CBME 1: OPERATIONS

MANAGEMENT AND TQM

CHAPTER 3
PRODUCT AND
SERVICE DESIGN
GROUP 1
 3.1 3.2 3.3 3.4
Introduction Idea Generation Legal and Human
Ethical Factors
Consideration

3.5 3.6 3.7 3.8

Cultural Global Environmental Other Design
Factors Product and Factors Considerations
Service Design Sustainability
 3.9 3.10 3.11 3.12
Phases in Designing for Service Design Operations
Product Production Strategy
Design and
Development
3.1 INTRODUCTION

The essence of a business organization is the

products and services it offers, and every aspect of
the organization and its supply chain are structured
around those products and services.Product or
service design should be closely tied to an
organization’s strategy. It is a major factor in cost,
quality, time-to-market, customer satisfaction, and
competitive advantage.

The introduction of new products or services, or changes to

product or service designs, can have impacts throughout the
organization and the entire supply chain. Some processes may
change very little, while others may have to change considerably
in terms of what they do or how and when they do it.
 WHAT DOES PRODUCT AND
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)
 KEY QUESTIONS

What level of quality is Does it make sense

Is there demand for it? Can we do it? appropriate? from an economic
standpoint?
What is the potential Do we have the What do customers
size of the market, and necessary knowledge, expect? What level of What are the potential
what is the expected skills, equipment, quality do competitors liability issues, ethical
demand profile? capacity, andsupply provide for similar considerations,
chain capability? Also, items? How would it fit sustainability issues,
is outsourcing some or with our current costs, and profits? For
all of the work an offerings? nonprofits, is the cost
option? within budget?
 Product and service design
has typically had strategic
REASONS implications for the success
and prosperity of an

FOR organization. Furthermore, it

has an impact on future
activities. Consequently,
PRODUCT decisions in this area are
some of the most
AND fundamental that managers
must make.

SERVICE Organizations become

involved in product and
DESIGN OR service design or redesign for
a variety of reasons. The main

REDESIGN forces that initiate design or

redesign are market
opportunities and threats.
The factors that give rise to market opportunities and threats can be one or more changes:
Social and
demographic Competitive Technological

Economic Political, liability, Cost or

or legal availability
 3.2 IDEA GENERATION

Ideas for new or redesigned products or services can come

from a variety of sources, including customers, the supply
chain, competitors, employees, and research. Customer
input cancome from surveys, focus groups, complaints,
and unsolicited suggestions for improvement.

REVERSE ENGINEERING
01 Dismantling and inspecting a competitor’s product to
discover product improvements.

RESEARCH AND DEVELOPMENT (R&D)

02 Organized efforts to increase scientific knowledge or
product innovation.
RESEARCH AND
DEVELOPMENT
... efforts may involve:

D
E
V
BASIC E
RESEARCH L converts the
APPLIED has the objective of O results of
advancing the state of P applied
RESEARCH knowledge about a
M research into
subject, without any useful
has the objective near-term expectation E commercial
of achieving of commercial N applications.
commercial
applications
applications.
T
3.3 LEGAL AND
ETHICAL 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

UNIFORM
PRODUCT LIABILITY
COMMERCIAL CODE
the responsibility of a which says that products
manufacturer for any carry an implication of
injuries or damages merchantability and
caused by a faulty product fitness; that is, a product
because of poor must be usable for its
workmanship or design. intended purposes.
Organizations generally want designers to adhere to guidelines such as
the following:

Produce Make health

designs that and safety a
Give
are primary
customers
consistent concern.
the value
with the
they expect.
goals of the
organization.
 3.4 HUMAN FACTORS

a specific area of expertise that specializes in SAFETY AND

optimizing the interaction of humans with a
device or product LIABILITY

NEW FEATURES REALITY

3.5 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, as illustrated by the following
reading.
ADDITIONAL FACTORS

01 02 03
CUSTOMER FUNCTIONALITY
REQUIREMENTS The factor that influences the COST
product design for which the One of the biggest
One of the most important
purpose of the product must constraints that a designer
aspect that needs to be met
fulfill the purpose on why it is holds before crafting the
and satisfied.
developed. creative outlet

