6/22/2023

Kwame Nkrumah University of

Science & Technology, Kumasi, Ghana

OPERATAIONS MANAGEMENT
PRODUCT AND SERVICE DESIGN
ISD552 MBA YEAR 1
Dr. John Opoku Mensah
Dr. Cosmos Benjamin Osei
UNIT 2
Supply Chain & Information Systems Department
School of Business
CoHSS
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john,mensah@knust.edu.gh/
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UNIT OUTCOME WHAT DOES SERVICE AND PRODUCT DESIGN DO?

At the end of this unit, students will be able to: • Business models that are simple allow customers’ needs to be
translated into the form and shape of the goods or services that
• Understand the issues involved in defining product and
they demand and order.
service design; • Companies create competitive advantage through product design,
• Examine trends in Product and service design a process that can help firms gain their customers’ loyalty. If the
• Understand the Product and Service design concepts product/service design of the company is good, it improves
products’ quality, and performance.
• Determine product and service Process • If a product/service offers excellent functional and sales utility and
• Identify challenges in the service process is produced in a cost-effective way for a reasonable price it
ensures profitability and business continuity.
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WHAT DOES SERVICE AND PRODUCT DESIGN DO? WHAT IS PRODUCT & SERVICE DESIGN
Product & service design involves idea generation, concept
• Translate customer wants and needs into product development, testing and manufacturing or implementation of a
and service requirements. physical object or service
• Refines existing products and services. Strategic importance of product & service design
• Develop new products and/or services.  Serves as a strategic tool for achieving organizational goals in
• Formulate quality goals. modern businesses
 Determines product & service quality, customer satisfaction and
• Formulate cost targets. cost levels
 Defines a company’s customer base, image/brand, competition
and future growth
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TRENDS IN PRODUCT AND SERVICE DESIGN TRENDS IN PRODUCT AND SERVICE DESIGN
Increased emphasis on :
 Customer satisfaction (e.g designing products & services that are
“user friendly”)
 Introducing new products or services
 Refining existing products and services Why is it important for organisations to reduce time to introduce a
 Reducing time to introduce a product or service to the market product to the market?
 The organization’s capabilities to produce or deliver the right item
on time
 Environmental concerns (e.g. packaging and disposal issues, using
less material, recycling parts, green logistics)
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OBJECTIVES OF PRODUCT & SERVICE DESIGN CONSIDERATIONS IN THE DESIGN

Product and service design/redesign should be closely tied to the organization’s
 Improving quality and product performance
overall strategy.
 Reducing customer complaints and product liability (e.g.
Reasons for design or redesign considerations:
injuries, accidents, & warranty claims)
 Economic: Cost, low demand
 Adjusting to technological change (using new assembly plant)
 Quality
 Responding to competition
 Time-to-market
 Social and demographic reasons (e.g. changing taste &
 Customer satisfaction
preferences, aging population)
 Competitive advantage
 Meeting legal and industry requirements (e.g. ISO series)
 Legal requirements: regulations, laws , safety issues
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CRITERIA FOR A GOOD DESIGN PRODUCT DESIGN CONCEPT/APPROACH

Designing products for ease of production comes out with three interrelated
 Aesthetically pleasing concepts
 Specialization:
 Meeting customer expectations using resources exclusively to make a narrow range of products
 Satisfying customer needs  Standardization:
 High performance the design activity that reduces variety among a group of
products or parts
 Reliability
 Simplification (value engineering):
 Easy to manufacture the elimination of the complex features so that the intended function is
performed but with reduced costs, higher quality, or more customer
satisfaction
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SIMPLIFICATION/VALUE ENGINEERING CONT… INTRODUCING NEW PRODUCTS

Why should new products be introduced?
 Preliminary considerations
o can we find new markets for existing products?
o are there new uses for existing products?
o can we modify the service delivery aspect of existing products?
 When should new products be introduced?
o life cycle audits (considering the position of the product in its life
cycle)
- helps in revitalizing or dropping existing products
o design and introduction lead time (time between when ideas are
generated till they finally turned into product)
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LIFE CYCLE OF PRODUCT OR SERVICE LIFE CYCLE OF PRODUCT OR SERVICE

