PRODUCT & SERVICE
DESIGN
Presented by :
Rebecca C. Orozco
PRODUCT & SERVICE DESIGN
Product and Service Design
Various activities and responsibilities of product and
service design include the following:
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);
PRODUCT & SERVICE DESIGN
Product and Service Design
4. Formulate quality goals (marketing, operations);
5. Formulate cost targets (accounting, finance, operations);
6. Construct and test prototypes (operations, marketing,
engineering); and
7. Document specifications.
NOTE: Though product and service design affects every functional area
of an organization, marketing and operations have major involvement.
PRODUCT & SERVICE DESIGN
Reasons for Product/Service Design
• Strategic implications for success and prosperity
of an organization
• Impact on future activities
The main forces that initiate design and redesign
include:
a. Market opportunities
b. Market threats
PRODUCT & SERVICE DESIGN
Factors that give rise to market
opportunities and threats
• Economic(e.g., low demand, excessive warranty claims,
the need to reduce cost)
• 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)
• Technological (e.g., in product components, processes)
PRODUCT & SERVICE DESIGN
The Design Process
An effective design process:
• Matches product or service characteristics with
customer requirements
• Ensures the customer requirements are met in
the simplest and least costly manner
• Reduces the time required to design a new
product or service
• Minimizes the revisions necessary to make a
design workable
PRODUCT & SERVICE DESIGN
Idea Generation
Perceptual maps – compare customer perceptions of a
company’s products with competitors’ products
Benchmarking – comparing a product or process against
the best-in-class product
Reverse engineering – carefully dismantling competitor’s
product to improve your own product
PRODUCT & SERVICE DESIGN
Feasibility Study
The feasibility study
consists of a market
analysis, an economic
analysis and a
technical/strategic
analysis.
PRODUCT & SERVICE DESIGN
Feasibility Study
Market analysis
– assesses whether there’s enough demand for the
proposed product to invest in developing it further
(e.g. customer surveys,interviews, focus
groups,market tests)
PRODUCT & SERVICE DESIGN
Feasibility Study
Economic analysis
– looks at estimates of production and development
costs and compares them to estimated sales volume
(e.g. cost/benefit analysis,decision theory, NPV,
IRR)
PRODUCT & SERVICE DESIGN
Feasibility Study
Technical/Strategic Analyses
– answers questions such as: Does the new product
require new technology? Is the risk or capital
investment excessive?Is sufficient capacity
available for production?Does the new product
provide a competitive advantage for the company?
PRODUCT & SERVICE DESIGN
Preliminary Design
• FORM DESIGN (how product will look)
• FUNCTIONAL DESIGN (how the product will
perform)
PRODUCT & SERVICE DESIGN
Preliminary Design
Reliability – the probability that a product will perform
its intended function for a specified length of time under
normal conditions of use
Rs = (R1), (R2)…(Rn) series
Rs = 1- [(1-R1)(1-R2)] parallel
PRODUCT & SERVICE DESIGN
Preliminary Design
Maintainability – also called serviceability, refers to the
ease and/or cost with which a product or service is
maintained or repaired
System Availability (SA) = ___MTBF____
MTBF + MTTR
PRODUCT & SERVICE DESIGN
Preliminary Design
• PRODUCTION DESIGN (how the product will be
made)
Recommended approaches:
1. Simplification
– reduces the number of parts, assemblies, or
options in a product
PRODUCT & SERVICE DESIGN
Preliminary Design
• PRODUCTION DESIGN (how the product will be made)
Recommended approaches:
2. Standardization
– makes possible the interchangeability of parts among
products resulting in higher volume production and
purchasing, lower inventory investment, easier
purchasing and material handling, fewer quality
inspections and fewer production difficulties (e.g. light
bulbs, batteries, CD)
PRODUCT & SERVICE DESIGN
Preliminary Design
• PRODUCTION DESIGN (how the product will be made)
Recommended approaches:
3. Modular Design
– combines standardized building blocks, or modules, to
create unique finished products(e.g. Campbell’s soup
produces 4 basic broths then adds special ingredients to
produce 125 varieties of final soup products)
PRODUCT & SERVICE DESIGN
Final Design and Process Plans
• Pilot run
• Final design (consists of detailed drawings and
specifications for the new product or service)
• Process plans are workable instructions for