PRODUCT
DESIGN

04 05 06
SHAPE MATERIALS DURABILITY
Arises from an analysis of the A factor that gives a major Product protection is also
technologies that your impact in producing a very essential and that
product requires. product particuarly on the should be an environment-
quality of the materials specific protection
preferred.
 3.6 GLOBAL PRODUCT AND SERVICE DESIGN
Traditionally, product design has been conducted Global product design can provide design
by members of the design team who are located outcomes that increase the marketability and
in one facility or a few nearby facilities. However, utility of a product.
organizations that operate globally are
discovering advantages in global product design, Advances in information technology have played
which uses the combined efforts of a team of a key role in the viability of global product design
designers who work in different countries and teams by enabling team members to maintain
even on different continents. continual contact with each other and to
instantaneously share designs and progress, and
The use of global teams also allows for customer to transmit engineering changes and other
needs assessment to be done in more than one necessary information.
country with local resources, opportunities, and
constraints to be taken into account.
 Product and service design is a focal
3.7 ENVIRONEMENTAL point in the quest for sustainability. Key
aspects include cradle-to-grave
FACTORS: assessment, end-of-life programs,
reduction of costs and materials used,
SUSTAINABILITY reuse of parts of returned products, and
recycling.

Cradle-to-Grave Assessment End-of-Life (EOL) Programs

also known as life cycle analysis, is the deals with products that have reached the
assessment of the environmental impact of a end of their useful life. The purpose of these
product or service throughout its useful life. For programs is to reduce the dumping of
products, cradle-to-grave analysis takes into products, in landfills or third-world
account impacts in every phase of a product’s life countries, as has been the common practice,
cycle.Although services generally involve less use
or incineration, which converts materials
of materials, cradle-to-grave assessment of
into hazardous air and water emissions and
services is nonetheless important, because
generates toxic ash. Although the programs
services consume energy and involve many of the
are not limited to electronic equipment, that
same or similar processes that products involve.
equipment poses problems because the
The goal of cradle-to-grave assessment is to
choose products and services that have the least equipment typically contains toxic materials
environmental impact while still taking into such as lead, cadmium, chromium, and other
account economic considerations. heavy metals.
The Three Rs: Reduce, Reuse, and Recycle
Designers often reflect on three particular aspects of potential cost saving and reducing
environmental impact: reducing the use of materials through value analysis; refurbishing
and then reselling returned goods that are deemed to have additional useful life, which is
referred to as remanufacturing; and reclaiming parts of unusable products for recycling.

Reduce: Value Reuse: Recycle

Analysis Remanufacturing
Value analysis refers Remanufacturing refers Recycling means
to an examination of to refurbishing used recovering materials for
the function of parts products by replacing future use. Companies
worn-out or defective recycle for a variety of
and materials in an
components, and reasons, including
effort to reduce the
reselling the products. 1. Cost savings
cost and/or improve This can be done by the 2. Environment concerns
the performance of a original manufacturer, 3.Environmental
product. or another company. regulations
 DESIGN FOR Design so that used
products can be
DISASSEMBLY
easily taken apart.
(DFD)

DESIGN FOR Design that facilitates

the recovery of
RECYCLING
materials and
(DFR) components in used
products for reuse.
3.8 OTHER DESIGN CONSIDERATION

Product or service life cycles

Standardization
Product or service reliability
Range of operating conditions
 STRATEGIES FOR PRODUCT OR SERVICE LIFE STAGES

Most, but not all, products and

services go through a series of stages
over their useful life, sometimes
referred to as their life cycle, as
shown in Figure 4.1. Demand
typically varies by phase. Different
phases call for different strategies. In
every phase, forecasts of demand
and cash flow are key inputs for Figure 4.1 Products of service often go through
strategy. stages over time.
Product Life Cycle Management
Product life cycle management (PLM) is a
systematic approach to managing the
series of changes a product goes through,
from its conception, design, and
development, through production and any
redesign, to its end of life.