 May be any length from a few hours to decades.
Example;
• Few Hours (Newspapers)
• Months (Seasonal Fashions)
• Years (VCRs, Bluray, Pendrives)
• Decades (Volkswagen Beetle)
 The operations function must be able to introduce
new products successfully

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INTRODUCTORY PHASE GROWTH PHASE

Still undergoing “fine tuning” and there are Expenses like: • Product Design begins to stabilize
• Research
• Product Development • Effective Forecasting for matching capacity with demand
• Process Modification & Enhancement becomes necessary
• Supplier Development
• Examples: Mobile Phones, Computers

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MATURITY PHASE SATURATION PHASE

• Product is mature • Product is in abundance in the market
• Competitors established • More production, less demand
• High volume, innovative production required • Improvement and value addition required to
• Cost Control, Design Freeze important maintain demand

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DECLINE PHASE IDEAS STAGES OF PRODUCT

• Dying Products may be stopped ORGs ABILITY
DEVELOPMENT
• Resources & managerial talent is wasted in CUSTOMER
REQUIREMENTS

producing them FUNCTIONAL SPECS

• Unless dying products make some unique Scope of product

PRODUCT
SPECIFICATIONS

contribution to the firm’s reputation, their Dev. team

DESIGN REVIEW

production should be terminated. TEST MARKET

INTRODUCTION

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EVALUATION
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NEW PRODUCT OPPORTUNITIES NEW PRODUCT SOURCES

R&D
1. Understanding the customer Marketing Dpt.
Brainstorming is a
Internal

Employees
2. Economic change useful tool Management

3. Sociological and demographic change

4. Technological change Sources of ideas

5. Political/legal change
External

Customers
6. Market practice, professional standards, Competitors
suppliers, distributors Internet/foreign markets
Government

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TERMS UNDER PRODUCT DESIGN TERMS UNDER PRODUCT DESIGN

 Manufacturability  Reverse engineering
The ease of fabrication and/or assembly while considering The dismantling and inspecting of a competitor’s product
cost, quality and productivity to discover product improvements
 Concurrent engineering  Robust design
Bringing engineering design, suppliers of inputs, Design that results in products or services that can
manufacturing personnel, etc. together early in the function over a broad range of conditions
design phase. Insensitive to environmental factors either in
manufacturing or in use.
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TERMS UNDER PRODUCT DESIGN CONT… TERMS UNDER PRODUCT DESIGN CONT…
 Computer-Aided Design (CAD)  Design for manufacturing (DFM)
- using computer graphics to assist in the design of products - minimizing parts requirements and simplifying operations; and
o increases productivity of designers, 3 to 10 times - designing part for multiple applications/modular design
o creates a database for manufacturing information on product  Modular Design
specifications - a form of standardization in which component parts are
o provides possibility of engineering and cost analysis on subdivided into modules that are easily replaced or
proposed designs interchanged (e.g. building planes)

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QUALITY FUNCTION DEPLOYMENT HOUSE OF QUALITY

• Determining what will satisfy the customer
• Translating Customer desires into the target design
• Used early in the design process Correlation
• One tool is House of Quality: Relationship between customer desires and matrix

product or service. Design

requirements
Six Steps for building HOQ:
– Identify Customer wants
Customer
– Identify how product will satisfy customer require-
Relationship
matrix
Competitive
assessment
ments
– Relate customer wants to product hows
– Identify relation between firm’s hows
Specifications
– Develop Important Ratings or
target values
– Evaluate competing products www.knust.edu.gh www.knust.edu.gh

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HOQ EXAMPLE PROCESS DESIGN

Process design considerations:
Correlation:
X Strong positive
Positive
 Type of process; ranges from intermittent to repetitive/continuous
 Degree of vertical integration (the degree a firm chooses to do
X X
X X
X Negative
* Strong negative
Water resistance
Accoust. Trans.
Energy needed

Energy needed

Engineering
to close door

to open door
Check force

processes itself- raw material to sales)

Competitive evaluation
resistance
Door seal

Characteristics
Window

X = Us
on level
ground

A = Comp. A
B = Comp. B
Customer
 Flexibility of resources (production & Volume)
(5 is best)
Requirements 1 2 3 4 5

X AB
Easy to close 7
Stays open on a hill 5 X AB
 Degree of customer contact (a lot of intermediaries?)
 Make-to-stock strategy (uses the push system/tradition production
Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise
Importance weighting
2
10 6 6 9 2 3
X A

Relationships:
B
approach)
 Assemble-to-order strategy (e.g. the IT industry assembles
level to 7.5 ft/lb

Strong = 9
Reduce energy

Reduce energy
Reduce force
current level

current level
current level
to 7.5 ft/lb.

