CBME 1-Operations Management with TQM

CHAPTER 4
Product and Service
Design
Prepared by:
Rebecca Q. Lising, MBA
Topics outline
01 Idea Generation
02 Global products and service designs
03 Environmental factors: Sustainability
04 Other issues in product and service designs
05 Phases in product design and development
06 Phases in the service design process
 INTRODUCTION
➢Customer Satisfaction begins with product and
service design.
➢Process selection and capacity planning impact the
ability of the product system to deform and to
satisfy customers.
 INTRODUCTION
➢Flexibility, Production time, and cost are key
considerations in process design.
➢ Process selection and layout are closely related.
➢ Layout decisions are influenced by decisions made in
product and service design.
➢Work design focuses on the human element in
production systems.
 INTRODUCTION
➢Managers are realizing that workers are a valuable
asset and can contribute greatly to the organization’s
success.
➢It is essential to the success of the organizations to
involve all of the functional area of the organization
in design decisions.
 WHAT DOES PRODUCT AND SERVICE
DESIGN DO?
The various activities and responsibilities of product and service design
include the following(functional interactions are shown in parenthesis)

1. Translate customer wants and needs, into product and service

requirements.(marketing, operation)
2. Refine existing product and services.(marketing)
3. Develop new product and/or services.(marketing. Operations)
4. formulate quality goods(marketing, operation)
 WHAT DOES PRODUCT AND SERVICE
DESIGN DO?
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)
 REASONS FOR PRODUCT AND SERVICE
DESIGN OR REDESIGN
● Product and service design has typically had strategic
implications for the success and prosperity of an
organization.
● Furthermore, it has an impact on future activities.
Consequently, decisions in this area are some of the
most fundamental that managers must make.
 REASONS FOR PRODUCT AND SERVICE
DESIGN OR REDESIGN
• Organizations become involved in
product and service design or
redesign for a variety of reasons.
• The main forces that initiate
design or redesign are market
opportunities and threats.
 REASONS FOR PRODUCT AND SERVICE
DESIGN OR REDESIGN
● The factors that give rise to market opportunities and threats can be one or
more changes in:

➢ ECONOMIC (low demand; excessive warranty claim; the need to reduce

cost)
➢ SOCIAL AND DEMOGRAPHIC (aging baby bloomers; population shifts)
➢ POLITICAL, LIABILITY OR LEGAL (government changes; safety issues; new
regulations)
 REASONS FOR PRODUCT AND SERVICE
DESIGN OR REDESIGN
➢ COMPETITIVE (new or changed products or services; new
advertising/promotion)
➢ COST OR AVAILABILITY (of raw materials; components; labor)
➢ TECHNOLOGICAL (in product component processes)

While each of these factors may seem obvious, in technological part a need to
create a faster, smaller microprocessor that spawns a new generation of
personal digital assistants or cellphones. Advances may require altering existing
products.
OBJECTIVES OF PRODUCT AND SERVICE
DESIGN
❑ The main focus of product and service design is
customer satisfaction.
❑ Hence, it is essential for designers to understand
what the customer wants and design with that in
mind.
❑ Marketing is the primary source of this information
❑ Quality, is high on the list of priorities in product
and service design, having high quality was enough
for a product or service to stand out
❑ For many electronic product, “high tech”
appearance is a design factor
EXAMPLE OF A NEW PRODUCT DESIGN

Dutch Boy Paint

Containers from a
classic old container
to a new twist and
pour container.
 LEGAL, ETHICAL AND ENVIRONMENTAL
ISSUES
❖ Designers must be careful to take into account a wide array of legal
and ethical considerations. Moreover, if there is a potential to harm
the environment, then those issues become important.
❖ Most organizations have numerous government agencies that
regulate them. Among the more familiar federal agencies are the
Bureau of Food and Drug, the Occupational Health and Safety
Administrations, the DENR and various local agencies and NGOs.
LEGAL, ETHICAL AND ENVIRONMENTAL
ISSUES
● Organizations generally want designers to adhere to guidelines
such as the following:

✓ Produce designs that are consistent with the goals of

organizations.
✓ Give customers the value they expect.
✓ Make health and safety a primary concern.
✓ Consider potential to harm the environment
 LEGAL, ETHICAL AND ENVIRONMENTAL
ISSUES
● Product Liability
➢ can be a strong incentive for product
improvement.
➢ Is the responsibility of the manufacturer for any
injuries or damages caused by a faulty product
because of poor workmanship or design
Environmental Factors: Sustainability
● Product and service design is a focal point in the quest for sustainability.
Cradle-to-Grave Assessment
● The assessment of the environmental impact of a product or service throughout its useful life.
● Focusing on such factors as global warming (the amount of carbon dioxide released into
atmosphere) , oxygen depletion, and solid waste management
● The goal is to choose products and services that have the least environmental impact while still
taking into account economic considerations.