A goal of PLM is to eliminate waste and

improve efficiency.
There are three phases of PLM application:

Beginning of life, Middle of life, which End of life, which

which involves involves working involves strategies
design and with suppliers, for product
development; managing product discontinuance,
information disposal, or
and warranties; recycling.
DEGREE OF
STANDARDIZATION
Standardization refers to the extent to
which there is absence of variety in a
product, service, or process.
Standardized products are made in large
quantities of identical items.
Standardized service implies that every
customer or item processed receives
essentially the same service.
Standardized processes deliver
standardized service or produce
standardized goods.
 Advantages and Disadvantages of Standardization

Advantages Disadvantages
1. Fewer parts to deal with in
1. Designs may be frozen with
inventory and in manufacturing.
too many imperfections
2. Reduced training costs and time.
remaining.
3. More routine purchasing,
handling, and inspection 2. High cost of design
procedures. changes increases resistance
4. Orders fillable from inventory. to improvements.
5. Opportunities for long production 3. Decreased variety results in
runs and automation. less consumer appeal.
6. Need for fewer parts justifies
increased expenditures on
perfecting designs and improving
quality control procedures.
 DESIGNING FOR MASS
CUSTOMIZATION

Mass customization, a strategy of producing

standardized goods or services, but
incorporating some degree of customization in
the final product or service.
 DESIGNING FOR MASS CUSTOMIZATION

Delayed differentiation is a postponement tactic:

the process of producing, but not quite completing,
a product or service, postponing completion until
customer preferences or specifications are known.
There are a number of variations of this. In the case
of goods, almost-finished units might be held in
inventory until customer orders are received, at
which time customized features are incorporated,
according to customer requests.
 DESIGNING FOR MASS CUSTOMIZATION

Modular design is a form of standardization. Modules

represent groupings of component parts into
subassemblies, usually to the point where the
individual parts lose their separate identity.
 DESIGNING FOR MASS CUSTOMIZATION

Advantages of Modular design:

1. Failures are often easier to diagnose and remedy
2. Ease of repair and replacement;
3. The manufacture and assembly of modules
generally involve simplifications:

Disadvantages of Modular design;

1. Decrease in variety:
2. Inability to disassemble a module in order to
replace a faulty part;decrease in variety:
 RELIABILITY

Reliability is a measure of the ability of a

product, a part, a service, or an entire system
to perform its intended function under a
prescribed set of conditions.

The term failure is used to describe a

situation in which an item does not perform
as intended.
 RELIABILITY
Improving Reliability. Reliability can be improved in a
number of ways,

Potential ways to improve the reliability:

1. Improve component design.

2. Improve production and/or assembly techniques.
3. Improve testing.
4. Use backups.
5. Improve preventive maintenance procedures.
6. Improve user education.
7. Improve system design.
 RELIABILITY

A fundamental question concerning improving

reliability is: How much reliability is needed?

The optimal level of reliability is the point where the

incremental benefit received equals the incremental
cost of obtaining it. In the short term, this trade-off is
made in the context of relatively fixed parameters (e.g.,
costs). However, in the longer term, efforts to improve
reliability and reduce costs can lead to higher optimal
levels of reliability.
Robust Design

Robust design 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.
Robust Design
Taguchi’s Approach.
Japanese engineer Genichi Taguchi’s approach
is based on the concept of robust design. His
premise is that it is often easier to design a
product that is insensitive to environmental
factors, either in manufacturing or in use, than
to control the environmental factors.

Parameter design- This involves determining the

specification settings for both the product and the
process that will result in robust design in terms of
manufacturing variations, product deterioration,
and conditions during use.
 DEGREE OF NEWNESS

Modificati Expansion of Clone of a New

on of an an existing competitor’s product or
existing product line product or service
product or or service service
service offering
 DEGREE OF NEWNESS

The degree of change affects the newness to the organization and

the newness to the market.
QUALITY FUNCTION DEPLOYMENT

Quality function deployment (QFD) is a structured approach

for integrating the “voice of the customer” into both the product
and service development process. 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.

