Operations Management

and
Total Quality Management (TQM)
Module 3

Product and Service Design

 Learning Objectives 

By the end of the lesson, the participants should be able to:

 Explain the strategic importance of product and service design.

 Describe what product and service design does.

 Discuss the importance of legal, ethical, and sustainability

considerations in product and service design.
 Identify some reasons for design or redesign.

 Briefly describe the phases in product design and development.

 List the characteristics of well-designed service systems.

Words Ponder
INTRODUCTION
 What Does Product and Service Design Do?
The various activities and responsibilities of product and service design
include the following:
 Translate customer wants and needs  Formulate cost targets.
into product and service  Construct and test prototypes.
requirements.  Document specifications.
 Refine existing products and services.
 Translate product and service
 Develop new products and/or specifications into process
services. specifications.
 Formulate quality goals.
 Product and Service Design
Key questions of product and service design
From a buyer’s standpoint, most purchasing decisions entail two
fundamental considerations; one is cost and the other is quality or
performance.
From the organization’s standpoint, the key questions are:
 Is there demand for it?
 Can we do it?
 What level of quality is appropriate?
 Does it make sense from an economic standpoint?
 IDEA GENERATION

 One of the strongest motivators for new and improved products or

services is competitors.
 Research is another source of ideas for new or improved products
or services (Research and development (R&D).
 Customer input can come from surveys, focus groups, complaints,
and unsolicited suggestions for improvement.
 Input from suppliers, distributors, and employees can be obtained
from interviews, direct or indirect suggestions, and complaints.
 Product and Service Design

Major factors in design strategy

 Cost
 Quality
 Time-to-market
 Customer satisfaction
 Competitive advantage
 Reasons for Product or Service Design
 Economic
 (e.g., low demand, excessive
warranty claims, the need to reduce
costs).
 Social and demographic
 (e.g., aging baby boomers,
population shifts).
 Political, liability, or legal
 (e.g., government changes, safety
issues, new regulations).
 Competitive
 (e.g., new or changed products or
services, new
advertising/promotions).
 Cost or availability
 (e.g., of raw materials, components,
labor, water, energy).
 Technological
 (e.g., in product components,
processes).
 Objectives of Product and Service Design

 Main focus
 Customer satisfaction
 Secondary focus
 Function of product/service
 Cost/profit
 Quality
 Appearance
 Ease of production/assembly
 Ease of maintenance/service
 Legal, Ethical, and Environmental Issues

 Legal
 FDA, OSHA, IRS
 Product liability
 Uniform commercial code
 Ethical
 Releasing products with defects
 Environmental
 EPA
Legal, Ethical, and Environmental Issues (continued)

 Product liability - is the responsibility of a

manufacturer for any injuries or damages caused
by a faulty product because of poor workmanship
or design.

 Uniform Commercial Code - A product must be

suitable for its intended purpose.
 HUMAN FACTORS

 Human factor issues often arise in the design of consumer

products.
 Safety and liability are two critical issues in many instances.
 For example, the crashworthiness of vehicles is of much interest to consumers,
insurance companies, automobile producers, and the government.
 Companies in certain businesses may seek a competitive edge by adding new
features. Although this can have obvious benefits, it can sometimes be “too much
of a good thing,” and be a source of customer dissatisfaction.
 CULTURAL FACTORS

Product designers in companies that operate globally also

must take into account any cultural differences of different
countries or regions related to the product. This can result in
different designs for different countries or regions.
Example:
Mc Donald’s fast-food presence globally, offer variety of
food to cater the customers preference.
 GLOBAL PRODUCT AND SERVICE DESIGN

 Global product design can provide design outcomes that increase the
marketability and utility of a product.
 The diversity of an international team may yield different points of
view and ideas and information to enrich the design process.
 Advances in information technology have played a key role in the
viability of global product design teams by enabling team members to
maintain continual contact with each other and to instantaneously share
designs and progress, and to transmit engineering changes and other
necessary information.
 ENVIRONMENTAL FACTORS:
SUSTAINABILITY
Product and service design is a focal point in the quest for
sustainability.
Key aspects include:
 Cradle-to-grave assessment,
 End-of-life programs,
 Reduction of costs and materials used,
 Reuse of parts of returned products, and
 Recycling.
 Cradle-to-grave assessment

