Chapter 4

Product &
Service Design
 Strategic Product and Service Design

– The essence of an organization is the goods and services it offers

– Every aspect of the organization is structured around them

– Product and service design – or redesign – should be closely tied to an

organization’s strategy
 What Does Product & Service Design Do?
1. Translate customer wants and needs into product and service requirements
2. Refine existing products and services
3. Develop new products and services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications
8. Translate product and service specifications into process specifications
9. Involve inter-functional collaboration
 Key Questions
1. Is there a demand for it? 3. What level of quality is
– Market size appropriate?
– Demand profile Customer expectations
Competitor quality
2. Can we do it? Fit with current offering
– Manufacturability - the capability of
an organization to produce an item at 4. Does it make sense from an
an acceptable profit economic standpoint?
– Serviceability - the capability of an Liability issues, ethical
organization to provide a service at an considerations, sustainability
acceptable cost or profit issues, costs and profits
 Reasons to Design or Re-Design
– The driving forces for product and service design or redesign are
market opportunities or threats:
– Economic
– Social and demographic
– Political, liability, or legal
– Competitive
– Cost or availability
– Technological
 Idea Generation
1. Supply-chain based – Research and development
– Supply- chain based: (R&D)
– Organized efforts to increase
2. Competitor based Ideas can come from scientific knowledge or
anywhere in the supply product innovation
– Basic research
3. Research based – R&D chain:
– Has the objective of
– Customers advancing the state of
knowledge about a subject
– Competitor based: By studying how a without any near-term
– Suppliers expectation of commercial
competitor operates and its products applications
and services, many useful ideas can be – Distributors – Applied research
generated – Has the objective of
– Employees achieving commercial
applications
– Reverse engineering – Maintenance and repair – Development
– Dismantling and inspecting a personnel – Converts the results of
applied research into useful
competitor’s product to discover commercial applications.
product improvements
 Legal Considerations

– Legal considerations
– Product liability
– The 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
– Under the UCC, products carry an implication of merchantability and fitness
 Ethical Considerations

– Designers are often under pressure to

– Speed up the design process
– Cut costs
– These pressures force trade-off decisions
– What if a product has bugs?
– Release the product and risk damage to your reputation
– Work out the bugs and forego revenue
 Sustainability

– Sustainability
– Using resources in ways that do not harm ecological systems that support human existence
– Key aspects of designing for sustainability
– Cradle-to-grave assessment (Life-Cycle assessment)
– End-of-life programs
– The 3-Rs
– Reduction of costs and materials used
– Re-using parts of returned products
– Recycling
 Cradle-to-Grave Assessment

– Cradle-to-Grave Assessment
– aka Life-Cycle Assessment (LCA)
– The assessment of the environmental impact of a product or service throughout its useful
life
– Focuses on such factors as
– Global warming
– Smog formation
– Oxygen depletion
– Solid waste generation
– LCA procedures are part of the ISO 14000 environmental management procedures
 Reduce: Costs and Materials
- Value analysis

– Examination of the function of parts and materials in an effort to reduce the cost and/or improve the
performance of a product
– Common questions used in value analysis
– Is the item necessary; does it have value; could it be eliminated?
– Are there alternative sources for the item?
– Could another material, part, or service be used instead?
– Can two or more parts be combined?
– Can specifications be less stringent to save time or money?
– Do suppliers/providers have suggestions for improvements?
– Can packaging be improved or made less costly?
 Re-Use: Remanufacturing & DFD

– Remanufacturing
– Refurbishing used products by replacing worn-out or defective components
– Can be performed by the original manufacturer or another company
– Reasons to remanufacture:
– 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 increasingly requiring manufacturers to take back
used products
– Design for disassembly (DFD)
– Designing a product to that used products can be easily taken apart
 Recycle

– Recycling
– Recovering materials for future use
– Applies to manufactured parts
– Also applies to materials used during production
– Why recycle?
– Cost savings
– Environmental concerns
– Environmental regulations
– Companies doing business in the EU must show that a specified proportion of their products are recyclable

– Design for recycling (DFR)

– Product design that takes into account the ability to disassemble a used product to recover the
recyclable parts
Product or Service Life Stages
 Standardization

– 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
 Designing for Mass
Customization

– Mass customization
– A strategy of producing basically standardized goods or services, but incorporating
some degree of customization in the final product or service
– Facilitating techniques
– Delayed differentiation
– Modular design
 Delayed Differentiation

– Delayed differentiation
– The process of producing, but not quite completing, a product or
service until customer preferences are known
– It is a postponement tactic
– Produce a piece of furniture, but do not stain (color) it; the
customer chooses the stain (color)
 Modular Design

