Chapter 4 Product and service design typically has strategic

implications for the success and prosperity of an

INTRODUCTION organization. The factors that give rise to market
opportunities and threats can be one or more changes:
What Does Product and Service Design Do?
• Economic (e.g., low demand, excessive warranty
- Primary focus should be on customer satisfaction.
claims, the need to reduce costs)
Activities and Responsibilities of product and service • Social and demographic (e.g., aging baby boomers,
design: population shifts)
• Political, liability, or legal (e.g., government changes,
1. Translates customer want and needs into product
safety issues, new regulations)
and service requirements (marketing, operations)
• Competitive (e.g., new or changed products or services,
2. Refine existing products and services (marketing)
new advertising/promotions)
3. Develop new products and/or services (marketing,
operations) • Cost of availability (e.g., of raw materials,
4. Formulate quality goals (marketing, operations) components, labor, water, energy)
5. Formulate cost targets (accounting, finance, • Technological (e.g., in product components, processes)
operations) Technological changes can require product or service
6. Construct and test prototypes (operations, design adjustments. New technologies, like faster
marketing, engineering) microprocessors, can directly improve products such as
7. Document specifications smartphones. Advances in processing may also require
8. Translate product and service specifications into design changes for compatibility. Additionally, digital
process specifications (engineering, operations) recording technology lets viewers skip commercials,
Objectives of Product and Service Design prompting advertisers to integrate products into TV
programs through placement or actor mentions to
Primary consideration: customer satisfaction maintain viewer attention.
Secondary considerations: cost of profit, quality, ability IDEA GENERATION
to produce a product or provide a service, ethics/safety,
and sustainability. Customer Input:

Key Questions • Sources: Surveys, focus groups, complaints, and

unsolicited suggestions for improvement.
Buyer’s standpoint – cost, quality/performance
Supply Chain Input:
Organization’s standpoint -
• Sources: Suppliers, distributors, and employees via
1. Is there demand for it? Potential size of the market,
interviews, direct/indirect suggestions, and
and the expected demand profile. (long term/short
complaints.
term, grow slowly/quickly)?
2. Can we do it? Knowledge, skills equipment, capacity, Competitors' Products/Services:
and supply chain capability?
• Studying competitors’ products and operations
Manufacturability – the capability of an organization (pricing policies, return policies, warranties, location
to produce an item at an acceptable profit. strategies, etc.).
Serviceability – the capability of an organization to Reverse Engineering – dismantling and inspecting a
provide a service at an acceptable cost or profit. competitor’s product to discover product improvements
3. What level of quality is appropriate? Customers • Used in automotive industries to examine best-in-
expect? Quality do competitors provide for similar class components (e.g., hood release, dashboard
items? Would fit current offerings? display, door handle).
4. Does it make sense from an economic standpoint?
Potential liability issues, ethical considerations, • Can lead to developing a better product, though
sustainability issues, costs and profits? For some forms may be illegal under the Digital
nonprofits, is the cost within budget? Millennium Copyright Act.

Reasons for Product and Service Design of Redesign

Suppliers as a Source of Ideas: LEGAL AND ETHICAL CONSIDERATIONS

• Emphasis on supply chains and supplier partnerships Legal Considerations

as an important source of ideas.
• Designers must consider a range of legal and ethical
Research and Development (R&D) – organized efforts to factors, which are often mandatory, especially when
increase scientific knowledge or product innovation. there is potential harm to the environment.

• Advances in semiconductors, medicine, Organizations are regulated by various government

communications, and space technology are often agencies, including:
attributed to R&D at universities, research
➢ Food and Drug Administration (FDA)
foundations, government agencies, and private
enterprises. ➢ Occupational Health and Safety Administration
(OSHA)
Types of R&D:
➢ Environmental Protection Agency (EPA)
1. Basic Research: Advances knowledge without near-
term commercial applications (usually funded by ➢ State and local agencies.
government and large corporations).
Examples of Legal Impact on Design:
2. Applied Research: Aims to achieve commercial
applications. • Bans on cyclamates, red food dye, phosphates,
3. Development: Converts applied research results into asbestos leading to redesigns.
commercial applications.
• Automobile pollution standards and safety features
Benefits of Successful R&D: (e.g., seat belts, airbags, safety glass, energy-
absorbing bumpers) influencing automotive design.
• Leads to patents, licensing, and royalties.
• Toy design regulations addressing sharp edges, small
• Early market entry provides a temporary monopoly, choking hazards, and toxic materials.
allowing higher pricing before competitors catch up.
• Construction regulations: Use of lead-free paint,
Costs of R&D: safety glass, accessibility for disabled individuals,
• High costs, with some companies spending over $1 standards for insulation, electrical wiring, and
million per day on R&D. plumbing.