Cradle-to-grave assessment - The assessment of the environmental impact

of a product or service throughout its useful life.
 also known as life cycle analysis, is the assessment of the environmental
impact of a product or service throughout its useful life, focusing on such
factors as global warming (the amount of carbon dioxide released into the
atmosphere), smog formation, oxygen depletion, and solid waste generation.
 The goal of cradle-to-grave assessment is to choose products and services
that have the least environmental impact while still taking into account
economic considerations.
 End-of-Life Programs

End-of-life (EOL) programs deal with products that have

reached the end of their useful lives.
 The purpose of these programs is to reduce the dumping of
products, particularly electronic equipment, in landfills or
third-world countries, as has been the common practice, or
incineration, which converts materials into hazardous air and
water emissions and generates toxic ash.
 The Three Rs: Reduce, Reuse, and Recycle

Reduce: Value Analysis

 Value analysis - examination of the function of parts and materials in an effort to reduce
cost and/or improve product performance.

Reuse: Remanufacturing
 Remanufacturing - Refurbishing used products by replacing worn-out or defective
components.
 Design for disassembly (DFD) - Design so that used products can be easily taken apart.

Recycle
 Design for recycling (DFR) - Design that facilitates the recovery of materials and
components in used products for reuse.
 Designers Adhere to Guidelines

 Produce designs that are consistent with the goals

of the company
 Give customers the value they expect
 Make health and safety a primary concern
 Consider potential harm to the environment
Life Cycles of Products or Services

 a
Break Time for 10 minutes
You may attend to your personal needs or stand for a
while.
 Standardization

 Standardization
 Extent to which there is an absence of
variety in a product, service or process
 Standardized products are immediately
available to customers
 Advantages of Standardization

 Fewer parts to deal with in inventory &

manufacturing
 Design costs are generally lower
 Reduced training costs and time
 More routine purchasing, handling, and inspection
procedures
 Advantages of Standardization (Cont’d)

 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 of Standardization

 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

 Mass customization:
 A strategy of producing standardized goods or
services, but incorporating some degree of
customization
 Delayed differentiation
 Modular design
 Product Design

 Product Life Cycles

 Robust Design
 Concurrent Engineering
 Computer-Aided Design
 Modular Design
 Delayed Differentiation

 Delayed differentiation is a postponement

tactic
 Producing but not quite completing a
product or service until customer
preferences or specifications are known
 Modular Design
Modular design is a form of
standardization in which component
parts are subdivided into modules that
are easily replaced or interchanged. It
allows:
 easier diagnosis and remedy of
failures
 easier repair and replacement
 simplification of manufacturing and
assembly
 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
Robust Design
 Robust Design:
Design that results
in products or
services that can
function over a
broad range of
conditions.
 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
Phases in Product Development Process
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation
 Reverse Engineering

Reverse engineering
It is the Dismantling and inspecting
of a competitor’s product to discover product
improvements.
 Research & Development (R&D)

 Organized efforts to increase scientific knowledge or

product innovation & may involve:
 Basic Research advances knowledge about a subject
without near-term expectations of commercial
applications.
 Applied Research achieves commercial applications.
 Development converts results of applied research into
commercial applications.
 Manufacturability

 Manufacturability is the ease of

fabrication and/or assembly which is
important for:
 Cost
 Productivity
 Quality
 Computer-Aided Design

 Computer-Aided Design (CAD) is product design using

computer graphics.
 increases productivity of designers, 3 to 10 times
 creates a database for manufacturing information on
product specifications
 provides possibility of engineering and cost analysis on
proposed designs.
 Recycling

 Recycling: recovering materials for future use

 Recycling reasons
 Cost savings
 Environment concerns
 Environment regulations
 Service Design

