Product and Service Design

Chapter 4
 Discussion
Why product and service design is strategically
important?
 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 organizations
strategy
 What Does Product & Service Design Do?
Translate customer wants and needs into product and
service requirements
Refine existing products and services
Develop new products and services
Formulate quality goals
Formulate cost targets
Construct and test prototypes
Document specifications
Translate product and service specifications into process
specifications
 Key Questions
1. Is there a demand for it?
Market size
Demand profile
2. Can we do it?
Manufacturability - the capability of an organization to produce an item at an
acceptable profit
Serviceability - the capability of an organization to provide a service at an
acceptable cost or profit
3. What level of quality is appropriate?
Customer expectations
Competitor quality
Fit with current offering
4. Does it make sense from an economic standpoint?
Liability issues, ethical considerations, sustainability issues, costs and profits
 Reasons for Design or Re-Design
The driving forces for product and service design (or redesign) are
market Opportunities or Threats:
Economic
Low demand, excessive warranty claims, need to reduce costs
Social and Demographic
Aging populations, population shifts
Political, Liability, or Legal
Government changes, safety issues, new regulations
Competitive
New or changed products and services
Cost or Availability
Raw materials, components, labor, water, energy
Technological
Product components, processes
 Idea Generation
Supply-Chain Based
Ideas can come from anywhere in the supply
chain:
Customers
Surveys, focus groups, complaints, suggestions
Suppliers
Distributors
Employees

Airbus files patent for saddle seats on planes

 Idea Generation
Competitor-Based
Studying how a competitor operates and its
products and services

Reverse engineering
Dismantling and inspecting a competitors product
to discover product improvements
 Discussion
Discuss the following questions in groups:
Is reverse engineering ethical?
Can reverse engineering be used for service?
 Idea Generation
Research Based
Research and Development (R&D)
Organized efforts to increase scientific knowledge or
product innovation

Basic research
Objective: advancing the state of knowledge about a subject
without any near-term expectation of commercial applications
Applied research
Objective: achieving commercial applications
Development
Converts the results of applied research into useful
commercial applications.
 Discussion
Discuss the following question in groups:
Basic research has nothing to do with actual
products. Companies do not benefit from it.
Is this statement true?
 Idea Generation Kickstarter
https://www.kickstarter.com/discover?ref=nav
 Design Considerations - Legal
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
 Design Considerations - Ethics
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
Design Considerations Human Factors

Safety and Liability

Adding new features
Good? Bad?
Design Considerations Cultural Factors

Customers come from all over the world.

Different designs for different countries or
regions.
Language
Other?
Localization
http://www.kfc.com.cn/kfccda/food.html
 Design Considerations Environmental
Factors: Sustainability
Recap: 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
 End-of-Life (EOL) Programs
EOL programs deal with products (business
and consumer) that have reached the end of
their useful lives
The goal of such programs is to reduce the
dumping or incineration of products (e.g.,
electronics) which may pose hazards to the
environment
 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
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
 Other Design Considerations
Strategies for product or service life stages
Standardization
Product or service reliability
Product or service robustness
Degree of newness
 Other Design Considerations
Product/Service Life-Stages

Discontinue?
high cost, Replace?
low Find new
demand, uses
possibly
quality
issues,
getting
first into
the market

lower cost, low cost, high productivity,

increased standardization, few design
demand, changes are needed ,
higher higher reliability
reliability
 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
Coaxial Cable
 Advantages & Disadvantages of
Standardization
Advantages
1. Fewer parts to deal with in inventory and in manufacturing
2. Reduced training costs and time
3. More routine purchasing, handling, and inspection procedures
4. Orders fillable from inventory
5. Opportunities for long production runs and automation
6. Need for fewer parts justifies expenditures on perfecting designs
and improving quality control procedures

Disadvantages
7. Designs may be frozen with too many imperfections remaining.
8. High cost of design changes increases resistance to improvements
9. Decreased variety results in less consumer appeal
 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 it; the customer
chooses the stain
 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
 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
 Quality Function Deployment
The House of Quality
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
(negative) Refrigerator
Correlation door
between (Davis et al.,
technical 2007,
requirements Fundamentals of
Operations
Management)

Customer
requirements Customer
10=highest requirements
competitive
evaluation
Correlation
5=best
between
customer &
technical
requirements

Door seal
adhesiveness
Importance Technical
weight. requirements
Sum of competitive
evaluation
5=best 34
 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
Kano Model
 Phases in Products
Design & Development
1. Feasibility analysis
Demand, development and production cost, potential profit, technical analysis, capacity
req., skills needed, fit with mission.
2. Product specifications
Whats needed to meet customer wants
3. Process specifications
Weigh alternative processes in terms of cost, resources, profit, quality
4. Prototype development
Few units are made to find problems with the product or process
5. Design review
Changes are made or project is abandoned
6. Market test
Determine customer acceptance. If unsuccessful return to Design-review.
7. Product introduction
promotion
8. Follow-up evaluation
Based on feedback changes may be made.
 Designing (products) for Production
1. Concurrent engineering
2. Computer-Assisted Design (CAD)
3. Production requirements
4. Component commonality
 1. Concurrent Engineering
Concurrent engineering
Bringing design and manufacturing engineers
together early in the design phase
manufacturing personnel, marketing and purchasing
personnel in loosely integrated cross-functional teams
Views of suppliers and customers may also be sought
The purpose:
achieve product designs that reflect customer wants as
well as manufacturing capabilities
 2. Computer Aided Design (CAD)
Increases designers productivity.
Directly provides information to manufacturing
(dimensions, material - BOM).
Perform analysis: engineering ,cost.
Shortens time-to-market

e.g., AutoCad, SolidWorks, Visio

 3. Production Requirements
Designers must take into account production capabilities
Equipment
Skills
Types of materials
Schedules
Technologies
Special abilities
When opportunities and capabilities do not match management
must consider expanding or changing capabilities.
Related concepts:
a. Design For Manufacturing (DFM)
b. Design For Assembly (DFA)
c. Manufacturability
 DFM and DFA
a. Design for Manufacturing (DFM)
The designing of products that are compatible with an
organizations abilities
b. Manufacturability
Ease of fabrication and/or assembly
It has important implications for
Cost
Productivity
Quality
c. Design for Assembly (DFA)
Design that focuses on reducing the number of parts in a product
and on assembly methods and sequence.
 A more general term
Manufacturability
Ease of fabrication and/or assembly
It has important implications for
Cost
Productivity
Quality
 4. 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

4-44
 Service Design Definitions
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,
accompanying goods, and the explicit (core features) and
implicit (ancillary features) services included
 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
 Service Blueprint
a method used in service design to describe
and analyze a proposed service
Recap