• Large companies like IBM ($6 billion/year) and Product liability – the responsibility of a manufacturer
Hewlett-Packard Enterprises ($2 billion/year) invest for any injuries or damages causes by a faulty project.
heavily. • High-profile lawsuits from companies such as
Firestone Tire & Rubber, Ford Motor Company,
• Critics argue U.S. companies spend too little on R&D,
General Motors, tobacco companies, and toy
leading to a loss of competitive advantage.
manufacturers.
Shift from Product to Process R&D: • Implied warranties under the Uniform Commercial
Code: Products must be usable for intended
• Some companies are shifting from focusing primarily
purposes.
on products to a more balanced approach that
includes both product and process R&D. Consequences of Product Liability:

Technological Life Cycles: 1. Increased legal costs, insurance costs, expensive

settlements, and recalls.
• Technologies, like products, go through life cycles.
2. Growing customer awareness of product safety
• R&D efforts must account for competitive factors impacting product image and demand.
over a technology's life cycle and plan for next-
generation technology. • Designers must ensure products are reasonably free
of hazards or include safety guards, devices to
When Research May Not Be Ideal: reduce risks, and clear warning notices.
• In certain instances, research may not be the best
approach for developing new products or services.
Ethical Considerations ➢ Provides design outcomes enriched by varied
ideas and information.
• Designers often face pressure to speed up the design
process and cut costs, which can involve trade-offs Challenges:
with ethical considerations.
➢ Mismanagement of diversity can lead to
• Example - Vaporware: A software company may face conflicts and miscommunication.
the dilemma of releasing software with bugs or
waiting longer, risking damage to reputation and Role of Information Technology:
revenue.
➢ Enables continual contact among team
Organizations generally want designers to adhere to members.
guidelines such as the following:
➢ Facilitates sharing of designs, progress,
• Produce designs aligned with the goals of the engineering changes, and necessary information
organization (e.g., quality over cost-cutting). instantaneously.
• Give customers the value they expect. ENVIRONMENTAL FACTORS: SUSTAINABILITY
• Make health and safety a primary concern for all
parties: Employees who produce or deliver products. Product and service design, focal point in the quest of
Workers transporting products. Customers who use sustainability. Key Aspects:
products or receive services. General public Cradle-to-Grave Assessment
potentially endangered by the products or services.
• the assessment of the environmental impact of
HUMAN FACTORS product or service throughout its useful life
Issues arise in the design of consumer products. Two • focuses on global warming, smog formation, oxygen
critical issues that must be considered: Safety and depletion, and solid waste generation.
Liability e.g., crashworthiness of vehicles is of much • For products, it takes into account impacts in every
interest to consumers, insurance companies, automobile phase of a product’s life cycle.
products, and the government. • Considers energy consumption, pollution and waste,
and transportation in all phases.
Another issue for designers to take into account is
• For services, it consumes energy and involve many of
adding new features to their products or services.
the same or similar processes that products involve.
Beneficial but can be “too much of a good thing” and can
be source of customer dissatisfaction. Goal – to choose products and services that have lease
environment impact, while still taking into account
CULTURAL FACTORS
economic considerations.
Cultural differences of different countries or regions
End-of-Life Programs (EOL)
related to any product. Can result to different designs.

GLOBAL PRODUCT AND SERVICE DESIGN • Deal with products that have reached the end of
their useful lives. Products include both consumer
• Traditional Design Teams: Typically located in one or products and business equipment.
a few nearby facilities. • Purpose – reduce the dumping of products,
• Global Product Design: Involves teams working in particularly electronic equipment, in landfills or
different countries and continents, leveraging third-world countries, as has been the common
combined efforts. practice, or incineration, which converts materials
• Advantages of Global Teams: into hazardous air and water emissions and
generates toxic ash.
➢ Access to the best human resources globally
without needing to assemble them in one place. The Three Rs: Reduce, Reuse, and Recycle

➢ 24-hour operation, reducing time-to-market. Designers often reflect on three particular aspects of
potential cost savings and reducing environmental
➢ Enables customer needs assessment in multiple
impact:
countries, considering local resources,
opportunities, and constraints. 1. reducing the use of materials through value analysis;
➢ Increases product marketability and utility 2. refurbishing and then reselling returned goods that
through diverse viewpoints. are deemed to have additional useful life, which is
referred to remanufacturing; OTHER DESIGN CONSIDERATIONS
3. Reclaiming parts of unusable products of recycling.
Strategies for Product or Service Life Stages
Reduce: Value Analysis
• Products and services go through a series of stages
• Examination of the function of parts and materials over their useful life, sometimes referred to as their
in an effort to reduce cost and/or improve product life cycle.
performance.

