Product and Service

Design
GROUP 4 | ABUAN & TAMAYO
Product and Service Design
• Essence of an organization is the goods and
services it offers.
• Every aspect of the organization is structures around
them.
• Product and service design or redesign should
be closely tied to an organization’s strategy.
Product and Service Design

• Good design makes good business

sense because it translates customer
needs into the shape and form of the
product or service and so enhances
profitability.
Product Design

The objective of product design is to create goods or

services with excellent functional utility and sales
appeal at an acceptable cost and within a
reasonable time. The product should be produced
using high-quality, low-cost materials and methods.
Service Design
Service design is a process in which the designer focuses on creating
optimal service experiences.

⮚ Sequencing, by partitioning a complex service into separate processes.

⮚ Evidencing, by visualizing service experiences and making them
tangible.
⮚ Holistic, by considering touchpoints in a network of interactions and
users.
Design as Business Strategy

• Product and service innovation is

becoming a key avenue in pursuing a
competitive edge, and sustainability
issues are being given increasing
importance in business decisions.
What Does Product & Service Design Do?
1. Translate customer wants and needs into product and service requirements.
(marketing, operations)
2. Refine existing products and services. (marketing)
3. Develop new products and/or services. (marketing, operations)
4. Formulate quality goals. (marketing, operations)
5. Formulate cost targets. (accounting, finance, operations)
6. Construct and test prototypes. (operations, marketing, engineering)
7. Document specifications.
8. Translate product and service specifications into process specifications.
(engineering, operations)
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:
1. Is there demand for it? What is the potential size of the market, and what is the expected
demand profile (will demand be long term or short term, will it grow slowly or quickly)?
2. Can we do it? Do we have the necessary knowledge, skills, equipment, capacity, and
supply chain capability? For products, this is known as manufacturability; for services,
this is known as serviceability. Also, is outsourcing some or all of the work an option?
3. What level of quality is appropriate? What do customers expect? What level of quality do
competitors provide for similar items? How would it fit with our current offerings?
4. Does it make sense from an economic standpoint? What are the potential liability
issues, ethical considerations, sustainability issues, costs, and profits? For nonprofits, is the
cost within budget?
Manufacturability
• The capability of an organization to produce an
item at an acceptable profit.
Serviceability
• The capability of
an organization to
provide a service
at an acceptable
cost or profit.
Reasons for Product and Service Design or Redesign

Product and service design has typically had strategic

implications for the success and prosperity of an
organization. Organizations become involved in product and
service design or redesign for a variety of reasons.

The main forces that initiate design or redesign are market

opportunities and threats.
Reasons for Product and Service Design or Redesign

The factors that give rise to market opportunities and threats can be one or more changes:
• 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).
Ideas Generation

1. Supply-chain based
• Ideas can come from anywhere in the supply chain:

⮚ Customers – can come from surveys, focus groups, complaints, and unsolicited
suggestions from improvement
⮚ Suppliers, Distributors, Employees - can be obtained from interviews, direct or
indirect suggestions, and complaints
⮚ Maintenance and repair personnel
Ideas Generation
2. Competitor based
• By studying competitor’s products or services and how the competitor operates, an
organization can glean many ideas

• Reverse engineering

- dismantling and inspecting a competitor’s product to discover product improvements

- Can enable company to leapfrog the competition by developing an even better
product
- Suppliers are still another source of ideas.
Ideas Generation
3. Research based

• Organized efforts to increase scientific knowledge or product innovation

• Some research leads to patents, with potential of licensing and royalties
• First organization to bring a new product or service to market generally stands profit
from it before the others can catch up. Early products may be priced higher because
a temporary monopoly exist until competitors bring their versions out.
Research Based

• BASIC RESEARCH

Has the objective of advancing the state of knowledge about a subject

without any near term expectation of commercial applications
Generally underwritten by the government and large corporations
Research Based

• APPLIED RESEARCH

Has the objective of achieving commercial applications

because of the potential for commercial applications, appeals
to a wide spectrum of business organizations
Research Based

• DEVELOPMENT

Converts the results of applied research into useful commercial

applications.
Legal Considerations
• Designers must be careful to take into account a wide array
of legal and ethical considerations. Generally, they are
mandatory. Moreover, if there is a potential to harm the
environment, then those issues also become important.
Most organizations are subject to numerous government
agencies that regulate them.
Product Liability
• responsibility a manufacturer has for any injuries or damages caused by as
faulty product

Some of the concomitant costs

• Litigation
• Legal and insurance costs
• Settlement costs
• Costly product recalls
• Reputation effects
Uniform Commercial Code (UCC)

• A product must be suitable for its intended purpose.