Requirements often take the form of a general statement such

as, “It should be easy to adjust the cutting height of the lawn
mower.” Once the requirements are known, they must be
translated into technical terms related to the product or service.
QUALITY FUNCTION DEPLOYMENT

FIGURE 4.2
An example of the house of quality: the main
QFD matrix

Source: Ernst and Young Consulting Group, Total

Quality (Homewood, IL: Dow-Jones Irwin, 1991),
p. 121. Reprinted by permission.
QUALITY FUNCTION DEPLOYMENT

FIGURE 4.3
The house of quality
QUALITY FUNCTION DEPLOYMENT

FIGURE 4.4
An example of the house of quality
QUALITY FUNCTION DEPLOYMENT
The Kano Model
The Kano model is a theory of product and service
design developed by Dr. Noriaki Kano, a Japanese
professor, who offered a perspective on customer
perceptions of quality different from the traditional
view that “more is better.” Instead, he proposed
different categories of quality and posited that
understanding them would better position designers
to assess and address quality needs. His model
provides insights into the attributes that are
perceived to be important to customers. The model
employs three definitions of quality: basic,
performance, and excitement.
The Kano Model
Basic quality refers to customer requirements that
have only a limited effect on customer satisfaction
if present, but lead to dissatisfaction if not present.

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 “wow” factor), such as a voucher
for dinner for two at the hotel restaurant when
checking in.
The Kano Model

FIGURE 4.6A FIGURE 4.6B

The Kano Model As time passes, excitement factors become
performance factors, and performance
factors become basic factors
4.9 PHASES IN PRODUCT DESIGNAND DEVELOPMENT

1. Feasibility analysis 5. Design review

2. Product specifications 6. Market test

3. Process specifications 7. Product introduction

4. Prototype development 8. Follow-up evaluation

3.10 DESIGNING FOR
PRODUCTION
CONCURRENT ENGINEERING
To achieve a smoother transition from product design to
production, and to decrease product development time,
many companies are using simultaneous development, or
concurrent engineering. In its narrowest sense,
concurrent engineering means bringing design and
manufacturing engineering people together early in the
design phase to simultaneously develop the product and
the processes for creating the product .
Key advantages of this approach are the following:
1. Manufacturing personnel are able to identify production
capabilities and capacities.
2. Design or procurement of critical tooling, some of which
might have long lead times,
can occur early in the process.
3. The technical feasibility of a particular design or a portion
of a design can be assessed early on.
4. The emphasis can be on problem resolution instead of
conflict resolution.

Disadvantages
1. Long-standing boundaries between design and manufacturing can be
difficult to overcome. Simply bringing a group of people together and
thinking that they will be able to work together effectively is probably
naive.
2. There must be extra communication and flexibility if the process is to
work, and these can be difficult to achieve.
COMPUTER-AIDED DESIGN (CAD)
Computers are increasingly used for product design.
Computer-aided design (CAD) uses commputer graphics for
product design. The designer can modify an existing design or
create a new one on a monitor by means of a light pen, a
keyboard, a joystick, or a similar device.

Major Benefits
• increased productivity of designers
• creation of a database for manufacturing
PRODUCTION REQUIREMENTS

As noted earlier in the chapter, designers must take into

account production capabilities. Design needs to clearly
understand the capabilities of production (e.g., equipment,
skills, types of materials, schedules, technologies, special
abilities).

Forecasts of future demand can be very useful, supplying information

on the timing and volume of demand, and information on demands
for new products and services.

Manufacturability is a key concern for manufactured goods: Ease of

fabrication and/or assembly is important for cost, productivity, and
quality. With services, ease of providing the service, cost, productivity, and
quality are of great concern.
Design for Manufacturing (DFM)
The designing of products that are compatible with an
organization’s capabilities.

Design for assembly (DFA)

Design that focuses on reducing the number of parts in
a product and on assembly methods and sequence.

Manufacturability
The capability of an organization to produce an item at an
acceptable profit.
COMPONENT COMMONALITY

Companies often have multiple products or

services to offer customers. Often, these
products or services have a high degree of
similarity of features and components. This
is particularly true of product families, but
it is also true of many services. Companies
can realize significant benefits when a part
can be used in multiple products.
3.11 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,
the accompanying goods, and the explicit and implicit
services included.
 System design involves development or refinement
of the overall service package:

1. The physical resources needed.

2. The accompanying goods that are purchased or consumed by the
customer, or provided
with the service.
3. Explicit services (the essential/core features of a service, such as tax
preparation).
4. Implicit services (ancillary/extra features, such as friendliness,
courtesy).
 OVERVIEW
Service design begins with the choice of a service
strategy, which determines the nature and focus
of the service, and the target market.