Introduction Phase:

• Product may be treated as a curiosity item.

• Buyers may be skeptical about bugs and price
changes after the introductory period.
• Strategic trade-offs:
Weighing between resolving bugs vs. getting ahead of
Reuse: Remanufacturing the competition.
Getting to market at an advantageous time (e.g.,
• Refurbishing used products by replacing worn-out or during peak buying periods like back-to-school or
defective components, and reselling the products. holidays).
Important reasons for doing this: • Important to have a reasonable forecast of initial
-Remanufactured product can be sold for about 50% of demand for adequate supply/capacity.
the cost of a new product Growth Phase:
-Process requires mostly unskilled and semiskilled
workers • Design improvements and increasing demand lead to
-European workers requires remanufacturing on used higher reliability and lower costs.
products, because fewer products end up in landfils and • Growth in demand.
less depletion of natural resources, such as raw materials • Forecasting demand growth rate and duration is
and fuel. crucial.
• Capacity increases must coincide with rising
Design for disassemble (DFD) – design so that used
demand.
products can be easily taken apart.

Recycle Maturity Phase:

• Recovering materials for future use. • Product or service demand levels off.
• Applies not only to manufactured parts but also to • Few design changes are needed.
materials used during production, such as lubricants • Costs are low, productivity is high.
and solvents. • New uses for products/services can extend life and
increase market size. Examples: Baking soda, duct
Companies recycle for a variety of reasons, inclucing tape, vinegar, and LEGO market growth.
1. Cost savings Decline Phase:
2. Environment concerns
3. Environmental regulations • Decisions must be made:
• Discontinue or replace the product/service.
Design for recycling (DFR) – design that facilitates the
• Abandon the market or find new uses or new users.
recovery of materials and components in used products
for reuse.
• Example: Duct tape and baking soda have been used • Modular design – a form of standardizarion in
beyond their original purposes (taping ducts, which component parts are grouped into modules
cooking). that are easily replaced of interchanged. E.g.,
• Advantages of keeping existing products: Same computers, which have modular parts that can
workers, same equipment, same supply chain. be replaced if they become deffective.

Product Life Cycle Management Reliability

• A systematic approach to managing the series of • A measure of the ability of a product, parto, or
changes a product goes through, from its conception system perform its intended function under a
to its end-of-life. prescribed set of conditions. Also a consideration
• A goal of PLM is to eliminate waste and improve for sustainability.
efficiency. It is considered to be an integral part of • The higher the reliability of a product, the fewer
lean production. the resources that will be needed to maintain it,
and the lest frequently it will involve the three
There are three phases of PLM application: Rs.
• Failure – situation in which a product, part, or
1. Beginning of life, which involves design and
development; system does not perform as intended.
2. Middle of life, which involves working with • Normal operating conditions, the set of
supplies, managing product information and conditions under which an item’s reliability is
warranties; and specified. Includes load, temperature, and
3. End of life, which involves strategies for product humidity ranges, as well as operating procedures
discontinuance, disposal, or recycling. and maintenance schedules.

Degree of Standardization Improving Reliability

• An important issue that often arises in both 1. Improve component design

product/service deign and process design 2. Improve production and/ore assembly
• Standardization refers to extent which a techniques.
product, service, or process lacks variety. 3. Improve testing
4. Use backups
5. Improve preventive maintenance
procedures
6. Improve user education
7. Improve system design

Robust Design

• Design that results in products or services that can

function over a broad range of conditions.
Designing of Mass Customization • The more robust a product or serviec, the less likely it
will fail due to a change in the environment in
• The question for producers is how to resolve these
which it is used or in which it is performed. The
issure without
higher customer satisfaction.
1. Losing the benefits of standardization,
and Taguchi’s Approach, Japanese engineer Genichi Taguchi’s
2. Incurring a host of problems that are approach is based on the concept of robust design.
often linked to variety.
o It is often easier to design a product that is
• Mass customization, a strategy of producing
insensitive to environmental factorsm either
standardized goods or services, but incorporating
in manufacturing or in use, than to control
some degree of customization. One is delayed
the environmental factors.
differentation, and another is modular design.
o Central feature is parameter design.
• Delayed differentation is a postponement tactic;
the process of producing, but not quite
completing, a product or service until customer
preferences are known.
Degree of Newness
Product or service design chance can range from the
modification of an existing product or service to an
entirely new product or service:

1. Modification of an existing product or

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

Low level of newness – fairly quick and easy transition

to producing the new product

Little difficulty with market acceptance, but possibly

low profit potential.