Ethical Considerations

• It is important for managers to be aware of these issues

and for designers to adhere to ethical standards.
Ethical Considerations

• Designers are often under pressure to speed up the

design process and to cut costs. These pressures
often require them to make trade-off decisions, many
of which involve ethical considerations.
Ethical Considerations
Organizations generally want designers to adhere to
guidelines such as the following:

• Produce designs that are consistent with the goals of the

organization.
• Give customers the value they expect.
• Make health and safety a primary concern.
Environmental Factors

1.Sustainability

Using resources in ways that do not harm

ecological systems that support human existence.
Key Aspects of designing for sustainability

1.1 Cradle-to-Grave Assessment also

known as Life-cycle assessment (LCA)

Assessment of the environmental impact of a

product or service throughout its useful life.
Key Aspects of designing for sustainability

1.1 Cradle-to-Grave Assessment

Focuses on such factors as:

- global warming
- smog formation
- oxygen depletion
- solid waste generation
Key Aspects of designing for sustainability

1.1 Cradle-to-Grave Assessment

LCA procedures are part of the ISO 14000

environmental management procedures.
Key Aspects of designing for sustainability

1.2 End-of-Life 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
Key Aspects of designing for sustainability

1.3 The 3-Rs

Deal with products that have reached the end of

their useful lives. The purpose of these programs
is to reduce the dumping of products
Key Aspects of designing for sustainability

1.3 The 3-Rs

1.3.1 Reduce: Value Analysis
* examination of the function of parts and
materials in an effort to reduce.
* remanufacturing refers to refurbishing used
products by replacing worn-out or defective
components, and reselling the products.
* can be performed by the original manufacturer
or another company.
Environmental Factors

Common questions used in value analysis

1. Is the item necessary; does it have value; could it be eliminated?
2. Are there alternative sources for the item?
3. Could another material, part, or service be used instead?
4. Can two or more parts be combined?
5. Can specifications be less stringent to save time or money?
6. Do suppliers/providers have suggestions for improvements?
7. Can packaging be improved or made less costly?
Key Aspects of designing for sustainability

1.3 The 3-Rs

1.3.2 Reuse: Remanufacturing
refers to refurbishing used products by
replacing worn-out or defective components, and
reselling the products. It can only be performed by
the original manufacturer or another company.
Key Aspects of designing for sustainability

1.3 The 3-Rs

Reasons to manufacture:
- remanufactured products can be sold for about 50% of the cost of a new
product.
- the process requires mostly unskilled and semi-skilled workers.
- in the global market, European lawmakers are increasing.
Key Aspects of designing for sustainability

1.3 The 3-Rs

Design for disassembly (DFD):
designing a product to that used products
can be easily taken apart.
Key Aspects of designing for sustainability

1.3 The 3-Rs

1.3.3 Recycle
recovering materials for future use.
- applies to manufacture parts
- also applies to materials used
Key Aspects of designing for sustainability

1.3 The 3-Rs

Reasons for recycling:
1. Cost savings
2. Environmental concerns
3. Environmental regulations
Key Aspects of designing for sustainability

1.3 The 3-Rs

Design for recycling (DFR):
product designs that takes into account
the ability to disassemble a used product to
recover the recyclable parts.
Other Design Considerations

1. Standardization
- extent to which there is an absence of
variety in a product, service, or process.
- Products are made in large quantities of
identical items.
- Every customer or item processed
receives essentially the same service.
Other Design Considerations

1. Standardization
Advantages:
- fewer parts to deal with in inventory and in
manufacturing
- reduced training costs and time
- more routine purchasing, handling, and inspection procedures.
- orders fillable from inventory
- opportunities for long production runs and automation
- need for fewer parts justifies increased expenditures on perfecting
design and improving quality control.
Other Design Considerations

1. Standardization

Modular design – a form of

standardization in which component parts are
grouped into modules that are easily
replaced or interchanged.
Other Design Considerations

1. Standardization
Advantages of Modular Design
- easier diagnosis and remedy of failures
- easier repair and replacement
- simplification of manufacturing and assembly
- training costs are relatively low
Other Design Considerations

1. Standardization
Disadvantages of Modular Design
- limited number of possible product
configurations
- limited ability to repair a faulty module;
the entire module must often be scrapped.
Other Design Considerations

2. Reliability
The ability of a product, part, or