End-of-Life Programs (EOL)

● Deal with products that have reached the end of their useful lives.
● The purpose of this program is to reduce the dumping of products, particularly electronic
equipment, in landfills or third world countries, which converts materials into hazardous air and
water emissions and generates toxic ash.
The Three Rs: Reduce, Reuse, and Recycle
● Reduce:
Value analysis – examination of the function of parts and materials in an effort to reduce cost and/or
improve product performance.

● Reuse:
Remanufacturing – refers to refurbishing used products by replacing worn-out or defective
components, and reselling the products.

Design for disassembly (DFD) – designing products so that they can be more easily taken apart

● Recycle
✓ Recovering materials for future use
● Organizations generally want designers to
adhere to guidelines such as the following:

❑ Produce designs that are consistent with the

goals of organizations.
❑ Give customers the value they expect.
❑ Make health and safety a primary concern.
❑ Consider potential to harm the environment.
 OTHER ISSUES IN PRODUCT AND SERVICE
DESIGN
1. Life cycles- is the stages
through which a product or its category
bypass.

Product Life Cycle Management

A systematic approach to managing

the series of changes a product goes
through, from its conception to end of
life
 OTHER ISSUES IN PRODUCT AND SERVICE
DESIGN
2. Standardization- the extent to which there is absence of variety in a
product, services or process.

● Standardized products are made in large

quantities of identical items such as calculators,
computers, etc.

● Standardized service implies that every

customer or item processed receives essentially
the same service. Example: carwash
DEGREE OF STANDARDIZATION
● Mass customization
- a strategy of producing standardized goods or services, but incorporating some degree of
customization in the final product or services.
● Delayed differentiation
- is a postponement tactic
- the process of producing but not quite completing, a product or service until customer
preferences are known
- Example: furniture makers can produce dining room sets, but not apply stains allowing
customers a choice of stain.
● Modular design
- component parts are grouped into modules that are easily replaced or interchangeable.
- Example: Computers that have modular parts which can be replaced if they become
defective
 OTHER ISSUES IN PRODUCT AND SERVICE
DESIGN
3. 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.
Failure
➢ Situation in which a product, part, or system does not perform as intended
➢ Example: a smoke alarm might fail to respond to the presence of smoke

Normal Operating Conditions

➢ The set of conditions under which an item’s reliability is specified
➢ Example: using a passenger car to tow heavy loads will cause excess wear and tear on the
drive train
 OTHER ISSUES IN PRODUCT AND SERVICE
DESIGN
4. Robust design
➢ also called the Taguchi Method, greatly improves engineering productivity.
➢ Design that results in products or services that can function over a broad range of
conditions.
➢ Consider a pair of fine leather boots – obviously not made for trekking through mud
or snow.
➢ By consciously considering the noise factors (environmental variation during the
product’s usage, manufacturing variation, and component deterioration) and the cost
of failure in the field the Robust Design method helps ensure customer satisfaction.
 OTHER ISSUES IN PRODUCT AND SERVICE
DESIGN
5. The Degree of Newness
➢ products or service design change can range from the modification of an existing product or service
to an entirely new product or service.

✓ Modification of an existing product or service.

✓ Expansion of an existing product line or service offering.
✓ A clone of a competitor’s product or service.
✓ New product or service.
 OTHER ISSUES IN PRODUCT AND SERVICE
DESIGN

6. Cultural differences
● products design in companies that
operate globally also must take
into account any cultural
differences of different countries
or regions related to the product
PHASES IN PRODUCT DESIGN
AND DEVELOPMENT
IDEA GENERATION
product development begins with ideas

One of the strongest motivators for new and improved products or services is the competitors’
products and services.

REVERSE ENGINEERING – dismantling and inspecting a competitors’ product to discover

product improvement.