Two key issues of Service Design

1. Degree of variation in service requirements.

2. Degree of customer contact and customer
involvement in the delivery system.
Differences between Service Design and Product
Design
Service operations managers must contend with issues that may be
insignificant or nonexistent for managers in a production setting. These
include the following:

1. Products are generally tangible; services are generally

intangible.
2. In many instances services are created and delivered at the
same time.
3. Services cannot be inventoried.
4. Services are highly visible to consumers and must be designed
with that in mind; this adds an extra dimension to process design,
one that usually is not present in product design.
5. Some services have low barriers to entry and exit. This places
additional pressures on service design to be innovative and cost-
effective.
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. Here are some examples of
those different types:
• Insulated technical core; little or no customer contact
• Production line; little or no customer contact
• Personalized service
• Consumer participation
• Self-service
8. Demand variability alternately creates waiting lines or idle
service resources.
In services, a significant aspect of perceived quality relates to the
intangibles that are part of the service package. Designers must proceed
with caution because attempts to achieve a high level of efficiency tend to
depersonalize service and to create the risk of negatively altering the
customer’s perception of quality. Such attempts may involve the following:

1. Reducing consumer choices makes service more efficient, but it can be

both frustrating and irritating for the customer. An example would be a
cable company that bundles channels, rather than allowing customers to
pick only the channels they want.
2. Standardizing or simplifying certain elements of service can reduce the
cost of providing a service, but it risks eliminating features that some
customers value, such as personal attention.
3. Incorporating flexibility in capacity management by employing part-time
or temporary staff may involve the use of less-skilled or less-interested
people, and service quality may suffer.
 Phases in the Service Design Process
1. Conceptualize.
Idea generation
Assessment of customer wants/needs (marketing)
Assessment of demand potential (marketing)
2. Identify service package components needed (operations and
marketing).
3. Determine performance specifications (operations and marketing).
4. Translate performance specifications into design specifications.
5. Translate design specifications into delivery specifications.
Service Blueprinting
A method used in service design to describe and analyze a proposed
service.
The major steps in service blueprinting are as follows:

1. Establish boundaries for the service and decide on the level of detail
needed.
2. Identify and determine the sequence of customer and service actions
and interactions. A flowchart can be a useful tool for this.
3. Develop time estimates for each phase of the process, as well as time
variability.
4. Identify potential failure points and develop a plan to prevent or
minimize them, as well as a plan to respond to service errors.
Characteristics of Well-Designed Service
Systems
1. Being consistent with the organization’s mission.
2. Being user-friendly.
3. Being robust if variability is a factor.
4. Being easy to sustain.
5. Being cost-effective.
6. Having value that is obvious to customers.
7. Having effective linkages between back-of-the-house operations
and front-of-the-house operations. Front operations should focus
on customer service, while back operations should focus
on speed and efficiency.
8. Having a single, unifying theme, such as convenience or speed.
9. Having design features and checks that will ensure service that
is reliable and of high quality.
 Challenges of Service Design

Services can be
difficult to
Balancing supply describe precisely
Variability
and demand and are dynamic in
nature
Guidelines for Successful Service Design
1. Define the service package in detail. A service blueprint may be helpful for
this.
2. Focus on the operation from the customer’s perspective. Consider how
customer expectations and perceptions are managed during and after the
service.
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.
Guidelines for Successful Service Design
5. Make sure that managers are involved and will support the design once it is
implemented.
6. Define quality for both tangibles and intangibles. Intangible standards are
more difficult to define, but they must be addressed.
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 systems to monitor, maintain, and improve service.
3.12 OPERATIONS STRATEGY

Product and service design is a fertile area for achieving competitive advantage
and/or increasing customer satisfaction. Potential sources of such benefits
include the following:

• Packaging products and ancillary services to increase sales.

• Using multiple-use platforms.
• Implementing tactics that will achieve the benefits of high volume while
satisfying customer needs for variety, such as mass customization.
• Continually monitoring products and services for small improvements rather
than the "big bang” approach. Often the “little” things can have a positive, long-
lasting effect on consumer attitudes and buying behavior.
• Shortening the time it takes to get new or redesigned goods and services to
market.
 From a design standpoint, reducing the
time to market involves:

Using technology
Using Concurrent
such as computer-
standardized engineering to
aided design (CAD)
components to equipment to shorten
create new but rapidly design engineering time.
reliable products. new or modified
products.
SUMMARY
BORCELLE
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