplychaininsights.com/podcast/productivity-efficiency-and-global-effective...

Listen to the above podcast which discusses operations and supply chain management
efficiency and effectiveness - very much associated with product and service design. Think of a
business that you have had a bad experience with. How would you make it more effective and
efficient by improving their product or service line?

Operations and Supply Chain Management in the News

http://www.telegraph.co.uk/business/2017/07/07/city-london-police-drop-investigation...

Word Cloud

Figure 3.01 - Word Cloud on Effective Service Design

We have added a word cloud to this lesson to help set the scene with operational performance

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and some of the associated terms.

Introduction, Product and Service Design

We hope that you enjoyed the narrated PowerPoint slides to help you through the general
introduction to this lesson. As with the previous lesson, please ensure that you refer to the
core text, Slack et al. (2013), for all of your essential reading, plus also the journal articles and
other material that is recommended here.

When planning on producing a new product and/or service, the key factor is the product and
service design. There are a number of principles to consider: 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 product and service specifications into process specifications. The process of
designing these stages also has some important elements to consider - motivation, ideas for
improvement, the capabilities that a business can cope with, and, of course, forecasting
expectations.

In recent years there have also been some significant changes to technology as well as to the
competitive landscape and economic and demographic changes pose a range of market
opportunities and threats. Organisations must be aware of these changes in order to remain
competitive. A business can design an effective way of delivering a service by keeping up to
date with technology advances and, as a result, stay ahead of the game. But, critically, the
technology must work in the first place in order for this to happen!

The difference between Product and Service Design

Companies choose various ways to design their products and the type of services they
provide. We will come across some of the layout and service designs later in another lesson.
However, what is important is deciding which method to use in line with the target market and
the customers’ expectations.

Service design is an activity involving how people are planned to be in the right place at the
right time, having good open channels of communication and material components in order to
improve service quality. It is the interaction between the provider and customers that can
determine the level of service they receive. Generally, there are two very important issues in
service design - the degree of variation which can be tolerated, and the level of
standardisation which must be considered.

Product design looks at things such as ergonomics and how 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 and testing to product launch. Product
designers try to think about things which meet the needs of customers but that are also able to
generate a profit. Often this is completed in a systematic way.

So, what is the difference? Well, 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 in the same way that actual products can. In many ways, though, service can be
visible and certainly could be seen when thinking about the British Airways case earlier.

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McDonald’s

If any of you have seen the recent movie The Founder, you may already have a good working
knowledge of how McDonald’s came about. However, on pages 96 & 97, read the
McDonald’s case study and think about how their effective product and service design
impacts upon their global sales and world market share. Watch the video in the link below and
think about what it is about their service and process design that makes them so successful.
Discuss with your study partner and make some notes for your summative assignment later in
the course.

Summative Assignment Assistance Exercise

At the end of this module, you are due to write a 5000-word paper on a business you are
familiar with and audit their operations and supply chain environment. Within this, as you may
well know, you are to provide a number of recommendations that the business should act
upon because of your written report. In preparation for this, discuss with your study partner
recent product design developments in your industry. If you do not have an associated
industry, please select one that you are familiar with. Share your ideas with your tutor.

Importance of good design

In order to summarise the first assessment criteria that we highlighted at the start of this
lesson, we want to summarise the importance of good design. As you may have picked up
already through your wider reading and the case study of McDonald’s, product design is
about how the product feels, tastes, looks or what it is like to touch. The service design is the
part that improves the process of making the product, or the process that is used to get the
product to the customer, or indeed both. However, as Slack et al. (2013) suggest, the slightest
alteration in design can have a significant impact on the way in which a product is made or
delivered. However, for the purpose of clarity, here is why clever design is so important for a
business:

Can lead to an item being created to specification

Reduces production waste

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 Reduces the time a customer may have to wait for the product

Lowers wider production costs

Makes a company more efficient and thus effective.

Applying Good Design

Using the following four examples of businesses, note down, with a study partner, why good
design of services and products is so important to achieving success. Share your ideas with
your tutor.

Ikea

Mercedes-Benz

Sainsbury’s

Ryanair.

The 3 Stages of Design

The next stage of this lesson will review the three stages of design - concept generation,
concept screening and preliminary design. Within this part of the lesson, we will help you
to review each stage of the design life cycle and give you the opportunity to apply your
learning. We will review each stage individually, beginning with concept generation.

Concept Generation

As Slack et al. (2013) suggest, the design of products and services in operations is a process
itself, and there are approximately three steps. The first of these is ‘Concept Generation’.

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This is very much the ideas stage and where the ideas become an inspiration for later stages
in operations development.

Concept generation, which is when a product development team comes up with ideas, is the
most critical step in the service design process; without it, there is no design. Concept
generation is a procedure that begins with a set of customer needs and target specifications
and results in an array of product concept design alternatives from which a final design will be
selected.