➢The Ford Motor Company used this tactic in developing its highly successful Taurus Model
➢It examines competitors’ automobiles, searching for best-in class components (e.g. best hood
release, best dashboard display, best door handle)
PHASES IN PRODUCT DESIGN AND DEVELOPMENT
➢ Feasibility analysis-
➢ entail market analysis(demand), economic analysis(development
cost and production cost, profit potential), and technical
analysis(capacity requirements and availability, and the skills
needed), can answer the question “Does it fit with the mission?”
➢ Product specifications-
➢ involves detailed descriptions of what is needed to meet( or exceed)
customer wants, and requires collaboration between legal,
marketing and operations.
➢ Process specifications-
➢ alternatives must be weighed in terms of cost, availability of
resources, profit potential, and quality.
➢ Prototype development-
➢ units are made to see if there are any problems with the product or
process specifications.
PHASES IN PRODUCT DESIGN AND DEVELOPMENT
➢ Design review
➢ making any necessary changes, or
abandoning.
➢ Market test-
➢ used to determine the extent of consumer
acceptance.
➢ Production introduction
➢ promoting the product.
➢ Follow-up evaluation
➢ determining if changes are needed, and
refining forecasts.
Designing for Production
Concurrent Engineering
➢ Bringing engineering design and manufacturing personnel together

early in the design phase to simultaneously develop the product and

the processes for creating the product.
Computer-Aided Design (CAD)
➢ Uses computer graphics for product design

➢ 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

Production Requirements
Design for Manufacturing (DFM)
➢ The designing of products that are compatible with an organizations
capabilities
Design for Assembly (DFA)
➢ Design that focuses on reducing the number of parts in a product and on
assembly methods and sequence.
➢ A good design must take into account not only how a product will be
fabricated, but also how it will be assembled.
Manufacturability
➢ The capability of an organization to produce an item at an acceptable point.
➢ Sometimes used when referring to the ease with which products can be
fabricated and/or assembled
SERVICE DESIGN
❑ Service. refers to an act, something that is done for the
customers.
❑ 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 needed.
OVERVIEW OF SERVICE DESIGN

➢ Service design begins with

the choice of a service
strategy, which
determines and focus on
the service , and the
target market
 DIFFERENCES BETWEEN SERVICE DESIGN AND PRODUCT
DESIGN
● Service operations managers must contend with issues that may be
insignificant or non-existent for managers in a production setting. These
includes the following:

1. Products are generally tangible; services are generally intangible.

2. Oftentimes services can be created and at the same time delivered.
(haircut; carwash)
3. Services cannot be inventoried.
4. Services are highly visible to the customers and must be designed with that
in mind. (spa)
 DIFFERENCES BETWEEN SERVICE DESIGN AND PRODUCT
DESIGN
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 system 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.
PHASES IN THE SERVICE DESIGN PROCESS
1. Service blue printing

a method used in a service design to describe and analyze a proposed

service.

2. Characteristics of well-designed service system

✓ Being consistent with the ✓ Being easy to sustain

organization mission.

✓ Being cost- effective.

✓ Being user friendly.

✓ Being robust of variability is a factor.

PHASES IN THE SERVICE DESIGN PROCESS
3. Challenges of service design

- service design presents some special challenges that

are less likely to be encountered in product design, in
part, because service design also involves design of the
delivery system
GUIDELINES FOR SUCCESSFUL SERVICE
DESIGN
5. Make sure that managers are involved and will
support the design once it is implemented.
1. Define the service package in detail.
2. Focus on the operation from the 6. Define quality for both tangible and intangibles.
customer perspective.
3. Consider the image that the service 7. Make sure that recruitment, training and
package will present. reward policies are consistent with service
4. Recognize the designer familiarity with expectations.
the system
8. Established procedures to handle both
predictable and unpredictable events.

9. Establish systems to monitor, maintain and

improve service
 Thank You!
Do you have any
questions?

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Resources
Operations Management with Total Quality Management 2019 edition by CENGAGE
Learning
Operations Management 7th Edition by Roberta S. Russel and Bernard W. Taylor III
Operations Management by McGraw Hill Education, c.2016
Total Quality Management. Phil. Edition. by James R. Evans and William M. Lindsay
Stevenson, William J., Operations Management 11th Edition (International), McGraw
Hill/Irwin, New York, USA, 2012
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