manufacture, including necessary equipment and
tooling, component sourcing recommendations, job
descriptions and procedures for workers and computer
programs for automated machines
• Product launch
PRODUCT & SERVICE DESIGN
Techniques for Improving the Design Process
1. Establishing multi-functional design teams
2. Making design decisions concurrently rather
than sequentially
3. Designing for manufacture and assembly
4. Reviewing designs to prevent failures and
ensure value
5. Designing for the environment
6. Measuring design quality
7. Using quality function deployment
8. Designing for robustness
9. Engaging in collaborative design
PRODUCT & SERVICE DESIGN
Concurrent Design
- defined as a new approach to design that involves
the simultaneous design of products and processes
by design teams
PRODUCT & SERVICE DESIGN
Design for Manufacture and Assembly
- designing a product from a material that can be
recycled or easily repaired rather than discarded
PRODUCT & SERVICE DESIGN
Design Review
Failure and mode effects analysis (FMEA)
- a systematic approach to analyzing causes and
effects of product failure
- prioritizes failures and attempts to eliminate their
causes
PRODUCT & SERVICE DESIGN
Design Review
Fault tree analysis (FTA)
- a visual method for analyzing the interrelationships
among failures
- lists failures and their causes in a tree format
PRODUCT & SERVICE DESIGN
Design Review
Value Analysis (also known as value engineering)
- examination of the function of parts and materials in
an effort to reduce cost and/or improve product
performance
PRODUCT & SERVICE DESIGN
Design for Environment
- involves designing products from recycled material,
using materials or components that can be recycled,
designing a product so that it is easier to repair than
discard, and minimizing unnecessary packaging
Extended producer responsibility
– a concept that holds companies responsible for their
product even after their useful life
PRODUCT & SERVICE DESIGN
Metrics for Design Quality
1. Percent of revenue from new products or services
(measures extent of new product vs. incremental
product development): 15-30%
2. Percent of products capturing 50% or more of the
market
3. Percent of process initiatives yielding a 50% or more
improvement in effectiveness
PRODUCT & SERVICE DESIGN
Metrics for Design Quality
4. Percent of suppliers engaged in collaborative design
(shows a company’s ability to leverage the
knowledge of suppliers in designing better products)
5. Percent of parts that can be recycled (a measure of
greenness of product design; can be measured by the
average cost of product disassembly and disposal and
the % of parts that can be used again in a
remanufactured product)
PRODUCT & SERVICE DESIGN
Metrics for Design Quality
6. Percent of parts used in multiple products
(a measure of standardization and modularity)
7. Average number of components per product
(a measure of design simplicity)
PRODUCT & SERVICE DESIGN
Metrics for Design Quality
8. Percent of parts with no engineering change orders
(ECOs): a measure of how realistic the initial design is
or how well the design matches production capabilities
(industry leaders strive for an 80% or better first-pass
yield; industry average is less than 50%)
PRODUCT & SERVICE DESIGN
Metrics for Design Quality
9. Things gone wrong (TGW): a measure of design
quality that originates from the customer(takes into
consideration both the frequency and severity of
product failure, product recalls, warranty requests and
product liability)
PRODUCT & SERVICE DESIGN
Quality Function Deployment (QFD)
1. A structured process that translates the voice of the
customer to technical requirements at every stage of
design and manufacture
2. Uses a series of matrix diagrams called quality tables
that resemble connected houses
PRODUCT & SERVICE DESIGN
Quality Function Deployment (QFD)
3. The first matrix, dubbed the house of quality (has 6
sections: a customer requirements section, a
competitive assessment section, a design
characteristics section, a relationship matrix, a trade-
off matrix and a target values section), converts
customer requirements into product design
characteristics.
PRODUCT & SERVICE DESIGN
Quality Function Deployment (QFD)
4. QFD is a communications and planning tool that
promotes better understanding of design interactions,
involves manufacturing in the design process and
provides documentation of the design process.
PRODUCT & SERVICE DESIGN
Design for Robustness
Robust design yields a product or service
designed to withstand variations.