In terms of the source of such ideas, they can come from a variety of places:

Surveys completed by customers

Focus groups

Staff suggestions

Research and development communities

Growth in open sourcing and crowdsourcing.

The last bullet point is very interesting as it suggests that the ways in which ideas are being
generated is changing. Organisations such as Google have begun to use open sourcing much
more frequently, and this practice is growing ever more popular. Crowdsourcing is when an
open call is made for a product to be developed and several people offer to help, but not as
employees.

Concept Screening

The name really says it all here. At this stage of the operational service design, the business is
looking to filter the ideas that have been generated from the previous stage. Essentially, the
business is looking to ask, “do we have the capability to carry out this idea” and it will typically
ask a number of key questions in the process:

Do we have the skills, capacity and resources to carry this idea out?

Do we want to carry this idea out?

Will customers buy it?

Is it a product that fits demand?

How much will it cost and will there be a good ROI?

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As you would expect, these are all very important questions to ask when considering an
innovative design for a product or service. If you read page 133 of the core text, you will note
the example of the Japanese watermelons and the shape they needed them to be because of
the lack of space in Japan. At the early stages of farming, the shape of the watermelon would
be changed from spherical to square by forcing them to grow in this way. Although the
concept seemed bizarre, the idea works because of the circumstances in land mass. A good
model to grasp at this stage is the ‘ideas funnel’ which suggests that lots of ideas at the start
will eventually become just a few in what we know as the final stage, that of preliminary
design.

Preliminary Design

The final stage of the design process is called ‘preliminary design’. This is where, as you may
expect, once a feasible idea has been selected and screened, it becomes part of the initial
design process, where, if it works, it could be transferred into reality. The diagram on page
135 of the core text offers an excellent overview of the stages of preliminary design for a
remote mouse that you would use in your computer. The diagram shows that instead of
thinking of it as one project, it is broken down into the components of the mouse, and
essentially how it will work as one unit once it has been put together. Naturally, there are a
number of ways in which this stage of the design process can run more effectively, according
to Slack et al. (2013):

Simplicity - ensuring that the most direct way to produce the product or service is used,
thus reducing costs.

Standardisation - if somebody walks into a McDonald’s on Sauchiehall Street in

Glasgow and orders a cheeseburger, it should be the same as somebody ordering a
cheeseburger on High Holborn in central London. It makes the product appealing and
ensures consistency as well.

Commonality - Slack et al. (2013) cite the example of Airbus and their product design. At
Airbus, they use virtually the same components to build both their smallest and largest
aircraft, meaning that in some instances, a captain can fly practically any equipment as the
systems are also virtually identical.

Modularisation - this is a relatively new concept, but being able to pick and choose what
elements you seek with your product or service is growing in demand. Take the package
holiday industry, which is a key example of where this type of activity is in its prime.

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Imagine you work for Dyson!

Congratulations! You have just landed your first Operational Management role with Dyson. Mr
Dyson himself has just dropped by your office to say that the company are interested in
making a new leaf blower. As you know, in the autumn months, leaves on the ground can be
annoying and often dangerous if they are slippery. Mr Dyson has asked you to think of new
ways in which not only the product can be designed but also the service assistance side once
the products are available to purchase. In teams of two or three, think about what you would
do at each of the stages mentioned previously. Present the ideas back to your tutor and
discuss.

Design Evaluation and Improvement

This section of the lesson will review the ways in which the previous stages can be evaluated
and methods identified to improve the original concept. This is an important aspect of product
and service design because it suggests that the process never stops and is continual. This is
a good thing because a business which simply stops after the service has been designed
would not remain in a strong or competitive position for very long. As Slack et al. (2013)
suggest, this is a crucial stage in operations and supply chain management.

Taguchi methods

The Taguchi method of quality control is an approach to engineering that emphasises the
roles of research and development, product design and product development in reducing the
occurrence of defects and failures in products. The approach leans more in the direction of
design than manufacturing and considers the design to be hugely important. It also considers
quality control and tries to eliminate variances in production before they can occur.

Companies such as Toyota, Ford, Boeing and Xerox all adopt this type of method and have
found it to be hugely beneficial.

Value Engineering (VE)

This is also a very important method to explore as it is the stage at which questions are asked
about cost. If there are ways of making the product or providing the service cheaper without it

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impacting on quality, this is where operations managers will seek answers. As Slack et al.
(2013) identify, this is usually undertaken by project teams. If the product is made up of
components, for example, they will seek to establish if the product can be made with fewer
components. Teams may also establish at this point if the secondary functions are suitable;
suitability, compatibility, acceptability, for example.