– Modular design
– A form of standardization in which component parts are grouped into modules that are easily
replaced or interchanged
– Advantages
– Easier diagnosis and remedy of failures
– Easier repair and replacement
– Simplification of manufacturing and assembly
– Training costs are relatively low
– Disadvantages
– Limited number of possible product configurations
– Limited ability to repair a faulty module; the entire module must often be scrapped
 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
– Reliabilities are always specified with respect to certain conditions
– Normal operating conditions
– The set of conditions under which an item’s reliability is specified
 Robust Design

– Robust design
– A design that results in products or services that can function over a broad range of conditions
– The more robust a product or service, the less likely it will fail due to a change in the environment in
which it is used or in which it is performed
– Pertains to product as well as process design
– Consider the following automobiles:
– Ferrari Enzo
– Toyota Avalon
– Which is design is more robust?
 Degree of Newness

– Product or service design changes:

1. Modification of an existing product or service
2. Expansion of an existing product line or service offering
3. Clone of a competitor’s product or service
4. New product or service

– The degree of change affects the newness of the product or service to the market
and to the organization
– Risks and benefits?
 Quality Function Deployment
(QFD)

– Quality Function Deployment (QFD)

– An approach that integrates the “voice of the customer” into both
product and service development
– The purpose is to ensure that customer requirements are factored
into every aspect of the process
– Listening to and understanding the customer is the central feature
of QFD
The House of Quality Sequence
 Kano Model

– Basic quality
– Refers to customer requirements that have only limited effect on customer
satisfaction if present, but lead to dissatisfaction if absent
– Performance quality
– Refers to customer requirements that generate satisfaction or dissatisfaction in
proportion to their level of functionality and appeal
– Excitement quality
– Refers to a feature or attribute that was unexpected by the customer and
causes excitement
The Kano Model – As Time
Passes
 Concurrent Engineering

– Concurrent engineering
– Bringing engineering design and manufacturing personnel together early in the
design phase
– Also may involve manufacturing, marketing and purchasing personnel in
loosely integrated cross-functional teams
– Views of suppliers and customers may also be sought
– The purpose is to achieve product designs that reflect customer wants as well as
manufacturing capabilities
 Computer-Aided Design (CAD)

– Product design using computer graphics

– Advantages
– Increases productivity of designers, 3 to 10 times
– Creates a database for manufacturing information and product
specifications
– Provides possibility of engineering and cost analysis on proposed designs
– CAD that includes finite element analysis (FEA) can significantly reduce time to
market
– Enables developers to perform simulations that aid in the design, analysis,
and commercialization of new products
 Production Requirements

– Designers must take into account production capabilities

– Equipment
– Skills
– Types of materials
– Schedules
– Technologies
– Special abilities
 Manufacturability

– Ease of fabrication and/or assembly

– It has important implications for
– Cost
– Productivity
– Quality
 Component Commonality

– When products have a high degree of similarity in features and components,

a part can be used in multiple products
– Benefits:
– Savings in design time
– Standard training for assembly and installation
– Opportunities to buy in bulk from suppliers
– Commonality of parts for repair
– Fewer inventory items must be handled
 Service Design

– Begins with a choice of service strategy, which determines the nature

and focus of the service, and the target market
– Key issues in service design
– Degree of variation in service requirements
– Degree of customer contact and involvement
 Differences between Service
and Product Design
1. Products are generally tangible, services intangible
2. Services are created and delivered at the same time
3. Services cannot be inventoried
4. Services are highly visible to consumers
5. Some services have low barriers to entry and exit
6. Location is often important to service design, with convenience as a major factor
7. Service systems range from those with little or no customer contact to those that have a
very high degree of customer contact
8. Demand variability alternately creates waiting lines or idle service resources
 The Well-Designed Service System Characteristics

– Being consistent with the organization mission

– Being user-friendly
– Being robust if variability is a factor
– Being easy to sustain
– Being cost-effective
– Having value that is obvious to the customer
– Having effective linkages between back- and front-of-the-house operations
– Having a single, unifying theme
– Having design features and checks that will ensure service that is reliable and of
high quality
 Successful Service Design
1. Define the service package in detail
2. Focus on the operation from the customer’s perspective
3. Consider the image that the service package will present both to customers and to prospective customers
4. Recognize that designers’ familiarity with the system may give them a quite different perspective than that
of the customer, and take steps to overcome this
5. Make sure that managers are involved and will support the design once it is implemented
6. Define quality for both tangibles and intangibles
7. Make sure that recruitment, training, and reward policies are consistent with service expectations
8. Establish procedures to handle both predictable and unpredictable events
9. Establish system to monitor, maintain, and improve service