High level of newness – slower and more difficult, and

therefore more costly, transition.

more difficulty with acceptance, or It might mean a

rapid gain in market share with a high potential for The Kano Model
profits.
• A theory of product and service design developed by
Quality of Function Deployment (QFD) Dr. Noriaki Kano, a japanese professor, who oeffered
a perspective on customer perceptions of quality
• An approach that integrates the “voice of the different from the traditional view that “more is
customer” into both product and service better.”
development.
• The purpose is to ensure that customer requirements
are factored into every aspect of the process.
Listening to and understanding is the central
feature.
• Structure is based on a set of matrices. The main
matrix relates customer requirements (what) and
their corresponding technical requirements (how).

The model employs three difinitions of quality:

1. Basic – customer requirements that have only a

limited effect on customer satisfaction if present, but
lead to dissatisfaction if not present.

2. Performance – customer requirements that generate

satisfaction or dissatisfaction in proportion to their
level of functionality and appeal.

3. Excitement – a feature or attribute that was

unexpected by the customer and causes excitement (the
“wow” factor).
 PHASES IN PRODUCT AND DEVELOPMENT • Design for assembly (DFA) – desgin that focuses on
reducing the number of parts in a product and on
Feasibility analysis. Entails market analysis (demand),
assembly methods and sequence.
economic analysis (development cost and production cost,
profit potential), and technical analysis (capacity • Manufacturability – the capability of an
requirements and availability, and the skills needed). organization to produce an item at an acceptable
profit.
Product specifications. This involves detailed description
of what is needed to meet, customer wants, and requires Component Commonality
collaboration between legal, marketing, and operations. • Products or services have a high degree of similarity
Process specifications. Alternatives must be weighted in of features and components.
terms of cost, availability of resources, profit potential, • This is particularly true of product families , but it is
and quality. This involves collaboration between also true of many services.
accounting and operations. SERVICE DESIGN
Prototype development. One (or few) units were made to
• Service refers to an act, something that is done to or
see if there are any problems with the product or process
for customer.
specifications.
• Service delivery system – the facilities, processes, and
Design review. Any necessary changes are made or the skills needed to procide a service.
project is abandoned. Marketing, finance, engineering, • Product bundle – the combination of goods and
design, and operations collaborate to determine whether services provided to a customer
to proceed or abandon. • Service package – the physical resources needed to
Market test. Used to determine the extent of consumer perform the service, the accompanying goods that
acceptance. This phase is handled by marketing. are repurchased or consumed by the customer, or
provided with the service, and the explicit and
Product introduction. The new product is promoted. This implicit services included.
phase is handled by marketing.
Overview of Service Design
Follow-up evaluation. Based on user feedback, changes
may be made or forecasts refined. This phase is handled • Begins with the choice of a service strategy, which
by marketing. determines the nature and focus of the service, and
target market.
DESIGNING FOR PRODUCTION • Two key issues in service design are the degree of
Concurrent Engineering variation in service requirements and the degree of
customer contact and customer involvement in the
• Bringing engineering design and manufacturing delivery system.
personnel together early in the deisgn phase. • The greater the degree of customer contact, the
• “over-the-wall” aproach created tremendous greater the opportunities for selling.
challenges for manufacturing, generating numerous
conflicts and greatly increasing the time needed to Differences between Service Design and Product Design
successfully produce new product. 1. Products are generally tangible, services are
Computer-Aided Design (CAD) generally intangible.
2. Services are created and delivered at the same time.
• product design using computer graphics. Less latitue in finding and correcting errors before
• Finite element analysis (FEA), designers in industries customers finds them.
such as aeronautics, biomechanics, and automotives 3. Services cannot be inventoried.
used this. 4. Adds an extra dimension to process design, and one
that usually not present in product design.
Production Requirements
5. Some services have low batteries to entry and exit.
• Design for manufacturing (DFM) – the designing or 6. Location is often more important to service design,
products that are compatible with an organization’s with convenience as a major factor.
capabilities. 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 customer
waiting times, which sometimes leads to lost sales, or
idle service resources.

Phases in the Service Desing Process

1. Conceptualize

Idea generation
Assessment of customer wants/needs
Assessment of demand potential

2. Identify service package components needed

3. Determine performance specifications

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.
• Architectural drawing, that shows the basic customer
and service actions involved in a service operation.

Characteristics of Well-Designed Service Systems

• Being consistent with the organization’s mission

• Being user-friendly
• Being robust if variability is a factor
• Being easy to sustain
• Being cost-effective
• Having value that is obvious to customers
• 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
• Having a single, unifying theme, such as convenience
or speed.
• Having design and check that will ensure service
that is reliable and og high quality.