Quality Functional Deployment (QFD)

This form of evaluation is very much customer centred. Its aim is to establish will the customer
gain value from this product or service and what can be done to ensure that if not, things are
altered to ensure that they do? As Slack et al. (2013) mention, this form of evaluation is often
called the ‘house of quality’ because of its shape, and the ‘voice of the customer’ because
of its purpose. It is important to consider the customer, as it is entirely possible that the
customer may not have been considered since the conception of the original idea or service. If
you turn to page 139 in your core text, you will see a diagram of the QFD there for your own
extended reading. However, for the purpose of clarity, the QFD framework considers the
following key points and questions:

The wants and requirements of the customers

The potential performance of the product or service

How it will be designed

The relationship between how it will be designed and the wants and needs of the
customers

The technical evaluation of the components used.

Although the application of the QFD framework may vary, the unique purpose of it serves
operations teams well by essentially reviewing the requirements of the customers against the
design characteristics of the product or service.

Extra Reading

Akao

Govers

Please read these two articles and make notes as you progress. Keep your notes handy,

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though, as you may need them for your formative task at the end of this lesson.

Summary & Formative Task

We hope that you have enjoyed this lesson and found it interesting and productive. The aim of
it was to explore the ways in which products and service lines can be formulated, created and
evaluated using the most common techniques available. It is a major element of logistics and
supply chain management, and if the customer is not at the centre of it, it will prove difficult for
the business to achieve success and remain competitive for a long period of time.

Formative Task

You have recently become an operations and supply chain manager for Mercedes-Benz of
Glasgow. There have been a number of complaints about the service department and the way
in which cars are brought to the dealership and delivered back to the customers after being
attended to. The General and Regional Managers have asked you to review this service line
and think of a way it could be evaluated to become more effective.

In no more than 1000 words (+/- 10%), produce a brief report with your operational
recommendations on what Mercedes-Benz of Glasgow can do to turn things around. Submit
this to your tutor and seek feedback on your suggestions.

Summary & Contact your tutor

We hope that you have enjoyed this lesson and found it to be useful and beneficial. Please
ensure that you refer to the core text, but also read on a wider basis as well. Keeping your
knowledge up to date with the business sections of the main broadsheets, for example, is an
excellent way of doing this.

Product and service design is very important and it is vital that you understand the types of
idea formulation as well as effective ways of evaluating them. Keep yourself up to date with
relevant case studies and examples that you will be able to use in your summative assignment
at the end of the module. As you have learnt in this lesson, if the product and service design do
not complement each other, customers will not use the business, and they may not even
return. Therefore, the ideas of congruency and fit are hugely important.

References and journal articles

Essential reading

Slack, N., Brandon-Jones, A. and Johnston, R. (2013) Operations management. 7th edition.
Harlow: Pearson.

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Journal articles

Milner, C. (2016) Operations management: The interesting option, or ‘the pizza puzzle’.
Operations management. 42 (2), pp. 8-9. [Available from: Business Source Complete].

Piercy, N. (2012) Business history and operations management. Business History. 54 (2), pp.
154-178. DOI: 10.1080/00076791.2011.631121. [Available from: Business Source Complete].

Wider Reading

Alonso-Rasgado, T. and Thompson G. (2006) A rapid design process for Total Care Product
creation. Journal of Engineering Design. Vol. 17 (6), pp. 509-531.

Alonso-Rasgado, T., Thompson G. and Elfström B.-O. (2004) The design of functional (total
care) products. Journal of Engineering Design. Vol. 15 (6), pp. 515-540.

Amezquita, T., Hammond, R., Salazar, M. and Bras, B. (1995) Characterizing the
remanufacturability of engineering systems. In: Proceedings of ASME advances in design
automation conference, Boston, Massachusetts, 17-20 September 1995, DE-Vol. 82, pp.
271-278.

Andreu, J.-J. (1995) The remanufacturing process, Internal paper from Manchester
Metropolitan University, UK.

Gray, C. and Charter, M. (2007) Remanufacturing and Product Design - Designing for the 7th
Generation, The Centre for Sustainable Design, University College for Creative Arts, Farnham,
UK.

Sakao, T. and Shimomura, Y. (2007) Service Engineering: a novel engineering discipline for
producers to increase value combing service and product. Journal of Cleaner Production. 15,
pp. 590-604.

Sakao, T., Matzen, D. and Ölundh Sandström, G. (2008) Framing design research for service
orientation through PSS approaches, submitted to Journal of Engineering Design, special
issue on Product/Service Systems, 2008.

Movies Quotes (2017) First time in McDonalds - The Founder 2016 [video, online]. YouTube.
Available from: [accessed 18 July 2017].

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© 2017 Arden University Ltd. ALl rights reserved
© 2017 Arden University Ltd. ALl rights reserved
© 2017 Arden University Ltd. ALl rights reserved
 © 2017 Arden University Ltd. ALl rights reserved

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