Medium = 3
Target values
Maintain

Maintain
Maintain

components based on orders)

Small = 1
to 9 lb.

 Make-to-order strategy (uses the pull system/orders trigger

5 B
BA BA
B BXA X
Technical evaluation 4
A
X B
A X
3
(5 is best) 2 X A

production)
X
1

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TYPES OF PROCESS DESIGN PROCESS DESIGN TYPES CONTINUUM

 Intermittent operations:
• Capable of producing a large variety of product designs in
relatively low volumes (job Shop/batch)
Intermittent
operations
 Continuous operations:
• Capable of producing one (or a few) standardized designs in
very high volumes(mass production) Continuous
operations

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TYPES OF PROCESS DESIGN CONT… GOALS FOR ETHICAL AND ENVIRONMENTALLY FRIENDLY DESIGNS
Differences between intermittent and continuous operations It is possible to enhance productivity, drive down costs, and
Intermittent Continuous preserve resources using ethical considerations in product design.
Product variety Large Small 1. Develop safe and more environmentally sound products
Degree of Low High
standardization 2. Minimize waste of raw materials and energy
Critical resource Labour intensive Capital intensive
3. Reduce environmental liabilities
Importance of work High Low
skills 4. Increase cost-effectiveness of complying with
Type of equipment General purpose Specialized environmental regulations
Throughput time Longer Shorter
Work-in-progress More Less 5. Be recognized as a good corporate citizen
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GUIDELINES FOR ENVIRONMENTALLY FRIENDLY DESIGNS SERVICE DESIGN

Service typically includes direct interaction with the customer
1. Make products recyclable
2. Use recycled materials Approaches to Service Design:
3. Use less harmful ingredients  Substitute technology for people (automate to reduce interaction)

4. Use lighter components o E.g. ATM for both deposits and withdrawal?

 Get the customer involved in the design (QFD) and delivery stage (self-
5. Use less energy
service)
6. Use less material
 Provide high level of customer attention

 Modularization (Food & catering industry)

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SERVICE DESIGN DESIGNING SERVICE ORGANIZATION

A service is an intangible commodity that are offered by an
organizations. Service typically includes direct interaction with
the customer.
Services can be executed or delivered either directly
by people, such as in the case of professional services, or by
systems such as in the case of utilities. Examples:
teachers service,
doctor’s, service, lawyer’s, service, waiters service, after sale
services etc.
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• Designing of service is not easy like product because service cannot
be stored for future consumption. They should be met whenever
they are needed. Therefore, the availability of service capacities is a
major consideration in designing of service. The designing of service
involves following five stages in logical sequences.
• Identification of customer requirement.
• Development of service concept.
• Detailed design.
• Process technology.
• Redesign of process technology.
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SERVICE BLUE PRINTING

It is a method used in service design to describe and analyze a proposed service
A useful tool for conceptualizing a service delivery system showing basic customer and service
actions. A key element of a service blueprint is a flowchart of the service
Key Components of a Service Blueprint
1. Define standards for front-stage activities
2. Specify physical evidence
3. Identify principal customer actions
4. Line of interaction (customers and front-stage personnel)
5. Front-stage actions by customer-contact personnel
6. Line of visibility (between front stage and backstage)
7. Backstage actions by customer contact personnel
8. Support processes involving other service personnel
9. Support processes involving IT
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MOMENT OF TRUTH
 In customer service is the instance of contact or interaction between a
customer and an organization, that gives the customer an opportunity to
form (or change) an impression about the organization.
 This concept was created by CEO of Scandinavian Airways, Jan Carlzon
(1981 -1994)
 Critical moments between the customer and the organization that
determine customer satisfaction
 Note: there may be many of these moments, and these are the
opportunities to gain or lose business

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End of Lecture

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