4-1 Product and Service Design
Operations Management
William J. Stevenson
8th edition
4-2 Product and Service Design
CHAPTER
4
Product
and
Service Design
Operations Management, Eighth Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
4-3 Product and Service Design
Product Design
Product design is the process where designers use to blend user
needs with business goals to help brands make consistently
successful products.
Product designers work to optimize the user experience in the
solutions they make for their users—and help their brands by
making products sustainable for longer-term business needs.
Major factors in design strategy-
Cost
Quality
Time-to-market
Customer satisfaction
Competitive advantage
Product and service design – or redesign – should be
closely tied to an organization’s strategy
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Sources of Ideas for Products and Services
Internal
Employees
Marketing department
R&D department
External
Customers
Competitors
Suppliers
4-5 Product and Service Design
Product or Service Design Activities
Translate customer wants and needs into
product and service requirements
Refine (improve) existing products and services
Develop new products and services
Formulate quality goals
Formulate cost targets
Construct and test prototypes (samples)
Document specifications
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Reasons for Product or Service Design
Economic
Social and demographic
Political
Competitive
Technological
Liability or legal
4-7 Product and Service Design
Focuses/ Objectives of Product and Service Design
Primary/ Main focus
Customer satisfaction
Secondary focus
Function of product/ service
Cost/ profit
Quality
Appearance
Ease of production/ assembly
Ease of maintenance/ service
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Designing for Operations of P/S: Guidelines
Taking into account the capabilities of the
organization in designing goods and services
Guidelines to follow by the Designers of P/S:
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
4-9 Product and Service Design
Issues/ Factors Considering in P/S Design
Legal Issues:
Product liability- A manufacturer is liable for any injuries or
damages caused by a faulty product.
Uniform commercial code- Products carry an implication of
merchantability and fitness.
Ethical Issues:
Releasing products with defects is an unethical job.
Environmental Issues:
Concerns about the environmental pollution
Other Issues: (Details in the next slides)
1. Product/service life cycles
2. How much standardization
3. Product/service reliability
4. Range of operating conditions
4-10 Product and Service Design
1. Life Cycles of Products or Services
Figure 4.1
Saturation
Maturity
Decline
Demand
Growth
Introduction
Time
4-11 Product and Service Design
2. Standardization: Advantages and Disadvantages
Standardization- extent to which there is an absence of
variety in a product, service or process
Standardized products are immediately available to customers.
Advantages:
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
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.
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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.
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Ways/ Forms of Standardization
• Mass customization: It is a strategy of producing
standardized goods or services, but incorporating some
degree of customization.
• Delayed differentiation: It is a postponement tactic of
producing but not quite completing a product or service
until customer preferences or specifications are known.
• Modular design: It 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.
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3. Reliability & 4. Operating Conditions
3. Reliability: The ability of a product, part, or system to
perform its intended function under a prescribed set of
conditions. Besides, the situation in which a product, part, or
system does not perform as intended is called failure.
Ways of improving Reliability:
i) Component design, ii) Production/assembly techniques, iii)
Testing, iv) Preventive maintenance procedures, v) User
education, and vi) System design etc.
4. Normal operating conditions:
The set of conditions under which an item’s reliability is
specified. Normal Operating Conditions means those Service
conditions which are within the control of Grantee (Grantee
include natural disasters, civil disturbances).
4-15 Product and Service Design
Product Design: Strategies/ Ways
Product Life Cycles
Robust Design
Concurrent Engineering
Computer-Aided Design
Modular Design
Recycling
Research and Design
4-16 Product and Service Design
Product Design: Strategies/ Ways (Contd...
1. Life Cycles of Products or Services (Figure 4.1)
Saturation
Maturity
Decline
Demand
Growth
Introduction
Time
4-17 Product and Service Design
Product Design: Strategies/ Ways (Contd..
2. Robust Design: Design that results in
products or services that can function over a
broad range of conditions (reducing variations).
Degree of Newness
i. Modification of an existing product/
service
ii. Expansion of an existing product/service
iii. Clone of a competitor’s product/service
iv. New product/service
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Product Design: Strategies/ Ways (Contd..
3. Concurrent engineering: It is the bringing together of
engineering design and manufacturing personnel early in
the design phase…. in which the different stages run
simultaneously (at once), rather than consecutively
(serially).
Reverse engineering is the dismantling and inspecting of
a competitor’s product to discover product improvements.
4. Modular design: It 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
4-19 Product and Service Design
Product Design: Strategies/ Ways (Contd..
5. 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
6. Recycling: recovering materials for future/ further use
Recycling reasons-
Cost savings
Environment concerns
Environment regulations
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Product Design: Strategies/ Ways (Contd..
7. Research and Development: 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 is the ease of fabrication (production)
and/or assembly which is important for:
Cost
Productivity
Quality
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Phases in Product Development Process
1. Idea generation (SCM based, competitor based, research based)
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
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Service and Service Design
Service is an act
Service is something that is done to or for a customer
Many services are bundled with products
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
4-23 Product and Service Design
Service Design
Service design is the activity of planning and
arranging people, infrastructure, communication and
material components of a service in order to improve
its quality, and the interaction between the service
provider and its users.
Service design involves
The physical resources needed
The goods that are purchased or consumed by the
customer
Explicit services- observable benefits
Implicit services- psychological benefits
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Service Package
A Service Package is a collection of goods and
services provided by a service process to its customers.
It consists of four features:
1. Supporting Facility: The physical resources that
must be in place before a service can be offered.
2. Facilitating Goods: The materials purchased or
consumed by the customer or the items provided by
the customer to receive a service.
3. Explicit Services: The readily observable benefits.
4. Implicit Services: Psychological benefits.
4-25 Product and Service Design
Service or Product Development Strategies
Product Variety: Offering a wide assortment/ variety.
Design: Ease of use and desirable features.
Innovation: Translate new technology into new
products.
Service: Products with services added.
Leader: Being first to introduce new services and/or
products.
Middle of the Road: Wait for the leaders to introduce
new services and/or products.
Laggard: Wait to see if the leader’s new services
and/or products catch on in the market.
4-26 Product and Service Design
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
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Phases/ Steps 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
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Service Blueprinting: It’s Steps
Service blueprinting- is a method used in service
design to describe and analyze a proposed service.
It is a useful tool for conceptualizing a service delivery
system.
Following are the steps of 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
4-29 Product and Service Design
Characteristics of Well Designed Service Systems
Following are the characteristics of a well designed
service systems:
1. Consistent with the organization mission
2. User friendly
3. Robust (exhibit very good short-term process capability)
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
4-30 Product and Service Design
Challenges of Service Design
Variable requirements
Difficult to describe
High customer contact
Service – customer encounter (meeting)
4-31 Product and Service Design
Any Questions?
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