PRODUCT & SERVICE DESIGN
Design for Robustness
The conditions that cause a product to operate
poorly (called noise) can be separated into
controllable (design parameters such as material
used, dimensions and form of processing) and
uncontrollable factors (those under the user’s
control such as length of use, maintenance,
settings).
PRODUCT & SERVICE DESIGN
Design for Robustness
As part of the design process, design engineers
must also specify certain tolerances (allowable
ranges of variation in the dimension of a part).It is
assumed that producing parts within these
tolerances will result in a quality product.
PRODUCT & SERVICE DESIGN
Technology in Design
Computer-Aided Design (CAD)
– a software system that uses computer graphics to
assist in the creation, modification and analysis of a
design
PRODUCT & SERVICE DESIGN
Computer-Aided Design (CAD)
PRODUCT & SERVICE DESIGN
Technology in Design
Computer-Aided Engineering (CAE)
– engineering analysis, when performed at a computer
terminal with a CAD system; retrieves the description
and geometry of a part from a CAD database and subjects
it to testing and analysis on the computer screen without
physically building a prototype (ex. new drugs can be
tested on computer-generated DNA molecules;determine
how much stress will cause a bridge to crack)
PRODUCT & SERVICE DESIGN
Technology in Design
CAD/CAM(Computer-Aided Manufacturing)
– refers to control of the manufacturing process by
computers with the automatic conversion of CAD
design data into processing instructions for computer-
controlled equipment and the subsequent manufacture
of the part as it was designed; it’s the ultimate design-
to-manufacture connection
PRODUCT & SERVICE DESIGN
Advantages of CAD
• Radically reduces the lead time for new product
introduction.
• Costly mistakes in design and production are
avoided.
• Quality of designs and the products manufactured
are improved.
PRODUCT & SERVICE DESIGN
Advantages of CAD
Collaborative product commerce (CPC)
– a software system for collaborative design and
development among trading partners; it follows the life
cycle of a product
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
1. Services are intangible.
The quality of a service experience depends largely on a
customer’s service expectations.
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
2. Service output is variable.
The most important measures of service quality to a
customer are reliability and consistency.
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
3. Services have higher customer contact.
4. Services are perishable.
Because services can’t be inventoried, the timing and
location of delivery are important.
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
5. Consumers do not separate the service from the
delivery of the service.
In addition to deciding what, where and when, service
design also specifies how the service should be
provided.
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
6. Services tend to be decentralized and geographically
dispersed.
Many service employees are on their own to make
decisions.
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
7. Services are consumed more often than products so
there are more opportunities to succeed or fail with the
customer.
PRODUCT & SERVICE DESIGN
Special Considerations in
Service Design
Characteristics of Services:
8. Services can be easily emulated.
Competitors can copy new or improved services quickly.
PRODUCT & SERVICE DESIGN
The Service Design Process
• Service concept (the purpose of a service; it defines the
target and the desired customer experience)
• Service package (the mixture of physical items, sensual
benefits and psychological benefits)
• Performance specifications (outline expectations and
requirements for general and specific customers)
• Design specifications (describe the service in sufficient
detail for the desired service experience to be replicated for
different individuals at numerous locations
• Delivery specifications (outline the steps required in the
work process, including the work schedule, deliverables
and the locations at which the work is to be performed)
PRODUCT & SERVICE DESIGN
The Service Design Process
Service blueprint
– a type of process flowchart that emphasizes customer
interaction and service-related items such as failure
points and lines of visibility
References
Heizer, J. & Render, B. General Principles in Operations Management. 1stst edition
(Philippine edition). Philippines: Pearson Education South Asia Pte Ltd, 2005.
Krajewski, L.J., Ritzman, L.P. & Malhotra, M.J. Operations Management:
Processes and Value Chains. 8thth edition. New Jersey: Pearson Prentice Hall, 2007.
Russell, R.S. & Taylor, B.W. III. Operations Management. 4thth edition. New Jersey:
Pearson Education, Inc., 2003.
Russell, R.S. & Taylor, B.W. III. Operations Management Along the Supply
Chain. 6thth edition (International Student Version). Asia: John Wiley & Sons (Asia)
Pte Ltd., 2009.
Stevenson, Williams J. Operations Management. 9thth edition (International Student
Edition with Global Readings). Philippines: McGraw-Hill/Irwin, 2007.