 Service is an act
 Service delivery system
 Facilities
 Processes
 Skills
 Many services are bundled with products
 Service Design

 Service design involves

 The physical resources needed
 The goods that are purchased or consumed by the
customer
 Explicit services
 Implicit services
 Service Design

 Service
 Something that is done to or for a customer
 Service delivery system
 The facilities, processes, and skills needed to provide a service
 Product bundle
 The combination of goods and services provided to a customer
 Service package
 The physical resources needed to perform the service
 Differences Between Product
and Service Design

 Tangible – intangible
 Services created and delivered at the same time
 Services cannot be inventoried
 Services highly visible to customers
 Services have low barrier to entry
 Location important to service
 Phases in Service Design

1.Conceptualize
2.Identify service package components
3.Determine performance specifications
4.Translate performance specifications into design
specifications
5.Translate design specifications into delivery
specifications
 Service Blueprinting

 Service blueprinting
 A method used in service design to describe and analyze
a proposed service
 A useful tool for conceptualizing a service delivery system
Major Steps in Service Blueprinting

1. Establish boundaries
2. Identify steps involved
3. Prepare a flowchart
4. Identify potential failure points
5. Establish a time frame
6. Analyze profitability
Service blueprints include actions and the amount of discretion for
varying each step
 Characteristics of Well Designed
Service Systems
1. Consistent with the organization mission
2. User friendly
3. Robust
4. Easy to sustain
5. Cost effective
6. Value to customers
7. Effective linkages between back operations
8. Single unifying theme
9. Ensure reliability and high quality
 Challenges of Service Design

 Variable requirements
 Difficult to describe
 High customer contact
 Service – customer encounter
 Quality Function Deployment

 Quality Function Deployment

 Voice of the customer
 House of quality

QFD: An approach that integrates the “voice of the customer” into

the product and service development process.
 The House of Quality
Correlation:
X Strong positive
 a Positive
X X
X Negative
X X
* Strong negative

Water resistance
Accoust. Trans.
Energy needed

Energy needed
Engineering

to close door

to open door
Competitive evaluation

resistance

Check force
Door seal
Characteristics

Window
X = Us

on level
ground
A = Comp. A
B = Comp. B
Customer (5 is best)
Requirements 1 2 3 4 5

X AB
Easy to close 7
Stays open on a hill 5 X AB

Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Importance weighting 10 6 6 9 2 3 Relationships:

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
Small = 1

to 9 lb.
5 B
BA BA
B BXA X
Technical evaluation 4
A
X B
A X
3
(5 is best) 2 X A
X
1
 Operations Strategy

1. Increase emphasis on component commonality

2. Package products and services
3. Use multiple-use platforms
4. Consider tactics for mass customization
5. Look for continual improvement
6. Shorten time to market
 Shorten Time to Market

1. Use standardized components

2. Use technology
3. Use concurrent engineering
End of Presentation
 ACTIVITY / DISCUSSION AND REVIEW QUESTIONS

1. What are some of the factors that cause organizations to

redesign their products or services?

2. Name some of the main advantages and disadvantages of

standardization.

3. What is reverse engineering? Do you feel this is unethical?

4. What is life cycle assessment, and what is its overall goal?

5. Explain the term “three Rs” and how the three Rs relate to
sustainability.
 References
 Stevenson, W. (2011). Operation Management 12th Ed.. New York: Mc Graw-Hill / Irwin

 Sharma, S. (2018). Total Quality Management Concepts, strategy and Implementation for Operational
Excellence. New Delhi: Sage Publication Inc.

 Swink, M., Melnyk, S.A., and Hartley, L.H. (2020). Managing Operation Across the Supply Chain. New
York: Mc Graw Hill

 https://www.winwithteamwork.com/what-we-do/product-and-service-design

 https://www.sofigate.com/insight/3-reasons-why-you-need-service-design/

 https://opentextbc.ca/businessopenstax/chapter/the-product-life-cycle/

 https://www.mindtools.com/pages/article/newCT_97.htm